Once again, the International Monetary Fund (IMF) has made outlandish and inaccurate claims that Saudi Arabia needs—absolutely NEEDS—to push the price of oil higher to fund its government. This time, the IMF claims Saudi Arabia needs the price of Brent to be at least $85 per barrel. The problem with this claim is that it inaccurately implies that Saudi Arabia must work to achieve higher oil prices. However, this isn’t true and Saudi Arabia does not base its oil policy on the budgetary break-even price per barrel of oil.

In September, the IMF forecast that Saudi Arabia needed $73 per barrel. Back in the fall of 2017, I explained the faults in IMF logic when it claimed that Saudi Arabia needed $70 per barrel oil to balance its budget. Among the misunderstandings underlying the IMF calculations, I highlighted that:

1. Aramco oil revenue and Saudi revenue from Saudi Aramco are not interchangeable
2.  The 2017 IMF forecast seemed to ignore the tax rate on Aramco
3. Aramco has the lowest cost of production
4. Saudi Arabia had—and still has—significant cash reserves
5. The Saudi government is trying to spend less on welfare expenses
6. Saudi Arabia has easy access to cheap debt
7. There is nothing wrong with Saudi Arabia running a deficit, especially while interest rates are relatively low
8. Historically, Saudi Arabia has sought to maintain reasonable oil prices instead of prioritizing only high prices, because high oil prices lead to global recessions which depress oil demand

Now, we know even more about Saudi oil revenue and how it is determined. When Aramco released a bond prospectus at the start of April, we learned many of the company and the kingdom’s financial secrets. Among them, we learned that the government funds about 63% of its budget from Aramco through a mixture of income tax (at a 50% rate), royalties (a marginal rate) and dividend. The royalties depend on the amount of oil produced and the price of Brent. The income tax is largely impacted by the price of oil as well. However, the dividend is adjusted quarterly.

Essentially, the dividend is used as a quarterly check to the government to cover whatever the government needs after Aramco’s income taxes and royalties and after the government’s other sources of revenue. In the first quarter of 2019, the government miscalculated how much it needed in dividend and took too much from Aramco. This lead to a $7.41 billion surplus for the government in Q1 2019, despite oil prices that ranged from $54 to $69. Clearly, in Q1 the Saudi government did not NEED $85 oil.

Climate change may be a key issue influencing the outcome of the four-day European Parliament election, which begins on May 23.
A recent opinion poll showed that up to 77% of potential voters identified global warming as an “important criterion” when deciding who to vote for at the election.
The survey by ‘Ipsos MORI’ revealed how much climate change has climbed up on the priority list of European voters. The aim of the survey was to understand the importance of environmental issues in election.
Millions of youngsters marched across European cities over the last months to demand stronger action from politicians on climate change, part of a movement which mobilised millions more worldwide.
“Many young people are going to vote in the elections for the first time and are likely to choose MEPs who support more climate action,” said Wendel Trio, director of Climate Action Network Europe, an environmental organisation.
“This could bring about real change in the future European institutions,” he predicted.
But the violent protests against the carbon tax in France are also a reminder that climate policies can bite back on policymakers if they are not accompanied by social measures to lessen the impact on the poorest.
The survey revealed some common trends among countries. The impact of high electricity and gas prices, for instance, was identified as the top environmental priority in Poland (86%), Spain (88%), and Belgium (82%).
But the single most important environmental issue for voters is to produce food in a healthy, sustainable way. This was rated as the top issue in Slovakia (87%), Austria (86%), Italy (85%) and France (81%) – with an average rating of 82% across the 11 countries surveyed.
There are national divergences too. In Spain for example, voters consider solar energy as an important election topic, while Slovaks also mention wind power.
Meanwhile, French respondents tended to identify organic farming and pesticides as their top environmental concern.
A total of 751 Members of the European Parliament (MEPs) currently represent more than 512mn people from some 28 EU member states.
In February 2018, the European Parliament voted to decrease the number of MEPs from 751 to 705, if the United Kingdom were to withdraw from the European Union on March 29 this year.
However after an extension of the Article 50 process, the United Kingdom is now due to participate alongside other EU member states.
The UK is due to leave the EU on October 31, after Brexit was delayed, amid continuing parliamentary deadlock.
It means the UK must now hold European elections on May 23, or leave on June 1 without a deal.
Every five years, EU countries go to the polls to elect members of the European Parliament. The European Parliament is directly elected by EU voters.
Each country is allocated a set number of seats, roughly depending on the size of its population. The smallest, Malta (population: around half a million) has six members sitting in the European Parliament while the largest, Germany (population: 82mn) has 96.

