April 27, 2017

Another Persian Gulf oil producer considers public offering

The oil and gas producer is reportedly seeking advice from banks on offering its shares to the public.

© Hamad I Mohammed / ReutersSaudis to raise $10 billion ahead of Aramco IPO

Oman Oil plans to attract more foreign investment into the country, according to the sultanate’s Oil Minister Mohammed Al Rumhy, as quoted by Bloomberg.

“We are looking at the IPO option because we want to give a boost to the local stock market, and we want to see more foreign direct investments coming to the country,” Al Rumhy said in the interview.

The recent decline in oil prices forced members of the Gulf Cooperation Council, an organization of six Arab energy-producing monarchies to make steps toward restructuring their national oil companies – selling shares, merging units and cutting costs.

Saudi Aramco is planning an initial public offering, which may raise about $100 billion and become the world’s largest IPO, according to the kingdom’s authorities. Qatar Petroleum announced the merger of its two liquefied natural gas divisions following massive layoffs in 2015.

Along with the peers, Oman started extending its energy industry, developing new sources of income amid low oil prices, which had a notable impact on state revenues. The sultanate is constructing a port and metals factory in the Arabian Sea town of Duqm.

Oman Oil owns stakes in Hungarian oil and gas company MOL Group, Oman Gas, German logistics service provider Oiltanking and the Musandam power plant. In a move to go beyond refining, the corporation agreed to buy chemicals manufacturer Oxea from Advent International four years ago.

The government is not going to sell shares in state-owned Petroleum Development Oman (PDO), according to Al Rumhy. The company accounts for more than 70 percent of the country’s crude production and almost all of its natural gas supply.

Article source: https://www.rt.com/business/385599-oman-oil-ipo-saudi-aramco/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Oil companies exploiting famine and financial ruin in South Sudan

FILE PHOTO. A soldier from the United Arab Emirates watches over Yemeni territory on a helicopter on the frontline conflict zone of Marib in central Yemen. © Reuters Yemeni oil reserves under dispute as civil war rages on

The South Sudanese government and three humanitarian agencies declared a famine in some parts of the country in February, while the newly independent nation is desperately trying to bring its oil back online. A string of deals signed by President Salva Kiir over the past four months has demonstrated the country’s desperation for fresh streams of revenue as the civil war now approaches its four-year anniversary.

“The government is working hard to reinvigorate the petroleum industry in South Sudan by creating an enabling environment for international oil and gas companies to invest and operate,” according to Petroleum Minister Ezekiel Lul Gatkuoth. “It is up to the oil companies to come in, explore and produce. Partnership is what fuels the oil industry.”

The East African reported this week that oil companies with regional headquarters in Kampala, Nairobi, Addis Ababa, as well as several European cities are setting up meetings with top South Sudanese officials, and Kiir’s administration is happy to oblige the invitations.

Toward the end of last year, Suiss Finance Luxembourg AG announced a $10.5 billion deal that could rise to $105 billion in value when joint ventures in infrastructure and transportation are taken into account. While some may view this as a large stepping stone toward bringing back its oil revenues, Kiir’s critics were quick to attack the leader over the deal once news broke, referring to what they called “shadowy” businessmen from Kampala who had brokered the contract.

Another recent deal involves Oranto Petroleum, which has committed to a $500 million comprehensive exploration campaign, starting immediately” to evaluate oil prospects in the 25,150 kilometers that make up Block B3. Juba approved the block a couple of weeks ago, giving Oranto a 90 percent share, while keeping only 10 percent for the government’s Nile Petroleum (Nilepet). Oranto is a subsidiary of Nigeria’s Atlas Petroleum International Ltd (“Atlas”).

FILE PHOTO: British soldiers jump out of a helicopter © Damir SagoljHundreds of British troops sent to South Sudan as humanitarian crisis looms

The East African said the deal with Oranto has drawn harsh criticism due to a report from technical officials in the Ministry of Petroleum in which claims were made that the company lacked the technical expertise and financial capacity to manage the Block B3 project.

