Archives for April 2017

Saudi Arabia pushes for solar energy project to create thousands of jobs

April 26, 2017 by NewsMaker Leave a Comment

Saudi Arabia to shelve infrastructure projects costing billions as cheap oil bites

According to the country’s Ministry of Energy and Natural Resources, bidders who want to build about 3.45 gigawatts of solar and wind plants over the next three years, will be required to spend 30 percent of the capital they invest using the domestic workforce and companies.

“We want to create value,” Saudi Arabia’s head of the renewable project development office Turki al-Shehri told Bloomberg in an interview. “We don’t just want to bring in companies that open up manufacturing facilities at a very high premium, which the consumer will end up paying. We want to ensure that whatever they are opening is competitive, that it can compete globally for exports.”

The country’s growing population and surging demand for electricity are among the primary reasons behind the solar program.

Riyadh wants to leave more oil for export, thus generating more government revenue, and at the same time diversifying the economy away from crude oil.

“We see it as complementing oil because renewables bring more than just a low-value fuel,” Al-Shehri said. “It fits perfectly into our demand profile, which is high demand, almost 50 percent higher than you see in the evening from air conditioning.”

Saudi king returns perks to state employees, fires ministers hires sons

According to the IEA, the country burns around 900,000 thousand barrels of oil per day just to run air conditioning and keep the lights on during peak demand in the summer months.

Saudi ministers are reportedly working on a second auction of power-purchase deals for renewable energy developers that would grant government-guaranteed contracts for up to 25 years.

The ministry offers land and grid connection to the projects, and developers are required only to build the power plants.

As part of the “Vision 2030” plan aimed to diversify the Saudi economy away from fossil fuels, the government is spurring local industry to build products for export. The program also includes creating banks, a tourism industry, and manufacturing from the proceeds of energy.

Article source: https://www.rt.com/business/386193-saudi-arabia-solar-jobs/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Filed Under: Global Business

China offers contested South China Sea oil and gas blocks

April 26, 2017 by NewsMaker Leave a Comment

China overtakes US to become world’s top crude importer

It has already struck one deal, with Canada’s Husky Energy, which will drill two exploration wells in block 16/25 next year.

Some might consider Husky exceptionally brave given the circumstances. A lot of the South China Sea is the object of disputes between China and its neighbors, with a court in The Hague last year ruling against China’s claims and in favor of the Philippines—one of the neighbors opposing China’s expansion in the basin. China however, has not acknowledged the ruling, which has heightened tensions in the area.

The South China Sea may hold 28 billion barrels of oil, according to an estimate from the US Geological Survey from the mid-90s. Since then, with technology improvements, this figure could have increased substantially.

Of course, low oil prices or no low oil prices, everyone wants a piece of the oil pie, and China wants the biggest one. The question is: will foreign oil companies help China take it?

OPEC struggling to hold on to Asian market share

Some observers note a string of challenges for CNOOC in this endeavor. First, there is the simple problem with regional hostility: if a company chooses to work with China, it may be shown the door in Vietnam or Taiwan, as some of the territory covered by the blocks, which span 47,270 sq km, is disputed by the two countries.

Second, there is the uncertainty of oil and gas ownership if exploration leads to any significant discoveries. Companies willing to team up with CNOOC on the exploration of these 22 blocks, some authors argue, will effectively be taking China’s side in the territorial dispute, potentially straining a corporation’s reputation.

Third, there is the much more practical problem of the cost of exploration. According to one Chinese academic from Renmin University, exploration in the South China Sea involves high risks and high technical requirements, which only the bigger oil and gas players can afford.

On the other hand, a map of the blocks put up for sale shows that most of these are near China’s coastline, which means they are out of the sensitive parts of the sea. A total 16 of the 22 blocks are located in the Pearl River Mouth Basin, near the coast, energy analyst Han Xiaoping notes.

Oil recovers from month low, but market optimism fading away

This could potentially increase the confidence of foreign explorers as far as the possibility of a dispute over any oil and gas discovered goes. The other problems, however, will remain. It is a tough choice to make: China is by far the biggest market around the South China Sea, so working with the Chinese could ensure some sustainable returns. But with no fresh surveys and reserve estimate updates, the risk of failing to find viable resources is indeed high.

The CNOOC tender closes this September, so oil companies have another five months to make a decision. Keeping an eye on developments in the South China Sea is certainly advisable, but with a more pressing matter in the region, namely North Korea’s insistence on developing and testing new missiles, international focus has shifted temporarily.