Turkey’s sovereign wealth fund bolstered the capital ratios of five state-owned banks by €3.3bn ($3.7bn) in a bid to keep credit flowing in the economy.

A market stability fund within the government-controlled investor bought debt issued by the lenders under a recapitalisation programme announced on Monday, which will see a further €400mn flow to Islamic banks.

The Turkish administration is seeking to rekindle growth with cheap loans, while tasking the firms with salvaging industries and helping consumers in the hopes that private firms will follow.

State-owned lenders rushed to extend loans before municipal elections at the end of March as their commercial and international peers pulled back. That helped increase their market share by 3 percentage points to 43% between August and the end of February, according to data compiled by Bloomberg.

TC Ziraat Bankasi AS, the country’s biggest lender, received the most, selling €1.4bn of bonds.

Turkiye Halk Bankasi AS signed an agreement with the fund for a five-year loan of €900mn, the first interest payment of which will be made at maturity. That will improve Halkbank’s Tier 1 ratio by 210 basis points, which is “more than sufficient” to keep it above minimum thresholds, Ates Buldur, a banking analyst at Credit Suisse Group AG’s Istanbul unit, said.

The fund invested in Turkiye Vakiflar Bankasi TAO’s issuance of €700mn of five-year subordinated bonds. Vakifbank bonds have 5.076% coupon rate, although the Treasury earlier said they would have a zero-coupon.

Development bank Turkiye Kalkinma ve Yatirim Bankasi AS, which is being restructured, and Turkiye Ihracat Kredi Bankasi AS, also known as Eximbank, signed agreements for five-year subordinated loans of €150mn each.

Under the plan, the Treasury issues special-purpose government bonds to the stability fund, which then sells the notes to state lenders in exchange for subordinated debt. Islamic lenders Ziraat Katilim, Vakif Katilim and Emlak Katilim will also get funding.

Capital ratios have fallen as the country’s lenders have undertaken nearly $28bns in debt-restructuring requests. They’re also facing a growing pile of bad loans in the wake of the currency’s plunge last year, which has spurred inflation and increased funding costs. The government last year recapitalized three of its banks by selling bonds to its unemployment fund.

OPEC+ states including Saudi Arabia are complying with the terms of the agreement to limit oil output, Russian President Vladimir Putin said.

“We have agreements within the OPEC+. We fulfill our agreements and we don’t have any news, any information, from our Saudi partners and any other OPEC member, that they are ready to exit these agreements,” Putin told reporters in Beijing on Saturday, where he participated in the Belt and Road forum.

On Friday, U.S. President Donald Trump tweeted that he “spoke to Saudi Arabia and others about increasing oil flow” and said that “all are in agreement” after the administration announced on Monday that it wouldn’t extend waivers for buyers of Iranian crude that had allowed them to continue purchases despite American sanctions.

Asked about Saudi Arabia possibly compensating for shortfalls of Iranian oil on the global market, Putin said he hoped that wouldn’t happen and reiterated that countries should abide by the OPEC+ agreement.

The waivers expire on May 2 and China, India, Japan, South Korea, Italy, Greece, Turkey and Taiwan now face the prospect of having to find alternative supplies.

‘Colossal Potential’

“We can produce even more,” Putin said. “We have colossal potential, but it’s not about potential, it’s about the fact that we have agreements with OPEC that we keep to a certain level of output.”