Oranto Petroleum Chairman Prince Arthur Eze offered a rebuttal, telling reporters that his company stood “at the vanguard of African firms exploring and developing African assets,” adding that the company would elaborate with “partners to bring to light the immense potential of Block B3.”

“We believe the petroleum resources of Block B3 are vast. To reach our target of more than doubling current oil production, we need committed new entrants like Oranto,” Petroleum Minister Ezekiel Lul Gatkuoth said in defense of his department’s decision. Later addressing Bloomberg, he added: “Anybody who is willing to do business with us, they must actually show that they are ready and we will sign and if you are not ready to do business with us, get out of the way.”

World Oil described Oranto’s investment as a “bet” that South Sudan could end its civil war within three years to attract new investments to its ailing oil sector.

Atlas owns and operates 20 oil and gas fields in Africa, making it the largest African explorer. Its influence spans Benin, Côte d’Ivoire, Equatorial Guinea, Ghana, Liberia, Namibia, Nigeria, São Tomé and Príncipe, Senegal, and South Sudan.

Oranto has a history of finalizing oil deals with governments, and later selling oilfield rights to larger international corporations, effectively serving as a middleman.

Read more on Oilprice.com: Don’t Believe The Hype: Oil Markets Far From Recovery

A 2006 report by the Liberian Auditing Commission named the company in a bribery scandal as it aimed to unduly influence parliament members tasked with ratifying oil and gas concessions. Oranto had already planned to sell rights to the concessions to another firm and was using bribes to expedite the governmental process, according to the report.

© Esam Omran Al-FetoriMafia, guns and clans: the big Libyan oil heist

In Mali, Oranto saw its exploration contract cancelled in 2014 as part of 12 exploration agreements that were cancelled over various offences”.

Despite the allegations to the contrary, Eze characterized Oranto’s venture in South Sudan last month as a “long-term collaboration,” suggesting the company may not be planning to abscond.

The recent attacks on foreigners working on South Sudan’s oil and gas facilities serve as a warning for multinationals to stay away from the new country’s national resources, just as oil prices recover enough for Juba to begin profiting from the oil sector. This means South Sudan will have to offer a premium to companies willing to work in the country. Middlemen may not appear to be the perfect partners for struggling governments, but they are giving Juba a means to reach multinationals that can bankroll the development of its energy resources.

This article was originally published on Oilprice.com

Article source: https://www.rt.com/business/385581-oil-companies-south-sudan/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Calling Germany a ‘rogue’ economy is ‘bulls**t’ – finance minister

German Finance Minister Wolfgang Schaeuble © Fabrizio BenschSchaeuble wants to convince Trump that Germany’s trade surplus is good for America

The minister was asked on CNBC about stories in the British media, where Germany is accused of caring only about its own profit and ignores its neighbors.

“There are some writers even in the UK which write bullsh**t, with all due respect,” responded Schaeuble.

“Did you say bulls**t?” asked the anchor.

“Yes. I don’t like it,” said Schaeuble.

They were talking about a piece by Matthew Lynn in The Telegraph which describes Germany as the “biggest threat to the stability of the global economy right now,” more than the looming Brexit or US President Donald Trump’s “bone-headed protectionism.”

“Germany’s trade surplus. Hitting record highs with every month that passes, it now amounts to a massive nine percent of GDP. In effect, Germany has become an economic rogue state, hollowing out the industry of its neighbors, creating vast flows of footloose capital and undermining the stability of the financial system. It is time the rest of the world stood up to it and demanded the Germans bring it under control,” the journalist wrote.

Earlier this year, Trump also criticized Berlin about its €253 billion trade surplus, warning of a possible increase in tariffs on goods imported from Germany.

On Monday, Peter Navarro, who heads the White House’s new National Trade Council, asked for bilateral talks to reduce the US trade deficit with Germany.

“Trade policy is the responsibility of the European Union,” the German Economy Ministry responded.

The German finance minister defended his country’s vast trade surplus during his visit to Washington. Schaeuble has rejected US accusations of his country’s unfair trade policies and urged President Trump to remain engaged in trade liberalization.

