Archives for October 2015

The company sent letters to the workers on Thursday, saying they were suspended without pay in connection with the incident and that disciplinary procedures had been launched against them, reports France 24, citing union sources.

Police detained the men on Monday, following their identification with the help of video footage of the incident, according to an official at the prosecutor’s office. They were bailed to appear in court on December 2. The suspects face fines up to €45,000 and up to five years behind bars.

Twenty employees are facing disciplinary measures which could result in warnings or dismissals, according to the airline.

Footage of half-naked airline bosses fleeing from angry workers, hit the headlines on October 5. Several hundred employees stormed the company’s headquarters near Charles de Gaulle Airport in Paris where the central committee was holding a meeting. Air France executives were finalizing a restructuring plan, including 2,900 job cuts, which had been unveiled earlier.

Dozens of protesters stormed the meeting, with some attacking managers, ripping off their clothes and forcing them to flee. Deputy Director for Human Resources Xavier Broseta, naked from the waist up, had to scale a fence to escape the angry crowd. Another executive, Pierre Plissonnier, also had his shirt and jacket ripped.

The French airline and the two executives filed complaints with police of aggravated assault. Prime Minister Manuel Valls called the attackers “thugs” and promised Air France’s management support from the Socialist government. France’s President Francois Hollande said the incident had hurt the county’s image worldwide.

Air France is facing difficult times. France’s national carrier is trying to end four consecutive years of losses as it struggles to compete with low-cost carriers.

Article source: https://www.rt.com/business/318857-france-airline-workers-incident/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

According to Reuters, oil majors Exxon, Shell, Total and Eni have been buying more crude from Riyadh for their refineries in Western Europe and the Mediterranean in the past few months at the expense of Russian oil.

“I’m buying less and less Russian crude for my refineries in Europe simply because Saudi barrels are looking more attractive. It is a no brainer for me as Saudi crude is just cheaper,” a trading source in a major European company told Reuters, who preferred to stay anonymous.

The average price of Russian Urals oil in January – September 2015 was about $ 54.40 per barrel (compared to $ 105.07 for the same period last year). However, an analyst from Russia’s Uralsib bank Aleksey Kokin says Saudi contracts with European companies are looking at benchmarks such as Brent and Dubai, which are priced at $48-49 per barrel.

“And the Saudis are ready to offer a discount of $0.5-1.00 per barrel to this price,” he told Russian online newspaper Gazeta.ru.

According to the analyst, Russia provides nearly 25 percent of the oil used in Europe (Europe consumes about 14 million barrels a day, or 700 million tonnes of oil per year). The Russian share of European oil imports is around 35 percent.

“Saudi Arabia can painlessly provide Europe with an additional 1 million barrels per day,” says Kokin.

This would come at Russia’s expense and its share of the European market would decline by almost a third, he added.

Rosneft CEO Igor Sechin says Saudi Arabia is reducing prices to reach new markets. 

“In terms of competition, we are seeing now that Saudi Arabia has even come on the Polish market, where it has never been; it’s supplying raw materials through Gdansk. Actively dumping,” he said.

Russian Energy Minister Aleksandr Novak echoed Sechin’s concern, saying that Saudi Arabia’s entry into the Eastern European markets was “tough competition.”

Article source: https://www.rt.com/business/318847-saudi-arabia-russia-oil-dumping/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“Our goal is to achieve trade of $100 billion, and it is attainable, because our economies are complementary, and a lot can be done. And, of course, projects such as the Akkuyu nuclear power plant or Turkish Stream should be engines of development of our trade and economic relations,” he said on Thursday.

Turkish President Recep Tayyip Erdogan, when meeting President Vladimir Putin last month in Moscow, said he wanted trade between the two countries to reach $100 billion by 2023. He noted positive progress in trade between Turkey and Russia, saying it was estimated to be over $30 billion at the end of 2014.

In 2010, Moscow and Ankara signed an agreement to construct and operate the Akkuyu nuclear power plant in the Mersin province of Turkey. The $20 billion project will become the first nuclear power plant in the country. Turkey is interested in developing its own generating capacity. The construction of the Akkuyu nuclear power plant with a capacity of 4800 Megawatts will enable Ankara to reduce the cost of power generation and energy costs. The first unit of the power plant is expected to be completed in 2020, and be fully commissioned in 2023.

Another major project for the two countries is the Turkish Stream pipeline which is to deliver Russian gas to Turkey via the Black Sea. The construction of the pipeline which was scheduled to begin in June was delayed as the parties failed to reach an intergovernmental agreement.

