FILE PHOTO: The corporate logos of the state oil company PDVSA and Citgo Petroleum Corp are seen in Caracas, Venezuela April 30, 2018. REUTERS/Marco Bello
March 15, 2019
HOUSTON (Reuters) – A second maritime firm has told Venezuela’s state-run oil firm Petroleos de Venezuela it would end all charter contracts with the company as a result of U.S. sanctions, according to an internal document and a person familiar with the matter.
U.S.-based McQuilling Partners Inc, which provided PDVSA with four contract tankers, joined German tanker operator Bernhard Schulte Shipmanagement (BSM) in withdrawing from providing oil-shipping services to Venezuela.
The United States levied sanctions in January on PDVSA and Venezuela aimed at restricting oil revenues to the government of President Nicolas Maduro, whom the United States and 50 other countries no longer recognize as Venezuela’s legitimate leader.
The withdrawal of both maritime services provider undermine the OPEC member’s ability to supply its crude to global markets. Oil provides more than 90 percent of Venezuela’s export revenue.
Oil exports from Venezuela dropped by about 40 percent in the first month after sanctions were imposed on Jan. 28. More than 6 million barrels of oil were stranded on tankers after PDVSA demanded prepayment for the cargoes.
[For a chart of top importers of Venezuelan crude by country, see: https://tmsnrt.rs/2RYGk2E ]
“McQuilling will not engage in any ship brokerage activity and services involving charters with PDVSA” until the sanctions against PDVSA are lifted by the U.S. Treasury, according to a document seen by Reuters.
“We’re steering clear,” a McQuilling shipbroker said on Friday. “We obviously are not moving any barrels over there.”
PDVSA and the Venezuelan oil ministry did not immediately respond to requests for information on the availability of tankers.
McQuilling had contracts to supply four oil tankers – the Pericles, Morning Glory, Ice Energy and Felicity – to a PDVSA subsidiary, the document showed.
BSM on Thursday said in a statement that political developments made managing assets for the South American nation “an almost impossible task,” and it would return Venezuelan vessels to PDVSA by late this month or early April.
The firm operated a fleet of 15 PDVSA vessels and had worked in the Latin American country for almost 25 years.
(Reporting by Collin Eaton and Marianna Parraga; additional reporting by Catarina Demony in Lisbon; editing by Grant McCool)
FILE PHOTO: United States diplomat Elliott Abrams takes notes during a meeting of the U.N. Security Council called to vote on a U.S. draft resolution calling for free and fair presidential elections in Venezuela at U.N. headquarters in New York, U.S., February 28, 2019. REUTERS/Lucas Jackson
March 15, 2019
WASHINGTON (Reuters) – The U.S. special representative for Venezuela said on Friday that Venezuela’s oil exports have been dropping steadily by roughly 50,000 barrels per month and production is likely to dip below a million barrels a day within a “month or two.”
“They are heading down toward a million now, and in a month or two will be below a million” barrels per day, U.S. envoy Elliott Abrams told a news briefing, adding that the decline seen in recent days could partly be attributed to the blackouts that had crippled the country. “It’s a steady decline.”
The OPEC member’s oil production has dwindled in the last two decades, from more than 3 million bpd at the beginning of the century to between 1.2 million and 1.4 million bpd by late 2018. Most of the crude it produces now is heavy or extra heavy.
(Reporting by Lesley Wroughton; Writing by David Alexander)
FILE PHOTO: A man shows Argentine pesos outside a bank in Buenos Aires’ financial district, Argentina August 30, 2018. Picture taken August 30, 2018. REUTERS/Marcos Brindicci
March 15, 2019
By Eliana Raszewski
BUENOS AIRES (Reuters) – Argentina’s central bank wants to license market makers to help stabilize its embattled peso currency when the Treasury starts newly announced dollar sales in April, two people with direct knowledge of the plans told Reuters on Friday.
The bank hopes the market makers, dealers who agree to buy and sell at set prices, would bolster liquidity in the exchange market to help avoid the sharp gyrations the peso has suffered in recent weeks when it hit a record low of 42.5 pesos per dollar in thin trading.
“We are going to take advantage of the existence of this market auction to promote the creation of market makers in the FX market, something that does not exist now,” said one of the people. “It is something that we are talking with banks and it will most likely start together with the Treasury bids.”
Both sources asked not to be named because the plan has not been made public. Argentina’s central bank declined to comment.
Argentina’s treasury minister Nicolás Dujovne revealed on Thursday that the treasury would sell $9.6 billion in dollars from April until the end of the year via daily auctions of $60 million, aiming to acquire pesos to pay for ongoing expenses.
The announcement came after a sharp fall in the peso, dragged down by emerging doubts about the progress of the economy and rising political uncertainty generated by the upcoming general elections in October.
The second person said the dollar auctions “would provide liquidity at a time when it is possible that, given the uncertainty of the electoral process, the market will have this kind of dynamic,” referring to market volatility.