It’s unlikely that Saudi Arabia will abandon the OPEC+ pact that was reached in December and runs to the end of June, since it initiated the deal, Putin said. Russia joined the OPEC+ cooperation because a “coordinated price policy” was needed on the market, he said.

The Russian leader said he discussed the issue of contaminated oil in the Druzhba pipeline to Europe with Belarusian President Alexander Lukashenko. Transneft is investigating how the crude came to be contaminated and law enforcement may become involved if necessary, Putin said.

He told reporters that Russia’s Arctic LNG 2 project won’t affect pipeline gas supplies to China, which wants Russia to increase deliveries via the Power of Siberia link. Russia wants to increase LNG supplies to the world market to 100 million tons, he said.

MOSCOW/DUBAI (Reuters) – Japan’s Mitsui & Co Ltd (8031.T), Russian sovereign wealth fund RDIF and Saudi Aramco are in talks to buy stakes in Novatek’s (NVTK.MM) Arctic LNG 2 project, with the size of the investments still to be decided, sources familiar with the talks told Reuters.

Novatek plans to start producing LNG at Arctic LNG 2 in 2022-2023. The plant, which is expected to cost around $25.5 billion, will have an annual production capacity of 19.8 million tonnes and will be Novatek’s second LNG plant after Yamal LNG.

Novatek owns a 90 percent stake in the project, with France’s Total (TOTF.PA) holding the other 10 percent. Novatek intends to keep a 60 percent stake in Arctic LNG 2, offering 30 percent to other investors.

However, under certain conditions Novatek may cut its stake further, although not to below 50 percent in order to keep control over the project.

Two sources familiar with the talks said that Mitsui, Saudi Aramco and the Russian Direct Investment Fund are in talks with Novatek over taking stakes in the project, which should bring the Russian gas company closer to its goal of producing as much LNG as Qatar, one of the world’s top LNG suppliers.

“Mitsui, Saudi Aramco and RDIF are interested to buy a stake in Arctic LNG 2 but there is also an interest from South Asia,” one of the sources said.

Japan is the world’s top LNG consumer, with Russia among its key LNG suppliers. There are currently two LNG plants operating in Russia: Novatek’s Yamal LNG and Gazprom’s Sakhalin 2 and Moscow has ambitions for more.

A third source confirmed Mitsui’s interest in the project. Three other sources familiar with the talks confirmed the interest from Saudi Aramco and RDIF.

“Saudi Aramco is currently holding technical due-diligence. When the commercial talks approach, RDIF will join(in),” one of the three sources familiar with the talks said.

While RDIF will invest in the project, its contribution is likely to be less than Aramco’s, the second of the three sources familiar with the talks told Reuters.

Talks between Mitsui and Novatek are separate from talks with Saudi Aramco and RDIF, sources said. Each would have a stake in Arctic LNG 2 if their talks succeed, according to the sources.

Saudi Aramco declined to comment and Novatek could not immediately respond to a Reuters request for a comment on Friday. RDIF declined to comment.

“We have a general interest in the project and we are exchanging our opinions with parties involved,” a Mitsui spokesman said when asked whether the company planned to invest in the project.

This week, Novatek awarded a 2.2 billion euro ($2.51 billion) contract to Italian energy contractor Saipem (SPMI.MI) and Turkish oil and gas services firm Renaissance for the construction of gravity-based structure platforms that will stand on the seabed to support the LNG processing units.

($1 = 0.8749 euros)

Six months after the U.S. rocked oil markets by letting Iranian exports continue, its decision to end sanctions waivers that allowed shipments is also set to reverberate across the globe.

The U.S. is said to announce Monday morning in Washington that it won’t renew exemptions from its sanctions to buyers of Iranian crude after they expire on May 2. It marks a change in direction from November last year, when the Donald Trump administration granted waivers to eight importers as it sought to temper fuel prices ahead of American mid-term elections.

