A logo of Brazil’s state-run Petrobras oil company is seen at their headquarters in Rio de Janeiro, Brazil October 16, 2019. REUTERS/Sergio Moraes/File Photo Acquire Licensing Rights
RIO DE JANEIRO, Sept 28 (Reuters) – The head of Brazil’s state oil firm Petrobras (PETR4.SA) said on Thursday it will sign a memorandum of understanding with mining giant Vale (VALE3.SA) to study potential joint ventures in renewable energy, even as looks to new suppliers for diesel.
“Vale is a consumer (of energy) and probably very interested in hydrogen production, it has some activities in energy transition that are interesting,” Petrobras CEO Jean Paul Prates told reporters, saying the companies would look for synergies.
The partnership would come at a time when Petrobras is pushing to move into renewable energy. Earlier this month, the state-run firm unveiled plans to develop offshore wind farms.
Regarding diesel, Prates said Petrobras could if necessary and strategic import the fuel from abroad as bans on Russian imports – the main source of imported diesel in Brazil – could force the country to look for suppliers elsewhere.
Russia surpassed the United States as Brazil’s top supplier this year.
“We’re going to import to meet our contracts and possibly one or two more quotas that are necessary and that we see as an opportunity to enter a new market or a new customer that is good for us,” Prates said.
Meanwhile, spiking oil prices have widened the gap between Petrobras’ refinery prices and those charged abroad, which analysts say is discouraging third-party imports. Petrobras last adjusted its gasoline and diesel prices in mid-August.
“The models, for the time being, indicate it’s possible to maintain the same level with absolutely no risk to the company’s profitability,” said Prates.
Petrobras’ refinery utilization factor is currently at a rate of 94%, he added.
Reporting by Marta Nogueira; Editing by Steven Grattan and Sarah Morland
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LITTLETON, Colorado, Sept 19 (Reuters) – The deepening debt crisis in China’s construction sector – a key engine of economic growth, investment and employment – may trigger an unexpected climate benefit in the form of reduced emissions from the cement industry.
Cement output and construction are closely correlated, and as China is by far the world’s largest construction market it is also the top cement producer, churning out roughly 2 billion tonnes a year, or over half the world’s total, data from the World Cement Association shows.
The heavy use of coal-fired kilns during manufacturing makes the production of cement a dirty business. China’s cement sector discharged 853 million tonnes of carbon dioxide in 2021, according to the Global Carbon Atlas, nearly six times more than the next largest cement producer, India.
The cement sector accounts for roughly 12% of China’s total carbon emissions, according to Fidelity International, and along with steel is one of the largest greenhouse gas emitters.
But with the property sector grinding to a halt due to spiralling debt worries among major developers, the output and use of cement are likely to contract over the next few months, with commensurate implications for emissions.
HOUSING SLUMP
The property markets account for roughly a quarter of China’s economy, and for years Beijing has used the sector’s substantial heft to influence the direction of the rest of the economy by spurring lending to would-be home buyers and fostering large scale construction projects.
But the big property developers racked up record debt loads in recent years that have forced borrowing levels to slow, stoked concerns among investors, and slowed spending across the economy.
China Evergrande Group, once the second largest developer, defaulted on its debt in late 2021, while top developer Country Garden has drained cash reserves to meet a series of debt payment deadlines in recent months.
Fears of contagion throughout the property industry has spurred households to rein in consumer spending, which has in turn led to deteriorating retail sales and further economic headwinds.
Beijing has stepped in with a slew of measures designed to right the ship, including easing borrowing rules for banks and lowering loan standards for potential home buyers.
But property prices in key markets remain under pressure, which has served to stifle interest among buyers and add to the pressure on investors and owners.
CEMENT CUTS
With construction activity across China slowing, and several major building sites stopped completely while tussles over debt payments among developers continue, cement output is likely to shrink to multi-year lows by the end of 2023.
