Gazprom struggles to assert dominance on energy market

Gazprom struggles to assert dominance on energy market
Updated 16 August 2015

Gazprom struggles to assert dominance on energy market

Gazprom struggles to assert dominance on energy market

MOSCOW: Facing a cold shoulder from Europe and increased competition at home, Russia's Gazprom has struggled to assert dominance on the global energy market, prompting speculation the energy giant could have no choice but to splinter.

With the Russian economy slipping into recession on the back of lower oil prices and Western sanctions over Ukraine, the Economy Ministry predicted Gazprom would produce 414 billion cubic meters of gas this year, an all-time low for the public company sitting atop some of the world's largest natural gas reserves.
Gazprom's market capitalization has plummeted in recent years. Prior to the 2008 financial crisis, the company was worth more than $300 billion. Its value now hovers around $50 billion, trailing far behind the world's other major energy companies.
"Gazprom is confronted with the greatest challenge in its history," Chris Weafer, a partner at the Macro Advisory consultancy firm, told AFP.
"What remains to be seen is whether Gazprom becomes an appendage of the Foreign Ministry or evolves into a global energy company."
The decline in Gazprom's value and gas production coincides with mounting tensions with the European Union, which has accused it of catering to Moscow's geopolitical interests instead of operating according to business principles.
Gazprom is now grappling with a series of issues, including its recent loss of the Ukrainian market, Europe's energy diversification efforts and increased competition on the domestic market, which jeopardize its status as a gas giant.
The gas giant struck a $400 billion natural-gas deal with China last year, an agreement that was heralded as the symbol of Russia's pivot to Asia. Moscow and Beijing have since agreed on Russia supplying natural gas to western China.
But Western sanctions imposed on Moscow over the Ukraine crisis have undermined Gazprom's attempts to turn away from Europe, its traditional market.
Washington's ban on technology transfers to Russia for certain energy projects, including Gazprom's Yuzhnoye Kirinskoye field in the far eastern Okhotsk Sea, is stifling Moscow's ambitions on the Asian market.
Gazprom was set to use the field to develop its liquefied natural gas (LNG) production capacity and, according to some reports, exchange assets with Anglo-Dutch company Shell.
Without US technology, experts fear that Russia will not be able to exploit the field's resources.
"This is bad news for Russia because the production of LNG is a strategic objective in the region," said Valery Nesterov, an analyst at Sberbank Investment CIB.
The Ukraine conflict, which has propelled Russia's relations with the West to their post-Soviet nadir, has meanwhile exacerbated Europe's desire to dissociate from Gazprom.
The company, however, has reiterated that Russian energy resources remain the most accessible to fulfill Europe's growing demand for gas.
Gazprom's exports to Europe, which are expected to rise this year, still provide the company with hefty revenues in spite of lower energy prices.
After the EU blocked Russia's South Stream gas pipeline project — which would have brought Russian gas to western Europe via the Black Sea — Russian President Vladimir Putin announced the country would work on a new pipeline, the TurkStream, which would run through Turkey.
Gazprom is eager to complete the TurkStream pipeline to bypass Ukraine in its gas shipments, but its construction, which was scheduled to start in June, has been delayed.
Experts said it is unlikely that Ankara will make any decisions on the project until after upcoming general elections.
According to Mikhail Korchemkin, the director of the East European Gas Analysis firm, there are "next to zero" chances that the pipeline will be completed.
Critics have said Gazprom has been slow to react to the ever-changing gas market, clinging to lengthy contracts pegged to fluctuating oil prices.
Analysts have claimed that Gazprom could benefit from dividing its mammoth structure into smaller entities that would be more efficient and transparent.
Russian media has reported that Igor Sechin, the influential head of Russian oil giant Rosneft, has asked the government to open up gas exports to competition and to split Gazprom in two, separating energy production and transportation.
"I'm not sure Gazprom survives this difficult period," said analyst Korchemkin.
"It would be easier for its development if it split into pieces within a couple of years."


Revenue management systems key to success of Saudi health reforms says KPMG

Revenue management systems key to success of Saudi health reforms says KPMG
Updated 57 min 37 sec ago

Revenue management systems key to success of Saudi health reforms says KPMG

Revenue management systems key to success of Saudi health reforms says KPMG
  • The Kingdom’s Ministry of Health (MoH) is transitioning from being an all-in-one payer, provider and regulator of health services to becoming a regulator