The move threatens to squeeze supplies further in a market that’s already facing supply disruptions from Venezuela to Libya and Nigeria, and extend this year’s rally in global benchmark Brent crude above $70 a barrel. Prices are still below the four-year highs of over $86 they hit in October before the U.S. issued its waivers.

What the  waivers allowed: China — oil imports of as much as 360,000 barrels a day India — as much as 300,000 b/d of crude purchases South Korea — 200,000 b/d of condensate, an ultra-light oil Japan — exempted volume unknown; shipping data shows it bought 108,000 b/d that loaded in March Turkey — about 60,000 b/d Taiwan — volume unknown; nation’s refiners said previously they don’t plan to buy anything even with waivers

Here are some of the potential implications of the Trump administration’s latest decision, which is aimed at piling economic pressure on Iran over the Persian Gulf state’s nuclear program by cutting off a key source of the OPEC member’s revenue.

Fate of OPEC+ Deal

The U.S. government will also announce that it got commitments from suppliers such as Saudi Arabia and the United Arab Emirates to offset the loss of Iranian crude, according to people with knowledge of the matter.

That could jeopardize the output deal between the Organization of Petroleum Exporting Countries and its allies, which have been curbing supplies since the start of the year to avert a glut. Russia, one of the partners in the pact, has already signaled that the cuts may not need to be extended. A decision is expected when the producer group known as OPEC+ meets in June.

The pact was driven by Saudi Arabia after it was blindsided last year by the U.S. decision to grant waivers, which sparked a collapse in crude into a bear market in the fourth quarter. Now, the American pledge to eliminate oil exports from Iran may provide an incentive for Crown Prince Mohammed Bin Salman — a Trump ally — to ease the kingdom’s policy.

Price Relief?

While crude has jumped more than 3 percent on the news that the U.S. won’t renew exemptions, the future direction of prices may be determined by how much the likes of Saudi Arabia and the U.A.E. are able to cushion the blow amid other supply disruptions.

Last year, prices jumped to over $86 a barrel even though Saudi Arabia was pumping at record levels. Now, it’s not just Iranian shipments that are disrupted. Separate U.S. sanctions on Venezuela have squeezed supplies from that OPEC producer too, while fellow group member Libya is roiled by violence. Just on Sunday, a key oil pipeline in Nigeria was halted after a fire.

Iran’s exports in March totaled about 1.3 million barrels a day, tanker-tracking data compiled by Bloomberg show. Shipments were as high as 2.5 million barrels daily in April last year, before the U.S. announced plans to reimpose sanctions on the Islamic Republic.

Pain for Buyers

The current set of waivers expiring on May 2 allowed China, India, Japan, South Korea, Italy, Greece, Turkey and Taiwan to continue importing Iranian crude without being subjected to retaliatory U.S. sanctions. With the end of the waivers, the buyers face being cut off from the American financial system if they continue purchases.

Of the buyers, Asian nations India, South Korea, China and Japan are likely to be the hardest hit. If crude prices go higher, the budget deficit in import-dependent nations may also worsen and inflation could accelerate. The biggest importers had already put purchases from the Persian Gulf state on hold as they waited for the U.S. decision.

South Korea’s Hanwha Total Petrochemical Co. has already been buying and testing alternative cargoes from areas such as Africa and Australia. While it’s not impossible to find other options, that would raise costs and could affect the company’s profits, according to a spokesman.

Alternative American

Some buyers may find relief in the shape of rising U.S. shale exports. South Korea, for example, buys a form of ultralight oil known as condensate from Iran, which can potentially be replaced with an alternative from America — though it would mean higher freight costs owing to a longer shipping journey.

But for others, U.S. shipments may not be the best option. That’s because American shale supply is typically made of “light-sweet” varieties that have a relatively low sulfur content and density. The type of crude that’s being squeezed in the market — from Venezuela for instance — are “heavy to medium sour” grades that are more sulfurous and denser.