During the March to August period, the latest data available, total cement output was 11.36 million short tons, down 2 percent from the same period in 2022 and the lowest for that period in at least 10 years, China National Bureau of Statistics data shows.
In addition to curtailing output in response to the bleak domestic demand outlook in the property sector, cement plants may be forced to curb output rates over the winter months as part of annual efforts to cap emissions from industrial zones during the peak season for coal heating.
Some cement producers will likely look to boost exports in an effort to offset lower domestic sales, and in July China’s total cement exports hit their highest since late 2019.
But Chinese firms will face stiff competition from lower-cost counterparts in Vietnam, which are by far the top overall cement exporters and already lifted overall cement shipments by close to 3% in the first half of 2023, data from the Vietnam National Cement Association (VNCA) shows.
Some Chinese firms may be prepared to sell exports at a loss for a spell while they await greater clarity over the domestic demand outlook.
But given the weak state of global construction activity amid high interest rates in most countries, as well as the high level of cement exports from other key producers such as India, Turkey, United Arab Emirates and Indonesia, high-cost Chinese firms may be forced to quickly contract output to match the subdued construction sector.
And if that’s the case, the sector’s emissions will come down too, yielding a rare climate benefit to the ongoing property market disruption.
The opinions expressed here are those of the author, a columnist for Reuters.
Reporting By Gavin Maguire; Editing by Miral Fahmy
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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
People walk along the beach on the Suffolk coast as the Sizewell B nuclear power station can be seen on the horizon, near Southwold, Britain, January 31, 2019. REUTERS/Russell Boyce Acquire Licensing Rights
LONDON, Sept 18 (Reuters) – Britain on Monday opened the search for private investment in the Sizewell C nuclear project, inviting potential investors to register their interest.
The building of the plant by French energy giant EDF in southeast England, capable of producing around 3.2 gigawatts of electricity or enough to power around 6 million homes, was approved in July 2022.
“The government, the Sizewell C Company and EDF, the project’s lead developer, are looking for companies with substantial experience in the delivery of major infrastructure projects,” a statement from the Department for Energy Security and Net Zero said.
The British government announced last year that it would support Sizewell C with around 700 million pounds ($895 million) while taking a 50% stake during its development phase.
“The launch of the formal equity raise opens another exciting phase for the project, following a positive response from investors during market testing,” said Sizewell C Company Joint Managing Director, Julia Pyke.
Reporting by Kylie MacLellan, writing by William James
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A gas pump is inserted inside an Audi vehicle at a Mobil gas station in Beverly Boulevard in West Hollywood, California, U.S., March 10, 2022. Picture taken March 10, 2022. REUTERS/Bing Guan Acquire Licensing Rights
WASHINGTON, Sept 13 (Reuters) – The U.S. Energy Department has talked to oil producers and refiners to ensure stable fuel supplies at a time of rising gasoline prices, Jared Bernstein, head of the White House Council of Economic Advisers, said on Wednesday.
Rising U.S. gasoline prices were largely behind the largest increase in U.S. consumer prices in 14 months in August.
Gasoline prices jumped 10.6% in August after climbing 0.2% in July, accounting for more than half the increase in the Consumer Price Index. Gasoline prices peaked at $3.984 per gallon in the third week of August, according to data from the U.S. Energy Information Administration, up from $3.676 per gallon during the same period in July.
Reporting By Jeff Mason and Jarrett Renshaw
Editing by Chris Reese and David Gregorio
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A view shows a makeshift dwelling near an area where hundreds of artisan miners have found a rich seam of copper, in the hills of Tapairihua in Peru’s Andes, October 18, 2022. REUTERS/Marco Aquino/file photo Acquire Licensing Rights
LIMA, Aug 31 (Reuters) – Peruvian miner Minsur (MINSURI1.LM) has announced an investment of at least $2 billion in five years as it expands its copper and tin operations, an executive told Reuters on Thursday.