China is in a position to bargain for recognition of its claims in the South China Sea now – it is indeed “the economic lifeline” of North Korea, as President Trump called it recently, and it will need a major incentive to cut it. Whether the U.S. is ready to offer such an incentive is a whole other matter, however, just as uncertain is whether China will actually ask for it. Yet, it is a possibility worth considering.

This article was originally published on Oilprice.com

Article source: https://www.rt.com/business/386162-south-china-oil-gas/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Filed Under: Global Business

Brussels toughens Brexit position on financial services & citizens

April 25, 2017 by NewsMaker Leave a Comment

Cashing out? Banks to reveal post-Brexit plans

The changes have been reportedly agreed unanimously among the EU’s 27 remaining states at a meeting in Brussels. The document will be reviewed by ministers on Thursday and is expected to be signed off at Saturday’s EU27 summit.

“The 27 will not necessarily consider financial services in a free trade agreement, as Theresa May has expected,” an unnamed diplomat told Reuters after the meeting.

Britain’s Prime Minister Theresa May, who will open negotiations with the EU in June, said banking and other financial services were among her priorities for a future trade deal with the bloc after Brexit.

However, the EU is now insisting the City of London will only be allowed access to the single market in the future if it signs up to the EU’s regulatory and supervisory standards.

With the UK leaving the EU’s single market after Brexit its financial services companies will lose their “passporting” rights that enable them to do business in the bloc.

Labour pledges to keep borders open for EU citizens in UK to avoid ‘hard Brexit’ (VIDEO)

“Equivalence is not a right” for all non-EU countries, European Commission Vice President Valdis Dombrovskis told a conference in Belgium. “And it is not a blank check whereby the EU would give up control over key systemic risks to its financial stability.”

Among other amendments to the draft were the EU’s demand for Britain to pay a share of financial commitments made on the bloc’s seven-year budget until the end of 2020.

The EU wants about €60 billion ($65 billion) on Britain’s departure, some of it to be paid for years after Brexit.

Brussels said it will not open talks on a future relationship with Britain until it agrees to all terms in its “divorce” settlement during the two-year negotiating window.

Prime Minister May said earlier that “no deal is better than a bad one,” indicating she is prepared to walk away from the negotiations altogether if necessary.

Article source: https://www.rt.com/business/386095-eu-hardens-brexit-position/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

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Gazprom CEO sees Russian dominance of European gas market

April 25, 2017 by NewsMaker Leave a Comment

EU gives up blocking Russia’s Nord Stream-2 pipeline – report

“Today, in 2017, we are beating our 2016 record highs by around 10 percent. So we can expect a new record this year, and Gazprom’s European market share is poised to rise,” said Miller in an interview with Reuters.

Gazprom sold 179 billion cubic meters (bcm) of natural gas to Europe last year thanks to lower prices and cold weather on the continent.

According to Miller, the market share of Russian gas in Europe will continue to grow at least until 2035, as the continent’s output falls. The EU will need an additional 100 bcm of gas in the next 18 years, and Gazprom is ready to supply the bulk.

“A decrease in North Sea gas production, as well as in other EU countries, is becoming a very important factor… Given that, Russia’s market share will be rising,” said Miller.

On Monday, Gazprom partners Engie, OMV, Royal Dutch Shell, Uniper and Wintershall agreed to finance half of the €9.5 billion Nord Stream-2 project. The pipeline will double Nord Stream’s existing capacity, which delivers natural gas to Germany under the Baltic Sea bypassing Ukraine.

A contract on gas transit between Russia and Ukraine expires in 2019 and has not been renewed. According to Miller, when Nord Stream-2 is ready, deliveries through Ukraine will be reduced, but will not stop completely.

German energy giant calls for anti-Russian sanctions relief

“We are ready for talks… However, we can only talk about much smaller volumes, possibly around 15 bcm a year for countries which border Ukraine,” he said.

Ukraine has the capacity to deliver 120 bcm of Russian gas, but the volume has significantly fallen to 50-80 bcm as Gazprom builds new pipelines. At 15 bcm, it will be a fraction of what Ukraine previously transported.

“If you look from space, you can draw a direct line via the Baltic between new centers of production and Germany’s Greifswald. This route is 2,000 km (1,250 miles) shorter than the route via Ukraine,” Miller said.

While Gazprom’s share in Europe has grown to one-third over the last two decades, Miller rejects the argument the EU is overly dependent on Russian gas.

