Iran offers discount oil to Asia

Several key buyers, including China and India, who account for roughly half of Iran’s sales, have said they are not willing to make significant cuts to their energy purchases from Iran. (AFP)
Updated 15 August 2018
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Iran offers discount oil to Asia

  • ‘Discount is part of the nature of the global markets being offered by all oil exporters’
  • The United States will seek to block Iran’s international oil sales from November 5

TEHRAN: Iran is selling oil and gas at a discount to Asian customers as it prepares for the return of US sanctions, state news agency IRNA reported on Monday.
The “informed source” in Iran’s oil ministry did not give details of the discount but sought to downplay the move as common industry practice.
“Discount is part of the nature of the global markets being offered by all oil exporters,” the source told IRNA.
Bloomberg reported on Friday that the state-run National Iranian Oil Company was reducing official prices for September sales to Asia to their lowest level in 14 years, compared with Saudi crude.
The United States will seek to block Iran’s international oil sales from November 5, when the second phase of sanctions are reimposed as part of Washington’s withdrawal from the 2015 nuclear deal.
Several key buyers, including China and India, who account for roughly half of Iran’s sales, have said they are not willing to make significant cuts to their energy purchases from Iran.
But analysts predict Iran could still see its oil sales drop by around 700,000 barrels per day from their current level of around 2.3 million.
Much will depend on the European Union, which has vowed to resist US sanctions on Iran, but whose companies and financial institutions are more vulnerable to US financial pressure than their Asian counterparts.
French energy giant Total has already said it is pulling out of its multi-billion-dollar investment project in the South Pars oil field in southern Iran as a result of the renewed sanctions.


Shareholders of India’s Jet Airways approve debt-for-equity swap

Updated 4 min 2 sec ago
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Shareholders of India’s Jet Airways approve debt-for-equity swap

  • The plan will mean the lenders will have a bigger holding than any other shareholder
  • Currently, Chairman Naresh Goyal owns a 51 percent stake in the company and Abu Dhabi’s Etihad Airways owns 24 percent
MUMBAI: India’s Jet Airways said late on Friday that its shareholders approved a plan to convert existing debt to equity, paving the way for the troubled company’s lenders to infuse funds and nominate directors to its board.
Jet’s board last week approved a plan by lenders, led by State Bank of India, for an equity infusion, debt restructuring and the sale or sale-and-lease-back of aircraft.
The plan will mean the lenders will have a bigger holding than any other shareholder.
Currently, Chairman Naresh Goyal owns a 51 percent stake in the company and Abu Dhabi’s Etihad Airways owns 24 percent.
Jet, which had net debt of 72.99 billion rupees ($1.03 billion) as of end-December, has debt payments looming next month, according to rating agency ICRA. It has been unable to pay pilots’ salaries and has outstanding bills to aircraft lessors.
The company, India’s biggest full-service carrier, is struggling with competition from budget rivals, high oil prices and a weaker rupee. The share price took a beating in 2018, losing nearly 70 percent of its value.
In a regulatory filing, Jet said on Friday that 98 percent of its shareholders voted to increase the share capital to 22 billion rupees ($309.8 million) from 2 billion rupees at a special meeting.
Jet, whose financial woes are set against the backdrop of wider aviation industry problems, has been in the red for four straight quarters.