READ MORE: Putin: Energy is ‘locomotive’ of Russia – Turkey economic cooperation

Turkey does not have people authorized to sign the relevant agreements prior to the November parliamentary elections, Russia’s Foreign Minister Sergey Lavrov said on Wednesday. The agreement on the Turkish Stream construction might be maintained when the new government is formed in Turkey, Lavrov added.

READ MORE: Gazprom, Ankara agree to start Turkish Stream gas deliveries in Dec 2016

In December, Gazprom and Turkey’s Botas signed a memorandum of understanding over the construction of Turkish Stream. With a capacity of 63 billion cubic meters (bcm) of gas annually, about 16 bcm of that will be used by Turkey and the remaining 47 bcm will go to a hub on the Greek – Turkish border to be transported onwards to Europe. The first line of Turkish Stream will cost $2.9 billion and is expected to meet the growing demands of the Turkish market.

Article source: https://www.rt.com/business/318746-russia-turkey-trade-projects/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The Ukrainian Cabinet’s press service has stepped in for the PM and said he was meaning hryvnia. One trillion hryvnia is equivalent to $46 billion.

The Kremlin was surprised by Kiev’s demand.

“Crimea is the territory of the Russian Federation. Donbass is the territory of Ukraine. How did they get that one trillion? It is not clear,” Russian Presidential Press Secretary Dmitry Peskov told TASS. He added that if Ukraine doesn’t repay its $3 billion debt in full, Moscow will declare it in default

In June 2014, Yatsenyuk said Kiev would demand one trillion Ukrainian hryvnia ($90 billion at the time) from Russia. Since then, the Ukrainian currency has dropped almost 50 percent.

During the press conference on Thursday, Yatsenyuk also offered Russia until October 29 to accept a debt-restructuring deal over its $3 billion debt or go to the courts.

“We are ready for judicial proceedings,” said Yatsenyuk.

“On October 29 we again asked Russia to decide whether they are ready to accept Ukraine’s conditions,” he added, urging Russia to “join normal countries that made the decision to restructure [Kiev’s debt].”

“As expected, only one country did not participate in the [restructuring] vote – there is an interesting country called the Russian Federation. And the $3 billion that Russia should restructure and partially write off, remains unresolved,” Ukraine’s PM concluded.

Russia has repeatedly said it’s not interested in restructuring Kiev’s debt and intends to invest the money in infrastructure projects in its own territory.

At the end of August, Ukraine signed a restructuring agreement with Western creditors to reduce the national debt burden by about $3.6 billion. Kiev agreed with a creditor committee led by Franklin Templeton (which owns about $7 billion of Ukrainian bonds) on a 20 percent write-down of some $18 billion worth of Eurobonds.

READ MORE: Fitch downgrades Kiev to restrictive default

The current IMF policy only allows member states to miss payments to private investors. However, Moscow insists that Kiev’s debt is a state one.

According to Russian Finance Minister Anton Siluanov, the IMF is ready to change the rules individually for Ukraine. Officially, the IMF’s decision is motivated by a general change in the rules of the organization’s funding, but “it is clear that this is done exclusively in order to freeze payments to Russia,” Siluanov said.

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Article source: https://www.rt.com/business/318730-ukraine-legal-battle-russia/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“Surely, we have faced the crisis, nevertheless some experts say – and I agree with them – that the peak of the crisis has been reached and the economy in general – I don’t say absolutely – adapted or is confidently adapting to these changing conditions. This means the first signs of stabilization..,” Putin said at the Russia Calling! investment forum on Tuesday.

The Russian government and the Central Bank showed consistency and the ability to achieve results in crisis conditions, according to Putin, adding that the government expects economic growth to resume in the coming years.  The country will overcome the depression in some sectors of the economy, with positive dynamics to be restored as well, he added.

According to Putin, Russia’s political course will be based on realistic and modest forecasts for hydrocarbons and energy, based on a price of $50 a barrel.

READ MORE: Russia expects $60 oil in 2016, but ready for $50 – Kremlin

“This will enable us to focus more on our primary long-standing objective which is easier to be achieved in the current circumstances than in the context of high prices for our traditional exports. This objective is – structural changes in our economy; and our actions will be based on achieving that,” said Putin.

Speaking about Ukraine’s debt to Russia, Putin said he asked the Minister of Finance Anton Siluanov to talk with the International Monetary Fund about an additional $3 billion loan to Ukraine, so it could repay Russia.

The Russian President stressed that the government has no plans for any capital controls in the country and “no plans on restrictions of capital movement.”

According to Putin, that was one of the factors for the recent growth in direct investments.

“The third quarter [of 2015 – Ed.] saw direct inflow of investment for the first time since the second quarter of 2010,” said Putin.

