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Exxon’s Black Sea hopes dashed

Steven Mnuchin US TreasurySecretaryThe Trump administration has rejected Exxon Mobil’s application for a waiver from sanctions imposed on Russia after the annexation of Crimea and subsequent events in eastern Ukraine, dashing the oil company’s hopes that it could resume drilling in the Black Sea in partnership with Rosneft. (more…)

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Exxon in bid to resume Russian JV

Exxon Mobil has applied to the Treasury Department for a waiver from US sanctions on Russia in a bid to resume its Black Sea joint venture with state oil giant Rosneft, according to reports in the Wall Street Journal; but (more…)

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Trump travel ban puts Boeing’s $8bn deal with Iran Air in jeopardy

Trump travel banUS President Donald Trump’s decision to issue an executive order barring Iranian nationals from travelling to the US for the next three months has cast further doubt on Boeing’s $8bn deal to supply Iran Air with 80 aircraft that the two companies agreed in principle at the back end of 2016.
The travel ban (more…)

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Chinese real estate investment hits record high – with more to come

Strategic Hotels ChicagoChinese investment in overseas commercial and residential property investment hit a record high of US $33bn in 2016, a year-on-year increase of nearly 53% percent year-on-year, according to the latest data compiled by Jones Lang LaSalle (JLL), with the highlights of last year’s activity being (more…)

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Iran Air takes delivery of first Airbus jet in ‘bright day’ for aviation sector

IranAir Chairman Farhad Parvaresh with Airbus A321 Toulouse 110117Senior executives from Iran Air and Airbus converged on Toulouse last Wednesday to witness the official handover of the first of 180 aircraft manufactured by either the French airline giant or its US competitor Boeing that are destined for Iran since the lifting of sanctions early last year, on what (more…)

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Trump victory gifts Russian oligarchs $29bn as energy share prices soar

Gennady TimchenkoRussian oligarchs: Rising share prices and a resurgence in the value of the rouble brought on partly by the prospect of a Trump administration have added approximately $29bn to the fortunes of some of Russia’s richest men, making President Putin’s inner circle among the chief beneficiaries of last November’s presidential election, according to figures compiled and released by Forbes this week.
Among the biggest winners (more…)

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Vitol and NIOC pre-empt Trump with $1bn pre-finance Iranian oil deal

Vitol logoNIOC logoVitol, the world’s largest oil trader, has agreed to provide the National Iranian Oil Company (NIOC) with the euro equivalent of $1bn in exchange for a share in future oil product exports from Iran, it was being reported this week, in the first pre-finance deal to be signed between the Islamic Republic and a trading house since sanctions were lifted early last year.
The deal (more…)

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Concerns over Trump hard-line policy prompt BP to step back from Iran

Trump on IranLess than two months after deciding to exclude its US national CEO Bob Dudley from its attempts to capitalise on the potential of the Iranian oil industry, doubts over the policies that incoming President Donald Trump’s administration will adopt towards the Islamic Republic has prompted energy giant BP to stand back altogether, leaving the field open to its two biggest European rivals Royal Dutch Shell and Total. (more…)

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Obama hits Trump with new Russian sanctions and Arctic drilling ban

Navy Day Parade SevastopolOutgoing US President Barack Obama this week did his best to thwart his successor Donald Trump’s plans to improve relations with Moscow and to increase US oil and gas production by extending the sanctions imposed on Russia over its 2014 annexation of Crimea while almost simultaneously withdrawing (more…)

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EU extends Russian sanctions – but rift widens with Tillerson appointment

Polish Foreign Minister Radoslaw Sikorski

Polish Foreign Minister Radoslaw Sikorski

Russian sanctions: As widely anticipated, European Union leaders last week voted to extend economic sanctions against Russia over the ongoing conflict in Ukraine for a further six months. There were, however, signs of a rift beginning to emerge between some East European countries – led by Poland (more…)

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Tillerson ready to question sanctions as Merckel and Hollande back extension

