|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||7.25 - 7.30|
|52 Week Range||6.15 - 7.89|
|Beta (3Y Monthly)||0.45|
|PE Ratio (TTM)||24.74|
|Forward Dividend & Yield||0.36 (4.96%)|
|1y Target Est||N/A|
(Bloomberg) -- A U.S.-led coalition created to secure sea lines vital to oil shipping in the Middle East formally launched operations in the most concerted international response yet to months of tensions in the region.Formed in response to a series of attacks on vessels and onshore facilities that some coalition members blamed on Iran, the International Maritime Security Construct (IMSC), formerly known as Operation Sentinel, will protect ships transiting the Persian Gulf, Gulf of Oman and Bab el-Mandeb.One-third of the world’s seaborne crude and fuels passes from the Persian Gulf through the narrow Strait of Hormuz and into the Gulf of Oman on its journey to international markets. The Bab el-Mandeb is a bottleneck at the southern tip of the Red Sea for ships sailing to and from the Suez Canal.“Over the last six months, we have seen increased threats in these waters,” said U.S. Vice Admiral James Malloy, commander of America’s Fifth Fleet, based in Bahrain. The naval force will only attack if attacked, he said Thursday at a ceremony in Bahrain.Large naval vessels, such as frigates and destroyers, will guard critical chokepoints and smaller vessels will patrol the seas, according to a statement from the U.S. Navy. Airborne surveillance will monitor the flow of traffic through “high risk areas,” it said.The U.S. announced plans for Operation Sentinel in July after Iran shot down one of its surveillance drones the previous month. Washington and Tehran disagreed over whether it was flying over international or Iranian territory at the time.The U.K. joined the coalition in August, snubbing a European-led initiative favored by Prime Minister Boris Johnson’s predecessor. European leaders have steered clear of IMSC, citing President Donald Trump’s decision to withdraw from the 2015 agreement with Iran to limit its nuclear program as the cause of rising tensions.Bahrain, which hosts a large U.S. naval base, and Australia became members of the task force in August. Saudi Arabia joined five days after half of its oil production capacity was temporarily paralyzed by aerial attacks on Sept. 14. Yemen’s Iran-based Houthis claimed responsibility but the U.S. and Saudi Arabia said Iran was behind the assault.The incident followed attacks on several oil tankers in the Persian Gulf and Gulf of Oman in May, including two Saudi vessels. The United Arab Emirates, Saudi Arabia’s partner in the war against the Houthi movement, joined the task force in September. IMSC’s newest member, Albania, joined on Friday. Unlike most of the member nations, which are contributing vessels, Albania is only providing personnel, according to U.K. Royal Navy Commander Ben Keith, the force’s head of operations.“IMSC is about bringing anybody who can contribute anything to the party,” Keith said. “There are countries more able to provide high-end capability such as a destroyer, aircraft, but we will take whatever you can provide into IMSC to keep people safe.”To contact the reporter on this story: Verity Ratcliffe in Dubai at email@example.comTo contact the editors responsible for this story: Nayla Razzouk at firstname.lastname@example.org, Paul Abelsky, Bruce StanleyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Russia is sending its main crude oil through the Arctic Sea for the first time as melting ice increasingly opens up the controversial trade route to commercial shipping.Two oil tankers, between them carrying about 1.5 million barrels of Urals crude from the port of Primorsk in western Russia, sailed through the Arctic ocean to China in recent weeks, according to ship-tracking data compiled by Bloomberg. It’s the first time that’s happened since at least 2011, according to the Northern Sea Route Information Office.The cargoes represent a tiny fraction of what is a fast-expanding trade route. Shipments of commodities and other goods across the top of Russia doubled to about 20 million tons last year with oil and gas dominating. Companies using the Arctic benefit from lower fuel bills and quicker deliveries to customers. The trade-off is a threat to the environment.