Article source: https://www.rt.com/business/385544-germany-finance-minister-rogue-economy/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Schaeuble wants to convince Trump that Germany’s trade surplus is good for America

The fact German exports are significantly greater than its imports has been an issue for lingering international criticism.

Donald Trump stands on the running board of an SUV and waves at an overflow crowd at a campaign rally in Minneapolis, Minnesota, U.S. November 6, 2016. © Carlo AllegriTrump tells Germany to buy American automobiles, Germany to Trump: ‘Build better cars’

Earlier this year, US President Donald Trump joined the army of critics urging Berlin to rein in its €253 billion ($272 billion) trade surplus. Trump warned that he would impose stiff tariffs on goods imported from Germany.

According to German media reports, the finance minister has worked out 29 points aimed to assuage the concerns expressed by the White House. The main points of the paper apparently represent the fundamentals of economic policy.

While German Chancellor Angela Merkel is seeking to boost the country’s domestic economy, expecting the surplus to decrease to seven percent of GDP by next year against 8.6 percent in 2015, most of the factors bolstering the excess are beyond the government’s control, the document says.

“A large part of the current account surplus is determined by factors which cannot be directly influenced by German economic and financial policy. These include temporary factors such as the euro exchange rate or commodity and energy market prices,” the document reads, as quoted by Bloomberg.

In the paper, Schaeuble stresses that US jobs are dependent on Germany while companies and consumers are primarily responsible for the huge surplus.

“As a member of the European Union, Germany does not pursue an independent trade policy. Rather, trade policy is the competence of the EU. The policy of the federal government is in line with all international trade agreements and arrangements, in particular, it is also World Trade Organization-compliant,” the paper says.

READ MORE: Merkel admits Europe-US free trade deal is dead

Germany is currently one of America’s most important trading and investment partners, comprising nearly ten percent of all foreign direct investment in the US, according to the report. German corporations provide up to 672,000 jobs in the US while the equipment produced in Germany helps America to stay competitive and sustain jobs.

Article source: https://www.rt.com/business/385427-schaeuble-defend-trade-surplus-us/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Emirates cuts flights to US blaming Trump’s restrictions for declining demand

An Etihad Airlines plane at Los Angeles International Airport , California © Mark RalstonBusiness class ‘war’: Healthy Etihad bookings fly in face of US ‘security’ ban

“Emirates can confirm that we will be reducing flights to five of the 12 US cities we currently serve,” said a spokesperson for the company.

Daily flights from Dubai to Fort Lauderdale and Orlando in Florida will be cut to five a week from daily flights. Flights to Seattle, Boston, and Los Angeles will now be once a day, instead of twice daily.

Trump signed an executive order last month toughening vetting procedures on citizens of six Muslim-majority countries from entering the US. The order was rejected by American courts, but the administration said it will appeal.

Also in March, Washington banned laptops, tablets or any communication devices larger than a smartphone from being brought into the cabin of planes on direct flights to the US from ten airports in the Middle East, North Africa and Turkey, including the United Arab Emirates.

“Over the past three months, we have seen a significant deterioration in the booking profiles on all our US routes, across all travel segments,” said Emirates in a statement.

The lounge and bar area at the business class deck after the first landing of an Emirates Airbus A380 © Kai Pfaffenbach / ReutersUS electronics on flights ban may not be just about security

“The recent actions taken by the US government relating to the issuance of entry visas, heightened security vetting and restrictions on electronic devices in aircraft cabins have had a direct impact on consumer interest and demand for air travel into the US,” the company added.

Emirates is offering its premium travelers laptops on loan, but it hasn’t helped.

Emirates called itself a “profit-oriented enterprise,” explaining the decision.

That drew a response from the Partnership for Open and Fair Skies — the lobbying organization that speaks on behalf of American Airlines, Delta Air Lines, and United Airlines. The lobby said Emirates calling itself profit-oriented is “laughable,” as it makes money-losing flights possible only because of government subsidies.

Since 2015, American, Delta, and United have complained about unfair competition from three Middle East-based competitors — Emirates, Etihad, and Qatar Airways.

