Saudi Aramco signs preliminary gas deal with Shell

Saudi Aramco has signed a preliminary deal to pursue international gas opportunities with Royal Dutch Shell. (Reuters)
Updated 08 March 2018
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Saudi Aramco signs preliminary gas deal with Shell

LONDON/DUBAI: State oil giant Saudi Aramco signed a preliminary deal to pursue international gas opportunities with Royal Dutch Shell on Thursday as part of top crude exporter Saudi Arabia’s diversification drive before the listing of Aramco.
The memorandum of understanding (MoU) signed in London between the two companies was during the official visit of Saudi Crown Prince Mohammed bin Salman to Britain, and would include gas upstream and liquefaction projects.
“It is a discussion that began some time ago and now we have signed a memorandum to work on gas projects from upstream to downstream across the world and in Saudi Arabia. Concrete projects would be announced in due course,” Shell Chief Executive Ben van Beurden told Reuters after the signing ceremony.
Last year, industry sources told Reuters Saudi Arabia and international oil companies had discussed gas venture opportunities inside the Kingdom and abroad.
Aramco is gearing up for a share listing later this year, aiming to get a valuation of up to $2 trillion in what could be the world’s biggest initial public offering (IPO).
The Kingdom has a long-term goal of increasing the use of gas for domestic power generation, thus reducing oil burning at home and freeing up more crude for export.
Expanding its gas portfolio inside the Kingdom as well as abroad could help increase Aramco’s valuation as it generates more revenue from exports than selling oil at lower domestic prices — Saudi Arabia is the world’s fifth-biggest oil consumer despite being only the 20th-biggest economy.
Saudi Energy Minister Khalid Al-Falih, who is also Aramco’s chairman, had said Aramco was interested in investing in international upstream ventures, particularly gas, and could invest in importing gas into the kingdom.
Diversifying gas assets abroad would help Aramco achieve a better valuation and is attractive for investors, industry sources has said. Riyadh also plans to raise domestic gas prices, a move seen as an incentive for foreign companies.
Aramco controls gas reserves in excess of 8 trillion cubic meters, according to BP’s annual energy review. The Saudi company has said it wants to explore for gas in the shallow waters of the Red Sea as well as onshore shale gas.


US unveils new veto threat against WTO rulings

Updated 23 June 2018
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US unveils new veto threat against WTO rulings

  • US tells WTO appeals rulings in trade disputes could be vetoed if they took longer than the allowed 90 days
  • Trump, who has railed against the WTO judges in the past, threatens to levy a 20 percent import tax on European Union cars

GENEVA: The United States ramped up its challenge to the global trading system on Friday, telling the World Trade Organization that appeals rulings in trade disputes could be vetoed if they took longer than the allowed 90 days.
The statement by US Ambassador Dennis Shea threatened to erode a key element of trade enforcement at the 23-year-old WTO: binding dispute settlement, which is widely seen as a major bulwark against protectionism.
It came as US President Donald Trump, who has railed against the WTO judges in the past, threatened to levy a 20 percent import tax on European Union cars, the latest in an unprecedented campaign of threats and tariffs to punish US trading partners.
Shea told the WTO’s dispute settlement body that rulings by the WTO’s Appellate Body, effectively the supreme court of world trade, were invalid if they took too long. Rulings would no longer be governed by “reverse consensus,” whereby they are blocked only if all WTO members oppose them.
“The consequence of the Appellate Body choosing to breach (WTO dispute) rules and issue a report after the 90-day deadline would be that this report no longer qualifies as an Appellate Body report for purposes of the exceptional negative consensus adoption procedure,” Shea said, according to a copy of his remarks provided to Reuters.
An official who attended the meeting said other WTO members agreed that the Appellate Body should stick to the rules, but none supported Shea’s view that late rulings could be vetoed, and many expressed concern about his remarks.
Rulings are routinely late because, the WTO says, disputes are abundant and complex. Things have slowed further because Trump is blocking new judicial appointments, increasing the remaining judges’ already bulging workload.
At Friday’s meeting the United States maintained its opposition to the appointment of judges, effectively signalling a veto of one judge hoping for reappointment to the seven-seat bench in September.
Without him, the Appellate Body will only have three judges, the minimum required for every dispute, putting the system at severe risk of breakdown if any of the three judges cannot work on a case for legal or other reasons.
“Left unaddressed, these challenges can cripple, paralyze, or even extinguish the system,” chief judge Ujal Singh Bhatia said.
Sixty-six WTO member states are backing a petition that asks the United States to allow appointments to go ahead. On Friday, US ally Japan endorsed the petition for the first time, meaning that all the major users of the dispute system were united in opposition to Trump.