RIYADH: Robust revenue cycle management systems will be essential for Saudi Arabia’s new health care model, KPMG said in a report.
The Kingdom’s Ministry of Health (MoH) is transitioning from being an all-in-one payer, provider and regulator of health services to becoming a regulator, governing corporate payers and providers.
A key aspect of this transformation is the separation of the payer and the provider functions in the public health care sector, KPMG said. To facilitate future reimbursement to public health care providers, the Ministry of Health has set up the Program for Health Assurance and Purchasing (PHAP).
In addition, the Council of Cooperative Health Insurance (CCHI) has also firmed up regulations for private insurers.
With the introduction of mandatory health insurance underway in the public sector in the Kingdom and the wish to standardize across the public and private sector, Saudi health care providers will need to develop new capabilities to be able to generate revenue under the new reimbursement system, KPMG reported.  
“One of the key implications for health care providers of this introduction is the transformation of how health care service providers are reimbursed. Providers will primarily be paid on a per-patient basis, rather than via allocated budgets from the government,” said Emmeline Roodenburg, head of health care at KPMG in Saudi Arabia.
Patient acceptance and registration; billing and claims management; patient treatment and documentation; and coding and grouping are the four key operational elements of the Revenue Cycle Management (RCM) under the new mechanism.
While the risks that come with having a poor RCM function can be managed and mitigated, if they are left unchecked then the consequences could include revenue losses and fines for inaccurate invoicing, KPMG said.


Fashion retailers launch dedicated Gulf online stores

Fashion retailers launch dedicated Gulf online stores
Updated 19 April 2021

Fashion retailers launch dedicated Gulf online stores

Fashion retailers launch dedicated Gulf online stores
  • The website will feature new collections of the fashion line, as well as exclusive deals for online shoppers

DUBAI: Global fashion brands are launching dedicated online platforms as the pandemic upends shopping habits in the region.

Brands are launching dedicated channels as online shopping booms across the region.

Germany-based Hugo Boss has become the latest brand to open a regional online store serving Saudi Arabia, the UAE, Kuwait, Bahrain and Oman.

Customers can now shop through those dedicated online platforms, which will feature exclusive deals and collections.

E-commerce leaders said the pandemic has accelerated the industry's digital push.

Last year, luxury brands Bulgari, Louis Vuitton, and Dior launched their online selling platforms in the region, at the height of COVID-19-induced lockdowns and curfews.

Diesel has also announced an e-commerce platform targeting the UAE and Saudi markets.

Fashion labels  have been reinventing ways to engage with customers who are used to visiting stores to try on garments.

Some companies have also started to use 3D technology and augmented reality to create a holistic shopping experience for their customers.

 


Riyadh allows development on endowed lands as it eyes population doubling

Riyadh allows development on endowed lands as it eyes population doubling
Updated 19 April 2021

Riyadh allows development on endowed lands as it eyes population doubling

Riyadh allows development on endowed lands as it eyes population doubling
  • The decision allows planning, development, sale, purchase and other services

RIYADH: The Royal Commission for the City of Riyadh (RCRC) has lifted the suspension of development on large parts of the endowed lands north of King Salman Road, Saudi Press Agency reported.
The decision allows planning, development, sale, purchase and other services, provided that everything is compatible with the urban code of the city.
It is part of a series of measures aimed at helping the Saudi capital accommodate twice the current population by 2030, RCRC said
The commission said that Riyadh’s strategy is expected to put the city among the top ten cities in the world in terms of economy, competitiveness and quality of life by 2030.
A specialized committee has been formed to look into land affairs and the RCRC has also created a call center to improve communication with the public.

 


Saudi public debt issuance up 50% in 2020 to $43.4bn

Saudi public debt issuance up 50% in 2020 to $43.4bn
Updated 19 April 2021

Saudi public debt issuance up 50% in 2020 to $43.4bn

Saudi public debt issuance up 50% in 2020 to $43.4bn
  • The market value of stocks and debt instruments reached SR9.8 trillion by the end of 2020

RIYADH:  Saudi public debt issuance increased by nearly 50 percent in 2020 to SR163 billion ($43.4 billion), the Capital Market Authority reported.
Non-government debt issuance increased by more than 250 percent reaching SR31 billion compared to SR9 billion in 2019.  
The market value of stocks and debt instruments reached SR9.8 trillion by the end of 2020, the Authority said in its annual report.
That represented a rise of 335 percent when compared to 2017 when it launched its three-year Financial Leadership Program that ran until last year.
The Authority has been developing its strategic plan for the next three years 2021-2023 in line with updated plans to expand the Kingdom's financial sector.


DP World explores quantum computing technology to optimize business

DP World explores quantum computing technology to optimize business
Updated 19 April 2021

DP World explores quantum computing technology to optimize business

DP World explores quantum computing technology to optimize business
  • The company organized training sessions for its employees, as well as actual quantum computing coding exercises

DUBAI: Dubai’s port company DP World is exploring quantum computing technology to optimize its operations, the company said in a statement.

It said it was working with D-Wave Systems, a Canadian quantum computing company, to look at how the advanced technology can be applied to DP World’s logistics and trade business.

The company organized training sessions for its employees, as well as actual quantum computing coding exercises.

The technology, DP World said, can be applied to industrial logistics, fleet and traffic management, and other operations across the supply chain.

“Quantum computing capabilities complement our need to reach ultimate smart trade and achieve a seamless logistics infrastructure, where everything is connected, devices work in harmony, and all our operations components communicate with each other intelligently,” Mohammed Al-Muallem, DP World’s chief executive, said.

Quantum computers provide exponential processing power to solve complex problems, better than traditional computers.

The move is part of DP World’s digital push.