UnaCom Oil and Gas News
10th September - 16th September
Monday 10th September
Qatargas and China agree on 22-year LNG Gas SupplyQatargas has said today, that is has agreed a 22-year deal with PetroChina International Co, to supply China with around 3.4 million tonnes of liquefied natural gas. In an effort by China to step up its efforts in combating air pollution. China needs LNG to replace its usage of coal with cleaner burning natural gas. China has become the second largest buyer of LNG, after recently overtaking South Korea. China's LNG imports may surge 70 percent to 65 million tonnes by 2020, according to consultancy SIA Energy.
Tuesday 11th September
U.S Sanctions already starting to take its effect on Oil BuyersThe sanctions are set to come in place in November against Iran. And its effects are already starting to take place with JXTG Holdings Inc, Japan’s biggest refiner, and domestic rival Idemitsu Kosan Co. are both said to have skipped purchases of Iranian supplies loading in October. Bharat Petroleum is among Indian state-run refiners that haven’t booked any cargoes for the month either. These companies are waiting for their respective governments to negotiate import deals with the US. Companies are declining to buy October cargoes from Iran because of the possibility that those shipments may arrive only after Nov. 4. That’s when the U.S. will reimpose sanctions targeting Iran’s exports to force renegotiation over the Middle East nation’s nuclear program. With a drop-in export from Iran, coupled with disruptions in other producers like Libya, this could raise the price of Brent Crude over $80/bbl in the near-term. Meanwhile, China the biggest buy of Iranian oil, is increased Iranian crude imports via the Sino-Myanmar pipeline.
SABIC signs deal to build a petrochemical complex in ChinaSaudi Basic Industries Corp (SABIC) signed a memorandum of understanding (MOU) with China’s Fujian provincial government to build a petrochemical complex. This is the third major company to invest in chemicals in China over the past two months. With U.S. oil major Exxon Mobil and Germany’s BASF having announced plans to build ethylene complexes in southern China’s Guangdong province.
ExxonMobil planning on Upgrading UK Refinery for more than £500 millionExxonMobil is to potentially spend £500 million, to upgrade the UK’s largest oil refinery, Fawley, on England’s south coast. Fawley represents a fifth of British, refining capacity. The deal is not finalised, and an investment decision is still required, which is predicted to take place in the 2nd quarter next year. The upgrade would include, building a new hydrotreater and a new hydrogen plant, it would reduce Britain’s reliance on diesel imports. It will also allow the site to process a wider range of crude oils and secure up to 1000 jobs.
Wednesday 12th September
North Sea Drilling falls to its lowest levels since 1965The number of new wells being drilled in the North Sea, has fallen to levels not seen since the basin was first tapped over 50 years ago. Only four exploratory wells have been drilled in the first eight months of the year, with the most optimistic projections pointing to a total of 12 expected by the year end. This fall is a sign that companies are only willing to drill the most competitive and profitable wells.
Thursday 13th September
North Sea Oil and Gas to generate £10bn surplusNorth Sea Oil and Gas companies are set to generate a surplus of £10bn this year and the Treasury ready to set $2bn tax receipts, but companies are struggling with a drop-in discovery and drilling of wells. This surplus due to a report from Oil and Gas UK, links the increase in financial activity to a crude price rally since late 2016 combined with efforts to increase efficiency. The £10bn free cash flow will be the highest figure achieved since 2010, when the industry was at a boom. However, with drilling falling 50% over the last five years, its causing concern for the ability of the industry to realise its potential.
Friday 14th September
West Shetland generating excitement in the industryAfter reports yesterday that the UK was squandering its resources with a drop-in drilling reaching worrying levels. But now with Cairn energy generating huge amounts of cash from the Kraken field east of Shetland it brought into production last year and prominent Wood Mackenzie, noting that regulators thinks more than 1.5 billion barrels oil equivalent could be recovered West of Shetland with only less than 160 exploration wells having been drilled in the region to date. That compares with more than 500 in other area of the UK. They also said the huge fields that BP and Shell are likely to develop will drive production growth in the UK through the 2020s. And will encourage firms to look at other areas of the wilds West of Scotland.
Weekly Economic Round Up
10th September- 16th September
Monday 10th September
Australia's Investa has set September the 17th as the deciding date for Blackstone BidInvesta has September 17th as the date for which its shareholders vote on Blackstone’s Groups $2.4 billion bid. Blackstone had raised its per share price to A$5.52. After its rival Canada’s Oxford Properties Group (who already has a 10% share in Investa) also submitted a bid of A$5.50 per share.
Goldman Sachs selected as the adviser for SABIC stake saleSaudi Arabia’s, Public Investment Fund, has selected Goldman Sachs to be its advisor for the sale of its stake in petrochemicals firm SABIC to state oil company Saudi Aramco. Citi has won the mandate to advise SABIC on the transaction. Aramco plans to buy a controlling stake in SABIC, with the possibility of it taking the entire 70 percent holding owned by PIF, the kingdom’s sovereign wealth fund. This is Saudi's biggest ever M&A deal.
