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Vaar Energi, Norway's largest energy company, is looking to cut spending as its Q2 operating profits lag.
Norwegian oil company Vaar Energi reported a lower than expected operating profit for the 2nd quarter on Tuesday. It said that it intends to cut costs, while maintaining dividend payments totaling $1.2 billion in this year and next. The company's earnings before tax and interest (EBIT) rose from $992 to $1.2 billion in April-June, but still fell short of the $1.34 billion average forecast by nine analysts surveyed. Vaar, majority-owned by Italy's Eni in a press release, said that it planned to cut spending by $500,000,000 "for the period of 2025-2026", to improve its competitiveness and resilience in an unstable market. Vaar CEO Nick Walker stated that "with current production exceeding 350,000 barrels equivalent per day (boepd),we expect to reach approximately 430,000 boepd by the fourth quarter. This will help us achieve our plans for transformational growth in 2025." He added that the company is on track to maintain production between 350,000 and 400,000 boepd by 2030, with a portfolio of 30 new projects. Of these, more than 10 will be sanctioned in this year. (Reporting and editing by Terje Solsvik, Nerijus Adomiaitis)
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Investors focus on tariff negotiations and earnings to cause Asian stocks to fall
Investors took note of the tariff negotiations between America and its trading partners, as Asian stock markets dipped after reaching a peak of nearly four years on Tuesday. In Europe, the dithering mood will continue as earnings of firms such as SAP and UniCredit are expected to be a major focus. The EUROSTOXX Futures, DAX Futures, and FTSE Futures all fell by 0.5%. MSCI's broadest Asia-Pacific share index outside Japan reached its highest level in October 2021 during early Asian hours, but it was down 0.4% at the time of writing. The index has risen by nearly 16% in the past year. S&P 500, Nasdaq and Dow Jones both closed at record highs on Monday. After a long weekend of elections in which the ruling coalition lost in the upper house, Prime Minister Shigeru ishiba has vowed to stay in office. Japanese shares initially jumped, but then reversed their course and traded lower on Tuesday afternoon. The election results had been priced in by that time and weren't as bad as investors feared. The yen rose 1% on Sunday, recovering some of its losses in the past weeks. It was slightly weaker last at 147.73 dollars. Kristina Clifon, economist at Commonwealth Bank of Australia said that the weakening of Ishiba’s leadership would open the door for more fiscal expansion, which is bad for Japanese assets including the yen. The bottom line is that the yields on longer-term Japanese government bonds and JPY could fall if worries about Japan's fiscal expenditures intensify. Investors have focused on tariff negotiations in advance of the deadline of August 1, with the European Union exploring an broader range of possible countermeasures to the United States, as the prospects of an acceptable agreement with Washington diminish. CBA's Clifton says that the EU and Japan are the two most important countries for global growth. Clifton said that the USD's reaction to trade deals announced with these countries will depend on their details. He noted the dollar may fall again against the British pound and the euro. The euro remained steady at $1.1689 after gaining 0.5% the previous session, but was still far from the four-year high that it reached at the beginning of the month. Investors are looking for alternatives to U.S. stocks that have been hurt by tariff uncertainty. The euro is up 13% in 2018. The dollar index was 97.905. Investors await results from Wall Street giants Alphabet, Tesla, as also from European heavyweights LVMH and Roche this week, while uncertainty about tariffs clouds the outlook. Investors have been on tenterhooks for the past few weeks due to the rumblings about whether President Donald Trump would fire Fed chair Jerome Powell. Trump was on the verge of firing Powell last week but backtracked, citing the likely market disruption. U.S. Treasury secretary Scott Bessent stated on Monday that the Federal Reserve as an institution needed to be reviewed and to determine if it was successful. This further exacerbated concerns over the independence of the U.S. Central Bank. It is expected that the Fed will hold rates at their July meeting, but may lower them later in the year. The market will focus on Powell's address on Tuesday to get clues as to when the Fed may ease policy. Goldman Sachs' strategists predict that the Fed will deliver three consecutive 25 basis-point reductions starting in September "provided inflation expectation remains in check amid concerns about Fed independence." Brent crude futures dropped nearly 1%, to $68.56 per barrel. U.S. West Texas intermediate crude fell 1%, to $66.51 a barrel. (Reporting and editing by Shri Navaratnam in Singapore, and Jamie Freed.)