ثمة دول عانت فعلا من إفلاسها حين تخلّفت عن سداد ديونها. وربما آخرها، كانت اليونان التي عجزت عن تسديد دين خارجي بقيمة 16 مليار دولار عام 2010، وهو جزء من دين عام يقارب الـ350 مليار يورو. طلبت معونة صندوق النقد والإتحاد الأوروبي، ونالت ثلاث جرعات دعم مالية بلغت قيمتها نحو 285 مليار يورو… ولا تزال حتى اليوم تعاني آثار حزمات التقشف التي إنعكست على الحياة الاقتصادية والإجتماعية على السواء.

لكن، هل من تشابه بين لبنان واليونان؟
بالأرقام، بلغ الدين العام اليوناني نحو 355.6 مليار يورو، ونسبة الدين الى الناتج المحلي الإجمالي نحو 165.3%، والتضخم 3.1%، والنمو الحقيقي -6.9% وعجز الموازنة -9.1%. أما في لبنان، فالدين العام لم يتجاوز سقف الـ90 مليار دولار، فيما نسبة الدين إلى الناتج هي بحدود الـ150%، والتضخم 7%، والنمو الحقيقي 1.2% وعجز الموازنة 11.2%.

وفق المنطق الاقتصادي، لا أوجه شبه بين الأزمتين. فاليونان، الدولة العضو في الإتحاد الأوروبي، كانت تهدّد بإفلاسها إستقرار منطقة اليورو. لذا، طُرحت فكرة إخراجها من المنطقة الإقتصادية، إلا أن أوروبا قررت في نهاية المطاف مدّها بالمساعدة مقابل تنفيذ إصلاحات اقتصادية واجراءات تقشف تهدف إلى خفض العجز في الموازنة.

أما لبنان، فلا ينتمي إلا إلى جامعة الدول العربية التي تمثل منطقة تشهد أسوأ أحوالها. فهو لا يهدّد إستقرار أي دولة، ولا يُطرح إخراجه من أي تكتل إقتصادي. صحيح ان العجز في الموازنة هو القاسم المشترك، لكن بقدرة الإصلاحات وسياسات التقشف (نفذتها اليونان أيضا)، يستطيع وقف التدهور والخروج من الأزمة بمساعدة “سيدر”، إن تحرّكت مندرجاته بدءا بإقرار موازنة التقشف غير المسبوقة في تاريخ البلاد.

الإصلاحات وقطع دابر الفساد يكفلان خفض العجز دون الحاجة إلى إقتطاعات من أي نوع كانت، لأنها تكفل خفض “رواتب خيالية” تُمنح لمديرين في مؤسسات عامة من دون ما يوازيها من “إنتاجية”. فمزاريب الهدر والسمسرات والسرقات لا تزال مفتوحة على جشع بعض مسؤولين وطمع آخرين، وتراخي السلطة وتنازلها عن قوة الحكم لقطع دابر كل ما يثير الشهيات والشبهات، فيتسللون الى الصفقات وينقضون بالتالي على ما بقي من ثقة لتتوسّع الهوة ما بين اللبنانيين والسلطة الحاكمة.

مضى الخميس الأول ولم ينعقد اللقاء المالي في بعبدا بسبب غياب رئيس الحكومة عن البلاد (إجازة عائلية في السعودية)، علما أن البحث مخصص لبحث ما يجب إتخاذه من إجراءات إنقاذية. تحليلات كثيرة علّلت هجوم رئيس الجمهورية على “مَن تنقصهم الخبرة” لأنهم تسببوا بعدم إنعقاد اللقاء. قيل إن موعدا جديدا حُدّد هذا الخميس. لكن هل يلغيه “خميس الغسل” عند المسيحيين الشرقيين، أو أقله يخفّف من مفاعيله، فيُرجئ مجددا إلى خميس آخر؟ الوقت يمرّ ولبنان لا يملك “ترف الوقت”… لكنه قادر حتما، إن وُجدت الإرادة السياسية والقرار الواضح والموّحد، على إبعاد شبح الإفلاس ووقف سيل الهواجس والشائعات. ما على السياسيين سوى مواجهة المسؤوليات بجرأة!

