Archives for July 2016

Russia to provide $5bn state loan to Iran – Putin

The sides signed a contract for the construction of a power station in Iran’s Hormozgan province. The power plant’s four generators will have a 1,400 megawatt capacity. Moscow has already approved a €2.2 billion loan for infrastructure projects in the Iran, including the construction of the power station.

During the meeting with Russian Energy Minister Aleksandr Novak, Vaezi said Tehran plans new energy contracts with Russia in the near future. According to him, in two or three months Iran will reach its pre-sanctions oil output level of four million barrels a day. Vaezi added that the country has already regained 80 percent of the market share it held before the US and EU imposed sanctions on its oil industry in 2012.

Novak told the minister that almost all Russian oil and gas companies have shown an interest in energy exploration and production projects in Iran.

Gazprom is interested in developing Iranian gas supply and production, said the energy minister.

Russia’s Lukoil wants to resume cooperation in the Anaran oil project which it had to abandon in 2010 due to Western sanctions against Iran.

READ MORE: Russia may supply components for Iranian satellites

Following the meeting, the Russian energy minister said a road map will be signed for the two countries’ industrial projects. “The road map is currently at the final stage. It contains more than 70 projects between Russia and Iran.”

Novak also said that by the end of the year there may be a decision on a free trade zone. Relations between Russia and Iran “have reached a new unprecedented level,” according to Novak. Trade has risen 70 percent since 2015 and cooperation between Russian and Iranian entrepreneurs is on the rise, he added.

Moscow and Tehran have also agreed to continue cooperation in the banking sector, with the central banks meeting in August.

Article source: https://www.rt.com/business/353919-russia-iran-deals-cooperation/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The two firms’ cooperation may have a powerful effect on balancing the global oil market, according to Rosneft CEO Igor Sechin.

READ MORE: Russia to increase oil exports to China

They have also discussed possible cooperation to develop Venezuela’s electricity generation. These include building power plants running on petroleum, gas, coal and hydroelectricity.

“This will replace the existing power plants running on diesel fuel and direct the released volume of oil products to the market,” a Rosneft statement said.

Rosneft is currently working on five offshore drilling projects jointly with PDVSA.

The companies have agreed to start reciprocal deliveries of oil and petroleum products this year. A deal to establish a joint enterprise supplying natural gas was reached as well.

READ MORE: Rosneft begins its first intl offshore drilling project in Vietnam

“This will allow Rosneft to boost its presence in the global oil and oil product market,” the company said, adding that the new agreements will provide PDVSA with extra international outlets to sell its hydrocarbons.

The heads of the corporations have signed an agreement allowing Venezuelans to attend Russian universities.

All the contracts are worth $20 billion to the Venezuelan economy, according to the Venezuelan Oil Minister and president of PDVSA, Eulogio del Pino.

READ MORE: IMF predicts 700% inflation, 10% GDP contraction in Venezuela this year

Venezuela is looking for foreign investment to meet its ambitious oil production goals and curb its dire economic crisis. The country’s economy continues to deteriorate with consumer prices surging 700 percent and GDP set to decline by 10 percent this year, according to the International Monetary Fund.

Article source: https://www.rt.com/business/353916-rosneft-venezuela-energy-cooperation/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The criticism comes from the Fund’s own watchdog, the Independent Evaluation Office (IEO).

The IEO, which answers solely to the board of executive directors, accuses the IMF of misleading the board.

IMF chief Lagarde to stand trial in €400mn payout case – court

The report looked into how the IMF handled the eurozone crisis, which kicked-off with the May 2010 bailout of Greece, and subsequently spread to Ireland, Portugal and Cyprus.

The IEO found the “IMF’s pre-crisis surveillance identified the right issues but did not foresee the magnitude of the risks that would later become paramount.”

The watchdog blamed the Fund for its “overly optimistic growth projections,” especially in relation to Greece, and the inability to learn lessons from past mistakes.

In Greece, the IMF violated its own rules by giving Athens a bailout that couldn’t guarantee the financial aid would bring the country’s debt under control, or help the economy recover.

The Fund’s Chief Christine Lagarde has partly admitted the accuracy of the allegations concerning IMF policy towards Greece.

