Archives for March 2016

At least 35 people were killed in the latest terror attacks in Brussels just four months after 130 died in a series of coordinated attacks in Paris.

Paris Attacks cost Air France €50mn

Immediately after the Brussels bombings, hotel occupancy in Belgium plunged to 25 percent, down from 82 percent the night before, the Wall Street Journal cites STR, a company that tracks hotel industry data.

At the same time, hotel bookings in London fell to 59 percent and 67 percent in Paris.

Tourism in Europe has been struggling since last November’s Paris attacks that took the lives of 130 people.

The UN World Travel Organization in January predicted a 4.5 percent increase in tourists coming to Europe from abroad, down from the five percent surge last year. UK tour operator Thomas Cook said it is seeing five percent lower bookings than in 2015.

“The uncertain geopolitical environment is causing some customers to postpone booking their holidays,” CEO Peter Fankhauser told the WSJ.

The US State Department warned tourist about “potential risks” in going to Europe, saying that “terrorist groups continue to plan near-term attacks throughout Europe, targeting sporting events, tourist sites, restaurants and transportation.” This is the first such alert from the US since 2010.

A spokeswoman for the Russian tourism industry union Irina Tyurina said Russians are not cancelling booked tours, but are not booking new ones.

Russians are actively booking tours for May holidays, and the previously very quiet and secure Brussels is no longer attracting Russian tourists, as demand has fallen to zero, she said.

Article source: https://www.rt.com/business/337612-belgium-brussels-blasts-tourism/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

India may purchase Russia’s newest S-400 air defense systems – report

“The Federal Service has prepared a draft intergovernmental agreement on the supply of the S-400 systems to India and passed it to our partners, so we are awaiting a response,” said the FSMTC deputy director Vladimir Drozhzhov on the sidelines of the Defexpo India 2016 exhibition as cited by TASS.

India’s Defense Acquisition Council (DAC) approved the purchase of five regiments of S-400 air defense systems from Russia last December.

The cost of the deal was not disclosed. Local media suggest the cost of the air defense systems to India is about $6 billion.

If signed it will become the biggest defense deal between the two countries since 2001, when India agreed to buy 140 Sukhoi Su-30MK fighter jets.

Russia has pursued a policy not to sell its newest S-400s abroad before the rearmament and modernization of Russia’s own air defense forces is completed. India might become the second country to operate the S-400s if the deal is completed.

Last year Russia signed a deal with China for the delivery of S-400s for which Moscow received an advance payment. The deal involves no less than six S-400 systems worth of $3 billion, according to media reports. The deliveries under the contract could start in the first quarter of 2017.

The S-400 Triumph is Russia’s latest long-range anti-aircraft missile system, and is able to hit multiple-range air targets, including fighter jets, bombers, drones, ballistic and cruise missiles at ranges of about 400 kilometers. The S-400’s digital target acquisition system and radar allow detecting and hitting several different targets at once.

Article source: https://www.rt.com/business/337607-india-russian-s400-draft/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Saudi Arabia to move from oil, earn more from Hajj

According to the analysis, the kingdom lost ground in China, South Africa and the US between 2013 and 2015, despite the goal of maintaining its crude market share amid the oil glut.

“Saudi Arabia has had very difficult time selling oil in this environment,” Citigroup analyst Ed Morse told the FT. “Its rivals are going into a very crowded market in a very aggressive way.”

The country has also lost its market share in South Korea, Thailand, Taiwan and several western European countries, the FGE data showed.

Saudi Arabia’s share of Chinese oil imports fell from more than 19 percent in 2013 to almost 15 percent in 2015, because of increased supplies from Russia.

Over the past five years, Russian exports to China have more than doubled, increasing by 550,000 barrels a day. Russia surpassed Saudi Arabia as the biggest crude exporter to China in four months during 2015.

Russia steals Saudi’s crown as China’s top oil supplier

Data also showed that Saudi Arabia’s share of South African imports fell sharply during the three-year period, from almost 53 percent to 22 percent as Nigeria and Angola increased their shipments.

Saudi’s share of US imports also dropped from 17 percent to almost 14 percent between 2013 and 2015 due to the US shale oil boom.