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Kansai will begin surveys for a new nuclear power plant in Mihama
Kansai Electric Power announced on Tuesday that it would begin the surveys to build a new reactor for its Mihama Nuclear Power Station in Fukui Prefecture, western Japan. The existing facility will be replaced. This is the first concrete step in building a nuclear reactor in Japan after the Great East Japan earthquake in 2011, which resulted in a meltdown of the reactor that forced Tokyo Electric Power to close its Fukushima Plant. As the country relies heavily on imports of fossil fuels, the government wants to see nuclear power contribute more to energy security. Kansai is Japan's largest nuclear power company based on the number of reactors that are online. In a statement, the company stated that the surveys would include topography, geology, and other studies, as well as communication with local residents. An executive at Kansai told a press conference on Tuesday that the company is looking into the SRZ-1200 light water advanced reactor. Mitsubishi Heavy Industries has developed this type of reactor. Japan currently has more than a dozen nuclear reactors with a combined power of 12 gigawatts. Many companies are going through a licensing process to comply with stricter safety regulations implemented after the Fukushima 2011 disaster. Before the disaster, these companies operated 54 reactors. (Reporting and writing by Yuka Obasashi; editing by Chang-Ran Kim, Christian Schmollinger, and Katya Golubkova)
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Russell: OPEC and IEA crude demand forecasts could be too conservative
The International Energy Agency (IEA), as well as OPEC, are both more conservative in their growth forecasts. The numbers contained in the monthly report of the Organization of the Petroleum Exporting Countries and the wider OPEC+ are less optimistic. The IEA has a similar view. In its monthly report for July, it predicted that the global crude oil demand would grow by 700,000.00 barrels per day in 2025. This is the lowest growth rate since 2009. OPEC’s July report is a little more optimistic, predicting that oil demand will rise by 1,29 million bpd by 2025. Of this, 1.16 million bpd will come from countries outside of the Organisation for Economic Cooperation and Development. Both the IEA's and OPEC's forecasts are so cautious now that they run the risk of actually being too pessimistic. This is especially true in Asia, the region with the highest imports. Last year, OPEC was incredibly bullish about its demand predictions, despite the fact that Asia's crude imports fell. The difference between the demand forecasts and the imports are obvious, but it is the volume of seaborne crude imports that is driving the price of crude oil, as this market accounts for 40% of the daily global demand. OPEC's July 2024 Monthly Report forecasts that Asia's non OECD oil consumption will rise by 1,34 million bpd, with China representing 760,000 bpd. According to LSEG Oil Research, Asia's crude oil imports will actually decline in 2024. They will drop by 370,000 bpd and reach 26.51 millions bpd. The first drop in Asia's imports of oil since 2021 occurred at a moment when the demand was impacted by COVID-19-related lockdowns. The difference between OPEC’s bullish predictions for most of 2024 and reality of low crude imports from Asia may have tempered their forecasts for the year 2025. Question is, are they now being too cautious? ASIA RECOVERY OPEC's monthly report for July forecasts that non-OECD Asia will see its oil demand rise by 610,000 bpd by 2025. China, Asia's largest crude importer with 210,000 bpd, and India, Asia’s second biggest crude importer with 160,000 bpd, are the two main contributors. In its report from July, the IEA stated that they expect China's oil demand to increase by 81,000 bpd by 2025. India is also expected to gain 92,000 bpd. The demand for oil in Asia non-OECD is expected to rise by 352,000 bpd. The IEA and OPEC numbers are both modest, particularly since Asia's crude oil imports have actually seen a relatively high growth rate in the first half 2025. According to calculations based upon LSEG data, Asia's imports for the first half of the year totaled 27,25 million bpd. This represents a 510,000 bpd increase over the same period in 2013. Imports rose in the second quarter in particular in China as refiners capitalized on the lower oil prices at the time of cargo arrangements. Some of the increased oil imports were likely used to build up inventories. This process may continue into the second half if the oil prices remain low and OPEC+ continues to increase production amid the economic uncertainty caused by President Donald Trump's global trade war. The difference between the cautious oil demand estimates of this year and those of last year, which were more optimistic, shows that price is a much bigger factor in demand. This is especially true in Asia. In part, the low crude oil imports in Asia in 2024 were due to the high prices that persisted throughout the year. Prices peaked at $92 a bar in April before falling briefly below $70 a barrel only in September. Brent futures, the benchmark, peaked at just under $82 per barrel in January and traded as low as $58.50 a barrel as late as May. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, who is also an author. (Editing by Kate Mayberry).