“Greece, however, was unique: while initial economic targets proved overly ambitious, the program was beset by recurrent political crises, pushback from vested interests, and severe implementation problems that led to a much deeper than expected output contraction,” she said.

“On the other hand, Greece undertook enormous adjustment with unprecedented assistance from its international partners. This enabled Greece to remain a member of the euro area – a key goal for Greece and the euro area members,” Lagarde added.

There has been growing discontent in Latin America and Asia about the way the IMF used funds to save rich EU nations.

World Bank, IMF cling to past, resist change of global power balance – BRICS bank chief

According to the findings, the IMF judgment in solving the situation in Greece, Ireland, Portugal and Cyprus has “raised issues of accountability and transparency, which helped create the perception that the IMF treated Europe differently.”

The IMF was also criticized for making politically motivated decisions in solving the financial crises.

“The credibility of the IMF comes from the technical competence and independence of its staff and the Managing Director must ensure that its technical work is protected from political influence,” the report said.

Lagarde dismissed the IEO’s call for building up the Fund’s defense against political interference.

“I support the principle that the IMF’s technical analysis should remain independent. However, I do not accept the premise of the recommendation, which the IEO failed to establish in its report, and thus do not see the need to develop new procedures,” she said. 

The report is seen as an embarrassment to Lagarde, who is currently facing trial in France for alleged negligence over a fraudulent €405 million payout during her term as the country’s finance minister in 2008.

Article source: https://www.rt.com/business/353914-imf-eu-euro-greece/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Kiev refuses to pay Russian debt because it was ‘forced to take the money’

Earlier this week, Ukraine’s Finance Minister Oleksandr Danilyuk said the country didn’t intend to repay the $3 billion debt to Russia, calling it “a political credit”. The Kremlin insists the debt is sovereign.

READ MORE: Kiev imposes indefinite freeze on foreign debt repayment

Under international law freezing the assets of a debtor is a common measure. “Freezing the assets means the money stops working, in this case, it may become a measure of pressure,” said lawyer Osip Visotsky as quoted by Izvestia.

“If Russia gets down and dirty on the issue, the Ukrainian authorities will have to react. Ukraine shouldn’t hope the problem will simply go away,” Russian State Duma Deputy Leonid Slutsky told Izvestia. He stressed that Ukraine had better repay its sovereign debt.

Earlier this year, Russia filed a lawsuit against Ukraine in the High Court in London to recover the loan Kiev failed to pay back in December.

READ MORE: Moscow sues Kiev in London over $3bn debt

In May, Ukraine’s President Petro Poroshenko approved a bill extending the moratorium on paying off the country’s external debt, including the $3 billion Eurobond owed to Russia.

Ukraine’s debt to Moscow, recognized by the IMF as official and sovereign, is the result of the agreement signed in 2013 between President Vladimir Putin and former Ukrainian President Viktor Yanukovich. Russia agreed to lend Ukraine a $15 billion loan via the Ukrainian Eurobonds purchase. The first tranche of $3 billion was provided by Russia and was to be repaid by December 20, 2015.

READ MORE: IMF recognizes Ukraine’s contested $3bn debt to Russia as sovereign

Moscow had already suggested a debt-relief plan under which Ukraine could repay its arrears in three installments of $1 billion over the next three years. Russia wanted guarantees from the US, the EU or the International Monetary Fund on future payments of the Ukrainian sovereign debt. The deal, however, fell through, as Ukraine’s Western backers were unwilling to provide the guarantees.

Article source: https://www.rt.com/business/353884-russia-freeze-ukraine-assets/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Iran to buy Russian aerospace equipment and planes worth $21bln – report

“Iran shows a great interest in the experience of the Russian space program, including in the area of communication… The Russian satellites’ constructors have a very good chance of getting orders and contracts for Iranian projects,” Nikiforov told Rossiya 24 news channel, adding that negotiations are underway.

Vaezi is on an official visit and plans to meet Roscosmos officials, Russian Industry and Trade Minister Denis Manturov as well as Russian Energy Minister Aleksandr Novak.

Iranian Vice President Sorena Sattari has already said Tehran will buy satellite equipment and Sukhoi Superjet 100 (SSJ-100) airliners from Russia for $21 billion. Tehran is interested in using Russian rockets to launch satellites into orbit, he added.