“With climate change there’s a possibility you could see more shipments through there as the ice melts,” said Christopher Haines, an oil analyst at Energy Aspects Ltd. in London, adding that savings on time and costs are the driving forces behind the increased use of the Arctic.There’s long been opposition to using the Arctic for shipping, with organizations including the UN’s intergovernmental body for climate change saying it could have negative consequences for the region including higher emissions and threats to marine ecosystems. The International Maritime Organization, the main entity overseeing shipping, is considering regulating the use of heavy fuel oil as a shipping propellant in the Arctic.Dangerous TradeNike Inc. last week urged companies to avoid shipping through the region. Signatories to a pledge it made include Gap Inc., H&M Group Inc., and shipping companies CMA CGM SA and Hapag-Lloyd AG. That hasn’t stopped the flow of commodities -- especially from Russia.READ MORE: Baltic Urals Oil Takes Arctic Route to China on AframaxesThere are several dangers to transporting crude oil through the route, according to Malte Humpert, founder of The Arctic Institute, an NGO researcher. The particular emissions coming from burning heavy fuel oil, commonly used in oil tankers, accelerate ice melt, he said.The Arctic sea has already lost around 40% of its ice area since 1979, according to a UN report. The melt creates a vicious circle, amplifying the effects of climate change at certain times of the year, it says.“The most dangerous cargo you could ship through the Arctic could be crude oil,” Humpert said of the risk of spills. “In terms of low-risk, high-impact if it does happen, it will have disastrous impact.”The rate of ice melt in the region has allowed shipping through the so-called northern sea route to become more commonplace during summer months. Last year, the Venta Maersk was the first commercial container ship to use it.Short CutThe crude oil carried by the two tankers would usually have traveled via Egypt’s Suez Canal, or around Africa, to reach Asia. One of the vessel’s voyages took about a month. On the normal route, shipments can take longer than 50 days and require cargo-transfers at sea onto bigger supertankers that are best-suited to such long-distance voyages. Other crude oil, shipped from Russia’s Arctic Sea ports, has already been using the trade route.Spiking rates for supertankers earlier this month also made using smaller tankers, such as the ones shipping Urals oil to China via the northern route, more competitive, said Jefferies LLC analyst Randy Giveans.When rates surge for the industry’s biggest tankers, known as very large crude carriers, the oil companies that book them will sometimes divide cargoes and place them on smaller tankers if doing so is cheaper.“You’ve seen some cargo splitting, so smaller vessels are taking even longer voyages like the Arctic route over to Asia,” he said.\--With assistance from Jack Wittels.To contact the reporters on this story: Olivia Konotey-Ahulu in London at email@example.com;Dina Khrennikova in Moscow at firstname.lastname@example.org;Sherry Su in London at email@example.comTo contact the editors responsible for this story: Alaric Nightingale at firstname.lastname@example.org, Helen RobertsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Russia wants to make its Arctic waters more attractive to shippers than the Suez Canal and could be willing to compensate for potential risks to make that happen.President Vladimir Putin has made development of the Arctic one of Russia’s top long-term priorities and huge projects to export liquefied natural gas via the Northern Sea Route have already lured investors above the Polar Circle. But shippers of other products remain reluctant to make the detour from the Suez Canal toward the Arctic due to multiple risks.To deliver a cargo via the Northern Sea Route today, a shipping company needs an ice-class vessel or an icebreaker and to pay insurance costs more than twice those for the Suez Canal, according to Russia’s Deputy Minister of the Far East and Arctic Development Alexander Krutikov.His ministry, together with Russian think-tank Skolkovo, is working on a project to create a state-run container ship operator. The company would cover the cost of any risks associated with transporting international cargoes via the Arctic’s icy waters, including possible delivery disruptions and higher insurance payments.