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ADNOC close to finalising EU remedies for Covestro deal, sources say
People familiar with the situation said that ADNOC, Abu Dhabi's state oil company, is preparing remedies to deal with an EU investigation on subsidy allegations in its bid of 14.7 billion euros ($17.2 billion) for Germany's Covestro. It will likely convert a proposed capital increase of 1.2 billion euros into a shareholder loan. This is ADNOC’s largest acquisition ever and the largest foreign takeover of an EU-based company by a Gulf State. The European Commission (the EU's competition watchdog) has warned that ADNOC could be benefiting from subsidies, such as a guarantee that is unlimited, and that foreign aid may also be involved with the capital increase at Covestro. ADNOC is likely to convert the Covestro equity increase into a shareholder loan, at rates of the market. People familiar with the matter said that the company plans to address EU concerns regarding unlimited state guarantees, just as UAE telecoms group e& did last year to gain EU approval for certain parts of Czech Telecoms Company PFF. e& has agreed to remove the unlimited state guarantee it had provided by ensuring its articles of incorporation do not differ from UAE bankruptcy law. People said that ADNOC would likely pledge to keep Covestro’s technology and intellectual properties in Europe. The Commission, which is currently investigating the deal in its Foreign Subsidies Regulations (FSR), targeting unfair foreign assistance for companies, has declined to comment. A spokesperson for XRG (the international investment arm of ADNOC) said that it would not comment on current discussions. ADNOC's Chief Executive Sultan Ahmed Al Jaber spoke with EU Antitrust chief Teresa Ribera via phone on Friday, according to the sources. ADNOC slammed EU regulators last week for their disproportionate and intrusive requests for information, which it warned could jeopardize the deal. (Reporting and editing by Foo Yunchee)
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Barrick's executive advises Mali president on gold dispute
An official from the mines ministry said on Wednesday that a senior Barrick Mining executive, who was representing the company during tense talks with Mali’s government, has now switched sides and is now an advisor to Mali’s president. Hilaire Diarra, formerly the general manager of Barrick’s Tongon Gold Mine (Ivory Coast), was appointed special counsellor by Mali’s president through a decree that was signed late August. On Wednesday, an official from the Mines Ministry confirmed that the document was authentic. This move is a blow to the Canadian company's attempts to negotiate control of the Loulo-Gounkoto complex of gold mines, which is one of the highest-profile examples in West Africa of resource nationalism by military governments who want to control their gold and uranium resources. Diarra and Barrick's spokesperson didn't respond to comments immediately. Since 2023, the Mali government has been in negotiations with Barrick over the implementation a new code of mining that increases taxes and gives government a larger share of the gold mines. Former Barrick executives have been recruited to try and outmanoeuvre Barrick. In June, a Malian court appointed provisional administrator took over the Loulo-Gounkoto complex six months after Barrick had suspended operations at the site due to an impasse in negotiations. Samba Toure, a former Barrick executive, is now part of the provisional management running operations at the complex. Barrick's financial reports show that Loulo-Gounkoto will produce 578,000 ounces gold by 2024. Since the provisional administrator has taken control, 1 metric tonne of gold or 35,274 pounds, have been sold. A source with knowledge of the situation said that current production levels are around 25% of normal output. Diarra, who is a Malian national and began his mining career in Loulo, flew to Bamako this year from Ivory Coast to negotiate for the Canadian miner. This source, along with two others, confirmed the information. Reporting by Portia Crowe and Divya Raagapal Editing Robbie Corey Boulet, Veronica Brown, and David Goodman
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Africa aims to raise $50 billion a year through a new climate solution initiative
A draft declaration following a climate summit of leaders in Addis Ababa on Wednesday showed that Africa aims to secure $50 billion per year for a continental climate solutions initiative. The initiative is sponsored by Ethiopian Prime Minister Abiy Ahmad. The 54-nation African continent, which was ravaged by landslides and floods, wants to continue with its climate commitments despite the United States withdrawing from the Paris Climate Agreement. In the draft declaration, it was stated that the push is to establish the Africa Climate Innovation Compact (African Climate Facility) and the Africa Climate Facility in order "to mobilize $50 Billion annually in catalytic financing for climate solutions". Ethiopian officials didn't respond to requests for more information immediately, but Abiy said at the opening ceremony of Monday's summit that the initiative should be aimed at delivering 1,000 solutions by 2030 to combat climate challenges. Ethiopia's tree-planting campaign, which began in 2019, as well as a new mega hydroelectric dam that was launched on Tuesday are evidence of Africa’s ability to lead the way in economic development and ecosystem protection. African leaders presided at the opening of this summit over an agreement between African development financiers (ADF) and commercial banks, to mobilize $100 billion in investments for green energy generation. The draft declaration of the summit stated that Africa needs more than $3 trillion by 2030 to achieve its climate goals, but has only received $30 billion between the years 2021 and 2012. The report called for greater international commitments and partnerships in order to close the funding gap. It also emphasized the importance of grants to enable adaptation to climate changes. Reporting by Duncan Miriri, Dawit Endeshaw and Alexandra Hudson