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Sources say Indonesia will sign a $8 billion refineries deal with a US company amid tariffs agreement.
According to two sources with knowledge of the matter, and a presentation from the economic ministry, Danantara, Indonesia's sovereign wealth fund, plans to sign a $8 billion contract with U.S. engineering company KBR Inc. to build 17 modular refining plants. The contract was part of the trade agreement between Indonesia and the United States last week, which led to the reduction in threatened tariff rates from 32% to 19%. Airlangga Hartarto of Indonesia, who is the chief negotiator for the deal, revealed the modular refinery design during a briefing held behind closed doors on Monday night with Indonesian business leaders. Two sources confirmed that the deal was discussed in a presentation. Danantara, formerly Kellogg Brown & Root Inc., and KBR Inc. did not immediately reply to requests for comments. The proposed refinery contract has never been reported before, even though some details have been released, including the increased energy cooperation. Reporting by Stefanno Sulaiman, Dewi Kurniawati and Gibran Peshimam. Editing by Stephen Coates.
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Oil prices fall as concerns about trade wars increase fuel demand
Investor sentiment was impacted by the decline in oil prices on Tuesday, as fears that a brewing trade conflict between the U.S.A. and European Union would reduce fuel demand growth through a reduction of economic activity dampened investor confidence. Brent crude futures dropped 52 cents or 0.75% to $68.69 per barrel at 0325 GMT. U.S. West Texas Intermediate Crude was $66.69 per barrel, down by 51 cents or 0.76%. Both benchmarks ended the day slightly lower. The WTI August contract expires Tuesday, and the September contract, which is more active, was down 54 cents or 0.82% to $65.41 per barrel. "Broad Demand Concerns continue to simmer amid escalating trade tensions in the global market, particularly as markets watch the latest threats of tariffs between major economies, and Trump's possible announcements before August 1 deadline," said Priyanka Sackdeva, Senior Market Analyst at Phillip Nova. She added that investors are also looking at the ripple effect of new U.S. sanctions against Russian crude. Concerns about supply have been largely alleviated since major producers increased output and a ceasefire between Israel and Iran on June 24, ended the conflict. Investors are becoming increasingly concerned about the global economy due to changes in U.S. Trade Policy. The weaker dollar has helped to support crude oil prices as buyers of other currencies pay less. In a recent note, IG analyst Tony Sycamore noted that prices have fallen "as trade-war concerns offset the support provided by a softer dollar". Sycamore has also suggested that the tariff dispute between the U.S.A. and EU could escalate. According to EU diplomats, the EU is looking at a wider range of counter-measures that could be taken against Washington as prospects for a trade agreement are fading. US has threatened to impose 30% tariffs on EU imports if no deal is reached by August 1. As the Organization of the Petroleum Exporting Countries (OPEC) and its allies reduce their output, there are signs of a rising oil supply on the market. Saudi Arabian crude oil exports rose in May to their highest level in three months according to data released by the Joint Organizations Data Initiative on Monday. (Reporting from Anjana Anil, Bengaluru; Sudarshan Varadhan, Singapore; editing by Christian Schmollinger & Jamie Freed).