“I don’t think it is fair to talk about dependence. Our dependence is mutual: when we invest in developing fields and building pipelines, Gazprom relies on future demand and de facto depends on the European market as much as Europe depends on Russian gas,” said the Gazprom CEO.

Article source: https://www.rt.com/business/386081-russia-gazprom-miller-europe/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Filed Under: Global Business

Iran to finalize gas development deal with Total

April 25, 2017 by NewsMaker Leave a Comment
Total is waiting to see “positive” developments in the US concerning sanctions, according to Iran’s Deputy Oil Minister for International Affairs and Trade Amir Hossein Zamaninia.

Monster oil gas deposits discovered in Iran – local media reports

“Those developments are taking place, and Total will continue negotiating with Iran toward a final agreement over the project. This will depend on how prepared Iran would be and how long it would take to write the text of the deal. I don’t think it would take longer than a month,” he said as quoted by Iran’s ISNA news agency.

A preliminary agreement on developing the South Pars gas field’s Phase 11 was signed last November. Total along with China’s CNPC and Iran’s Petropars plan to invest $4.8 billion into the project.

Earlier this year, Iran’s Deputy Oil Minister Ali Kardor announced that Total had started planning the construction of the first pillar of the platform at South Pars.

Total may become the first big Western corporation to start investing in Iran’s oil and gas sector since the international sanctions on Tehran were lifted at the beginning of 2016.

The French firm is leading a consortium that aims to develop the field, which will reportedly have a production capacity of 1.8 billion cubic feet per day or 370,000 barrels of oil equivalent per day. Total’s has a 50.1 percent interest in the enterprise, according to the company.

READ MORE: Russian steel pipe maker bidding to supply Iran’s energy industry

Total had been waiting for an extension to a waiver on US sanctions against Iran before making the final decision on the investment worth $2.2 billion.

Last week, the White House confirmed that the Islamic Republic had so far complied with the agreed nuclear deal.

The 2015 agreement between Iran and six major powers lifted the decades-long sanctions. Since then, the country has been ramping up crude production to restore much of its lost market share. However, after years of economic isolation and underinvestment, Iran’s aging oil and gas infrastructure needs to get upgraded and redeveloped.

Article source: https://www.rt.com/business/386069-total-iran-gas-deal-coming/?utm_source=rss&utm_medium=rss&utm_campaign=RSS
Filed Under: Global Business

Saudi king returns perks to state employees, fires ministers & hires sons

April 24, 2017 by NewsMaker Leave a Comment
Saudi king’s son who ‘bombed ISIS Yemen’ named as ambassador to US

King Salman removed his civil service minister Khaled al-Araj, information minister Adel al-Turaifi, and technology minister Mohammed al-Suwaiyel. He also set up a committee to investigate allegations of abuse by the civil service minister.

Shortly after the announcement the Saudi share index TASI rose by one percent, on the back of expectations higher disposable incomes will give a boost to consumer sectors such as retailing and food.

Last year, Saudi Arabia introduced 20 percent cuts in ministers’ salaries and axed bonuses for public sector employees as a part of a strategy aimed at saving money in an era of low crude prices.

The measure has repeatedly been criticized due to its impact on ordinary Saudis. Internet users launched the Twitter hashtag ‘April 21 movement,’ demanding the reinstatement of allowances, a ban on the sale of state oil company shares, a constitutional monarchy and the restoration of the powers of the religious police.

READ MORE: Saudi Arabia to shelve infrastructure projects costing billions as cheap oil bites

The decree on bringing the benefits back followed a budgetary report that had demonstrated a better than expected performance in the first quarter of 2017.

“The government has conducted a review of the measures initiated in the fall in relation to the public sector employees’ allowances. A number of fiscal adjustment measures were taken over the last two years which led to a strong improvement in the government’s fiscal position,” said Minister of State Mohammed Alsheikh as quoted by Reuters.

He added that the move might boost the positive sentiment as domestic demand recovers on the back of enhanced government employees’ disposable income.

The central bank regulator requires banks maintain the current favorable terms of consumer and property loans to aid Saudis affected by the cuts.

READ MORE: Saudi Arabia eases Aramco’s tax burden ahead of historic IPO

Additionally, two of the King’s sons were appointed to key state posts. Prince Khaled bin Salman was made ambassador to Washington, while his brother Prince Abdulaziz bin Salman became state minister for energy affairs.