BP published its Global Energy Outlook earlier in the year. The key message is that renewables are growing faster than any fuel in history, but carbon emissions keep rising. In addition, energy demand is set to increase by a third by 2040 driven by increases in prosperity in the developing world.

Introducing the Outlook, BP CEO Bob Dudley said “One of the biggest challenges of our time is a dual one: the need to meet rising energy demand while at the same time reducing carbon emissions.” The world needs both – doing one without the other will not work.

The key findings in BP’s latest Energy Outlook are:

Even though global GDP will double by 2040, primary energy demand will increase only by a third, due to energy efficiency

The power sector will use around 75% of the increase in primary energy

85% of the growth in energy supply will be generated through renewable energy and natural gas, with renewables becoming the largest source of global power generation by 2040

Global carbon emissions continue to rise, signaling the need for a comprehensive set of policy measures, including decarbonisation, to achieve a substantial reduction in carbon emissions.

The majority of the increase in global primary energy will come as a result of the increase of income per head in the developing world, demanding more energy. Without an increase in energy becoming available this rising prosperity will be suppressed.

This will lead to growing competition between different energy sources driven by abundant energy supplies, and continued improvements in energy efficiency, keeping energy prices low.

Factors underpinning global energy changes and trends

There is a clear correlation between human progress and energy use. Around 80 per cent of the world’s population today live in countries where average energy consumption per head is less than that the European average. As a comparison, the average energy use per head in 2016 in China and Brazil was half that in Europe and in India about a fifth. Conversely, the US average was twice that in Europe.

Increasing prosperity means that the world will consume a third more primary energy by 2040 compared to now, but that will still leave about two thirds of the world’s population living below the European threshold.

Trade disputes and threats increase energy security concerns. This leads countries to increase domestically produced energy and reduce dependence on imports.

The greatest impact is on countries and regions most exposed to foreign trade and energy imports. Notable examples are China, Japan, India and Turkey. This results in less imports of oil and gas, and a shift in the fuel mix towards domestically-produced sources of energy, such as coal, nuclear and renewables, leading to a sharp reduction in global energy trade.

Trade disputes also impact oil and gas exporting countries. The US and Russia are notably vulnerable to this.

The message from history is that concerns about energy security can lead to permanent changes in global energy use, as did the 1973 Arab oil embargo.

Outlook for natural gas

The outlook for natural gas is good, with global demand expected to increase and be resilient over the next 20 or so years. But this is being increasingly impacted by the accelerated adoption of renewables combined with electricity storage, the unit costs of which are coming down fast.

Based on current trends, gas demand is expected to grow at a rate of about 1.7 per cent per year. To meet this, new investment will be needed into oil and gas production, with preference given to low-cost supplies.

The pattern of natural gas supply is changing, with the shale revolution making the US the world’s largest producer of gas. Also the rapid growth of LNG is transforming how natural gas is transported and traded globally, with a global reach.

LNG exports will increase significantly, led by the US and Qatar, fostering a more competitive and globally-integrated market. LNG trade is expected to double, with Asia remaining the dominant market. But this is highly dependent on the effects of prices, energy security, trade wars and sanctions.

The abundance of gas supplies and competition with increasingly cheaper renewables and coal mean that price matters. Lower prices will support future increases in demand and conversely high prices could limit future gas demand growth. Only projects with low development costs will succeed.

Challenges

The abundance of global oil and gas resources means that global energy markets are becoming more competitive. In addition, new technologies are revolutionising the way in which energy is produced, transported and consumed.

The greatest challenge will be to reconcile the need for more energy to support continued global economic growth and rising prosperity, together with the need for a more rapid transition to a lower-carbon future. As Dudley said, this is one of the biggest challenges of our time: “We know the desired outcome of energy transition, but we still do not know the path to get there.”

Environmental campaigners are urging oil and gas companies to reduce emissions and spending on fossil fuels. However, the challenge is: what are the alternatives to provide the additional energy the world will need in future? And when and how is this additional energy going to be provided in a reliable and dependable way, and on demand?

