No fuel tax cut, will stick to deficit target: Jaitley
The government does not intend to go easy on its fiscal deficit targets by easing taxes on fuel or by spending more during an election year. Union minister Arun Jaitley said on Tuesday that the government would stick to its fiscal deficit targets this year and not go in for panic reaction in response to crude oil prices or volatility in the foreign exchange market. Speaking at State Bank of India’s 5th banking conclave Jaitley described the increase in international oil prices as `artificial’ and `transient’. “A large number of suppliers do not have the strength to hold on at that level of supplies. They also need revenues based on their oil resource and therefore our whole attitude must be one where we have restraint. We have patience and we have the economic strength to deal with it,” said Jaitley. The Union minister’s statement comes on the back of criticism that the government is profiteering through high taxes on petrol and diesel and there is growing pressure on the government to cut taxes on fuel. “Pressure is being built to go in for panic reaction and to throw fiscal discipline to the winds. But the consequences of that will be a remedy worse than the problems,” said Jaitley. Reiterating that there was no additional pressure on spending this year being an election year, Jaitley said that every year in India is an election year. The union minister also indicated that the pressure on the rupee was arising out of the trade war between US and China. He said that India having chosen to be part of global economy is impacted by it. “Therefore, when China moderates its currency there is a significant impact on Asian economies and their currencies. We saw that in 2015 when the Chinese devalued their currency. For a couple of weeks, we found that the shake-up also impacted us. But because our fundamentals were strong, within a few weeks we were back on the normal range of where the rupee should be,” he said. Tim Brown Jersey
BP offloads 1 mn barrel of Angolan oil to Chinese refiner after 2 months on water: Sources
Oil major BP discharged 130,000 tonnes, or nearly 1 million barrels, of Angolan crude to a Chinese independent refiner last week, after holding the oil on water for more than two months amid slowing Chinese demand and multi-year high oil prices, sources with knowledge of the offloading said on Wednesday. Texas, a supertanker charted by BP carrying about 2 million barrels of Angolan crude, discharged part of the cargo in mid-April at Qingdao and was slated to offload the rest at Rizhao, another port in Shandong, shortly after. Instead, the tanker had been anchored off the coast until last week, when it discharged at the Rizhao terminal 130,000 tonnes of Cabinda crude to Shandong Qingyuan Group. Qingyuan, which is based at Linzi in the province of Shandong and operates a 5.2 million-tonne-per-year (104,000-barrel-per-day) refiner, is a regular customer of BP which has expanded its crude oil marketing to Chinese independent refiners over the last three years. Qingyuan has received an annual crude import quota of 4.04 million tonnes, and is one of the largest independently-run lubricant producers. Josh Gorges Womens Jersey
Exclusive: Japan’s Inpex delays production from giant Australia gas project
Japan’s Inpex has delayed gas production from its giant Ichthys field off the coast of Australia just weeks after giving assurances that output would start imminently. Inpex’s new chief executive officer said the company was yet to start churning out gas from the $40 billion project and did not give a timetable for when that would happen. Japan’s biggest oil and gas producer had said on June 1 that commissioning of all onshore and offshore facilities at the much-delayed project was complete and that gas would start flowing within a week or two. “There are various minor issues to address in the final safety checks … but there are no major problems with the facilities,” Ueda, 61, said on Tuesday in his first interview with overseas media since taking the helm at Inpex last month. The liquefied natural gas (LNG) project, already hit by multiple delays, is a major test for Inpex as it marks the first time it has operated a major energy development on its own. “We can start production in the not too distant future,” Ueda said, without giving details. He added that the company is keeping its target to ship its first LNG cargo by the end of September. Delays are common with large projects like Ichthys, but the development has been plagued by a wide range of issues, including contractor disputes, technical difficulties and bad weather. At full operation, Ichthys is expected to produce 8.9 million tonnes of LNG a year, along with about 1.7 million tonnes of liquefied petroleum gas and around 100,000 barrels per day of condensate, an ultra-light form of crude oil.