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Dutch Contractor Completes Malaysia’s Largest 'Rig-to-Reef' Decom Project
Dutch offshore contractor Marine Masters has completed its offshore scope for the decommissioning of the South Angsi Alpha (SAA) platform, operated by Hibiscus Oil & Gas Malaysia, marking a major milestone in the repurposing of retired offshore infrastructure.The platform’s substructure is now resting on the seabed as part of Malaysia’s largest rig-to-reef project.The SAA platform, located 130 km off the Terengganu coast, was a 4,000 mt weighing four-legged Mobile Offshore Application Barge (MOAB) that served as a full production facility for over 15 years.Following cessation of production, the topside and substructure were prepared for safe removal and partial reefing in line with Malaysian regulatory approvals. This marks the largest platform ever to be decommissioned and repurposed within Malaysian waters.Marine Masters was overall responsible for the removal of the MOAB by making use of the reversed installation method and the removal of various associated components for safe onshore disposal.The jacket was cut at -55 meters LAT and vertically separated, allowing the sections to be laid on the seabed as artificial reef structures. Additional tasks included the recovery of all 13 conductors, the retrieval of four MOAB support legs, and the cutting and transport of the Wellhead Access Platform.The MOAB topside has been skidded to shore at Labuan Shipyard, and all loose items have been offloaded. The ENA WB400 accommodation work barge was demobilized at the same time, while the two transport barges are currently en route to their respective demobilization ports.This marks the conclusion of Marine Masters’ active offshore operations on the project.Although the offshore scope is complete, the project continues with the final handling and disposal of the topside components.“This has been a highly successful campaign, with minimal delays and strong teamwork throughout. We are grateful to our client Hibiscus for their trust in us and having given us the opportunity to show that the combination of our oil and gas experience and salvage mindset is key for the safe and cost-efficient execution of a fast-track project like this. A special thanks to the Hibiscus project team for the pleasant and transparent collaboration,” said Danny Spaans, Founder & Director of Marine Masters.The South Angsi Alpha campaign stands as the largest decommissioning and reefing operation of its kind in Malaysian waters, and serves as a blueprint for responsible offshore retirement. The SAA decommissioning is part of Hibiscus Petroleum’s broader sustainability vision. The rig-to-reef initiative aligns with efforts to preserve biodiversity, enhance marine ecosystems, and promote sustainable fisheries and ecotourism in the region.
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MMA Offshore Officially Becomes Cyan Renewables
MMA Offshore has rebranded to Cyan Renewables following the acquisition, and opened a Melbourne office to support Australia’s offshore wind sector.The rebrand marks a pivotal step in aligning the business with Australia’s emerging offshore wind industry and the broader global transition to clean energy, the company said.Cyan Renewables to Buy MMA OffshoreWith the opening of Melbourne office, Cyan has established a regional presence adjacent to key upcoming offshore wind farm developments in Victoria and New South Wales.Cyan’s Melbourne office will be headed up by Wesley Griffiths, Head of Offshore Wind, Australia. Wes is an accomplished project logistics professional with significant experience in managing complex logistics project for the offshore wind and traditional energy sectors.With a track record across marine operations, subsea services, and complex offshore projects, the newly branded Cyan Renewables is well positioned to support the energy transition including the developing offshore wind industry in Australia, from early-stage surveying and construction support to long-term vessel operations and maintenance.“Australia is entering a transformative era for offshore wind, and Cyan Renewables is here to help make that transition possible.“By combining MMA’s deep local expertise with Cyan’s global focus and experience in renewables, we’re building a best-in-class partner for Australia’s clean energy future,” said Keng Lin Lee, CEO of Cyan Renewables.
Chinese production cuts back gains on iron ore as steel demand grows.
The price of iron ore futures ticked up on Tuesday due to a brightening steelmaking demand, but output cuts in China, the top consumer, limited the increase.
As of 0302 GMT, the most-traded contract for May iron ore on China's Dalian Commodity Exchange was trading 0.71% higher. It was 776.5 Yuan ($106.91).
The benchmark iron ore for April on the Singapore Exchange fell 0.82% to $101.45 per ton.
Mysteel, a Chinese consultancy, said that "the production of Chinese iron ore mines continued to rise last week." It attributed the increase to an increased steel production.
According to Mysteel, from March 14-20 the combined daily output of iron ore concentrator averaged 488.500 tonnes per day. This is an increase of 0.4% compared to last week.
Galaxy Futures, a broker, stated in a report that blast furnaces are expected to increase their production in the future.
Local reports say that several steelmakers in the Xinjiang Region of northwestern China began cutting production on Monday. This is a blow to the main steelmaking ingredient.
Xinjiang Ba Yi Iron and Steel Co., a subsidiary to the world's biggest steel producer, has plans to reduce daily crude steel production by 10% starting Monday.
Chinese stocks closed higher on Sunday, boosting sentiment. However, gains were limited as investors became cautious due to the approaching deadline for tariffs set by U.S. president Donald Trump.
Trump announced on Monday that auto tariffs will be implemented soon. However, not all the levies he had threatened would be imposed by April 2, and some countries could get a break.
Coking coal and coke, which are used to make steel, also posted gains of 0.25% and 0.88% respectively.
The benchmarks for steel on the Shanghai Futures Exchange were flat. Hot-rolled coils and stainless steel fell 0.22%, while rebar and wire rod both rose by nearly 0.3%. ($1 = 7.2631 Chinese Yuan) (Reporting and editing by Janane Vekatraman; Michele Pek)
(source: Reuters)