Article source: https://www.rt.com/business/385424-emirates-us-bookings-fall/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Russia to build 2 nuclear power plants in Iran

“The contract has been signed between the AEOI and Russia, and includes building two 1,000-megawatt nuclear power plants, the construction of which is about to start,” said Chitchian.

March 28, 2017. Russian President Vladimir Putin and President of the Islamic Republic of Iran Hassan Rouhani. © Aleksey NikolskyiRussia to enhance oil and gas industry cooperation with Iran — Putin

The minister added that the construction of a third joint power plant with Russia, with the capacity of 1,400 MW, has already begun.

Last year, the Iranian vice president and head of the country’s Atomic Energy Organization, Ali Akbar Salehi talked about the plans to construct two new nuclear units in cooperation with Russia. He stressed that the process could take up to ten years and would cost $10 billion.

Earlier this year, Russian Energy Minister Alexander Novak said Moscow wanted to finalize the agreement with Iran and help the country build more power plants.

Moscow and Tehran have been deepening ties in a number of sectors, including oil, defense, and fisheries.

Following a decade of total economic isolation energy-hungry Iran is eager to start building power plants and update its energy infrastructure. Russian companies are likely to be among the preferred bidders.

Russian energy major Gazprom has sealed a cooperation agreement with its Iranian counterpart for the development of local gas deposits.

During his visit to Moscow last month, Iran’s President Hassan Rouhani highlighted the importance of the energy sector in bilateral relations and the possible creation of a free trade zone between Iran and the Eurasian Economic Union that includes Russia, Belarus, Armenia, Kazakhstan, and Kyrgyzstan.

Article source: https://www.rt.com/business/385394-russia-iran-nuclear-power-plants/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

General Motors accuses Venezuela of illegally seizing its car plant

Venezuela's President Nicolas Maduro © Carlos Garcia RawlinsMaduro threatens jail for ‘bourgeois parasites’ from Heinz

“Yesterday, GMV’s (General Motors Venezolana) plant was unexpectedly taken by the public authorities, preventing normal operations. In addition, other assets of the company, such as vehicles, have been illegally taken from its facilities,” the company said in a statement, quoted by Reuters.

GM said it is a huge hit on the plant’s 2,678 workers, its 79 dealers and to its suppliers. The car industry in the country is in deep crisis over lack of components.

The economic crisis in Venezuela has hurt many other US businesses in the country, including food makers and pharmaceutical firms, which have been forced to cut operations.

In 2014, Venezuela announced a “temporary” takeover of two plants belonging to the US cleaning products maker Clorox Co which had left the country.

In 2015, Venezuelan President Nicolas Maduro threatened to imprison senior managers of the local Heinz subsidiary for “sabotaging the national economy.”

Maduro accused Heinz of creating artificial shortages to turn people against his socialist government.

According to the International Monetary Fund’s estimates, the country’s economy was the worst in the world last year, contracting 10 percent. Private economists estimate the drop at as much as 15 percent.

The IMF estimated inflation in Venezuela at 475 percent last year, and projected a 2000 percent inflation this year, with the recession to continue until at least 2019.

While the country is running out of cash and gold, it also faces shortages of basics like milk, eggs or flour, with prices skyrocketing.

Article source: https://www.rt.com/business/385387-venezuela-general-motors-plant/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Saudi February crude oil exports drop to 21-month low

© Leonhard FoegerIran ramps up oil output as OPEC production falls

According to data the single countries report to the Joint Organizations Data Initiative (JODI), Saudi Arabia’s crude oil exports in February stood at 6.957 million barrels per day, the lowest volumes shipped in a month since May 2015 when exports were 6.935 million bpd.

Since May 2015, Saudi exports were below 7 million bpd only in August 2015 and in February this year, data by JODI show.

By comparison, Saudi exports in January this year—when the OPEC deal took effect—were 7.713 million bpd.

In the two months leading to the start of the output cuts, the Kingdom’s exports exceeded 8 million bpd, at 8.258 million bpd in November, and at 8.014 million bpd in December.