Minsur is set to invest around $543 million in an underground project in Justa mine, which is owned by the firm and Chilean mining company Copec (COPEC.SN), Minsur corporate affairs executive Gonzalo Quijandria said in a phone interview with Reuters.
Another $381 million will be invested to expand the processing plant and to improve the Justa mine camp, which began operations in 2021, Quijandria said.
The mine produced 126,036 fine metric tons of copper last year and was the world’s seventh most productive copper mine, according to official data.
Peru is the world’s No. 2 copper producer.
Minsur also operates the only mine in Peru for tin, a relatively rare element, and produces about 9% of this metal globally, according to the company.
Regarding such a production, Quijandria said Minsur plans to invest $462 million in its tin production line and another $100 million in tin exploration projects in the country.
“They are sustaining investments that include new tailings dams in the San Rafael mine and improvements in the Pisco smelter,” he said.
Minsur also plans to invest some $342 million in the modernization of its polymetallic producer Minera Raura.
Earlier on Thursday, Peru’s ministry provided a different breakdown of figures from the company, and Reuters did not receive an immediate response to a query about the discrepancy.
The announcement followed a meeting between Minsur CEO Juan Luis Kruger and Peru’s energy and mines minister, Oscar Vera.
The Mina Justa Subterranea project will be the second largest and most modern underground mine in Peru,” the ministry said in a statement, adding that Minsur expects to present the first permits for the project in the first months of next year, with production expected to start in 2027.
Reporting by Marco Aquino; Editing by Brendan O’Boyle, Paul Simao and Leslie Adler
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BOGOTA, July 27 (Reuters) – Colombian police have seized property and bank accounts worth 1.3 trillion pesos ($329 million), proceeds from the sale and export of stolen crude oil, officials said on Thursday.
The national police and Interpol have carried out seven investigations since 2016 into the theft and smuggling of oil by four criminal organizations, a police statement said. The enterprise managed to export 975,000 barrels of crude between 2020 and 2021, it said.
Thousands of barrels of oil are stolen from Colombia’s pipelines each day, often by criminal gangs who refine it into a bootleg fuel known as pategrillo for use in making cocaine or running machinery in illegal mining.
The practice of perforating pipelines and storing oil in pools in the jungle is an environmental disaster, Reuters reported last year, after visiting clandestine refineries in Narino province.
“Businessmen and technicians are involved and the National Liberation Army (ELN) is clearly linked due to its illegal activities of hydrocarbon theft and attacks against the Cano Limon-Covenas pipeline,” said independent energy analyst Katherine Casas, referring to a rebel group that regularly bombs pipelines.
Police seized houses, apartments, boats, vehicles and four refineries earlier this week, as well as 17 bank accounts – Colombian and international – valued at 20.3 billion pesos ($5.14 million).
To sell the stolen oil, criminal groups mixed it with legally-bought crude so it could be exported via front companies, police said.
Colombia’s majority state-owned oil company Ecopetrol (ECO.CN) was the main victim of the scheme, costing it 60 billion pesos, police added.
“From 2013 to 2023, 9,925 illegal valves have been removed from Ecopetrol Group’s transportation systems,” the company said in a statement, adding that it was working with the government and security forces to tackle illegal operations.
The gangs stole crude from Colombia’s Cano Limon-Covenas pipeline which runs parallel to the border with Venezuela. It was processed elsewhere before being sold nationally or smuggled to the Pacific port city of Buenaventura and exported.
Furthermore, “large quantities” of light Venezuelan crude were brought into Colombia before being mixed with Colombian oil and exported via the Cano Limon-Covenas pipeline, the statement said.
($1 = 3,951.10 Colombian pesos)
Reporting by Luis Jaime Acosta and Oliver Griffin; editing by Grant McCool
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KAMPALA, July 26 (Reuters) – France’s TotalEnergies (TTEF.PA) said on Wednesday it had begun commercial drilling this month at its Tilenga petroleum project in Uganda’s west ahead of an expected start of oil production in the east African country in 2025.
