Warren Buffett’s Berkshire Hathaway Inc committed $10 billion on Tuesday to Occidental Petroleum Corp’s $38 billion cash-and-stock bid for Anadarko Petroleum Corp, boosting its chances of snatching a deal from Chevron Corp.

Occidental and Chevron are locked in the biggest oil-industry takeover battle in years as they eye Anadarko’s prized assets in West Texas’ huge Permian shale oil field.

Anadarko on Monday agreed to start negotiations with Occidental, saying its bid could potentially be superior to Chevron’s existing deal to buy Anadarko for $33 billion in cash and stock.

Berkshire’s cash provides Occidental with flexibility to fund and even increase its proposal. Anadarko has previously expressed reservations about the risk of Occidental having to get any deal voted through by its own shareholders. Occidental could now use the majority of the Berkshire investment to add cash to its bid and remove the requirement for a vote, if it so chooses.

The Berkshire investment, contingent on Occidental completing its proposed acquisition of Anadarko, could also repay some of the debt being taken on to finance the deal’s cash portion, or cover the $10 billion to $15 billion of proceeds from asset sales which Occidental plans in the two years after closing the acquisition.

Analysts said Buffett’s endorsement supports Occidental’s push to get the deal done but comes at a high cost.

Berkshire Hathaway will get 100,000 preferred shares and a warrant to purchase up to 80 million shares of Occidental at $62.50 apiece in a private offering, a statement from Occidental said.

The preferred stock will accrue dividends at 8 percent per annum, compared with about 5 percent yield on common equity and 4 percent on term debt, Tudor Pickering Holt analyst Matthew Portillo said.

“For Occidental shareholders, our view is this is a fairly expensive cost of financing for the transaction even though it carries a kind of nice headline of having Berkshire Hathaway participate in the potential financing here.”

It is rare for Buffett to participate in a bidding war for a company. The last time he did this was in 2016, supporting a consortium including Quicken Loans Inc founder Dan Gilbert that tried unsuccessfully to buy Yahoo Inc’s internet assets.

Shares of Occidental were down 2.1 percent at $58.89 at midday Eastern time, while those in Anadarko were down about 0.3 percent at $72.69. Chevron shares were up 2.7 percent at $120.88.

A Chevron spokesman reiterated that the San Roman, California-based company believes its “signed agreement with Anadarko provides the best value and the most certainty to Anadarko’s shareholders.”

Occidental and Chevron, two of the largest oil and gas producers in the Permian by production volumes, argue they can best squeeze more oil from Anadarko’s 240,000 acres (97,120 hectares)in the area.

The two companies control land adjacent to Anadarko’s properties and expect a deal will add deposits that can produce supplies for decades using low-cost drilling techniques.
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The Trump administration is ready to provide more federal aid to farmers if required, a White House adviser said on Monday, after rolling out up to $12 billion since last year to offset agricultural losses from the trade dispute with China.

“We have allocated $12 billion, some such, to farm assistance. And we stand ready to do more if necessary,” White House economic adviser Larry Kudlow told reporters.

The U.S. Department of Agriculture had previously ruled out a new round of aid for 2019. As of March, more than $8 billion was paid out as part of last year’s program. On Monday, the department said it had extended the deadline to apply to May 17.

A constituency that helped carry Republican President Donald Trump to victory in 2016, U.S. farmers have been among the hardest hit from his trade policies that led to tariffs with key trading partners such as China, Canada and Mexico.

While farmers have largely remained supportive of Trump, many have called for an imminent end to the trade dispute, which propelled farm debt to the highest levels in decades and worsened the credit conditions for the rural economy.

Beijing imposed tariffs last year on imports of U.S. agricultural goods, including soybeans, grain sorghum and pork as retribution for U.S. levies. Soybean exports to China have plummeted over 90 percent and sales of U.S. soybeans elsewhere failed to make up for the loss.

Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer were scheduled to travel to Beijing on Monday for the latest negotiations in what could be the trade talks’ endgame.

Both sides have cited progress on issues including intellectual property and forced technology transfer to help end a conflict marked by tit-for-tat tariffs that have cost the world’s two largest economies billions of dollars, disrupted supply chains and rattled financial markets.
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Palm oil plantations in Liberia are billed as bringing jobs and development but actually leave locals poorer, said a Liberian lawyer who won the prestigious Goldman Environmental Prize on Monday.

The U.S.-based Goldman Environmental Foundation gives the prize — often known as the Green Nobel — to six grassroots activists each year for efforts to protect the environment, often at their own risk.

Alfred Brownell was awarded for his successful campaign to protect more than 500,000 acres of tropical forest from palm oil development in the West African country, after which he was forced to flee Liberia in fear for his life.

He now lives in the United States but hopes to return to continue his work, as palm oil development continues to displace farmers without giving them an alternative means to earn a living, he said.

“These forests mean a lot to Liberia. The communities that we supported who live in these areas … it is their home and their resources and their farms,” said Brownell, 53.

“Instead of trying to empower them, (palm oil) causes the impoverishment of those communities. So this is not development at all,” he told the Thomson Reuters Foundation.

Sometimes palm oil companies offer jobs, but not enough for the number of people who lose their land, he said.

Liberians have protested land grabs by foreign palm oil companies for over a decade, since the former government gave out nearly half the nation’s territory in resource concessions.

