Saudi Aramco and Japanese firm extend Okinawa crude storage deal

Japan’s Trade and Industry Minister Hiroshige Seko
Updated 19 January 2017
0

Saudi Aramco and Japanese firm extend Okinawa crude storage deal

TOKYO: Japan Oil, Gas and Metals National Corp. (JOGMEC) has signed a contract with Saudi Aramco to extend a crude oil storage deal on the island of Okinawa by three years.
Under the agreement, Saudi Aramco can store up to 1 million kiloliters (6.3 million barrels) of crude oil on the island southwest of mainland Japan for the next three years, JOGMEC said in a statement.
The volumes are unchanged from the previous three-year deal, which is expiring this month. Japan and Saudi Aramco had earlier been discussing expanding the Okinawa crude storage by about 2 million barrels.
The volumes could still rise during the three years of the new contract, depending on the Japanese government’s budget and the availability of tank space, a JOGMEC official said.
In return for providing free storage space to Saudi Aramco, Japan gets a priority claim on the oil stocks in an emergency.
Saudi Aramco has stored crude in Okinawa since February 2011, and has used the facility to supply oil to China, Japan and South Korea among others.
Japan has a similar storage deal with Abu Dhabi National Oil Co. (ADNOC) under which the oil company can store the same volume of crude at the facilities at Kiire in Kyushu, southwest Japan.
Japan treats the oil stored by Saudi Aramco and ADNOC as quasi-government inventory, counting half of the barrels as part of the national strategic crude reserves.
Officials in Tokyo said Japan has agreed to allow the Abu Dhabi firm to store crude oil in the country for two more years, giving the nation’s second-largest supplier continued access to a depot through 2019.
The agreement came during a recent meeting between Japan Trade Minister Hiroshige Seko and ADNOC chief executive Sultan Al-Jaber in the United Arab Emirates (UAE), Japan’s Ministry of Economy, Trade and Industry said in a statement.
Tokyo has given UAE free crude storage since 2009. The arrangement had been due to expire at the end of this year and was extended to the end of 2019, a trade ministry official said.
Under the deal, ADNOC can store up to 6.29 million barrels (1 million kiloliters) at Kiire oil terminal in Kagoshima, southern Japan at no cost.
The deals with Saudi Aramco and ADNOC provide the two biggest oil suppliers to Japan easy access to Asian markets while giving the country priority access to the reserves if it is in short supply.
The government counts half of the barrels stored by Saudi Aramco and ADNOC as part of the national strategic crude reserves.


BMW picks insider Zipse as CEO to catch up with rivals

Oliver Zipse
Updated 19 July 2019
0

BMW picks insider Zipse as CEO to catch up with rivals

  • German giant has lost ground to Mercedes-Benz and Tesla as tech steps up

FRANKFURT: BMW has named Oliver Zipse as its new CEO, continuing the German carmaker’s tradition of promoting production chiefs to the top job even as the auto industry expands into new areas such as technology and services.
Hailing Zipse’s “decisive” leadership style, BMW hopes the 55-year-old can help it win back its edge in electric cars and the premium market  from rival Mercedes-Benz.
But some analysts questioned whether Zipse was the right choice with new fields such as software and services like car-sharing becoming increasingly important.
“What is intriguing is the cultural bias to appoint the head of production. It works sometimes but ... being good at building cars is not a defining edge the way it was 20 years ago,” said Jefferies analyst Philippe Houchois.
Current CEO Harald Krueger, and former chiefs Norbert Reithofer, Bernd Pischetsrieder and Joachim Milberg were all former production heads.
Zipse joined BMW as a trainee in 1991 and served as head of brand and product strategies and boss of BMW’s Oxford plant in England before joining the board.
He will become chief executive on Aug. 16, taking over from Krueger who said he would not be available for a second term.
“With Oliver Zipse, a decisive strategic and analytical leader will assume the Chair of the Board of Management of BMW. He will provide fresh momentum in shaping  the future,” said Reithofer.
Zipse helped expand BMW’s efficient production network in Hungary, China and the US, in a move that delivered industry-leading profit margins.
Under Krueger, BMW was overtaken in 2016 by Mercedes-Benz as the best-selling luxury car brand.
It also had an early lead over US  rival Tesla in electric cars, but scaled back ambitions after its i3 model failed to sell large numbers.
Reithofer initially championed Krueger’s low-key consensus-seeking leadership, but pressured him to roll out electric vehicles more aggressively, forcing Krueger to skip the Paris Motor Show in 2016 to reevaluate BMW’s electric strategy.
Krueger’s reluctance to push low-margin electric vehicles led to an exodus of talented electric vehicle experts, including Christian Senger, now Volkswagen’s (VW) board member responsible for software, and Audi’s Markus Duesmann, who is seen as a future CEO of the company.
Both were poached by VW CEO Herbert Diess, a former BMW board member responsible for research who was himself passed over for BMW’s top job in 2015.
VW has since pushed a radical 80 billion euro ($90 billion) electric car mass production strategy, and a sweeping alliance with Ford.

Other skills
“A CEO needs to have an idea for how mobility will evolve in the future. This goes far beyond optimising an existing business,” said Carsten Breitfeld, chief executive of China-based ICONIQ motors, and former BMW engineer. “He needs to build teams, attract talent, and promote a culture oriented along consumer electronics and internet dynamics.”
German manufacturers have dominated the high-performance market for decades, but analysts warn shifts towards sophisticated technology and software is opening the door to new challengers.
“Tesla has a lead of three to four years in areas like software and electronics. There is a risk that the Germans can’t catch up,” UBS analyst Patrick Hummel said.
Germany’s Auto Motor und Sport car magazine, normally quick to champion German manufacturers, this week ran a cover questioning BMW’s future.
“Production expertise is important, but if you want to avoid ending up being a hardware provider for Google or Apple, you need to have the ability to move up the food chain into data and software,” a former BMW board member said.