The slow death of Big Oil | Financial Times:
Oil and gas companies used to measure their success by how good they were at finding new reserves. The unforgiving rule by which they were judged was the “reserve replacement ratio”, a metric of how successful a company was at replacing the oil and gas it extracted with new supplies. Today, that view is being turned upside down. Bernard Looney, chief executive of BP, believes the future lies in producing less hydrocarbons, not more. He wants BP to cut its production of oil and gas by 40 per cent over the next decade.
The ambition marks the profound shift gripping the energy industry. Big Oil has to reinvent itself if it wants to survive in a low-carbon world. BP said this week it believes the global demand for oil may peak within the next few years and that consumption may never recover from the pandemic. Such a bleak assessment from one of the world’s largest oil companies would have been unthinkable just a few years ago.
The world was changing even before Covid-19. Climate change has moved to the forefront of the public’s consciousness. Pressure on the oil industry to adapt has come from all sides even as companies have yet to figure out how to generate revenues from lower-carbon businesses. Investors are more vocal, urging the likes of BP and Royal Dutch Shell to recognise the financial impact that global warming could have on their operations.
Thursday 17 September 2020
#Saudi energy minister warns oil market gamblers will be hurt "like hell" | Reuters
Saudi energy minister warns oil market gamblers will be hurt "like hell" | Reuters:
The Saudi Energy Minister warned traders on Thursday against betting heavily in the oil market saying he will try to make the market “jumpy” and promised those who gamble on the oil price would be hurt “like hell”.
The comments by Prince Abdulaziz bin Salman, OPEC’s most influential minister, came after a virtual meeting of a key panel of OPEC and allies, led by Russia, known as OPEC+.
Prince Abdulaziz told the gathering OPEC+ could hold an extraordinary meeting in October if the oil market soured because of weak demand and rising coronavirus cases, according to an OPEC+ source.
“Anyone who thinks they will get a word from me on what we will do next, is absolutely living in a La La Land... I’m going to make sure whoever gambles on this market will be ouching like hell,” Prince Abdulaziz told a news conference when asked about OPEC+ next steps.
He said OPEC+ would take a pro-active and pre-emptive stance in addressing oil market challenges.
The Saudi Energy Minister warned traders on Thursday against betting heavily in the oil market saying he will try to make the market “jumpy” and promised those who gamble on the oil price would be hurt “like hell”.
The comments by Prince Abdulaziz bin Salman, OPEC’s most influential minister, came after a virtual meeting of a key panel of OPEC and allies, led by Russia, known as OPEC+.
Prince Abdulaziz told the gathering OPEC+ could hold an extraordinary meeting in October if the oil market soured because of weak demand and rising coronavirus cases, according to an OPEC+ source.
“Anyone who thinks they will get a word from me on what we will do next, is absolutely living in a La La Land... I’m going to make sure whoever gambles on this market will be ouching like hell,” Prince Abdulaziz told a news conference when asked about OPEC+ next steps.
He said OPEC+ would take a pro-active and pre-emptive stance in addressing oil market challenges.
Credit Suisse Teams Up With #Qatar for Direct Lending Venture - Bloomberg
Credit Suisse Teams Up With Qatar for Direct Lending Venture - Bloomberg:
Credit Suisse Group AG and Qatar Investment Authority are joining forces to set up a multi-billion dollar platform to invest in direct lending.
The partnership will make loans to upper middle-market and large-cap companies in the U.S. and Europe, the Swiss bank and QIA said in a joint statement Thursday. The financing will mainly consist of first or second ranked loans which are secured against the business.
Sovereign wealth funds were important early investors in the now $850 billion private debt asset class with players like Singapore’s GIC establishing their own direct investment teams. In July, Apollo Global Management said it would seek to lend about $12 billion over the next three years via a financing platform anchored by Abu Dhabi’s Mubadala Investment Co.
The partnership is part of a trend among sovereign wealth funds moving into private markets to seek higher yields, said Diego Lopez, a managing director at Global SWF, a data provider. Global SWF has seen higher levels of activity by sovereign wealth funds this month, implying that investors think that the worst of Covid-19 may be over, added Lopez.
Credit Suisse Group AG and Qatar Investment Authority are joining forces to set up a multi-billion dollar platform to invest in direct lending.
The partnership will make loans to upper middle-market and large-cap companies in the U.S. and Europe, the Swiss bank and QIA said in a joint statement Thursday. The financing will mainly consist of first or second ranked loans which are secured against the business.
Sovereign wealth funds were important early investors in the now $850 billion private debt asset class with players like Singapore’s GIC establishing their own direct investment teams. In July, Apollo Global Management said it would seek to lend about $12 billion over the next three years via a financing platform anchored by Abu Dhabi’s Mubadala Investment Co.