Exxon Mobil CEO Rex TillersonTillerson: German Chancellor Angela Merkel and French President Francois Hollande yesterday put their collective weight behind a six-month extension of the package of economic sanctions imposed on Russia after its annexation of Crimea nearly three years ago; but the long-term future of the strategy is looking increasingly uncertain in the light of Donald Trump’s choice of Exxon Mobil Chairman and CEO Rex Tillerson as his Secretary of State. Tillerson has long been known to have a good personal relationship with Russian President Vladimir Putin and to be sceptical about the efficacy of the sanction strategy and this week claims have also emerged in several US media outlets that he had visited the White House more than 20 times in an effort to ensure that his company was not put at a competitive disadvantage by the manner in which the sanctions were imposed. The oil chief was said to be concerned that European nations might not apply the restrictions as strictly as the US. (more…)

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Putin celebrates as Qatar wealth fund and Glencore buy $11bn Rosneft stake

PutinRussian President Vladimir Putin took to the TV airways yesterday to celebrate the news that the commodity trader Glencore and Qatar’s QIA sovereign wealth fund – Glencore’s largest shareholders – had agreed to buy Moscow’s 19.5% stake in the state-run Rosneft oil giant for a figure Putin put at $11bn, boosted by what he described as “the rising trend in oil prices.”
The transaction was so big that Putin specifically asked Sechin to work with the Finance Ministry and central bank to ensure that it did not destabilize the currency market when the proceeds were converted into roubles. The rouble gained against the dollar in late trading after the deal was announced. and shares in Rosneft jumped by 6.4% on the news.
Glencore Chief Executive Officer Ivan GlasenbergPutin haled the surprise deal as the “largest acquisitions in the oil and gas sector in the world in 2016.” It is certainly the biggest foreign investment in Russia since the crisis in Ukraine and comes little more than a year after Glencore Chief Executive Officer Ivan Glasenberg had to go cap in hand to his shareholders for a cash injection. Qatar’s involvement also marks a rare venture of an OPEC member into the Russian energy sector.
Putin was joined on air by his long-term ally and Rosneft CEO Igor Sechin who thanked the President for his part in brokering the deal which, he said, only “became possible thanks to your personal contribution,…..the negotiated price is in our view the maximum possible with the minimum discount of 5% to market prices.” Financing will be provided by “one of the largest European banks,” he added, without specifying which one.
Putin and UlyukaevThe deal comes at the end of an eventful few weeks for Russia’s privatisation programme which has seen Economy Minister Alexey Ulyukaev dismissed and put under house arrest, accused of taking a bribe to end his objections to Rosneft taking part in the privatisation of Bashneft; and Deputy Finance Minister Alexei Moiseev announcing that hundreds of SMEs were likely to put up for sale next year as Moscow scrambles to raise cash to fill its $21bn budget deficit.
The new deal will go a long way to reducing that debt, but with Rosneft and Sechin himself subject to the sanctions imposed by the West after the annexation of Ukraine, Glencore announced that it would be “fully ring-fenced” from exposure to the Russian state company, apart from a 0.54% “indirect equity interest.”
Russia will retain a controlling stake in Rosneft after the deal, while BP owns a further 19.75% stake in the company.

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Rouhani threatens to revive nuclear programme after Senate votes for 10-year extension to Iran Sanctions Act

Isfahan nuclear plantIran’s President Hassan Rouhani yesterday called on outgoing US President Barack Obama not to sign a 10-year extension to Washington’s Iran Sanctions Act, amid reports that the Iranian parliament is preparing to table a motion that would give the government a mandate to resume its nuclear programme in retaliation. (more…)

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BP US CEO Bob Dudley stands back from special Iranian task force

 BP CEO Bob DudleyBP has formed a special task force to study the investment potential of the Iranian oil industry in the post-sanctions era – but, in an attempt to mitigate the risk of the US sticking to its ban on any American involvement in the Islamic Republic, the team is to be headed by its UK-born CFO Brian Gilvary rather than US national CEO Bob Dudley. (more…)

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Investment rolls back in as retailers bank on Russian economic recovery

FDI RussiaRussian economic recovery: Foreign direct investment into Russia reached $8.3bn in the first nine months of this year, according to data from the Central Bank of Russia (CBR), easily outstripping the $5.9bn reported for the whole of 2015, as foreign retailers began betting that the country’s two-year long recession is coming to an end.
Even before (more…)