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EU unlikely to increase tariffs against India and China on Trump's request
EU sources say that the European Union will not impose tariffs on India and China, which are the two main buyers of Russian crude oil, as the U.S. president Donald Trump has asked the bloc to. This week, an EU delegation including the EU's Russia sanction chief flew to Washington to discuss the ways in which the two sides could coordinate sanctions against Russia for its full-scale invasion into Ukraine. Officials have said that Trump has urged the EU, to hit India and China up to 100% with tariffs to put pressure on Russian president Vladimir Putin who depends on energy revenues for his country's conflict in Ukraine. The European Commission has not responded to a comment request. The European Union has placed extensive sanctions against Russia In its last package, published in July, it also included two Chinese banks and a major Indian refinery. Sources said that the EU does not treat tariffs the same as sanctions, and only imposes these after a lengthy investigation to establish a legal basis. So far, the bloc has only imposed tariffs on Russian and Belarusian farm products and fertilizers in response to the Ukraine War. It was argued that the tariffs were necessary to avoid creating a dependency which could be exploited, and to protect EU fertiliser producers. An EU diplomat stated that there has been no discussion about possible tariffs with India or China. The EU is also in the process of finalizing a trade agreement with India that the bloc will not want to compromise. Trump's position towards India appeared to soften by Wednesday when he stated that he wanted to reset the trade relations with New Delhi. A second EU source stated that such tariffs are risky, and they could be too broad. It is easier to sanction certain entities and to open the door for them to be delisted if they stop doing business with Russia. Until now, the EU has only listed small, unknown entities that are often shell companies, used by Russia to funnel military goods or dual-use products to its military. The EU plans to list Chinese refineries and banks from two countries in central Asia in its 19th set of sanctions, which could come as early as Friday. (Reporting and editing by Ros Russell, Philip Blenkinsop and Julia Payne)
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US oil stocks rise as crude exports drop and fuel demand falls, EIA reports
The Energy Information Administration reported on Wednesday that U.S. crude oil and fuel stocks rose during the past week, despite a drop in demand and exports. The EIA reported that crude stockpiles increased by 3.9 millions barrels, to 424.6million barrels for the week ending September 5. This was compared to analysts' expectations of a drawdown of 1 million barrels. The EIA reported that crude stocks at Cushing, Oklahoma's delivery hub, fell by 365,000 barges in the past week. U.S. crude oil exports dropped by 1.1m barrels per day, to 2.8m bpd. Meanwhile, net crude imports increased by 668,000 barrels a day. "A substantial drop in crude exports, coupled with a slight drop in refining activities, has encouraged a good build in crude inventories." The implied demand for gasoline and distillates has been weaker, said Matt Smith of ship tracking firm Kpler. The surprise increase in oil inventories has slowed the gains made by oil futures. Brent crude futures, the global benchmark, were trading at $67.02 per barrel at 11:02 am EDT (1502 GMT), up 62 cents. U.S. crude was up 63 cents to $63.25. Refinery crude rundowns fell by 51,000 barrels per day, but utilization rates increased by 0.6 percentage points to 94.9%. Total product supply, which is a proxy of demand, decreased by 871,000 Bpd, to 19.8 Mbpd. Gasoline consumption fell by 609,000 bpd and reached 8.5 million bpd. Distillate product supply was down by 391,000 bpd at 3.4 million. John Kilduff is a partner at Again Capital. He said, "We're waiting to see just how much the gasoline demand will drop after summer driving in the U.S., and it appears that it will be significant." He added that given the recent economic data, which showed a marked slowdown in the labor markets, the weak gasoline demand could also be an indicator of a slowing U.S. economy and global potential. The EIA reported that gasoline stocks increased by 1.5 million barrels during the week, to 220 millions barrels. This was in contrast with the expectation of a 243,000 barrel draw. ? The data revealed that distillate stocks, which includes diesel and heating oil rose by 4.7 millions barrels last week, versus the expectation of a 35,000 barrel increase. (Reporting from Liz Hampton in Denver, and Georgina Mccartney in Houston. Editing by Marguerita Choy)
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Sources say that Russia has increased September oil exports to western ports by 11%.
