Saudi Aramco IPO will guarantee growth and jobs: Al-Falih

Saudi Minister of Energy Khalid Al-Falih. (SPA file photo)
Updated 07 July 2017
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Saudi Aramco IPO will guarantee growth and jobs: Al-Falih

DUBAI: The forthcoming sale of shares in Saudi Aramco, the world’s biggest oil company, will help generate sustainable growth and quality jobs for citizens of the Kingdom, according to Minister of Energy Khalid Al-Falih.
In his message unveiling Aramco’s 2016 annual review on Thursday, Al-Falih, who is also chairman of the oil giant, said the planned initial public offering (IPO) on Saudi and international stock markets was “the most notable feature of the Kingdom’s transformation” as set out in the Vision 2030 plan to reduce its dependence on oil revenue.
“The Vision, which aims to diversify the national economy beyond oil and build a thriving private sector, will enable Saudi Aramco to expand its global presence. Concurrently with the Vision, the company will enlarge its supply chain and improve business reliability through a local network of suppliers and manufacturers while increasing the competitiveness of Saudi Arabia’s energy sector,” he said.
He added that the IPO — which is set to value Aramco at $2 trillion and which is scheduled for late next year — would “elevate the international visibility of the company’s decision making and governance, and building confidence in its long-term strategy.”
In 2016, which Al-Falih said was a “challenging year,” Aramco reached an all-time record for production of crude oil, pumping an average of 10.5 million barrels a day (mbd) — the biggest daily figure of any oil company in history.
Late in the year, Saudi Arabia led the Organization of the Petroleum Exporting Countries (OPEC) initiative to cap oil production in the face of falling prices, which Al-Falih said has “set the stage for an improved business environment in 2017.”
He said that 2016 was a “turning point” for Aramco, Saudi Arabia and the global oil industry.
Saudi Arabia ratified the Paris Agreement on climate change in 2016, just before the US signaled it was to leave the global pact to protect the environment. Al-Falih said that “the role of oil and gas in the global energy mix will remain significant for decades to come.”


Apple Watch, FitBit could feel cost of US tariffs

Updated 20 July 2018
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Apple Watch, FitBit could feel cost of US tariffs

SAN FRANCISCO: The latest round of US tariffs on $200 billion of Chinese goods could hit the Apple Watch, health trackers, streaming music speakers and other accessories assembled in China, government rulings on tariffs show.
The rulings name Apple Inc’s watch, several Fitbit Inc. activity trackers and connected speakers from Sonos Inc. While consumer technology’s biggest sellers such as mobile phones and laptops so far have faced little danger of import duties, the rulings show that gadget makers are unlikely to be spared altogether and may have to consider price hikes on products that millions of consumers use every day.
The devices have all been determined by US Customs and Border Patrol officials to fall under an obscure subheading of data transmission machines in the sprawling list of US tariff codes. And that particular subheading is included in the more than 6,000 such codes in President Donald Trump’s most recent round of proposed tariffs released earlier this month.
That $200 billion list of tariffs is in a public comment period. But if the list goes into effect this fall, the products from Apple, Fitbit and Sonos could face a 10 percent tariff.
The specific products listed in customs rulings are the original Apple Watch; Fitbit’s Charge, Charge HR and Surge models; and Sonos’s Play:3, Play:5 and SUB speakers.
All three companies declined to comment on the proposed tariff list. But in its filing earlier this month to become a publicly traded company, Sonos said that “the imposition of tariffs and other trade barriers, as well as retaliatory trade measures, could require us to raise the prices of our products and harm our sales.”
The New York Times has reported that Trump told Apple CEO Tim Cook during a meeting in May that the US government would not levy tariffs on iPhones assembled in China, citing a person familiar with the meeting.
“The way the president has been using his trade authority, you have direct examples of him using his authority to target specific products and companies,” said Sage Chandler, vice president for international trade policy at the Consumer Technology Association.
The toll from tariffs on the gadget world’s smaller product lines could be significant. Sonos and Fitbit do not break out individual product sales, but collectively they had $2.6 billion in revenue last year. Bernstein analyst Toni Sacconaghi estimates that the Apple Watch alone will bring in $9.9 billion in sales this year, though that estimate includes sales outside the United States that the tariff would not touch.
It is possible that the products from Apple, Fitbit and Sonos no longer fall under tariff codes in the $200 billion list, trade experts said. The codes applied to specific products are only public knowledge because their makers asked regulators to rule on their proper classification. And some of the products have been replaced by newer models that could be classified differently.
But if companies have products whose tariff codes are on the list, they have three options, experts said: Advocate to get the code dropped from the list during the public comment period, apply for an exclusion once tariffs go into effect, or try to have their products classified under a different code not on the list.
The last option could prove difficult due to the thousands of codes covered, said one former US trade official.