The partnership is part of a trend among sovereign wealth funds moving into private markets to seek higher yields, said Diego Lopez, a managing director at Global SWF, a data provider. Global SWF has seen higher levels of activity by sovereign wealth funds this month, implying that investors think that the worst of Covid-19 may be over, added Lopez.
Oil rises 2%, reverses loses as OPEC+ addresses market weakness | Reuters
Oil rises 2%, reverses loses as OPEC+ addresses market weakness | Reuters:
Oil prices rose more than 2% on Thursday, turning positive as OPEC and its allies said the producer group would crack down on countries that failed to comply with output cuts and planned to hold an extraordinary meeting in October if oil markets weaken further.
After falling early in the session amid bearish jobs numbers and a ramp up in Gulf of Mexico oil output following Hurricane Sally, crude benchmarks reversed course to gain on the day, bolstered by comments from OPEC.
“Although no amendments to the current supply-cut deal have been proposed by OPEC+ today, the producers group gave the impression that it does not sweep troubles under the carpet,” said Rystad Energy’s Head of Oil Markets, Bjornar Tonhaugen.
Brent oil futures extended gains to settle up $1.08 or 2.56% at $43.30 a barrel. U.S. crude futures settled higher by 81 cents, or 2.02% at $40.97 a barrel. Both contracts rose more than 4% on Wednesday.
Oil prices rose more than 2% on Thursday, turning positive as OPEC and its allies said the producer group would crack down on countries that failed to comply with output cuts and planned to hold an extraordinary meeting in October if oil markets weaken further.
After falling early in the session amid bearish jobs numbers and a ramp up in Gulf of Mexico oil output following Hurricane Sally, crude benchmarks reversed course to gain on the day, bolstered by comments from OPEC.
“Although no amendments to the current supply-cut deal have been proposed by OPEC+ today, the producers group gave the impression that it does not sweep troubles under the carpet,” said Rystad Energy’s Head of Oil Markets, Bjornar Tonhaugen.
Brent oil futures extended gains to settle up $1.08 or 2.56% at $43.30 a barrel. U.S. crude futures settled higher by 81 cents, or 2.02% at $40.97 a barrel. Both contracts rose more than 4% on Wednesday.
European, Middle Eastern & African Stocks - Bloomberg #UAE #Kuwait #Israel #SaudiArabia #Qatar close
European, Middle Eastern & African Stocks - Bloomberg:
Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.
Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.
#AbuDhabi Takes $615 Million Stake in U.S. LNG Exporter - Bloomberg
Abu Dhabi Takes $615 Million Stake in U.S. LNG Exporter - Bloomberg:
Abu Dhabi’s main sovereign wealth fund disclosed a 5.1% stake in Cheniere Energy Inc., the largest U.S. exporter of liquefied natural gas.
Abu Dhabi Investment Authority disclosed its holding in a filing dated Monday, giving it an interest in Cheniere valued at $615 million. It’s Cheniere’s fourth-largest shareholder, according to data compiled by Bloomberg.
The Trump administration has touted LNG exports as more than an economic boon for the U.S., viewing the shipments also as a foreign policy tool for spreading American influence abroad. Since the U.S. began shipping shale gas overseas in 2016, it’s vaulted into the ranks of the world’s top LNG suppliers. Houston-based Cheniere operates two export facilities: Corpus Christi in Texas and Sabine Pass in Louisiana.
ADIA has almost $580 billion in assets and is the world’s third-biggest government wealth fund, according to the SWF Institute.
Abu Dhabi’s main sovereign wealth fund disclosed a 5.1% stake in Cheniere Energy Inc., the largest U.S. exporter of liquefied natural gas.
Abu Dhabi Investment Authority disclosed its holding in a filing dated Monday, giving it an interest in Cheniere valued at $615 million. It’s Cheniere’s fourth-largest shareholder, according to data compiled by Bloomberg.
The Trump administration has touted LNG exports as more than an economic boon for the U.S., viewing the shipments also as a foreign policy tool for spreading American influence abroad. Since the U.S. began shipping shale gas overseas in 2016, it’s vaulted into the ranks of the world’s top LNG suppliers. Houston-based Cheniere operates two export facilities: Corpus Christi in Texas and Sabine Pass in Louisiana.
ADIA has almost $580 billion in assets and is the world’s third-biggest government wealth fund, according to the SWF Institute.