“The state pays for the Arctic exposure and the shippers cover the remaining costs themselves,” Krutikov said in an interview. The resulting costs for shipping companies “should be lower than in the Suez Canal, at least at the first stage,” to promote the route.If the idea is implemented, the state container ship operator would be responsible for transporting cargoes across the Northern Sea Route, stretching more than 3,000 nautical miles between the Barents Sea at the Russian border with Norway and the Bering Strait near Alaska.Feeder ships from European and Asian ports could sail as far as Murmansk in the Barents Sea and Kamchatka in the Far East, bringing cargoes to transshipment points, according to Krutikov. From there, the Russian container operator would take responsibility for the cargoes, he said. “This significantly lowers transportation costs, as foreign companies will not need Arctic vessels,” and Russia could also keep transshipment costs competitive, Krutikov added.The national ship operator would be needed to accompany international shippers for at least a decade, “otherwise no one will use” the Northern Sea Route, he said. “At some point the shippers will get used to and understand the infrastructure, will become more interested and then we can stop covering the Arctic exposure and make the route commercial.”Higher CostsThe cost of transporting a Twenty-Foot Equivalent Unit, a standard measure of a ship’s cargo capacity commonly known as TEU, via the Northern Sea Route could be around 36% higher than via the Suez Canal, according to a 2014 presentation made by Tuomas Kiiski, a research manager at Finland’s University of Turku.Kiiski made the calculations by comparing approximate costs for an Ultra Large Container Ship making a trip from Rotterdam-Singapore-Shanghai-Busan-Yokohama-Rotterdam via the Suez Canal with costs for a much smaller Panamax making the same trip via the Northern Sea Route, he said in the presentation to the Arctic Frontiers conference.The calculations are simplified as the actual comparison is fairly complex “due to lack of precedents for commercial Europe-Asia container shipping activity,” Kiiski said in an email to Bloomberg. “The main hindrance of container shipping is that the requirements of liner shipping – regular year-round service, fixed schedules, schedule integrity, a network of intermediate ports and economies of scale – are not met” in the Northern Sea Route now, he said.If navigation in the Northern Sea Route is extended to around 225 days per year, it may be economically viable to use the Arctic link during that period and the Suez Canal for the rest of the year, a 2014 research paper for Kyoto University suggests.Today, international transit accounts for just a fraction of total cargo flows along the Northern Sea Route. The bulk of the 20.2 million tons of cargo which were shipped via the route last year was LNG from Novatek PJSC’s Yamal LNG plant and crude from Gazprom Neft PJSC’s Novoportovskoye field. By 2024, Russia aims to increase shipments via the Northern Sea Route to as much as 80 million tons per year.To achieve that target, Russia will have to deal with extremely harsh environmental conditions. At the moment, it’s not possible to navigate across the Northern Sea Route for more than four months of the year. For the rest of the time, the Arctic waters are covered with thick ice with temperatures which fall as low as minus 40 degrees Celsius (also minus 40 Fahrenheit). That requires costly ice-breaking vessels and still doesn’t guarantee safe delivery of cargoes, as unpredictable winds can bring heavy, moving pack ice onto the route.“The task is to make the Northern Sea Route safe and economically viable for shippers, attractive both in terms of quality and price,” Putin said at the international Arctic Forum in April. Russia aims to launch round-the-year navigation along the Northern Sea Route by 2030, according to media reports, citing a draft of the Arctic Development program.Russia’s round-the-year navigation plans may be aided by the changing climate as global warming is slowly freeing up the country’s transpolar conduit from ice packs. Last year, Russia’s meteorological service Rosgidromet recorded the highest average surface winter temperature in the nation’s sea Arctic zone since 1952. Various studies suggest that climate change may extend the ice-free navigation period via the Northern Sea Route by several weeks between 2030-2050, enough to make the route commercially attractive for shipping transit.Enormous TaskThe project to create a state-run container ship operator is still in its infancy. Russia’s Ministry for Far East and Arctic development expects the think-tank Skolkovo to complete research on potential infrastructure and budget costs by the end of this year. The results of the research will then be discussed and updated for another half a year, and the final decision on whether the project is needed or not is up to Russia’s leadership, Krutikov said.However long it may take to set up a Russian state-run container operator, the overall development of the Northern Sea Route is a “project, which will develop at least 100 years given its scale,” Krutikov, who turns 32 this year, said.Appointed as deputy minister three years ago, he isn’t intimidated by such a daunting task. “I strongly believe that you should align yourself with something that is bigger than your life, only then you can achieve maximum results,” Krutikov said.