Saudi Aramco plans to change Asia crude oil price formula
Saudi Aramco plans to change the formula used to price its long-term crude oil sales to Asia starting from October, multiple trade sources said on Wednesday. The new formula will be based on the average monthly prices of Oman crude futures traded on the Dubai Mercantile Exchange (DME) and the average cash price for Dubai assessed by pricing agency S&P Global Platts, instead of the average of Oman and Dubai prices assessed by Platts, the sources said. Saudi Aramco is expected to officially notify customers in Asia later on Wednesday, the sources said. Saudi Aramco, DME and Platts could not be immediately reached for comment. The DME launched the Oman contract in 2007 and it is the most liquid physically deliverable futures contract for Middle East crude oil. In comparison, there are rarely bids or offers for Oman cargoes during the Platts market-on-close price assessment. “There won’t be a big difference in terms of prices as the values between Platts Oman and DME Oman are pretty close,” a trader with a North Asian refiner said. Saudi Aramco’s decision could improve liquidity for Oman futures trading on the DME and also for derivative instruments based off the Oman contract for hedging or price conversion purposes, a Singapore-based trader said. “This is a good change as Platts Oman cannot be hedged,” he said. Clyde Drexler Jersey
MRPL buys first Iraqi Basra Heavy crude from Shell – sources
Mangalore Refinery and Petrochemicals Ltd has bought its first cargo of Iraqi Basra Heavy crude from Royal Dutch Shell via a tender, two sources with knowledge of the matter said on Tuesday. MRPL is likely to blend the 1 million barrels Basra Heavy crude, which will be delivered in September, with lighter grades so it can be processed at its refinery, one of the sources said. Spokespeople for MRPL and Shell declined to comment on the deal. Green Bay Packers Jersey
US sanctions on Iran: Indian Oil chairman confident about oil supply
India, the fourth largest oil importer in the world, may cut imports from Iran following the White House’s ultimatum to cut Iranian oil imports to ‘zero’ by November 4. India was initially defiant and indicated that it would not comply. In an interview with CNNMoney, joint secretary for international cooperation at the Indian petroleum ministry, Sunjay Sudhir, said only sanctions by the United Nations are recognised by India, not unilateral ones put forward by the US. The Indian government also asked domestic oil companies to prepare a blueprint of alternative payment channels for procuring the Iranian oil post-November. Iranian imports will either have to be replaced by purchases from Kuwait or Saudi Arabia or will have to be paid for in alternate currency other than the Dollar. According to a report by Bloomberg, Indian Oil chairman Sanjiv Singh said Saudi Arabia can alone cover most of the world’s supply shortfall in case the US has its way and shuts down Iranian imports. He assured that there was nothing that India could not procure or produce. But India cannot afford to alienate itself from Washington because a large part of its service sector is dependent on US markets. If Trump decides to act upon his threat of sanctions, many Indian companies may lose business from the US. Moreover, Iran is also important from India’s point of view as it is strategically located. Trump’s ultimatum, hence, puts India in a dilemma. As a gesture of goodwill, Trump tweeted on Saturday, as per his request, Saudi Arabia will increase its oil production to meet any global shortfall. He said the Gulf nation agreed to increase production to up to two million barrels. Although there is no clear decision on what step to take next, Indian Oil’s Chairman is confident that India can and will ‘manage.’ Sean Couturier Authentic Jersey
“No Waivers For India”: US On Reducing Oil Imports From Iran
The US is prepared to work with nations that are reducing their oil imports from Iran on a “case-by-case basis”, but will not grant waivers to countries like India and Turkey as it could substantially reduce pressure on sanctions-hit Tehran, according to a senior Trump administration official. Iran is India’s third-largest oil supplier behind Iraq and Saudi Arabia. Iran supplied 18.4 million tons of crude oil during April 2017 and January 2018 (first 10 months of 2017-18 fiscal). Last month President Donald Trump withdrew the United States from the 2015 landmark Iran nuclear deal, re-imposing US sanctions that had been suspended in return for curbs on Tehran’s nuclear programme. At the time, the Trump administration gave foreign companies either 90 or 180 days to wind down their business with Iranian counterparts, depending on the type of commercial activity. Now, Washington is stepping up pressure on all countries, including India and China, to completely stop buying oil from Iran by November 4. “We are not looking to grant licenses or waivers, because doing so would substantially reduce pressure on Iran, and this is a campaign of imposing pressure,” Brian Hook, Director of Policy Planning at the State Department told reporters at a news conference yesterday. “And so, we are not looking to grant licenses or waivers