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Article source: https://www.rt.com/business/318547-russia-economy-crisis-peak/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“At OPEC, we are hopeful that the industry will see a more balanced oil market in 2016,” El-Badri said at a conference in Kuwait City on Sunday, adding: “We have recently seen a contraction in production from some non-OPEC producers and an uptick in demand growth.”

El-Badri said he expects global demand for oil to rise to 110 million barrels per day by 2040 from the current 93 million barrels per day, and that investors can be optimistic about the oil industry’s future in the coming months.

“We need to keep investing, it is essential for our industry,” said el-Badri. “I remain confident that our industry’s best days are yet to come.”

Qatar’s Energy Minister Mohammed Al Sada echoed the OPEC chief’s optimism, saying oil prices have bottomed out and there are signs of recovery in 2016. OPEC member Qatar is one of the largest oil producers in the world, with an output of 2.3 million barrels a day.

OPEC’s output in July hit a three-year high when the 12-member countries pumped 31.5 million barrels per day (bpd). The cartel’s chief then said  that oil prices will not drop lower, as demand was surging and production falling. He stressed that the cartel was not going to cut crude output.

Last month OPEC signaled of a possible change of stance. The cartel said it might cut output and stands ready to talk to other producers. But this is only possible with a change of policy by its largest producer Saudi Arabia.

READ MORE: Oil slumps into tailspin as OPEC leaves output unchanged

In June, despite falling prices, the cartel decided to keep the output quota unchanged at 30 million barrels, sending oil prices below $50 a barrel.

Brent futures for November were up 27 cents on Monday, trading at $52.92 per barrel. Price for West Texas Intermediate grew by 25 cents, $49.88 per barrel at 1:12pm GMT.

Article source: https://www.rt.com/business/318360-opec-oil-price-market/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“We are Russia’s number one natural gas consumer. Losing Turkey would be a serious loss for Russia. If necessary, Turkey can get its natural gas from many different places,” Erdogan was quoted as saying by Turkish daily Sabah.

“These are matters for Russia to think about. If the Russians don’t build the Akkuyu (nuclear plant) another will come and build it,” he added.

But life without Russian gas may be easier said than done.

In 2014, Turkey imported 27.3 billion cubic meters of gas from Gazprom, which amounts for nearly 60 percent of Turkey’s gas consumption. Turkey is Gazprom’s second biggest market after Germany. Russian gas is transported to Turkey via the Blue Stream pipeline which runs under the Black Sea and via the Trans-Balkan pipeline across Ukraine.

If Turkey decides to ditch Russian gas in its disagreement with Moscow over Syria, its supplier options become very limited. Ankara’s second biggest gas supplier is Iran, which also supports the Syrian president and Russia’s military operation. So, Turkey will likely have to turn to Azerbaijan, which supplies only 10 percent of Ankara’s needs. 

Nearly 75 percent of Turkey’s energy comes from abroad, while Russia accounts for one-fifth of Turkey’s energy consumption, making its number one energy supplier.  Russia is building the Akkuyu nuclear power plant. The project is costing about $20 billion, and will be the first nuclear power plant in the country.

“I think Erdogan made a political statement. It is populist, and should not be considered too seriously,” Volkan Ozdemir, director of the Institute for Energy Markets and Policy told RIA Novosti.

“The gas contract between Russia and Turkey is based on the ‘take or pay’ formula. This is why it is technically impossible for Turkey to fully abandon Russian gas supplies. Only an insignificant decline in supplies is possible. What is more, Russia has no right to significantly decrease or stop its gas deliveries to Turkey,” Ozdemir said.

Turkey said Russia invaded its airspace twice over the last week during its Syrian campaign. Moscow has said it would make corrections to the combat missions to avoid such incidents. NATO officials blasted Moscow for “unacceptable violations,” according to Secretary-General Jens Stoltenberg.

Turkish Prime Minister Ahmet Davutoglu earlier said the incident would not raise tensions between the two countries.

Article source: https://www.rt.com/business/318354-russia-turkey-gas-erdogan/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“Sanctions seriously affect the Russian economy… but I think they will be gradually lifted over the next three years as geopolitical conflicts cool… I have a positive outlook on the perspectives for investment in the Russian economy,” said Kudrin, speaking at the Moscow Stock Exchange Forum in New York.

“The risks are still high, but there are [foreign] companies that can work in such climate,” the former minister said.

“I am sure that now the situation in Ukraine will return to normal. We see serious progress associated with a reduction of the military component of the conflict,” Kudrin said. He added that efforts by the EU and Russia have gone some way to reduce the tension in Ukraine.

The forum kicked off on October 7 and was attended by about 400 representatives of global institutional investors and banks, experts in risk management and portfolio managers.