(Updates with a researcher’s comment in eleventh paragraph, climate change research in sixteenth paragraph)To contact the reporters on this story: Olga Tanas in Moscow at email@example.com;Dina Khrennikova in Moscow at firstname.lastname@example.orgTo contact the editors responsible for this story: James Herron at email@example.com, Helen Robertson, Rakteem KatakeyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Mondays are never easy. But there’s one Monday morning Patrick Jaïs has been trying to erase from his memory -- or at least from legal existence -- for half a decade.On a sunny morning in March 2014, French investigators stormed his Neuilly-sur-Seine home west of Paris. The officers rifled through his and his wife’s mobile phones as well as his personal laptop in a raid meant to shed light on insider-trading suspicions linked to a longtime friend’s activities.Right about the same time, another group of investigators turned up at the Paris law firm just off the Champs-Elysees where Jaïs, 60, is a partner specializing in mergers and acquisitions. A police officer there quickly secured access to his office to prevent evidence tampering.“It’s a first,” Jaïs’s attorney, Eric Deubel, said at a court hearing last month, pointing out that investigators at France’s civil markets regulator had never raided a lawyer’s offices or home before.Connecting DotsWhile Jaïs hasn’t been accused of any wrongdoing, the lawsuit challenging the validity of the raids at his office provides a window into the origins of a much larger criminal probe into suspicious trades linked to a dozen securities, including ad agency Publicis Groupe SA and bank Natixis SA.For years, French investigators have been trying to connect the dots between members of a loose network of traders thought to have cultivated ties to bankers or lawyers and shared tips via burner phones to avoid detection. British authorities joined the fray along the way -- and secured two convictions -- while the U.S. has its own separate probe.But the French case began more discreetly, focusing on a sharp dip of GDF Suez shares in 2012. Jaïs wasn’t initially on the radar of market regulators at the Autorite des Marches Financiers until investigators received a mysterious handwritten note in mid-2013. In the letter, Jaïs’s brother-in-law claimed he’d heard that a Geneva trader and friend of Jaïs, Lucien Selce, was getting confidential tips from the lawyer.Brother-in-LawJaïs has denied the accusations in court filings and said the letter was sent by his brother-in-law as part of a personal vendetta.Frederic Peltier, a lawyer for Selce, said he’s not aware of any GDF case involving his client. Selce has always denied involvement in any insider trading.The bad blood has to do with a messy divorce and custody fight between Jaïs’s current wife and her previous husband, according to people familiar with the matter. The brother-in-law testified against Jaïs’s wife -- his own sister. To counter the claim, Selce wrote a letter to the judge vouching for Jaïs’s wife and saying the brother-in-law was a convict who couldn’t be trusted, the people said. That prompted the brother-in-law to retaliate with the letter to the AMF.Selce’s lawyer declined to comment on the custody case. Attempts to find contact details for Jaïs’s brother-in-law were unsuccessful.The M&A lawyer hasn’t been charged and one of the two raids -- the search of his home -- was voided by a court of appeals in 2015 on procedural grounds. The current lawsuit focuses solely on the office raid. Jaïs and Deubel haven’t responded to calls seeking comment since the Sept. 26 hearing.But, when the AMF got the letter in 2013, it seemed it might provide a breakthrough. At the time, investigators were hunting for evidence that Selce might have been tipped off about a profit warning GDF Suez issued in December 2012 that made the utility’s shares drop as much as 16%, according to court documents in the Jaïs lawsuit. Selce and his business partner were suspected of having illegally pocketed 1.8 million euros ($2 million) on the dip, according to a previous ruling in the case.The AMF’s first move was to raid Selce’s chalet in an upscale French ski resort and also to look into a Rothschild banker who might have had access to insider information on GDF. Both lines of inquiry led nowhere, so