The World Bank has credited these policies with transforming Liberia into a promising place for investors after a long civil war, but activists say local communities rarely benefit.

“We’re talking about lots of communities seeing their customary lands go away, lands they depend upon on a daily basis for their livelihoods,” said Patrick Kipalu, Africa Program coordinator for Rights and Resources Initiative, a global network that advocates for indigenous peoples’ land rights.

“It’s so negative compared to the economic opportunities that those companies can bring,” Kipalu said.

Liberian authorities could not immediately be reached for comment.

Brownell helped community members file a complaint in 2012 alleging environmental damage and human rights violations by Golden Veroleum Liberia (GVL), a Southeast Asia-based agro-industrial company that had signed a deal with the state to lease 543,600 acres of land for palm oil production.

An industry body responded by halting GVL’s work on most of the land – a decision that was upheld last year after a legal battle.

Protests by community members led to violent clashes in 2015, and Brownell said that his home was attacked and family members arrested — leading him to flee.

GVL, still active in Liberia, said in an email that it acknowledged past mistakes and that it created a sustainability action plan in 2018 to resolve grievances with communities.
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Mexican President Andres Manuel Lopez Obrador on Monday symbolically launched work on a new airport for Mexico City to replace the nearly half-built $13 billion project he cancelled upon taking office.

Lopez Obrador promised the new Felipe Angeles airport northeast of the capital won’t exceed its budget and will save the government money even with the cancellation of the partially built airport.

“It’s going to resolve the problem of saturation at the current Mexico City airport, but also be an example of how you can carry out a rational, austere policy based on honesty that needs to establish itself as the way to live and the way to govern in our country,” Lopez Obrador said.

The new airport — named for a general allied with revolutionary icon Pancho Villa — is at the Santa Lucia military air base and the army is in charge of getting it built for $4.1 billion.

It is supposed to begin operating in mid-2021, though construction has not yet begun.

Two new runways would be added to its existing one and the commercial airport would share the space with the military.

Critics have argued that the new airport will have difficulty operating simultaneously with the existing airport, but in a report by the military, consultant Navblue said they could operate simultaneously in terms of air space.

One of the early hitches pointed out in the military’s environmental impact statement is a small mountain named “Paula” that sits beside one of the runways. It would be too close for commercial airliners to use that runway, so the report says it would be dedicated exclusively to military use.

But the biggest concern raised in the report has to do with water. The airport would consume an estimated 6 million liters (1.6 million gallons) per day from an already severely overtaxed aquifer that the capital depends on, and that’s not including consumption from hotels and other businesses that will spring up around it, the report said.

Three existing wells on the air base should provide enough water, but that is expected to lower the water table in the aquifer, so some wells could go dry.

The report says that could be mitigated by creating recharge zones in the area to put water back into the aquifer. Another possibility would be bringing water from another, less-stressed aquifer.

On Monday, the Zeferino Ladrillero Human Rights Center called on the government to consult with the more than 20 communities around the airport. The group warned that the water consumption would directly impact livestock and agriculture, and with it the livelihoods of thousands of families.

Lopez Obrador, though, said consultations had already taken place.

“I can tell you now that the consultation with the communities around Santa Lucia happened and what do you think? The people approved the project,” he said. There was no description of when or how those consultations were performed.

When the time the airport it begins to operate in mid-2021, it could handle nearly 20 million passengers.

One of the looming questions is how flights will be divided between the capital’s main airport, Benito Juarez International, and the new one at Santa Lucia. The environmental impact statement for the project mentions that initially two airlines will be operating there, but it does not say which.

The new airport would connect to the existing one via a 28-mile (46 kilometer) route with dedicated bus lanes to speed passengers to their connecting flights. About 5 miles of that route would actually be along a perimeter road built for the now-cancelled airport at Texcoco.

In October, before Lopez Obrador had taken office, he held an unofficial referendum on cancelling the $13 billion Texcoco project, which was already nearly half completed. He proposed converting the Santa Lucia air base and making improvements at Benito Juarez, which had been targeted for closure. The plan received 70% approval, though critics complained that fewer than 2 percent of Mexico’s registered voters took part.

Lopez Obrador complained the Texcoco project backed by the previous administration was drenched in corruption and faced environmental problems because it was being built on a former lakebed. Auditors said in February that they had found some $167 million in questionable costs.

The government says it will build a third terminal at Benito Juarez. That airport, surrounded by residential neighborhoods and with no possibility of adding an additional runway, is beyond capacity. More and more flights are parked on the tarmac with passengers shuttled to the overcrowded terminals on buses.

Arriving flights are increasingly delayed because they can’t get a landing slot.

The government announced last week that the nearly 31,000-acre (12,500 hectare site of the scrapped airport would be converted into a park.

The survival of Santa Lucia, which also had been set for closure under the Texcoco plan, is another victory for Mexico’s military, which has been tasked with running the project. It also has been given the lead in combating the country’s rampant fuel theft problem and a soon-to-retire general will head the newly created militarized police force, the National Guard.

The general in charge of airport construction said Friday that its design would be “austere,” in contrast with the elaborate Norman Foster-designed terminal for the now cancelled airport. The government says even factoring in the lost investment in the cancelled airport and the cost of converting Santa Lucia, the total expense will be only slightly more than a quarter of what the Texcoco airport would have cost.
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