Tuesday 11th September
German department stores chains Kaufhof and Karstadt to mergeSigna Holding and Hudson’s Bay Company have agreed to merge Germany’s two major department store chains, Galeria Kaufhof and Karstadt, to tackle the competition from ecommerce (buying and selling online.) The deal will combine the retail operations with annual sales of around 5.4 billion euros. The merge will be 49.99 percent owned by Canadian retail giant Hudson’s Bay, while Austrian Karstadt owner Signa will hold the remainder. The deal also comprises of the sale of stakes in HBC’s European real estate assets to Signa and will result in net proceeds of 411 million euros for HBC.Signa will be involved in the day to day operations of the combined business.
After investor backlash, Elementis to pay less for MondoBritish chemicals company Elementis has struck a deal $100 million less than initially agreed following backlash from its investors over the price. Elementis said on Tuesday that is has agreed to pay $500 million for Mondo Minerals, down from $600 million previously offered. Elementis was buying Mondo Minerals to expand into talc additives used in a range of products from plastics to cosmetics. Elementis said that the acquisition would be funded by a rights issue of about $230 million and from debt facilities.
Network Rail sells its property portfolio to fund railway improvementsBritain’s Network Rail agreed to sell its commercial property portfolio to property outsourcing firm Telereal Trillium and a Blackstone Group affiliate for 1.46 billion pounds. Network rail said that the sale consisted of about 5200 properties. This comes after the company looks to improve London’s commuter railway lines after coming under pressure from regulators and lawmakers for its poor management. Telereal and Blackstone Property Partners will be equal stakeholders and intend to be long term owners of the estate. Telereal will oversee the day-to-day property management of the portfolio, as the company have managed real estate occupied by local and central government departments, including Royal Mail and the Department of Work and Pensions.
Wednesday 12th September
Sterling down as rumours about leadership challenge to May circulateThe Sterling fell today, after reports of a potential leadership challenge to Theresa May. The pound fell a quarter of a percent to as low as $1.2994 against the dollar after the BBC reported a group of about 50 lawmakers in May’s government had met to discuss how and when they could force her out of her job. After concerns about her decision to remain in a free trade zone for goods with the EU. The pound has jumped up and down after every Brexit related news, with investors trying to work out the type of deal being reached.
Trade War sends Chinese Stocks into disarrayThe trade war only began 6 months ago and has already sent the Chinese stocks stumbling into the same league as debilitated emerging markets such as Turkey, Argentina and Venezuela. China's stock has fallen 20% in 2018, joining the worst performing trio of the already mentioned countries. On the other hand, the American Nasdaq is one of the world’s biggest gainers, rising by 15.5%. Chinas currency has also fallen and share transaction volumes have shrunk.
Thursday 13th September
Takeda considering selling Shire's eye care business to cut debtJapans Takeda Pharmaceuticals is considering to sells its Shire eye care business once it closes its $62 billion purchase of the company, to cut some of the debt raised when needed to buy the company. Takeda's purchase of Shire was the largest overseas purchase by a Japanese company. If Takeda chose to sell of Shire's Xiidra drug which treats dry eye, as well as its Natpara medicine used to control low blood calcium levels, it could help to raise between $4 billion and $5 billion.
Oxford raises Blackstone Bid for Australians InvestaCanadian Oxford Properties Group has raised its bid for Australian office owner Investa Office Fund to A$5.60 per share compared to Blackstone’s most recent offer of $5.52 escalating a bidding war with private equity giant Blackstone Group. This comes just after recent news on Monday, that Australia’s Investa had set September 17th as the data for which its investors vote on Blackstone’s bid.
Friday 14th September
China approves Takeda's takeover of ShireTakeda announced today, that China has approved its $62 billion takeover of Shire. This acquisition will be Japans largest oversea purchase ever. It has already received approval from Brazil, USA and is currently waiting responses from Japan and the European Union. Takeda's stocks are 15% down, since the company first said it was considering a bid for Shire, with investors concerned about the heavy debt burden the deal will impose on the drug maker.
Walmart acquires Mexican food company app Cornershop for $225 millionWalmart has purchased Latin American food delivery service Cornershop for $225 million, in a move to increase its online grocery business in Mexico and Chile. This deal follows Walmart’s recent acquisitions as it aims to compete with Amazon.com Inc, the world’s largest online retailer. The acquisition of Cornershop which offers its service through a mobile app, will help it quicken deliveries for its Walmart, Superama and Sam’s Club stores in Mexico. The aim for Walmart is deliver food to more than 40 percent of U.S. households by year’s end using delivery companies like Uber and already has started in Canada by teaming up with start-up Instacart for on-demand grocery deliveries.
UnaCom Economic News Round Up
10th September-16th September
Wednesday 13th September
Takeda considering selling Shire's eye care
business to cut debt
Takeda Pharmaceuticals is considering to sells its Shire eye care business once
it closes its $62 billion purchase of the company, to cut some of the debt raised
when needed to buy the company. Takeda's purchase of Shire was the largest
overseas purchase by a Japanese company. If Takeda chose to sell of
Shire's Xiidra drug which treats dry eye, as well as its Natpara medicine used
to control low blood calcium levels, it could help to raise between $4 billion
and $5 billion.
Thursday 14th September
Boehringer buys ViraTherapeutics
has exercised an option to acquire all the shares of oncolytic virus company
ViraTherapeutics. ViraTherapeutics will operate in Austria, as a branch of
Boehringer’s Discovery Research organisation. ViraTherapeutics specialises in
the development of oncolytic viral therapies.
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