READ MORE: Russia becomes China’s top crude supplier

The average market share loss across the 15 core countries slowed in 2015 compared to the previous year, according to FGE. However, Riyadh secured crude market share gains in Brazil, India and Japan last year.

The kingdom’s crude exports represented 8.1 percent of global oil demand (excluding its own needs) in 2015, compared to 7.9 percent in the previous year. The figure was 8.5 percent in 2013.

Article source: https://www.rt.com/business/337565-saudi-oil-market-loss/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

​Putin signs law on offshore assets amnesty

According to Rijock, many affluent Russians are evading income tax. Russia intends to hold the UK responsible as the scheme involving British overseas territories, the British Virgin Islands (BVI) and the Cayman Islands, he writes.

The extent of sanctions, and when they will be imposed upon the UK, is not known.

“Russia is blaming the United Kingdom for failing to terminate local legislation that allows companies with bearer shares to exist in the British Virgin Islands, and to allow non-UK nationals to form such entities.”

Russian nationals are purchasing BVI companies, he said, referring to individuals who are privy to the investigation. Using the total anonymity associated with a BVI company and its bearer shares, they then open corporate accounts in the Cayman Islands. As a result that cash is transferred and held by an entity whose ownership cannot be determined.

The British Virgin Islands is known as the world’s biggest provider of offshore companies. The territory’s prosperity almost entirely depends on offshore cash injections.

UK the new Caymans? Tiny Welsh town goes offshore

In his blog Rijock claims a financial services firm in Road Town, Tortola refers all “corporate” clients to offices in Grand Cayman. A bank account is further arranged through a local financial services provider.

“Hundreds of millions of dollars have been hidden from view in this manner, and Russian law enforcement, and regulatory agencies, cannot ascertain beneficial ownership, even when they have the name of the corporation,” said Rijock.

A former banking attorney, money launderer and advisor to drug traffickers, Ken Rijock now consults with law enforcement and the financial services industry. He is a global provider of highly structured risk intelligence for banks, institutional lenders, lawyers, accounting firms and other regulated financial services.

Rijock has assisted in fighting money launderers on a global scale after he had been arrested and served time in a US federal prison for racketeering and money laundering.

World-Check is a source of structured intelligence on heightened risk individuals and organizations.

Article source: https://www.rt.com/business/337452-russia-uk-sanctions-tax/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

​Putin signs law on offshore assets amnesty

According to Rijock, many affluent Russians are evading income tax. Russia intends to hold the UK responsible as the scheme involving British overseas territories, the British Virgin Islands (BVI) and the Cayman Islands, he writes.

The extent of sanctions, and when they will be imposed upon the UK, is not known.

“Russia is blaming the United Kingdom for failing to terminate local legislation that allows companies with bearer shares to exist in the British Virgin Islands, and to allow non-UK nationals to form such entities.”

Russian nationals are purchasing BVI companies, he said, referring to individuals who are privy to the investigation. Using the total anonymity associated with a BVI company and its bearer shares, they then open corporate accounts in the Cayman Islands. As a result that cash is transferred and held by an entity whose ownership cannot be determined.

The British Virgin Islands is known as the world’s biggest provider of offshore companies. The territory’s prosperity almost entirely depends on offshore cash injections.

UK the new Caymans? Tiny Welsh town goes offshore

In his blog Rijock claims a financial services firm in Road Town, Tortola refers all “corporate” clients to offices in Grand Cayman. A bank account is further arranged through a local financial services provider.

“Hundreds of millions of dollars have been hidden from view in this manner, and Russian law enforcement, and regulatory agencies, cannot ascertain beneficial ownership, even when they have the name of the corporation,” said Rijock.

A former banking attorney, money launderer and advisor to drug traffickers, Ken Rijock now consults with law enforcement and the financial services industry. He is a global provider of highly structured risk intelligence for banks, institutional lenders, lawyers, accounting firms and other regulated financial services.

Rijock has assisted in fighting money launderers on a global scale after he had been arrested and served time in a US federal prison for racketeering and money laundering.

World-Check is a source of structured intelligence on heightened risk individuals and organizations.

Article source: https://www.rt.com/business/337452-russia-uk-sanctions-tax/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The judges ruled a clause in the contract preventing major regulatory changes for a decade was unacceptable. The condition might give energy companies pricing and regulatory stability for ten years despite future changes in government. This could serve as a protection from regulatory changes in taxation, antitrust limitations and export quotas.