TotalEnergies has faced fierce resistance from environmental protection groups and green energy campaigners who say the Tilenga project, which is partly located in a national park, and a planned crude oil export pipeline are a disaster for the planet.
“Drilling of the Tilenga wells began in July 2023, with production scheduled to start in 2025. A total of 420 wells will be drilled at Tilenga,” a spokesperson for TotalEnergies said.
TotalEnergies and its partner, China’s CNOOC, have said production in Tilenga will hit a peak of 190,000 barrels per day.
Tilenga is one of Uganda’s two oil projects. Commercial drilling at Kingfisher, the second project – which is controlled by CNOOC – begun in January.
A coalition of environmental pressure groups said on Wednesday that drilling in the Murchison Falls National Park (MFNP) and the associated crude oil pipeline was detrimental to global efforts to cut reliance on fossil fuels and would devastate the park’s ecosystem.
“The decision by TotalEnergies and its partners to drill for oil within MFNP, while ignoring the biodiversity conservation, climate change and socio-economic risks … is a direct contradiction to the global urgency to protect our remaining wild spaces and reduce fossil fuel reliance,” they said in a statement.
The park, one of Uganda’s largest and most visited, is bisected by the River Nile and is famed for its spectacular vistas and rich biodiversity that includes wild animals such as elephants, giraffes, hippos and chimpanzees.
The park is also home to a wetland site designated to be of international importance under the Ramsar Convention – the Murchison Falls-Albert Delta Wetland System.
TotalEnergies says it is committed to protecting the park’s biodiversity and that development will be limited to an area that is less than 1% of the park land.
Reporting by Elias Biryabarema in Kampala and Benjamin Mallet in Paris; Writing by Elias Biryabarema; Editing by George Obulutsa and Mark Potter
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BEIJING, July 13 (Reuters) – China’s crude oil imports in June jumped 45.3% on the year to the second-highest monthly figure on record, customs data showed on Thursday, with refiners building up inventories despite tepid domestic demand.
Crude imports in June totalled 52.06 million metric tons, or 12.67 million barrels per day (bpd), the data from the General Administration of Customs showed.
It was a substantial increase on the 8.72 million bpd imported in June last year, when the economy was battered by widespread COVID-19 lockdowns.
Crude imports also held their upward momentum on a month-on- month basis, up 4.58% from May’s 12.11 million bpd.
Total imports for the first half were 282.07 million metric tons, up 11.7% from 252.52 million in the corresponding period last year.
Teapot refiners in the eastern province of Shandong stepped up runs as authorities lifted curbs on the import of diluted bitumen in late June, helping to ease inventory pressure at its ports.
More broadly, however, inventories continue to rise against an uncertain macroeconomic backdrop. Commodities consultancy Vortexa estimated onshore crude inventories at 980 million barrels at the end of June, just 20 million barrels below an all-time record in August 2020.
While kerosene demand is up strongly on the year, boosted by a resumption in flights after the removal of curbs on travel, weakness in the manufacturing and property sectors has hurt demand for diesel, despite government stimulus measures.
“The long-haul spot barrels were booked when (arbitrage) windows were open, despite soft demand when the cargos arrived in June,” said Emma Li, a China oil markets analyst at Vortexa in Singapore.
China imported 10.39 million metric tons of natural gas in June, up 19.2% from 8.72 million a year ago when importers cut spot purchases amid high global liquefied natural gas (LNG) prices. Total gas imports for the first half stood at 56.63 million metric tons, a 5.8% increase on last year.
Refined fuel exports rose 40.6% to 4.51 million metric tons from 3.21 million in June last year, but down from the previous month’s 4.89 million metric tons.
Reporting by Andrew Hayley; Editing by Himani Sarkar, Shri Navaratnam and Jamie Freed
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NEW DELHI, July 7 (Reuters) – India’s Reliance Retail, run by Asia’s richest man Mukesh Ambani, has been valued at $92-96 billion by two global consultants, a source with direct knowledge of the matter told Reuters, in a move that could signal plans for an eventual IPO.