broadly on the reimposition of sanctions, because we believe pressure is critical to achieve our national security objectives,” he said. Mr Hook said that the first part of US sanctions against Iran will snap back on August 6. “These sanctions will include targeting Iran’s automotive sector, trade in gold, and other key metals,” he said. “The remaining sanctions will snap back on November 4. These sanctions will include targeting Iran’s energy sector and petroleum-based transactions, and transactions with the Central Bank of Iran,” Mr Hook said. “We are prepared to work with countries that are reducing their imports on a case-by-case basis, but as with our other sanctions, we are not looking to grant wavers or licenses,” Mr Hook said when asked about India and Turkey which import Iranian oil. After Trump announced his withdrawal from the Iranian nuclear agreement, Mr Hook said American officials have been visiting several world capitals to convey president Trump’s message of cooperation and coordination on the Iran issue. “Many countries around the world share our interests in countering terrorism, halting the proliferation of missiles and promoting peace and stability in the Middle East. We want to work with these countries to build a strong global effort,” he said. “Our focus is on getting as many countries importing Iranian crude down to zero as soon as possible. We are also working with oil market participants, including producers and consumers, to ensure market stability. “Banking sanctions will also snap back on November 4th, and we will be aggressively enforcing these provisions to lock up Iran’s assets overseas and deny the Iranian regime access to its hard currency,” Mr Hook said. Patrick Chung Jersey
Greece awards Exxon, Total tenders for Crete oil and gas exploration
A consortium of U.S. Exxon Mobil , France’s Total and Hellenic Petroleum has been awarded a tender to explore for oil and gas off Greece, the energy ministry said on Tuesday. Greece launched the tender for two sites off Crete last year after expressions of interest by the consortium, in which Exxon and Total each have 40 percent. The group was the sole bidder. The licences must be ratified by parliament before exploration work can begin. Exxon and Total are currently exploring off Cyprus. Trai Turner Authentic Jersey
High oil price the biggest risk for India’s economy: Moody’s investors poll
Most investors representing domestic and international financial institutions think high oil prices have emerged as a major risk to India’s economy, Moody’s Investors Service said in a report today. The finding is based on a Moody’s real-time poll of 175 people held last month at the 4th Annual India Credit Conference in Mumbai and Singapore during which market participants from over 100 financial institutions were asked questions on some of the most pressing credit issues facing India. “When asked about the top risks facing the Indian economy, most of the respondents highlighted high oil prices as the top risk, while 30.3 per cent of those in Singapore picked rising interest rates as the next top risk, and 23.1 per cent of those in Mumbai picked domestic political risks as the second top risk,” said Joy Rankothge, a Moody’s Vice President and Senior Analyst. In both locations, most attendees said they believed India would not meet the central government’s fiscal deficit target of 3.3 per cent of GDP for the fiscal year ending March 2019. Only 23.3 per cent of the respondents in Singapore and 13.6 per cent in Mumbai thought that the fiscal targets would be achieved, with 84.7 per cent in Mumbai and 76.7 per cent in Singapore expecting some fiscal slippage. The audiences in both Singapore (85.7 per cent) and Mumbai (93.6 per cent) thought that the government’s bank recapitalization package is mostly insufficient to resolve solvency challenges. At the same time, while 59.6 per cent of the attendees in Mumbai thought that banks will be unable to raise capital from markets as planned, only 32.1 per cent thought so in Singapore. Conversely, 53.6 per cent of attendees in Singapore thought that the recapitalization amount was insufficient even if capital was raised via markets, while only 34 per cent thought so in Mumbai. Attendees in both locations said funding conditions will be one of the top factors driving the outlook for non-financial corporates: 38 per cent in Mumbai and 34.6 per cent in Singapore. In Mumbai, 28 per cent chose the resumption of capital investment as the second key factor, while only 11.5 per cent thought so in Singapore. In contrast, 26.9 per cent of the Singapore audience selected government policy and reforms as the second-most important factor affecting the credit outlook, compared with 22 per cent in India. During the polls, the investors were asked a variety of questions related to top risks facing the India economy; fiscal deficit for 2018-19; $32 billion recapitalization package; public sector banks; impact of fintech on the financial system; M&A as a credit solution for solvency challenges; credit conditions for Indian corporates; private sector investment in the infrastructure space; and the growth of foreign investor participation. Stefen Wisniewski Authentic Jersey