Deeper oil supply cut ‘an option,’ says OPEC chief

Oil prices have failed to gain a lasting boost from supply disruptions this year, including the attack on the Saudi Aramco oil installations in Abqaiq, Saudi Arabia. (Reuters)
Updated 10 October 2019

Deeper oil supply cut ‘an option,’ says OPEC chief

  • Slowing global growth raises prospect of long-term production cutbacks ahead of policy summit

LONDON: A deeper cut in oil supplies is among options for OPEC and its allies to consider in December, its secretary general said on Thursday as the producer group’s forecasts pointed to slower global growth and lower demand next year.

OPEC, Russia and other producers, an alliance known as OPEC+, have since January implemented a deal to cut oil output by 1.2 million barrels per day to support the market. The pact runs to March 2020 and the producers meet to set policy on Dec. 5-6.

“The conference will take appropriate, strong, positive decisions that will set us on the path of heightened and sustained stability for 2020,” Mohammad Barkindo said at a briefing in London.

“All options are open,” he said, when asked about the prospect of a deeper oil supply cut.

Oil prices have failed to gain a lasting boost from supply disruptions this year, including the attack last month on Saudi Arabian oil installations that briefly shut down more than half of production in the world’s top exporter.

HIGHLIGHTS

• OPEC, allies meet on Dec. 5-6 in Vienna.

• Options on the table include deeper oil supply cut.

• December meeting likely to set policy for 2020.

Brent crude was trading near $58 a barrel, down from a 2019 high near $75 in April. Concern about weaker economies and demand due to uncertainties such as Brexit and the US-China trade dispute have overshadowed lower supply.

While the last meetings of OPEC and its allies in July decided on supply for the next nine months, the next meeting in Vienna will likely take a longer view.

“We will be faced with real data for 2020 that will enable us to review the current arrangement and come up with a decision that probably will cover the whole of the year,” Barkindo said.

OPEC separately released its October monthly oil market report on Thursday in which it trimmed its forecast for world economic growth in 2020 to 3 percent from 3.1 percent, saying “it seems increasingly likely that the slowing growth momentum in the US will carry over to 2020.”

Barkindo sounded a more upbeat tone, saying data was preliminary and could surprise to the upside.

In a forecast that could press the case for further supply restraint, OPEC predicts a drop in demand for OPEC crude next year due to higher supply from rivals such as the US.


Cirque du Soleil walks a tightrope through pandemic

Updated 06 June 2020

Cirque du Soleil walks a tightrope through pandemic

  • Suitors wage backstage battle to rescue debt-stricken Canadian circus icon
  • Among the potential bidders is former fire eater Guy Laliberte, who fouded the acrobatic troupe in 1984

MONTREAL: Its shows canceled due to the COVID-19 pandemic, an already heavily indebted Cirque du Soleil’s fight for survival has invited an intense backstage battle to try to save the Canadian cultural icon.

High on a list of potential suitors is former fire eater Guy Laliberte, who founded the acrobatic troupe in 1984 but later sold it.

“Its revival will have to be done at the right price. And not at all costs,” said the 60-year-old, determined not to see his creation sold to private interests.

The billionaire clown said after “careful consideration,” he decided “with a great team” to pursue a bid, but offered no details.

Under his leadership, the Cirque had set up big tops in more than 300 cities around the world, delighting audiences with contemporary circus acts set to music but without the usual trappings of lions, elephants and bears.

Then the pandemic hit, forcing the company in March to cancel 44 shows worldwide, from Las Vegas to Tel Aviv, Moscow to Melbourne, and lay off 4,679 acrobats and technicians, or 95 percent of its workforce.

Hurtling toward bankruptcy, the global entertainment giant and pride of Canada commissioned a bank in early May to examine its options, including a possible sale.

Meanwhile, shareholders ponied up $50 million in bridge financing for its “short-term liquidity needs.”

Laliberte, the first clown to rocket to the International Space Station in 2009, ceded control of the Cirque for $1 billion in 2015.

It has since fallen into the hands of American investment firm TPG Capital (55 percent stake) and China’s Fosun (25 percent), which also owns Club Med and Thomas Cook travel. The Caisse de depot et placement du Quebec (CDPQ) retains the last 20 percent.

The institutional investor, which manages public pension plans and insurance programs in Quebec, bought Laliberte’s last remaining 10 percent stake in the business in February, just before the pandemic.

Since 2015, the Cirque has embarked on costly acquisitions and renovations of permanent performance halls, while its creative spirit waned, according to critics in the Quebec press.

Meanwhile, it piled on more than $1 billion in debt.

Fearing that the Cirque would be “sold to foreign interests,” the Quebec government recently offered it a conditional loan of $200 million to help relaunch its shows as restrictions on large gatherings start to be eased worldwide.

But the agreement in principle is conditional on the Cirque headquarters remaining in Montreal and the province being allowed to buy US and Chinese stakes in the company at an unspecified time in the future, “at market value” and with “probably a local partner,” said Quebec Minister of the Economy Pierre Fitzgibbon.

“The state does not want to operate the circus, but the circus is too important to Quebec (to leave it to foreigners),” he said.

In addition to Laliberte, other prospective buyers include Quebecor, the telecoms and media giant of tycoon Pierre Karl Peladeau, whose opening lowball bid was outright rejected.

“It is essentially the value and reputation of the brand” that has piqued interest in the company, says Michel Magnan, corporate governance chair at Concordia University in Montreal.

But “as long as there are restrictions on gatherings of people, the future is not very rosy” for the Cirque, he said.

Several challenges await, according to Magnan.

“There were a lot of people working in all of these shows. Where are they now? What are they doing? How are they doing? In what shape are they, what state of mind?” he said.

“The more time passes, the more this expertise risks evaporating.”

Small consolation: The Cirque resumed its performances on Wednesday in Hangzhou, China, five months after a coronavirus outbreak in the city.