Reliance had appointed independent valuers EY, which valued the company at $96.14 billion, and BDO, which priced it at around $92 billion, the source said, declining to be named as the details are confidential.
Reliance, EY and BDO did not immediately respond to requests for comment.
Reliance Retail includes Ambani’s core retail businesses, including digital and brick-and-mortar stores. It is fully owned by Reliance Retail Ventures, which also houses other retail operations such as international partnerships and the billionaire’s consumer goods business.
The valuations show consultants estimate Ambani’s businesses are growing fast. In 2020, Reliance Retail Ventures raised 472.65 billion Indian rupees ($5.72 billion) by selling a 10.09% stake, valuing it at roughly $57 billion based on current exchange rates.
Investors at the time included KKR, the Saudi Public Investment Fund, General Atlantic and the UAE’s Mubadala.
News of the valuation comes ahead of a possible initial public offering (IPO) of Reliance’s retail division. Ambani has said he plans to list his retail operations at some point, but has so far not given a timeline or details of his plans.
EY valued Reliance Retail at 884.03 rupees per share, while BDO valued it at 849.08 rupees, the source said.
Reliance Retail has in recent years partnered with a slew of global brands to launch and expand their presence in India. From fashion to food, its partner brands include Burberry, Pret A Manger and Tiffany.
Reporting by Aditya Kalra in New Delhi, M. Sriram and Dhwani Pandya in Mumbai and Chris Thomas in Bengaluru; Editing by Savio D’Souza, Louise Heavens and Mark Potter
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WEST COLUMBIA, South Carolina July 6 (Reuters) – President Joe Biden traveled to South Carolina to tout a new $60 million solar investment as the latest example that he is rebuilding the U.S. manufacturing industry.
Biden and top administration officials are fanning across the country to champion how the administration’s economic policy – dubbed by them “Bidenomics” – is reshaping the country. US voters continue to question the strength of the economy, and Biden’s leadership, amid record employment and slowing inflation.
The investment by Enphase Energy Inc (ENPH.O) is part of some $500 billion in private investment that has boosted U.S. manufacturing since he became president, Biden said.
“I’m not here to declare victory on the economy. I’m here to say we have a plan to turn it around quickly,” Biden said.
The investment by Enphase will create some 1,800 new U.S. jobs, including 600 in South Carolina, between Enphase and its partner, multinational manufacturing giant Flex Ltd, according to the White House.
Enphase intends to open up six new manufacturing lines, bolstering clean-energy supply chains and helping power as many as 1 million homes per year with solar energy.
Biden administration officials are stressing that Republicans voted against the Inflation Reduction Act, which created hundreds of millions of dollars in tax incentives to promote green energy projects. Yet, officials note, that these same Republicans applaud local investments spurred by the legislation.
[1/6]U.S. President Joe Biden delivers remarks on the U.S. economy and his administration’s effort to revive American manufacturing, during his visit in Flex LTD, in West Columbia, South Carolina, U.S. July 6, 2023. REUTERS/Jonathan Ernst
One project will soon break ground in the district of Georgia congresswoman Marjorie Taylor Greene, an unrelenting Biden critic who recently sought to impeach the president.
“I’ll be there for the groundbreaking,” Biden said.
Biden toured a Flex facility in West Columbia, South Carolina that will make products for Enphase at the plant.
Enphase sells microinverters and batteries for solar arrays but its products are manufactured at factories in China, Mexico and India.
Thursday’s announcement will mark Enphase’s first US-based contract manufacturing facility.
Raghu Belur, co-founder and inventor, Enphase Energy, showed Biden a table of the company’s products and said his company has built millions of them over the years, but all outside the U.S.
“Thanks to your leadership, we are building them in the U.S. now,” Belur said.
Reporting By Jarrett Renshaw; Editing by Heather Timmons and Alistair Bell
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