AMF investigators sought permission from a judge to conduct searches at Jaïs’s home and office.Paris Law FirmWhile GDF wasn’t a client of his, Jaïs could well have had access to insider information about the profit warning, AMF officials reasoned, according to court filings in Jaïs’s lawsuit. He was a partner at the prestigious Paris law firm De Pardieu Brocas Maffei, which has represented GDF at times, according to documents in an unrelated tax case.Investigators also found evidence of money transfers between Jaïs and Selce. But the M&A lawyer says in court filings that his friend simply loaned him 150,000 euros to settle a tax bill and he’s paid him back since then.The French markets regulator may have also had an ax to grind. Aside from M&A and private equity work, Jaïs was sometimes a defense lawyer in market abuse cases opposing AMF investigators. Just a few months before his home and office were raided, Jaïs had won a lawsuit against the regulator overturning fines totaling 4.7 million euros in a case involving two hedge funds. Representatives at the AMF didn’t respond to requests for comment.‘So Insignificant’In the end, the Jaïs steer may have been fruitless. Deubel, his lawyer, said the raids at the M&A lawyer’s home didn’t provide any useful information and the law firm inspections turned up just one document that Jaïs deemed “so insignificant” that he voluntarily provided it to the court.But investigators persevered, following information from other sources that led to additional Selce acquaintances. And by then French criminal authorities had joined the chase.After several months, they took a keen interest in Selce’s friend, Thomas Seligman, a Paris hair salon owner. Police inspectors tapped a burner phone traced to him and listened in on his calls. They soon became convinced Seligman had acted as an intermediary between Selce and a Societe Generale SA banker with first-hand access to inside knowledge on large deals. The trio were charged in 2015 over suspicious transactions related to the $10 billion acquisition of chemical producer Airgas Inc. by French rival Air Liquide SA. The men have challenged the charges and no trial has been ordered.Four others have also been charged in relation to the Airgas trades, including another acquaintance of Selce, Alexis Kuperfis. When police started tapping Kuperfis’ phone in late 2014, they discovered he was in contact with Walid Choucair, a suspect in a parallel U.K. probe. In June, Choucair was convicted and sentenced to three years for trading on tips from a friend at UBS Group AG.French authorities shared the tapes with their British counterparts and the conversation was played at Choucair’s trial.‘Big’ InvestigationThere’s a “big f--king investigation,” Choucair warned Kuperfis. While Kuperfis’s name came up at the Choucair trial, he has not been accused of any wrongdoing by U.K. authorities.Lawyers for Kuperfis declined to comment. Thibault de Montbrial, a lawyer for Seligman, also declined to comment.But over the last five years, while the insider-trading investigations have dragged on, Jaïs has tried to get on with his life. He remains a partner in good standing at De Pardieu, which didn’t respond to requests to comment. And while Jaïs says the office raid didn’t support the AMF’s suspicions, he continues to fight to get it tossed out.Jaïs contends that investigators didn’t do enough to protect his rights. He argues that while he was shown the search warrant on the day of the office raid, he should have also been given a copy of a lengthier document detailing the judge’s reasoning to authorize it. Losing this lawsuit would be a blow for the AMF and could require investigators to provide both documents during inspections.“This is really a question of principle,” according to Deubel. A ruling in the case is scheduled for the end of the month.\--With assistance from Aaron Kirchfeld and Franz Wild.To contact the reporter on this story: Gaspard Sebag in Paris at firstname.lastname@example.orgTo contact the editors responsible for this story: Anthony Aarons at email@example.com, Robert FriedmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- President Donald Trump’s decision to move American troops out of Syria to make way for a Turkish attack on pro-U.S. Kurdish forces cements America’s growing reputation in the Middle East for being unreliable, unpredictable and, increasingly, even weak.Unreliability was the first thing noticed — by America’s biggest critics, such as Iran; its main competitors, including Russia; and even its allies, including Israel and Saudi Arabia. The impression began to form during President Barack Obama’s first term, when Washington, after a period of dithering, abandoned Egypt’s President Hosni Mubarak, allowing his ouster after huge street protests. Was this America’s way of showing solidarity with friends?Such questions grew into serious doubts when Obama, with five other international powers, signed a nuclear agreement with Iran. Israel expressed alarm, and more quietly so did Gulf Arab countries. All feared it might even be the start of a broader U.S.