The Russian rocket and space corporation Energia is currently developing components for Egypt’s Egyptsat-A satellite. Energia designed and manufactured EgyptSat-2 which was successfully launched from the Baikonur space center in 2014.

Last year, the subsidiary of the Russian Space Center and French satellite provider Eutelsat signed a long-term launch contract. In terms of the deal, several Proton-M carrier rocket launches with Eutelsat satellites will be carried out between 2016-2023 from the Baikonur Cosmodrome. The first launch is expected to carry the Eutelsat 9B satellite into orbit. The high-power broadcast satellite is designed to provide digital television and data services for Scandinavia and the Baltic countries.

Over the past 15 years, Russian Proton rockets have launched 11 Eutelsat satellites into space.

Article source: https://www.rt.com/business/353876-roscosmos-components-iranian-satellites/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Marissa Mayer to expect $55m golden parachute from Yahoo

Besides the original golden parachute of $55 million from Yahoo if Mayer’s contract is severed, the CEO may also profit from selling company stock. This would more than double her walk-away package to more than $122 million, according to Fortune.

The magazine calculates Mayer will get $42 million in stock options and $25 million from selling 650,290 shares of restricted stock.

Mayer is also entitled to receive her salary, which was $1 million in 2015, for two years after she leaves the company. Yahoo is also obliged to pay $26,324 per year for her health insurance and $15,000 for 24 months to help her get a new job.

“I think the bottom line is look at what [Mayer] is ending up with: She did quite well even if shareholders didn’t,” said compensation consultant Brian Foley, who helped Fortune with the figures.

Marissa Mayer joined Yahoo as chief executive in 2012 from rival Google. Mayer had been unsuccessful in trying to revive the company’s core media and online advertising business. She was criticized for spending funds on projects that failed to produce any substantial revenue.

At the height of the dot-com boom the Silicon Valley web pioneer had a market capitalization of $128 billion. Today, Yahoo’s market cap is $36.36 billion.

On Monday, Verizon announced the acquisition of Yahoo for $4.83 billion. The deal has doubled Verizon’s digital advertising business, and the buyer got Yahoo’s search, mail, and content businesses. Yahoo will be merged with Verizon’s AOL unit.

Yahoo is keeping its 15 percent stake in Chinese e-commerce company Alibaba and Yahoo Japan, which have a combined value of $40 billion. The company tried to sell its stake in the Chinese e-commerce giant, but has abandoned the idea.

According to the original reports, Mayer’s compensation was supposed to be $54.9 million. Mayer said she doesn’t want to leave, saying “It’s important to me to see Yahoo into its next chapter.”

Article source: https://www.rt.com/business/353871-marissa-mayer-golden-parachute-yahoo/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The French state-owned energy company EDF is holding a board meeting to decide whether to give the green light to the major nuclear power plant project in southwest England. It would generate seven percent of Britain’s power providing electricity for about six million homes.  

The Hinkley Point (HPC) nuclear power plant is expected to have an estimated lifetime of 60 years and is scheduled to begin generating in 2025, several years later than planned.

EDF is financing most of the project’s cost, while Chinese investors are expected to take a 33.5 percent stake. The main reason for the delay has been worries over funds, with French trade unions warning the massive investment could ruin EDF’s finances.

“HPC is a unique asset for French industry as it would benefit the whole of the nuclear industry and support employment in major companies and smaller enterprises in the sector,” said EDF.

UK unions said they would warmly welcome a positive decision on the project which would provide 25,000 jobs.

“We urge the EDF board to give the financial go-ahead on a project which will generate thousands of decent skilled jobs and help meet the energy needs of the UK for generations to come,” said Kevin Coyne, Unite union’s national officer for energy.

Environmental groups such as Greenpeace have called for investment in renewable energy instead. They criticized the government’s promise to pay EDF £92.50 for each megawatt hour of energy it generates. Activists also raise concerns the plant is being built by foreign governments at a time when some countries, like Germany, are moving away from nuclear energy.

READ MORE: UK could generate almost all power from renewables by 2030 – Greenpeace

“The UK government doesn’t have to sign the contract with the French and Chinese state-owned nuclear companies,” said John Sauven, the executive director of Greenpeace.