Nevertheless, emissions are going in the wrong direction. The world needs a comprehensive set of policies to meet the dual challenge of more energy, less emissions. Dudley summed this up when he said “we can do this even faster and more efficiently with clearer, smarter policy signals from governments.”

But, as BP said, it is important to remember that it is not a race to renewables – it is a race to reduce emissions. With increasing global energy demand, most fuels will still be needed to 2040. The road to Paris is long and challenging.

Implications for the East Med

Clearly there is a future for natural gas. But the world has plentiful supplies and only low-cost projects will succeed. East Med gas is expensive to develop and unless ways are found to keep costs down – for example through the development of large-scale, integrated, projects – it will struggle to secure export markets.

The possibility of ExxonMobil developing a large-scale LNG plant at Vasilikos, together with Total and Eni, offers the best hope. But time is not on our side. This needs to be given priority over all other options and brought forward. Waiting for another ten years to get there may be too late.

Cyprus also needs to prioritise adoption of renewables. The continuous delays in liberalising the electricity market, now to December 2021 at the earliest, are inexcusable. These delays give credence to the suspicion that they are linked to the plan to import LNG. This was aired in earlier articles in the Cyprus Mail, including one in September last year, stating “After years of delays, and with full knowledge of what should happen and by when, Cyprus is not yet ready to liberalise the energy market! Only one word can describe this – incredible!… The earliest possible this can now be achieved is 2020… Let us hope that this will continue as planned, given the incredible number of postponements to date!”

Sadly, like many other past promised deadlines, 2020 has also gone. And I predict that 2021 will have the same fate. What we need is clear, firm, plans and transparency!

Novatek, Russia’s largest private gas producer, said its joint venture with Gazprombank, Cryogas-Vysotsk has commenced full-scale production of liquefied natural gas (LNG).

“Cryogas-Vysotsk is our first medium-scale LNG project,” noted Novatek’s head Leonid Mikhelson on Wednesday.

“Our marketing strategy provides for loading of bunkering vessels, small wholesale LNG sales, and LNG sales as a motor fuel to the Baltics, Scandinavia and North-Western Europe markets,” he said.

Mikhelson further added the company sees potential to expand its commercial presence in this developing LNG market segment.

Cyrogas-Vysotsk is a medium-tonnage LNG project located in the port of Vysotsk, Leningrad Region of Russia on the Baltic Sea.

The project’s initial design capacity is 660,000 tons of LNG per annum, and its infrastructure includes a 42,000 cubic meters LNG storage tank and an offloading berth designed to handle LNG carriers with a capacity of up to 30,000 cubic meters.

Novatek acquired a 51 percent participation interest in Cryogas-Vysotsk project in July 2017.

Occidental Petroleum Corp. triggered a bidding war for Anadarko Petroleum Corp. after making a $57 billion (£44bn) counter-offer in attempt to break up a proposed takeover by Chevron Corp.

Occidental said Wednesday it’s offering $76 per share in cash and stock. That compares with Chevron’s April 12 agreement to buy The Woodlands, Texas-based Anadarko for $65 a share in stock and cash.

Key Highlights

Andarko’s assets include operations in the Permian Basin in West Texas and New Mexico. The world’s fast-growing oil major patch, the Permian has helped to turn the U.S. into a net exporter and become a bigger producer that Saudi Arabia. Chevron earlier this year unveiled ambitious growth plans for the Permian. The Occidental offer may not be as appealing as Chevron’s to Anadarko shareholders despite the higher price. Occidental’s smaller size and balance sheet compared with Chevron mean there may be more uncertainty over its prospects of completing a deal. Also, it’s not immediately obvious how Occidental would fund Anadarko’s giant liquefied natural gas plant that’s being developed in Mozambique. The project may have to be sold, adding another layer of uncertainty.

Market Reaction

Anadarko shares rose 15 percent in pre-market New York trading.