Israeli High Court overturns contentious natural gas deal: It turns out Netanyahu’s “I always get what I want” was premature.

— Na’ama Carmi (@ncarmi) March 27, 2016

“The stability clause in this chapter of the plan, in which the government undertakes for a decade to not only not legislate but to also fight any legislation against the plan’s provisions, was determined without authority – and as such is rejected,” wrote Deputy Supreme Court president Elyakim Rubinstein, adding that this was especially the case when the government seeks to limit the judgment of the next government, whose composition and ideology will be different than this one.

Prime Minister Benjamin Netanyahu called the ruling ‘mystifying’ and said the court’s decision seriously threatened the development of gas reserves of the State of Israel.

“Israel is seen as a state in which excessive judicial intervention makes it difficult to do business with. We will search for other ways to overcome the severe damage caused to the Israeli economy following this surprising ruling,” said the prime minister.

The debated agreement between US-based Noble Energy and Israeli partner Delek was signed by Netanyahu in December 2015. The deal aimed to allow the companies to start extracting gas from the massive Leviathan field off Israel’s coast. The offshore deposits reportedly contain nearly 623 billion cubic meters of gas.

Noble Energy and Delek have purchased a number of recently discovered gas fields and supply factories and the country’s electric company, owns Leviathan as well.

Noble Energy’s CEO David L. Stover criticized the court’s decision, saying that developing such a project with a huge investment made over a number of years requires Israel to provide a stable investment climate.

”The court’s ruling, while recognizing that timely natural gas development is a matter of strategic national interest for Israel, is disappointing and represents another risk to Leviathan timing,” said Stover.

Article source: https://www.rt.com/business/337449-israel-court-us-deal/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Saudi petrochemicals giant sees oil at $60 by year end

Short positions on US benchmark WTI crude, or in other words, bets that prices will go down, have fallen by 131,617 contracts, or 67 percent, since the beginning of February.

According to Bloomberg, over the past 10 years there have been only two other seven-week short-covering streaks: in September 2009 and in December 2012. In both cases, the liquidation of short positions was much slower and was accompanied by a rally in oil prices.

During the week ending March 22, market participants cut another 25,435 negative forecasts, bringing down the number of bearish contracts to 64,431, which is a nine-month low.

However, bets on oil prices going up haven’t seen a corresponding growth. During the same week, long positions increased by just 5,844 contracts, a fraction of the nosedive in bearish outlooks.

This has made investors think the oil prices are unlikely to rise further. “The rally has come from shorts getting scared out of their positions, and you’re not seeing a lot of money coming in on the long side. It really calls into question the fortitude and staying power of the rally,” John Kilduff, partner at Again Capital LLC, a New York hedge fund focused on energy told Bloomberg.

Iran’s oil ‘catch-22’

On Monday, crude prices were up with Brent at $40.6, WTI at $39.79 per barrel, which is still off the rally’s peak of $41.45 seen on March 22.

The oil market is now waiting for the world’s leading crude producers, headed by Russia and Saudi Arabia, to meet on April 17 in Qatar to discuss an output freeze.

According to OPEC Secretary General Abdalla Salem el-Badri, these talks may be successful even without Iran’s participation. Tehran wants to boost its production to the pre-sanctions level of four million barrels per day (bpd) from the current 2.8 million bpd.

However, Russia’s Lukoil Vice-President Leonid Fedun has been skeptical about Iran’s ability to significantly boost production, saying it can add only 300,000-400,000 barrels to the market without serious foreign investment.

Another OPEC member to skip the meeting is Libya. In the aftermath of the civil war, the country’s oil production is down by 75 percent. Tripoli now wants production to recover.

Article source: https://www.rt.com/business/337434-oil-prices-bearish-bet/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Chinese tourists spent $1 billion on holidays in Russia last year

Even with stock exchange turmoil and a slowing economy China overtook developed countries, including the United States both in cash spent on travelling and the number of trips. Last year the Chinese made 120 million trips overseas, the report says.

“A lot of this growth is stimulated by more and more people coming into the middle class,” said WTTC president David Scowsill.

Tourists from China prefer travelling around Asia when they leave the country for the first time. Europe and the United States are popular options as well as countries with easier visa policies, the study finds.