A worker checks the valve of an oil pipe at Al-Sheiba oil refinery in the southern Iraq city of Basra. © Essam Al SudaniOPEC’s №2 producer goes rogue, plans 600,000 bpd oil output increase

Saudi oil production in February was 10.011 million bpd, and that’s the same figure the Saudis had reported to OPEC for their production that month.

Saudi refinery intake jumped to 2.673 million bpd in February from 2.127 million bpd in January, to a record high since JODI started publishing data in January 2002.

The high refinery intake in February was not only the result of the lower exports.

According to the Saudi Press Agency, Saudi Aramco planned to shut its 126,000-bpd crude oil refinery in Riyadh for planned maintenance for 80 days beginning on March 1.

“It seems that Aramco is preparing for the long shutdown of the Riyadh refinery by increasing production from other refineries as they need to keep some products in stocks while the refinery is closed,” independent analyst Mohamed Ramady told Bloomberg from London.

This article was originally published on Oilprice.com

Article source: https://www.rt.com/business/385363-saudi-february-crude-oil-exports/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Russia’s agriculture sector booming despite or thanks to intl sanctions

Following the Western penalties imposed on Russian companies in 2014 and subsequent countersanctions introduced by Moscow in response, some local officials took the opportunity to boost the development of domestic production. Many Russian enterprises managed to encourage import substitution and made exports more competitive.

© Vitaliy TimkivRussia strengthens position on global food market

Despite doubts expressed by traders and economists, that optimism has turned out to be justified on at least one economic front – agriculture and related sectors.

Last year, Russia managed to gain the world’s lead as an exporter of grain, after shipping 34 million tons out of its record crop of 119 million tons.

Apart from grain, Russian farmers have completely substituted imports of chicken and pork with domestic production. The country became a top producer of sugar beet with greenhouse vegetable output increasing 30 percent over the previous year.

Agricultural goods have become Russia’s second biggest export after oil and gas.

Besides increased government subsidies to farmers, the sector has also benefited from Russia’s geographical position with highly fertile “black earth” regions in central and southern Russia located close to export terminals on the Black Sea. The trade routes allow the country to supply significant North African and Middle Eastern wheat importers such as Turkey and Egypt.

Russian agriculture and associated industries have huge potential for further growth as increased earnings allow farmers to invest in technology and more fertilizers to boost productivity.

“Russia’s agriculture boom shows that, despite sanctions and the poor state of east-west relations, there are pockets of value and opportunity to be found in the Russian market,” reports the Financial Times.

Article source: https://www.rt.com/business/385285-russia-agriculture-flourishes-sanctions/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Gold prices will continue to climb due to geopolitical tensions

© Ajay VermaGold price soars to 5-mth high on geopolitical unrest

The precious metal approached $1,300 per troy ounce on Tuesday before retreating to $1,283 on Wednesday.

Intesa analyst Daniela Corsini told Bloomberg prices could fall in mid-year as the US Federal Reserve hikes interest rates, but they are likely to bounce back, reaching $1,350 an ounce at year-end.

“Markets will surely remain nervous about this uncertainty. And if economic data in the US remains strong, then gold will regain its role as an inflation hedge,” she told the media.

India, the world’s second-biggest gold market, has recovered from the government’s ban on larger banknotes, and the demand will grow there, Corsini predicted.

In India, the “impact of the demonetization scheme has run its course, and we had very strong imports in February and March,” she said.

Corsini added that in Europe traders will use gold as a safe haven ahead of elections in France, Germany, and the UK.

Investors are also worried about geopolitical tension in Syria, Afghanistan, and Turkey as well as US relations with Russia and China.

“Short-term risk is skewed to the downside, but underlying support is there with the focus on political uncertainties. We see the yen continuing to strengthen, and a strong yen and strong gold have gone hand-in-hand since November,” Saxo Bank’s head of commodity strategy Ole Hansen said on Wednesday.

“Also expectations about the dollar are up for revision, the strong dollar story is fading. [US President Donald] Trump is talking it down, and we’re seeing weakness creep into US data, changing the perception of how much rates have to rise,” he added.

Article source: https://www.rt.com/business/385274-gold-price-keeps-climbing/?utm_source=rss&utm_medium=rss&utm_campaign=RSS