Two industry sources and calculations show that Russia revised its September crude export plans from western ports up to 2.1 millions barrels per day, an 11% increase over the initial schedule. This is due to drone attacks on domestic refining plants reducing local demand for crude. The preliminary plan had estimated 1.9 million barrels per day (bpd) and the August exports were 2.0 million bpd. It is anticipated that the increase in Urals crude production will meet an extra demand for spot in India. Purchases of this grade fell in August but are still strong despite Western sanction. Nirmala Sitharaman, the Indian Finance Minister, said last week that Indian oil companies will continue to buy Russian oil. Indian Oil Corp's head of finance, who is the top refiner in the country, stated earlier this week that the spot supply of Russian crude oil has not changed since earlier. Since late August, a number of Russian facilities have suffered damage, including Rosneft’s Ryazan refinery in early September, and Kuibyshevsk, which stopped operations on 28 August. Recently, fires broke out in the Afipsky refinery and Krasnodar after drone attacks by Ukraine. Reporting by Kirsten Doovan; Editing by Kirsten Doane
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Italy's Meloni talks to Modi in India, but skirts the U.S. Tariff Request
In a telephone call with her Indian counterpart Narendra Modi on Wednesday, Giorgia Mello praised the "excellent" relations between her country and India. She did not mention U.S. demands that the EU impose tariffs up to 100 percent on Indian imports. Officials claim that Donald Trump, the U.S. president, asked the European Union to impose new import duties on China and India this week as part of an effort to pressure Russia, the main oil supplier for both nations. The Italian Premier's Office said that Meloni, Modi, and their respective offices reaffirmed the commitment to deepening cooperation in trade, investment, and connectivity. The statement did not mention Trump's demands. The statement said that the two leaders discussed Ukraine and expressed their support for "all international efforts" to promote a truce and resume negotiations in order to achieve a just peace. India, which is the world's largest purchaser of Russian crude oil, has benefited from discounts on Russian production as Europe and the U.S. shunned Russian petroleum over Moscow’s invasion of Ukraine in 2022. India has stated that it will continue to buy Russian oil if it is economical, despite Trump's decision imposing heavy import tariffs against Indian goods. (Reporting and editing by Frances Kerry.)
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Gold nears record highs amid softer inflation data that fuels Fed's cut bets
Gold prices rose on Wednesday as investors hoped that the Federal Reserve would resume rate reductions at its meeting next week, after softer than expected U.S. inflation figures. As of 9:16 am EDT (1316 GMT), spot gold was up 0.6% to $3,647.79 an ounce after reaching a record high on Tuesday of $3,673.95 per ounce. U.S. Gold Futures for December Delivery were up 0.2% to $3,687.40. Labor Department data revealed that U.S. producers prices fell unexpectedly in August. This was due to a decrease in service costs. Fawad Rasaqzada is a market analyst for City Index and FOREX.com. He said that any further weakness in U.S. economic data would continue to support the gold price, as it could indicate more than two interest rate cuts before the end of the year. Gold is traditionally viewed as a hedge to political and economic uncertainties and inflation. It also tends do well when interest rates are low. It has increased by more than 38% in the past year. CME's FedWatch showed that the markets are pricing in 90% of a quarter point cut during the Fed's meeting on September 16-17, and there is a slim chance for a bigger cut. The market confidence that easing is imminent was reinforced by the soft nonfarm payrolls data released last week, which indicated a cooling of labor market conditions. The Labor Department revised down its estimates of job growth through March. This suggests that job growth had already slowed before President Donald Trump's aggressive import tariffs. A federal judge temporarily blocked Trump’s Tuesday attempt to remove Federal Reserve governor Lisa Cook. This was a setback for White House in the legal battle that threatens central bank independence. The Fed will now focus on Thursday's Consumer Price Index reading. Ricardo Evangelista is a senior analyst with ActivTrades. He said that the $3,750 level was the next major resistance. If the precious metal consolidates above this mark, it could reach $3,900 before the end of the year. Silver spot increased 0.4%, to $41.06 an ounce. Palladium climbed 2.7% to 1,179.30 and platinum gained 1%. (Reporting by Sherin Elizabeth Varghese and Ishaan Arora in Bengaluru)
Chevron wins tender for offshore gas exploration in Greece - Source
Stavros papastavrou, Greece's Energy minister announced on Wednesday that U.S. Oil Major Chevron had submitted a bid for exploration of natural gas in four offshore blocks in a consortium along with Hellenic Energy. The tender was launched this year, after Chevron Oil Refinery and Hellenic Energy showed interest in four deep sea blocks near the Peloponnese Peninsula and Crete.
The bid deadline was Wednesday at 1400 GMT (1700).
Greece, a country that produces very little oil, has increased its renewable energy production in recent years, but it still heavily relies on gas to generate electricity. The country wants to tap into its own resources to help the European Union move away from Russian energy following Moscow's invasion of Ukraine.
The discovery of significant reserves of gas off Egypt (which is located south-east of Crete) has sparked hope that Greek waters may also hold gas. ExxonMobil's consortium is evaluating seismic data in the area near Crete, which borders two licensed blocks. This will be done before any decision is made on whether to test drill. (Reporting and editing by Angeliki Kooutantou, Lefteris Pamidimas; Kirsten Donovan, Edward McAllister)
(source: Reuters)