Article source: https://www.rt.com/business/385945-saudi-fires-ministers-pay-cuts/?utm_source=rss&utm_medium=rss&utm_campaign=RSS
Filed Under: Global Business

Euro, stocks surge on French election results

April 24, 2017 by NewsMaker Leave a Comment
The euro was up about one percent at $1.0856 at 9:10am GMT after peaking earlier at the highest level against the US dollar since mid-November.

‘Hope of EU’? European elites flock to praise Macron, some call for Le Pen’s defeat

At the same time, investor demand to hold French bonds over German debt tightened sharply to below 50 basis points for the first time since late January.

According to Sunday’s poll, Emmanuel Macron topped the voting, moving to the final round with Marine Le Pen.

Traders had expressed worries about a possible victory of far-left candidate Jean-Luc Mélenchon over Macron, which could have given French voters a choice of two Euroskeptic candidates.

“Markets are fully pricing in a Macron victory. Macron is pro-euro, pro-business,” said Jordan Rochester, a foreign exchange strategist at Nomura, as quoted by FT.

Macron’s preliminary lead in the presidential race mitigates the risk of an anti-establishment shock amid the UK’s decision to leave the European Union as the candidate pledges to keep France in the bloc.

“Macron will be reassuring to markets, with his pledge to lower corporate taxes and to lighten the administrative burden on firms. He basically represents continuity,” BBC cites Octavio Marenzi, chief executive of the financial research consultancy Opimas in Paris as saying.

Macron currently enjoys 62 percent support, while his rival Marin Le Pen has 38 percent, according to a snap poll from Ipsos on Sunday.

READ MORE: French election 2017: Macron and Le Pen advance to presidential run off

“That’s what the FX market is going to trade off in the days ahead and indeed is already doing. The euro is on its way up, and risk assets and currencies are heaving a sigh of relief,” noted analysts at Société Générale, as cited by FT.

Hints on improving the economy boosted some speculation that the European Central Bank may signal the end of its bond-buying scheme, encouraging investors to shift to European shares.

“This outcome is likely to drive ‘risk-on’ in financial markets with European equities higher,” Jonathan Stubbs, an analyst at Citigroup told the FT.

Article source: https://www.rt.com/business/385923-euro-markets-surge-france-elections/?utm_source=rss&utm_medium=rss&utm_campaign=RSS
Filed Under: Global Business

Alibaba’s Jack Ma predicts decades of ‘pain’ ahead

April 24, 2017 by NewsMaker Leave a Comment
“In the next 30 years, the world’s pain will be much greater than its happiness,” Ma said at an entrepreneurial conference in Zhengzhou, China. “Social conflicts over the next 30 years will hugely impact every industry.”

According to Ma, the world must radically change the way people are taught and establish how to work with robots to help soften the blow caused by automation and the internet economy.

“Machines should only do what humans cannot,” Ma said, adding “only in this way can we have the opportunities to keep machines as working partners with humans, rather than as replacements.”

The founder of the e-trading platform Alibaba said he had tried to warn people in the early days of e-commerce it would disrupt traditional retailers but few listened. This time he wants to caution against the impact of new technologies, so no one will be surprised.

READ MORE: Jack Ma makes massive investment in mobile gaming distribution

“Fifteen years ago I gave speeches 200 or 300 times reminding everyone the internet will impact all industries, but people didn’t listen because I was nobody,” he said.

Cloud computing and artificial intelligence are essential for business, according to Ma, who has called for traditional industries to stop complaining about the internet’s effects on the economy. He said Alibaba’s central online marketplace Taobao has already created millions of jobs.

A former English teacher, Jack Ma set up Alibaba in 1999. It is now the world’s biggest e-commerce platform with a market capitalization of $246.12 billion.

The company has recently announced steps to diversify the business, expanding into the digital area. It plans to invest a billion yuan ($145 million) into mobile game distribution.

Last year, Ma revealed an ambitious plan to create 100 million jobs in the next two decades.

Article source: https://www.rt.com/business/385913-jack-ma-world-pain/?utm_source=rss&utm_medium=rss&utm_campaign=RSS
Filed Under: Global Business

Another Persian Gulf oil producer considers public offering

April 21, 2017 by NewsMaker Leave a Comment
The oil and gas producer is reportedly seeking advice from banks on offering its shares to the public.

Saudis 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
Filed Under: Global Business

Oil companies exploiting famine and financial ruin in South Sudan

April 21, 2017 by NewsMaker Leave a Comment
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”).

Hundreds 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.

Mafia, 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
Filed Under: Global Business

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