Popular destinations like Germany, Britain and Iceland have profited from the growing outbound trends in China. Australia and New Zealand remained attractive as well, according to WTTC.

Japan has benefited the most from the Chinese tourism boom thanks to the devaluation of the yen and a relaxed visa policy for visitors from China.

Older travelers prefer organized group tours while the young tend to go abroad on their own, according to the report.

However, in contrast to the huge increase in travelers going abroad, tourism into China had grown just three percent though still staying above the global average.

“Interest in inbound tourism into China will thrive if there is resolve on continuing visa facilitation into the country and focusing on strong destination promotion,” said Scowsill.

The Chinese economy is currently growing at its lowest rate in over three decades due to the slowing manufacturing sector and reduced demand for commodities. Despite the slowdown, Beijing reported an enviable growth of 6.9 percent last year.

Article source: https://www.rt.com/business/337413-chinese-tourists-global-spending/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“If [EU’s Ambassador to Russia – Ed.] Vygaudas Usackas believes that it is possible, I can only agree. Greece more than welcomes the construction of pipelines on its territory which will contribute to the diversification of gas supplies and energy security,” she said.

Europe lays out conditions for Russia’s South Stream return

According to the ambassador, Greece has actively supported the South Stream idea and also supports the new Poseidon project to deliver Russian gas under the Black Sea to Europe through third countries.

EU’s Ambassador to Russia Vygaudas Usackas has said the European Union is ready to resume talks with Russia over the South Stream pipeline to southern Europe, but the project should fully comply with the rules of the Third Energy Package.

EU’s Third Energy Package prohibits companies from both owning the gas and operating the pipeline.

Russia’s EU envoy Vladimir Chizhov has also hinted there is a possibility of renewing negotiations in the near future.

The European Union could resume talks with Russia on South Stream as European demand for Russian gas would increase in the long-term, he said.

Moscow cancelled South Stream in 2014 after the EU’s unwillingness to support the project. Construction of the onshore facilities for the pipeline was started by Russia’s Gazprom in 2012. Two years later the project was suspended by Bulgaria at the request of the European Commission, which accused South Stream of non-compliance with the EU’s Third Energy Package.

The pipeline was supposed to deliver Russian natural gas to southern Europe passing through Bulgaria, Serbia, Hungary, Slovenia, Italy and Austria. Branches would run to Croatia and Bosnia.

Article source: https://www.rt.com/business/337407-greece-russia-south-stream/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

According to the newspaper’s source, close to military exports and technical cooperation, potential customers are looking to buy the weapons proved in action. These are armaments in the inventory of Russian military or already bought by another country. 

“In Syria, we achieved two goals. On the one hand, we demonstrated the combat capabilities of our military technology and attracted the attention of customers. On the other hand we tested more than half of our fleet in combat conditions,” the source said.

Kommersant reports that after the campaign began, in December 2015 Algeria requested 12 Su-32 bombers (export version of the Su-34). According to the director of the Chkalov Novosibirsk Aircraft Plant Sergey Smirnov, the negotiations had been going on for eight years, but developed slowly.

However, the success of the bomber in Syria has given new impetus to the negotiations. The newspaper says the first order of the Su-32 will cost Algeria at least $500-600 million, and there is an option for another 6-12 aircraft.

In parallel with these negotiations, Algeria has requested a Su-35S for testing. The Algerian army is interested in purchasing at least ten of the fighters for $850-900 million.

Indonesia, Vietnam and Pakistan are also interested in the Su-35. The all have experience in operating Soviet aircraft but want to upgrade. The contracts with Indonesia and Vietnam may be worth as much as $1 billion each. The contract with Pakistan is complicated due to its relationship with India.

Egypt has already signed a contract on buying 46 Ka-52 helicopters. The Syrian campaign is likely to boost demand in the Middle East.

The appearance of the S-400 in Syria has sharply increased interest in this product from the Saudi Army, as well as intensified talks with India. It’s not known, whether Russia is interested in selling its latest generation anti-aircraft weapon, but, if sold, the contract may be worth $2-3 billion, depending on the number of launchers.

Article source: https://www.rt.com/business/337404-russian-arms-syria-campaign/?utm_source=rss&utm_medium=rss&utm_campaign=RSS