Despite the sanctions, it’s business as usual for Russian investment bankers working with US companies. “When it comes to business and doing it with US partners that you have known for ages, sanctions are set aside,” says Roman Lokhov of Russia’s BCS brokerage firm.

BCS recently bought Alforma Capital Markets, a New York-based company previously owned by Alfa Bank. The company is focused on serving institutional investors and hedge funds in the United States, and its activities are regulated by the Securities and Exchange Commission (SEC).

“Business is business. Well, of course, sanctions are a bad thing, but in terms of business conversation, I don’t see any difference. There are lots of people [in the US] we have known for 10 years. Russia is a big country with a big economy and potential for investors. Of course, they are interested in what’s going on. Basically, our conversations, the way we do business, remains the same,” said Lokhov.

“America is still the largest shareholder of Russian stocks. Then, America is the largest financial centre and we see a lot of institutions willing to access Russia. This is why they are expanding and must be present here,” he added.

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Article source: https://www.rt.com/business/318132-moscow-exchange-us-kudrin/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“The establishment of CIPS is an important milestone in yuan internationalization, providing the infrastructure that will connect global yuan users through one single system,” Helen Wong, greater China chief executive at HSBC, was cited as saying by the Financial Times.

CIPS will accept payments in cross-border trade, direct investments, financing and personal remittances. The system is open for operations 11 hours a day. The first CIPS transaction was completed by Standard Chartered Bank for Sweden’s IKEA.

Nineteen banks have been authorized to use CIPS; eight of them are Chinese subsidiaries of foreign banks, including Citi, Deutsche Bank, HSBC and ANZ.

READ MORE: ​China’s mega international payment system is ready, will launch this year – report

Prior to launching CIPS international, transfers in Chinese currency could be carried out mostly through offshore clearing banks in Hong Kong, Singapore or London. While the procedure was slow and costly, the new system is expected to significantly reduce the cost and time for money transfers.

China is also trying to reduce its reliance on the global transaction services organization SWIFT.

Beijing has been trying to bolster its currency’s presence internationally. The yuan was the fourth most-used currency for cross-border payments in August, with more than 100 countries using it for transactions.

The Chinese currency has overtaken the Japanese yen but is still well behind the US dollar, euro and the pound.  Rivaling the dollar in the global financial system has been Beijing’s ambition for the yuan since 2010. The country has already opened clearing hubs in London and Frankfurt.

China is pushing hard for the inclusion of the yuan in the International Monetary Fund (IMF) currency basket. While the IMF said the yuan still does not meet the criteria of a freely usable currency, the head of the organization Christine Lagarde said it’s “not a question of if, it’s a question of when.”

Article source: https://www.rt.com/business/318103-china-payment-system-yuan/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Horn said he knew about possible emissions non-compliance in the spring of 2014.

“…I was told that there was a possible emissions non-compliance that could be remedied,” he admitted.

“I was informed that EPA [Environmental Protection Agency – Ed.] regulations included various penalties for non-compliance with the emissions standards and that the agencies can conduct engineering tests which could include ‘defeat device’ testing or analysis. I was also informed that the company engineers would work with the agencies to resolve the issue,” the statement said.

Horn said that on September 3 Volkswagen disclosed details to US authorities about the defeat device in emissions software in diesel vehicles for the model years 2009 to 2015.

He apologized for the use of the software, saying “we have broken the trust of our customers, dealerships, and employees, as well as the public and regulators,” adding: “We have totally screwed up.”

The CEO added that the company took full responsibility for its actions and was cooperating with all relevant authorities.

Volkswagen has withdrawn the certification application for the company’s model year 2016 vehicles, according to the document.

Bosses in the US will give evidence to the House Energy Committee and Commerce Subcommittee in a public hearing on Thursday.

The world’s biggest auto manufacturer has been engulfed in the pollution scandal which has rocked the global car market. It started last month, after the EPA reported that VW vehicles contained emissions cheating software.

The device allowed VW vehicles to pollute 10 to 40 times over the legal limit.

READ MORE: German prosecutors investigate former VW boss

The carmaker has admitted selling 11 million cars worldwide which manipulated emission test results.

Criminal investigations have been opened by German, US and French authorities. This led to Volkswagen Chief Executive Officer Martin Winterkorn’s resignation and his replacement by former Porsche chief Matthias Mueller.

READ MORE: Germany warns auto makers of follow-up tests after VW scandal

On Wednesday, the company said it will start recalling cars equipped with the cheating devices in January and all the cars should be fixed by the end of 2016.

The manufacturer will also delay or cancel some non-essential projects to slash spending as fines linked to the emissions scandal could reach $18 billion in the US alone.

Article source: https://www.rt.com/business/318014-vw-head-aware-cheating/?utm_source=rss&utm_medium=rss&utm_campaign=RSS