Why Labor Rules Are Such a Big Issue in Persian Gulf: QuickTake - Bloomberg
Why Labor Rules Are Such a Big Issue in Persian Gulf: QuickTake - Bloomberg:
For decades, Gulf Arab states have attracted scrutiny for migrant sponsorship rules widely criticized as abusive to the foreigners who make up large parts of their labor forces. Governments have taken gradual steps to reduce the scope for exploitation under the so-called kafala system, and in August, Qatar became the first to guarantee foreigners a minimum wage regardless of wage or nationality. It says it will ultimately dismantle kafala, a pledge Bahrain made in 2009 and has yet to completely fulfill. With Gulf states reliant on foreigners to do everything from build towers to sweep roads to tend children, the system has proved durable.
1. Where does the kafala system come from?
During the oil boom of the 1970s, Arab Gulf states began importing large numbers of foreign workers to build infrastructure quickly and cheaply, and to provide services for their suddenly prospering societies. Kafala is an Arabic word meaning sponsorship or guarantorship, and has evolved into a system of employment. The six nations of the Gulf Cooperation Council -- Saudi Arabia, Kuwait, Bahrain, Qatar, Oman and the United Arab Emirates -- are most closely associated with the practice. It’s also used for low-skilled workers employed in Lebanon and Jordan.
For decades, Gulf Arab states have attracted scrutiny for migrant sponsorship rules widely criticized as abusive to the foreigners who make up large parts of their labor forces. Governments have taken gradual steps to reduce the scope for exploitation under the so-called kafala system, and in August, Qatar became the first to guarantee foreigners a minimum wage regardless of wage or nationality. It says it will ultimately dismantle kafala, a pledge Bahrain made in 2009 and has yet to completely fulfill. With Gulf states reliant on foreigners to do everything from build towers to sweep roads to tend children, the system has proved durable.
1. Where does the kafala system come from?
During the oil boom of the 1970s, Arab Gulf states began importing large numbers of foreign workers to build infrastructure quickly and cheaply, and to provide services for their suddenly prospering societies. Kafala is an Arabic word meaning sponsorship or guarantorship, and has evolved into a system of employment. The six nations of the Gulf Cooperation Council -- Saudi Arabia, Kuwait, Bahrain, Qatar, Oman and the United Arab Emirates -- are most closely associated with the practice. It’s also used for low-skilled workers employed in Lebanon and Jordan.
#Dubai May Be as Indebted as South Africa If Dissenters Are Right - Bloomberg
Dubai May Be as Indebted as South Africa If Dissenters Are Right - Bloomberg:
Determining how much debt Dubai’s government has amassed depends on who’s counting. What is less in dispute is that the uncertainty comes at a cost.
Unlike the government, Moody’s Investors Service and S&P Global Ratings include Dubai’s local bank borrowings to make the calculation, arriving at an estimate of about 290 billion dirhams ($79 billion). The debt burden could equal 77% of this year’s gross domestic product, according to S&P, comparable with what the International Monetary Fund predicts for South Africa and just behind Oman.
However, in the prospectus for its $2 billion bond sale this month, Dubai put its debt at 123.5 billion dirhams, a figure that leaves out what’s owed by the emirate’s government-related entities, or GREs.
“Moody’s and S&P are taking a broader and more conservative approach,” said Todd Schubert, Singapore-based head of fixed-income research at Bank of Singapore. “As investors, we certainly pay attention to what the rating companies think as we realize that other incorporate their views into their evaluations of the credit.”
Dubai’s Department of Finance declined to comment.
Determining how much debt Dubai’s government has amassed depends on who’s counting. What is less in dispute is that the uncertainty comes at a cost.
Unlike the government, Moody’s Investors Service and S&P Global Ratings include Dubai’s local bank borrowings to make the calculation, arriving at an estimate of about 290 billion dirhams ($79 billion). The debt burden could equal 77% of this year’s gross domestic product, according to S&P, comparable with what the International Monetary Fund predicts for South Africa and just behind Oman.
However, in the prospectus for its $2 billion bond sale this month, Dubai put its debt at 123.5 billion dirhams, a figure that leaves out what’s owed by the emirate’s government-related entities, or GREs.
“Moody’s and S&P are taking a broader and more conservative approach,” said Todd Schubert, Singapore-based head of fixed-income research at Bank of Singapore. “As investors, we certainly pay attention to what the rating companies think as we realize that other incorporate their views into their evaluations of the credit.”
Dubai’s Department of Finance declined to comment.
MIDEAST STOCKS-Most major Gulf bourses fall as financials weigh | Nasdaq
MIDEAST STOCKS-Most major Gulf bourses fall as financials weigh | Nasdaq:
Most major Gulf stock markets slipped in early trade on Thursday, pressured by losses in financial shares, while petrochemical firms supported the Qatari index.
Saudi Arabia's benchmark index .TASI eased 0.3%, driven down by a 0.4% fall in Al Rajhi Bank 1120.SE and a 0.8% decline in Riyad Bank 1010.SE.
