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[waldron] 12/6/2018 06:50

Monday 11 June 2018 5:00am
City watchdog Andrew Bailey defends controversial rules to clear way for Saudi Aramco London listing
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Jasper Jolly
Chief City reporter, mainly covering big banks, challengers, Brexit and economic [..] Show more
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SAUDI-OIL-ARAMCO
Saudi Aramco is still yet to decide the location for its listing (Source: Getty)

The top financial watchdog has split the City with controversial changes to listing rules which could allow Saudi Aramco to list in London, but Financial Conduct Authority (FCA) boss Andrew Bailey insists the reforms will raise standards.

From July the regulator will create a new category with less strict requirements within its “premium”; rules for firms which are majority-owned by a sovereign state, such as the giant oil producer Aramco, for which the Saudi state hopes to gain an ambitious $2 trillion valuation.

The FCA made some concessions to critics of the original plans – after a consultation process which lasted six months longer than initially planned – but Bailey told City A.M. that they will strengthen the City and actually boost standards at the firms in question.

Read more: FCA to bring in controversial new premium listing category in July

“We would want companies in the premium listing because the standards are higher,” Bailey said. “Companies want to be in it because it conveys a strong message, which is right.”

Firms will still be forced to show they are running an independent business, and must also give shareholders pre-emption rights, which allow first refusal on new share issues. Voting rights proportionate to equity held by investors must also be maintained, he added.

Yet some of the City’s most influential business groups remain unconvinced, arguing that some of the changes waterdown accountability to shareholders.

Chris Cummings, chief executive of the Investment Association, said the group, which represents the managers of trillions of pounds in investments, was disappointed by the free rein for companies to engage in related-party transactions – with, for instance, a sovereign shareholder – without prior consultation with other investors.

Read more: Former Royal Dutch Shell and GSK veteran joins Aramco board

He added that any firms in the new category should not be allowed into indices such as the FTSE 100 benchmark, which could force investment houses and pension funds to own Aramco shares. Index decisions will remain with the private providers, such as the London Stock Exchange Group’s FTSE Russell arm, the FCA says.

Stephen Martin, head of the Institute of Directors business lobby group, said the FCA had not laid out why a new listing category for sovereign-owned firms was necessary at all. He said: “If anything, we believe that listing rules should be strengthened for this category of issuer given its distinctive governance challenges and risks.”

Bailey acknowledged the “quite strong views on both sides”, but insisted that the changes the FCA made after consultation represent a “minimum, pragmatic number of changes” while also “preserving the important protections of independent voting rights”.

The regulator decided to back down on a proposal which would have allowed firms to escape independent votes on the election of independent directors, and added an obligation to report related-party transactions, albeit after the event.

Read more: That the Saudi Aramco IPO is in jeopardy should surprise no-one

The plans will apply to governments around the world looking to partially privatise their firms, but all eyes will be on the Saudi government, which has still not disclosed its preferred listing destination. The listing itself has reportedly been delayed to next year at the earliest, with New York, Hong Kong, and the Saudi Tadawul exchange thought to be among the rivals to London.

Lobbying for London has taken place at the highest levels of government, including on a visit to the Saudi capital, Riyadh, in April last year. Bailey denied that he has come under pressure from the government about the plans, which were first mooted in July last year. He has also met officials from Aramco.

“We’re an independent regulator so we’re not influenced by what the government think at all,” Bailey said, adding there was not “some sort of covert relation with the UK government on this”. Bailey said he has not spoken to ministers about the listing changes.

Neither has the decision been driven by specific trade policy, but rather a commitment to the openness of London’s markets. The government has been keen to promote the idea that the UK will remain a leading financial centre after Brexit.

“It’s not international trade policy, but it is about having a financial market in London which meets our integrity objectives,” he said. “Within that it’s open to competition.”

Read more: City watchdog seeks to reassure big investors on Saudi Aramco float

[skiboy10] 11/6/2018 23:01

Golden Cross @ TOM

[maywillow] 11/6/2018 14:03

News // Transportation and storage
European companies getting ready for Turkish Stream gas
today, 15:22Neftegaz.RU2

St. Petersburg, June 11 - Neftegaz.RU. European companies are preparing for possible natural gas from the TurkStream natural gas project, Alexander Medvedev, vice chairman of the Russian state-owned gas and oil giant Gazprom said on June 8.



Speaking at a press conference in St. Petersburg, on the TurkStream project, Medvedev said Bulgaria has initiatives for a 2nd line to extend to Europe as part of the TurkStream natural gas pipeline project. «I think this shows Bulgaria's regret, which prevented the South Stream project, leading to its cancellation. We do not consult the Bulgarian route for the line to reach Europe in TurkStream for now,» he said.



A.Medvedev also said gas delivery to Turkey will start by the end of 2019. «The exact date depends both on the construction of the sea part of the project and on the readiness of the Turkish gas distribution system. However, it would 100 % start in 2019, no doubts about it.»



Turkey and Russia recently signed a protocol to jointly end the 2nd line of the TurkStream gas pipeline project by the end of 2019.



Pointing to the signing of a protocol between BOTAŞ Petroleum Pipeline Corporation and Gazprom for construction of the land section of the line to extend to Europe in TurkStream, Medvedev said for the 2nd line of the project, some natural gas transport systems in Europe need to increase capacity, adding that European companies have begun preparing for possible natural gas from TurkStream.