-Iranian rapprochement that would replace their longstanding U.S. partnerships.It didn’t help when Obama called Gulf Arab countries “free riders,” and suggested they “share” the Middle East with Iran. To Saudis, especially, who had sided with the U.S. for decades, that felt like a betrayal.After the 2016 U.S. election, America’s Middle Eastern partners hoped President Donald Trump would improve matters. Instead, he kept up the unreliability, and added a heavy measure of unpredictability.Trump famously finds it advantageous to keep friends and foes alike off balance. Such unpredictability may be useful in the real estate business. It may also work in international relations for small, disruptive states like Iran and North Korea that rely on chaos and destabilization to further their agendas. But for a global power looking to preserve stability in a volatile region like the Persian Gulf, unpredictability is self-defeating.Even the Israelis, who benefited from Trump’s unpredictability when he recognized their annexations of Jerusalem and the Golan Heights, have been unnerved by his sudden reversals on North Korea and other global challenges. As they watch him abandon the Syrian Kurds to Turkey, some are wondering if they might be next.Saudi Arabia and other Gulf Arab countries have concluded that Trump sees them mainly as arms purchasers. So they have little difficulty imagining him making friends with Iranian leaders, and reaching for photo-ops and small diplomatic victories largely at their expense.Added to all this is the growing perception in the Middle East that the U.S. is losing, or has lost, the will to fight. While no one doubts America’s military and economic power, it has also, in the aftermath of disastrous campaigns in Iraq and Afghanistan, demonstrated serious conflict fatigue. That became evident when President Obama declined to enforce his own “red line” against the use of chemical weapons in Syria. And it appeared twice more recently when Trump essentially ignored Iran’s downing of an American drone and audacious attacks on Saudi oil facilities.But no action, or non-action, has been as stark as this week’s abandonment of the Kurds, who have been the key allies in the American battle against Islamic State terrorists. Now it appears to friend and foe alike that the U.S. has fundamentally lost its nerve in the Middle East. It will fight only in self-defense, and only as a last resort.All this calls to mind the 1956 Suez fiasco, which resulted in a collapse of British and French authority in the Middle East that presaged a broader loss of global clout for those declining European powers. At the time, they were being superseded by the rise of American and Soviet dominance.The U.S., in contrast, has undermined its own authority with no help from any other country or competitor. This only reinforces its image as a global power that, especially in the Middle East, is growing ever more unreliable, unpredictable and weak.To contact the author of this story: Hussein Ibish at firstname.lastname@example.orgTo contact the editor responsible for this story: Mary Duenwald at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Hussein Ibish is a senior resident scholar at the Arab Gulf States Institute in Washington. For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
When Suez SA (ENXTPA:SEV) released its most recent earnings update (30 June 2019), I compared it against two factor...
Shares in French waste and water group Suez dropped more than 6% on Wednesday after its new chief executive unveiled a four-year plan to boost earnings but lacked clarity on dividends and planned asset sales. The plan unveiled on Wednesday by Bertrand Camus, who was appointed in May, follows an appeal in July by activist investor Amber Capital for a review of the utility's strategy to create more value for its shareholders. Camus' 2020-2023 strategy focused on boosting earnings per share, cutting costs and selling assets, but he declined to say which assets the firm may sell and gave no date for a long-awaited dividend increase.
In December 2018, Suez SA (EPA:SEV) released its earnings update. Generally, analysts seem fairly confident, with...