Dubai's main share index .DFMGI slipped 0.2%, pressured by a 0.5% fall in Emirates NBD Bank ENBD.DU and a 0.7% slide in Emaar Properties EMAR.DU.
In Abu Dhabi, the index .ADI lost 0.4%, with the country's largest lender First Abu Dhabi Bank FAB.AD declining 0.5% and Emirates Telecommunications ETISALAT.AD was down 0.2%.
Abu Dhabi National Oil Company will reduce crude oil supplies to term buyers by 25% in November as part of its commitment to the OPEC+ deal, a notice seen by Reuters showed and sources with knowledge of the matter said.
The Qatari index .QSI edged up 0.2%, helped by a 3.3% jump in Mesaieed Petrochemical Holding MPHC.QA and a 1% gain in petrochemical maker Industries Qatar IQCD.QA.
Most major Gulf stock markets slipped in early trade on Thursday, pressured by losses in financial shares, while petrochemical firms supported the Qatari index.
Saudi Arabia's benchmark index .TASI eased 0.3%, driven down by a 0.4% fall in Al Rajhi Bank 1120.SE and a 0.8% decline in Riyad Bank 1010.SE.
Dubai's main share index .DFMGI slipped 0.2%, pressured by a 0.5% fall in Emirates NBD Bank ENBD.DU and a 0.7% slide in Emaar Properties EMAR.DU.
In Abu Dhabi, the index .ADI lost 0.4%, with the country's largest lender First Abu Dhabi Bank FAB.AD declining 0.5% and Emirates Telecommunications ETISALAT.AD was down 0.2%.
Abu Dhabi National Oil Company will reduce crude oil supplies to term buyers by 25% in November as part of its commitment to the OPEC+ deal, a notice seen by Reuters showed and sources with knowledge of the matter said.
The Qatari index .QSI edged up 0.2%, helped by a 3.3% jump in Mesaieed Petrochemical Holding MPHC.QA and a 1% gain in petrochemical maker Industries Qatar IQCD.QA.
European, Middle Eastern & African Stocks - Bloomberg #UAE #Kuwait #Israel #SaudiArabia #Qatar mid-session
European, Middle Eastern & African Stocks - Bloomberg:
Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.
Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.
#Israel, #Dubai diamond exchanges begin strategic collaboration | Reuters
Israel, Dubai diamond exchanges begin strategic collaboration | Reuters:
The Israel and Dubai diamond exchanges said on Thursday they have signed a strategic agreement of collaboration to promote cooperation and dialogue between the two bourses.
As part of the agreement, the Israel Diamond Exchange will open a representative office in Dubai and the Dubai Multi Commodities Centre will open an office in Ramat Gan to promote trade between the two countries and assist with business requirements.
The Israel and Dubai diamond exchanges said on Thursday they have signed a strategic agreement of collaboration to promote cooperation and dialogue between the two bourses.
As part of the agreement, the Israel Diamond Exchange will open a representative office in Dubai and the Dubai Multi Commodities Centre will open an office in Ramat Gan to promote trade between the two countries and assist with business requirements.
Oil falls as demand worries re-emerge, crews return to U.S. Gulf rigs | Reuters
Oil falls as demand worries re-emerge, crews return to U.S. Gulf rigs | Reuters:
Oil prices fell on Thursday, after rising steeply in the two previous sessions, as concerns about weak fuel demand re-emerged and producers in the Gulf of Mexico prepared to resume output following Hurricane Sally.
Brent crude LCOc1 futures fell 67 cents, or 1.6%, to $41.55 a barrel at 0628 GMT, after climbing 4.2% on Wednesday.
U.S. West Texas Intermediate (WTI) crude CLc1 futures were down 70 cents, or 1.7%, to $39.46 a barrel, after jumping 4.9% on Wednesday.
“We are seeing some profit-taking this morning from market participants who remain broadly sceptical that crude has priced in the market’s weaker turn through Q3-Q4 and specifically don’t buy into yesterday’s sharp rebound,” said Vandana Hari, oil market analyst at Vanda Insights.
Oil prices fell on Thursday, after rising steeply in the two previous sessions, as concerns about weak fuel demand re-emerged and producers in the Gulf of Mexico prepared to resume output following Hurricane Sally.
Brent crude LCOc1 futures fell 67 cents, or 1.6%, to $41.55 a barrel at 0628 GMT, after climbing 4.2% on Wednesday.
U.S. West Texas Intermediate (WTI) crude CLc1 futures were down 70 cents, or 1.7%, to $39.46 a barrel, after jumping 4.9% on Wednesday.
“We are seeing some profit-taking this morning from market participants who remain broadly sceptical that crude has priced in the market’s weaker turn through Q3-Q4 and specifically don’t buy into yesterday’s sharp rebound,” said Vandana Hari, oil market analyst at Vanda Insights.