Gazprom previously said in a statement that with BOTAŞ it would create a joint venture, TurkStream Gas Transport, to construct the second line of the TurkStream project.

[maywillow] 11/6/2018 11:54

Energy Europe Ltd Announce Five-Year Agreement

News provided by
Orbit Energy

03:00 ET

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LONDON, June 11, 2018 /PRNewswire/ --

Orbit Energy Ltd, an exciting new entrant to the Great Britain (GB) electricity and gas market, has agreed to an exclusive five-year deal with Shell Energy Europe Ltd for the supply of its power, gas and environmental products.

This agreement allows Orbit Energy to hedge its commodity risk and secure competitive energy prices for its customers, enabling accelerated growth in 2018.

"Adding Shell Energy Europe as our strategic trading partner allows us to provide stable prices and peace of mind to our customers from day one. This partnership is a critical milestone, one that will support sustainable growth through continuity of supply for all Orbit Energy customers"; said Tim Szakacs, Co-founder and CEO, Orbit Energy.

"Orbit Energy represents an exciting new opportunity for Shell Energy Europe Ltd as it demonstrates our ongoing commitment to partner with experienced management teams with proven success in energy supply markets." said Michael Siddique, Manager, Structured Energy Transactions for Shell Energy Europe Ltd.

Orbit Energy offers secure and easy online enrolment, and affordable electricity and gas supply throughout GB. For more information, visit the Orbit Energy website:

ABOUT ORBIT ENERGY

Orbit Energy supplies electricity and gas to homeowners and small businesses throughout Great Britain's deregulated energy markets. The company is a joint venture of Australian-based Energy Global Investments and US-based Genie Energy.

ABOUT SHELL ENERGY EUROPE LTD

Shell Energy Europe Ltd is one of the major energy supply businesses and a leading marketer and trader of energy commodities, including gas, power and environmental products. Shell Energy Europe Ltd's main trading office is in London.

Contact:

Tim Szakacs
Chief Executive Officer
D: [phone]
E: [e-mail]

SOURCE Orbit Energy

[sarkasm] 09/6/2018 11:32

Oil prices 'heading lower this year, to sink further in 2019'
WASHINGTON, 0 hours, 18 minutes ago
Oil prices are heading for a downturn later this year and will sink even lower in 2019 as the fundamentals of supply and demand weaken, said a report.

Despite oil prices recently rising to three-and-half year highs, the investment bank left its forecast for international benchmark Brent crude unchanged at $69.30 a barrel. On Friday, Brent was trading at just under $77 a barrel, off its recent high of $80.50, reported CNBC, citing a research note by top US bank JP Morgan.

JP Morgan now sees US West Texas Intermediate crude averaging $62.20 a barrel, down $3 from its last estimate. WTI was trading at nearly $66 a barrel Friday, after nearly touching $73 a barrel two weeks ago.

"While geopolitical tensions and lingering risks of large supply disruptions remain an upside risk throughout the second half in 2018, we think that prices will be corrected downwards towards end of the year and remain capped in 2019," JP Morgan analyst Abhishek Deshpande wrote in the note.

The bank knocked down its 2019 Brent forecast by $1, to $63 a barrel. It lowered its outlook for WTI slightly to $58.25 a barrel. June's Opec meeting might be one of the worst since 2011, says expert.

An Opec meeting in two weeks will determine the short-term price movement, said the bank.

Oil market heavyweights Russia and Saudi Arabia have recently signaled they could ease a deal between the 14-member Opec and other producers to limit output, which has been in place since January 2017.

The Saudis and Russia are wary of prices rising high enough to dent demand as Venezuela's output continues to decline amid an economic crisis and as US sanctions come into force against Iran, Opec's third-biggest producer.

Oil prices suggest the market is betting on an output increase of about 400,000 barrels a day, according to JP Morgan.

"We think there might be one last hurrah (upside) when it comes to prices especially if Opec were to announce a release of barrels which is less than what markets have priced in currently," observed Deshpande.

Still, JP Morgan thinks the rally would unwind. That's because any move by Opec to ease output caps would signal a return to pre-2017 production levels.

It would also tip the finely balanced oil market towards oversupply starting in the fourth quarter, when the restored barrels are likely to start arriving at import terminals.

JP Morgan already believes the supply-and-demand fundamentals of the market are poised to weaken.

The bank expects oil demand to grow more slowly than previously anticipated, which correlates to J.P. Morgan's downward revisions to economic growth in Europe, Latin America and the Middle East.

On the supply side, global output is poised to rise by 2 million barrels a day in 2018, 200,000 barrels a day higher than JP Morgan's last forecast.

Supply from outside Opec is set to rise by 2.2 million barrels a day, driven by a surge in output from the US, which is quickly closing in on top producer Russia, which pumps about 11 million barrels a day.

JP Morgan does see a path to a higher oil price in 2018 and 2019. In its high-case scenario, Brent averages $74.55 a barrel this year and $78.75 next year.

The catalysts for a higher price include Opec and Russia extending their output limits into 2019 and the wealth of geopolitical risks throughout the market.

"The risk of oil prices gravitating towards the high case remains high given the rise in geopolitical tensions and potential risk to large scale disruptions to oil supply from key oil producing countries such as Iran and Venezuela in particular," Deshpande said.