Argentina’s peso has remained recently within a non-intervention trading band that came into effect last year, but the central bank is concerned about volatility in a market where there can be low liquidity.
“One thing is the value (of the peso), and another thing is when the variations are very abrupt and with little liquidity,” the second person said. “That type of dynamic is disruptive.”
(Reporting by Eliana Raszewski; Editing by Adam Jourdan and Phil Berlowitz)
FILE PHOTO: U.S. Deputy Secretary of State John J. Sullivan attends the U.S.-Brazil Security Forum, at the Itamaraty Palace in Brasilia, Brazil May 22, 2018. REUTERS/Adriano Machado
March 15, 2019
JOHANNESBURG (Reuters) – U.S. Deputy Secretary of State John Sullivan said on Friday South African land reform should be carried out in a transparent manner so it did not hurt investor sentiment and the economy.
“My plea was for transparency in how land reform is accomplished, other than that I have been in listening mode,” Sullivan told journalists during a visit to Johannesburg.
(Reporting by Alexander Winning; Editing by Andrew Heavens)
FILE PHOTO: Telecom Italia new logo is seen at the headquarter in Rozzano neighbourhood of Milan, Italy, May 25, 2016. REUTERS/Stefano Rellandini//File Photo
March 15, 2019
MILAN (Reuters) – France’s Vivendi, which is Telecom Italia (TIM) top shareholder, urged Italian market watchdog and TIM’s auditors to further investigate what it called governance issues at the Italian group.
The French media group and activist investor Elliott, which owns just under 10 pct of TIM, are at loggerheads over the Italian group’s governance and management.
Vivendi is seeking the removal of TIM Chairman Fulvio Conti and four other board members and cites the fact that TIM’s auditors said in a report they found irregularities in the way information was shared with the company’s board members in the run-up to the ousting of Chief Executive Amos Genish.
TIM’s board on Thursday rejected the report issued by the group’s auditors.
(Reporting by Francesca Landini, editing by Louise Heavens)
FILE PHOTO: A liquified natural gas (LNG) tanker leaves the dock after discharge at PetroChina’s receiving terminal in Dalian, Liaoning province, China July 16, 2018. REUTERS/Chen Aizhu/File Photo
March 15, 2019
By Florence Tan
HOUSTON (Reuters) – Liquefied natural gas (LNG) producers must avoid becoming over-reliant on the strong Chinese demand growth seen in the past two years and should intensify efforts to broaden their markets and create new uses for the fuel, senior company executives said at an energy conference this week.
The warnings were underscored by this year’s drop in Asian spot prices for the super-cooled gas. LNG prices this week fell to their lowest for this time of the year since 2016, weighed down by rich supplies.
China became the world’s second largest LNG importer after Japan in 2018 after imports nearly doubled from the previous year. The country’s robust appetite served to underpin spot prices even as a wave of new supplies from Australia, Russia and the United States swept into the market.
“We are becoming too reliant on China in the last couple of years,” Woodside Petroleum’s Chief Executive Officer Peter Coleman warned at the CERAWeek energy conference in Houston earlier this week.
“It worries me because we’ve seen others drop off in the same period for demand.”
LNG consultancy Poten & Partners has forecast 33 million tonnes of new supply in 2019, but only 16 million tonnes of extra demand. Demand growth in China could slow to 8 million tonnes in 2019 against the 15.7 million tonnes in 2018, according to Wood Mackenzie.
“I would caution the LNG industry not to make linear extrapolations of Chinese LNG demand based on what you’ve seen in the last two years,” Hendrik Gordenker, chairman of Japan’s JERA Co, a fuel trading joint venture between Tokyo Electric Power and Chubu Electric Power, told the conference.
China has choices in terms of potential energy supplies, including gas from Russia and central Asia, and domestic shale gas, said Gordenker who heads the world’s largest LNG buyer. The nation also is developing renewable energy sources and could continue to tap coal, he said.
To ease reliance on China, LNG producers must broaden their markets, develop new uses for the gas and continue to push for a carbon tax globally to nudge out coal, executives said.
“We need to continue to develop a broader market base, or else we run the risk that other commodities have had of just becoming so focused on Chinese growth that it can become extremely additive,” Woodside’s Coleman said.
“We need to go a lot harder after coal, probably best way to do that is to get a common carbon price around the world,” he said, adding that using LNG for shipping is also a way to increase the fuel’s demand.
(GRAPHIC: LNG demand growth – https://tmsnrt.rs/2U82jSn)
(Reporting by Florence Tan; Editing by Marguerita Choy)
FILE PHOTO: Brazil’s Economy Minister Paulo Guedes attends a meeting with governors about pension reform bill proposal in Brasilia, Brazil February 20, 2019. REUTERS/Adriano Machado
March 15, 2019
RIO DE JANEIRO (Reuters) – Brazil’s Economy Minister Paulo Guedes said on Friday that pension reform must deliver at least 1 trillion reais ($262.26 billion) in savings in order to fund a transition from the current system to individual retirement accounts.
