Washington considers loans to troubled oil companies

US Treasury Secretary Steve Mnuchin insists there will be no shareholder bailouts. (AFP pic)

WASHINGTON: The US administration is considering loans to energy companies hit by the global economic shutdown caused by the coronavirus pandemic, Treasury Secretary Steve Mnuchin said Sunday.

Mnuchin insisted there would be no shareholder bailouts, but said loans were under close consideration.

“The secretary of energy and I are studying it and we’re looking at it very carefully,” he said on Fox News Sunday.

US energy companies are reeling from the collapse in demand for oil as economies have shut down in the face of Covid-19 and a deep plunge in oil prices.

On Friday, Mnuchin told reporters that one of several possible alternatives was for the government to take equity stakes in troubled oil companies.

On Sunday, however, he stressed that US President Donald Trump had said there would be no bailouts, whether for airlines or oil companies.

“We will consider, again, loans to companies in a proper scenario with strategic importance, but no bailouts. No shareholder bailouts,” he said.