“We need to invest in reliable homegrown renewable energy like offshore wind which is powering other northern European countries more cheaply than Hinkley, even taking into account the back-up cost when the wind doesn’t blow,” he added.

READ MORE: Radioactive honey found near nuclear power station

Greenpeace said the UK does not have to be dependent on nuclear power and fossil fuels, while by 2030 the country could produce more than 80 percent of its electricity from wind, solar and tidal power.

Article source: https://www.rt.com/business/353726-first-nuclear-plant-uk/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Ukraine extends ban on Russian imports through 2017

Kiev urged WTO members to pay attention to the negative impact of regional trade restrictions on the whole of global trade, according to Ukraine’s Trade Ministry.

“Once again Ukraine called on the Russian Federation to suspend groundless transit restrictions and resume equal-opportunity free flow of goods for all the WTO members,” the ministry said.

Earlier this month, the Kremlin extended restrictions on Ukrainian goods transported through Russia to Kazakhstan to cover neighboring Kyrgyzstan. Ukraine responded with the similar measures despite Brussels urging not to take retaliatory action.

Currently, Ukraine is obliged to transport goods to Belarus in sealed containers with the freight equipped with the GLONASS navigation system installed when it crosses Russia’s border. The tracking system is to be removed as soon as the cargo leaves Russian territory.

READ MORE: Brussels urges Russia to lift Ukrainian transit restrictions

Russia suspended the free trade treaty with Ukraine in January after Kiev signed the EU association agreement. The Kremlin was concerned Ukraine’s move to open its borders to Europe compromises Russian interests and economic security, enabling the Ukraine to illegally supply embargoed European goods to Russia.

Two years ago, Russia introduced a food embargo against countries that supported anti-Russian sanctions over the conflict in Ukraine. The EU, the US, Canada, Norway and Australia, Albania, Montenegro, Iceland, and Liechtenstein are included in Moscow’s sanction list.

READ MORE: Trade war with Moscow reveals another unpleasant surprise for Kiev

The ban, which includes meat, fish and milk products, as well as fruit and vegetables, has been extended through 2017.

Article source: https://www.rt.com/business/353721-ukraine-russia-ban-transit/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Russian firm may save Boeing’s iconic Jumbo Jet

“If we are unable to obtain sufficient orders… it is reasonably possible that we could decide to end production of the 747,” Boeing stated in regulatory filing on Wednesday.

The manufacturer reported its first quarterly loss in nearly seven years, from a total of $3 billion in charges, including for the 747 jet. Other charges came from delays to Boeing’s advanced 787 Dreamliner and its new aerial-refueling tanker.

According to the filing, Boeing has “a number of completed aircraft” that are unsold, and production positions the company has been unable to sell so far.

At the end of June, Boeing had 32 undelivered 747s on its book, “including 20 that have not been sold.”

The company has canceled plans to increase production of the 747 to one plane per month from 2019. It now plans to make just six of the planes a year, starting in September. Two are expected to serve the US president beginning in 2023.

Boeing said demand has weakened for 747 freighters and passenger planes. Freighter orders have seen a sharp slowdown since the 2008 global financial crisis, while more goods are traveling by sea or in the bellies of passenger aircraft. In terms of passenger carrying, demand for the 747 aircraft- nicknamed ‘Jumbo Jet’ and ‘Queen of the Skies’- has also waned as airlines turn to smaller twin-engine jets.

Demand for four-engine, high-capacity jets was waning even before rival Airbus rolled out its super-jumbo A380 in 2007, according to vice president of analysis at Teal Group, Richard Aboulafia.

“The era of the large quad jet was clearly fading when it [Airbus- A380 – Ed.] was launched,” he told daily kansas.com, adding airlines no longer need a lot of planes that seat 500 or more people, and certainly not ones that use four engines.

READ MORE: Russian-Chinese passenger jet to take on Boeing Airbus

Boeing has delivered more than 1,500 of its four-engine 747 jets since the aircraft was introduced in 1970. The latest version of the 747 is capable of traveling the length of three football fields in a second, and is used by Cathay Pacific, Lufthansa, Air China, and other airlines.