Guedes said the government would consider privatizing state-controlled companies Petroleo Brasileiro SA and Banco do Brasil SA after Privatization Secretary Salim Mattar finishes his current slate of planned privatizations.
(Reporting by Rodrigo Viga Gaier and Gram Slattery)
FILE PHOTO: Chicago Board Options Exchange (CBOE) Global Markets sign hangs at its headquarters building in Chicago, Illinois, U.S., September 19, 2018. REUTERS/Michael Hirtzer
March 15, 2019
NEW YORK (Reuters) – Cboe Global Markets said it no longer plans to offer bitcoin futures contracts as the exchange operator reassesses its plans for trading digital asset derivatives amid slumping volumes.
Currently listed Cboe XBT futures contracts, which expire in June, remain available for trading, Cboe said in a statement late on Thursday.
Cboe launched the first U.S. bitcoin contracts in December 2017, around the time the underlying cryptocurrency hit an all-time high near $20,000. CME Group Inc followed shortly after with its own product, which it still lists.
The contracts were aimed at making it easier for investors and speculators to trade the new asset class. Building liquidity in the underlying product was also seen as a crucial step to gaining approval for a bitcoin exchange-traded fund.
However, interest in Cboe’s bitcoin futures contract has waned along with a crash in the price of bitcoin. The cryptocurrency is currently at around $3,855.
Chicago-based Cboe declined further comment.
The exchange currently has an application with the Commodities Futures Trading Commission to list a bitcoin ETF.
(Reporting by John McCrank; Editing by Steve Orlofsky)
FILE PHOTO: The South Korean and American flags fly next to each other at Yongin, South Korea, August 23, 2016. Courtesy Ken Scar/U.S. Army/Handout via REUTERS
March 15, 2019
WASHINGTON (Reuters) – The Trump administration has requested consultations with South Korea under the two nations’ free trade pact to try to resolve U.S. concerns about procedures in competition hearings held by a South Korean trade commission.
“Some of these (Korea Fair Trade Commission) hearings have denied U.S. parties certain rights, including the opportunity to review and rebut the evidence against them,” the Office of the U.S. Trade Representative said in a statement. “Denial of this fundamental right undermines their ability to defend themselves.”
(Reporting by Tim Ahmann)
FILE PHOTO: Interserve offices are seen in Twyford, Britain January 17, 2018. REUTERS/Peter Nicholls/File Photo
March 15, 2019
By Iain Withers
LONDON (Reuters) – Troubled outsourcing company Interserve, one of the British government’s biggest contractors, is set to go into administration later on Friday after its shareholders rejected a rescue plan.
Interserve’s shareholders voted 59 percent against a debt-for-equity rescue package at a general meeting in central London on Friday, in a victory for its biggest shareholder, US hedge fund Coltrane, which owns a 28 percent stake and had opposed the plan.
The company is now expected to file to go into a ‘pre-pack’ administration on Friday evening, under a plan overseen by EY which would see Interserve’s creditors buy its assets.
Interserve, which provides services to the public sector ranging from school dinners to hospital cleaning, said this arrangement should ensure that its business can continue to operate “as normal” for the time being.
Shares in the company have been suspended.
Interserve chairman Glyn Barker told investors ahead of the vote on Friday the firm was struggling with a “financial burden that is completely unsustainable and is crippling”.
Barker had warned against rejecting the rescue plan and forcing the firm into administration, arguing it would be “more disruptive to the company, significantly more costly and would deprive shareholders of any value whatsoever”.
An Interserve spokesman told Reuters the company’s lenders had already set up a company with a shadow board ready to buy Interserve’s assets.
Interserve employs 68,000 people worldwide, with around 45,000 of them in Britain. It ran into difficulty after a string of ill-advised acquisitions and loss-making contracts weighed on its finances and piled on debt, raising fears it could collapse into insolvency like rival outsourcer Carillion.
The GMB union, which represents Interserve workers, said the company’s turmoil showed outsourcing public sector contracts to private companies had been a “disastrous experiment”.
“Ministers have learned absolutely nothing from the Carillion fiasco and are hell-bent on outsourcing public sector contracts.
“Shambolic mismanagement is putting jobs on the line and services in jeopardy. Our public services can’t go on like this.”
The rejected rescue plan would have handed Interserve’s lenders, which include banks and hedge funds, 95 percent ownership of the company in exchange for cancelling 485 million pounds ($641.95 million) of its debts, with existing investors’ holdings diluted to 5 percent.
A representative for Coltrane at the general meeting declined to comment on the situation, other than saying “I voted for Donald Trump” when asked how the firm had voted.
The pre-pack administration will wipe out all shareholder value.
(Reporting by Iain Withers; Editing by Lawrence White and Rachel Armstrong)