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US embassy and Sberbank lead objections as LinkedIn is banned

linkedin-logoLinkedIn yesterday became the first major social network to fall foul of the Russian authorities when the country’s communications regulator Roskomnadzor ordered public access to its website to be blocked. The Interfax news agency is reporting (more…)

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World Bank upgrades forecast for Russian economy as Moscow looks in hope to Trump to trigger detente

REUTERS/Sergei KarpukhinThe Russian economy could return to growth as early as next year, the World Bank predicted yesterday, with a rise in oil prices expected to help it bottom out in the second half of the year. While the bank is forecasting that Russia’s GDP will contract by 0.6% this year, it now sees it growing by 1.5% in 2017 and 1.7% in 2018. Back in April, the bank was forecasting a 1.1% growth rate for next year.
While it is now expects higher oil prices to have a positive impact on domestic demand and to trigger investment activity as some of the country’s major companies replenish their stocks, it warned that the Russian economy remained dangerously dependent on its oil and gas sectors. “This growth upsurge, however, is unlikely to turn the tide in terms of building a more diversified economy,” it said.
US President elect Donald TrumpThe Kremlin will also be hoping that Trump’s victory in the US Presidential elections may put paid to one of the World Bank’s other concerns, namely that economic sanctions imposed after the annexation of Crimea might complicate Russia’s economic recovery. On receiving news of yesterday’s shock result. Russian President Vladimir Putin sent Donald Trump a congratulatory telegram in which he expressed his hope that relations between the two world powers would improve “from their crisis state.” Ties between Moscow and Washington must be “based on principles of equality, mutual respect and a real accounting of each other’s positions,” he added.

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Golden Globes go to China

Golden GlobesGolden Globes: The Dalian Wanda Group, the real-estate conglomerate owned by Chinese billionaire Wang Jianlin, has finalised deal to buy the American entertainment production company Dick Clark Productions in its entirety for $1bn, it announced yesterday. 
The acquisition is the Group’s third significant deal in the US entertainment sector in a year after it paid $3.5bn for the California-based Legendary Entertainment in January and $650m for AMC Theaters (headquartered in Kansas) in July, but this is its first foray into television. “Obtaining top television production rights brings about complementary and coordinated development for Wanda’s current focuses on the film, tourism, and sports industries,” the Chinese firm said. The American company’s management team “would remain in its entirety”, it added, and that they had signed “a long-term operation target agreement with the management.”
Wang JanlianWhile a group of US Congressmen have already accused Wang of being one of Beijing’s “state champions” earlier this year, the Chinese tycoon prefers to see himself as an angel investor who can help struggling US entertainment companies capitalise on the huge Chinese market. He is on record as saying that he intends to increase Dalian Wanda’s share of the world’s movie theatre seats from 13% to 20% by the end of the decade.
Wanda CityWang is also in a struggle for with Disney for domination of the Chinese theme park sector and has made clear his intention to be operating 20 parks across China by 2020. Earlier this year, Wang, who is worth around £23bn according to Forbes, wants to open six more theme parks in the next three years and have 15 in China by 2020. The first of these – the 200-ha Wanda Cultural Tourism City – opened in Nanching in September and features what is claimed to be the highest and longest roller coaster in the country. It has also infuriated senior Disney officials after Captain America and Snow White were spotted milling around with guests on the opening day.
Wang is defiant. ‘This craze for Mickey Mouse and Donald Duck is over, the period when we would blindly follow where Disney led has been gone for years,” he said. “A tiger cannot take on a pack of wolves.”

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Major oil field discovered in Alaska

Caelus Energy exploration platform, AlaskaA little-known energy exploration company this week claimed to have found new recoverable oil reserves in Alaska that could equal Russia’s entire output from its Arctic fields and which could breathe new life into the state’s ailing economy. Caelus Energy LLC, (more…)

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US treasury accused of ‘terrorism’ as Russia looks to win race to secure foothold in Iranian banking sector

Iranian women in banksIranian banking sector: Russian banks are ready to steal a march on their Western counterparts by establishing a foothold in Iran, according to a senior figure in the Russian banking sector, just weeks after (more…)

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