Russia yet to finalize stance before OPEC+ considers deeper oil cuts

Russia agreed to reduce output by 228,000 barrels per day (bpd) to about 11.18 million bpd in 2019 as part of cuts agreed by the group known as OPEC+. (AFP)
Updated 03 December 2019

Russia yet to finalize stance before OPEC+ considers deeper oil cuts

  • Russia agreed to reduce output by 228,000 barrels per day to about 11.18 million bpd in 2019
  • But it pumped more than its quota in November, producing 11.244 million bpd

MOSCOW: Russian Energy Minister Alexander Novak said on Tuesday he expected this week’s meeting of OPEC oil producers and their allies to be constructive but said Moscow had yet to finalize its position in talks on possible additional supply curbs.
Russia agreed to reduce output by 228,000 barrels per day (bpd) to about 11.18 million bpd in 2019 as part of cuts agreed by the group known as OPEC+. But it pumped more than its quota in November, producing 11.244 million bpd.
The Organization of the Petroleum Exporting Countries, Russia and other producers, which previously agreed to reduce combined output by 1.2 million bpd or 1.2 percent of global demand until March, hold discussions in Vienna on Thursday and Friday.
“I will not tell you anything now as we are still finalizing our position,” Novak told reporters. “Let’s wait ... But I think the meeting, as usual, will be of constructive nature.”
Two sources said on Monday that OPEC+ was discussing cutting output by at least an additional 400,000 bpd, as Riyadh seeks high oil prices to balance its budget and help Thursday’s pricing for Saudi Aramco’s initial public offering (IPO). The Saudis have been lobbying others to deepen cuts.
Novak said Russia’s average cut was 195,000 bpd in November and said Moscow aimed to comply fully with the quota in December.
Russia earlier called for a change to the way its output is measured to exclude gas condensate, which accounts for about 7 percent-8 percent of Russia’s total oil production, or about 800,000 bpd.
Novak told reporters he planned to discuss excluding condensate from Moscow’s quotas at the OPEC+ meeting.
By excluding condensate and only taking into account oil production, Novak said Russia’s output could be about 225,000 bpd to 230,000 bpd less in December.
“That said, we will discuss with our colleagues to take into account our statistics the same way as for OPEC countries — excluding condensate,” the minister said.
Vagit Alekperov, chief executive of Russia’s No.2 oil producer Lukoil, said in comments broadcast on Tuesday that it would not be expedient to deepen global oil production cuts in the winter season, especially for Russia.
Russian data cites production in tons. Reuters uses a conversion rate of 7.33 barrels per ton of oil.


HSBC, StanChart shares fall to 22-year lows

Updated 22 September 2020

HSBC, StanChart shares fall to 22-year lows

  • Falls follow reports on movements of allegedly illicit funds; shares fall amid wider selloff in stocks

LONDON: HSBC’s shares in Hong Kong and Standard Chartered’s in London fell on Monday to their lowest since at least 1998 after media reports that they and other banks, including Barclays and Deutsche Bank, moved large sums of allegedly illicit funds over nearly two decades despite red flags about the origins of the money.

BuzzFeed and other media articles were based on leaked suspicious activity reports (SARs) filed by banks and other financial firms with the US Department of Treasury’s Financial Crimes Enforcement Network (FinCen).

HSBC shares in London fell as much as 5 percent to 288 pence, their lowest intraday level since 2009, after the lender’s Hong Kong shares earlier touched a 25-year low. The stock has now nearly halved since the start of the year.

StanChart dropped as much as 4.6 percent in London to its lowest since 1998, against the backdrop of a broader sell-off in the market with the STOXX European banks index down 4.8 percent.

More than 2,100 SARs, which are in themselves not necessarily proof of wrongdoing, were obtained by BuzzFeed News and shared with the International Consortium of Investigative Journalists (ICIJ) and other media organizations.

In a statement to Reuters on Sunday, HSBC said “all of the information provided by the ICIJ is historical.” The bank said that as of 2012 it had embarked on a “multi-year journey to overhaul its ability to combat financial crime.”

StanChart said in a statement it took its “responsibility to fight financial crime extremely seriously and have invested substantially in our compliance programs.”

Barclays said it believes it has complied with “all its legal and regulatory obligations, including in relation to US sanctions.”

The most number of SARs in the cache related to Deutsche Bank, whose shares fell 5.2 percent on Monday. In a statement on Sunday, Deutsche Bank said the ICIJ had “reported on a number of historic issues.”

“We have devoted significant resources to strengthening our controls and we are very focused on meeting our responsibilities and obligations,” a spokesperson for the bank said.

London-headquartered HSBC and StanChart, among other global banks, have paid billions of dollars in fines in recent years for violating US sanctions on Iran and anti-money laundering rules.

The files contained information about more than $2 trillion worth of transactions between 1999 and 2017, which were flagged by internal compliance departments of financial institutions as suspicious. 

The ICIJ reported the leaked documents were a tiny fraction of the reports filed with FinCEN. HSBC and StanChart were among the five banks that appeared most often in the documents, the ICIJ reported.

“It confirms what we already knew — that there are huge numbers of SARs being filed with relatively low numbers of cases brought through to prosecution,” said Etelka Bogardi, a Hong Kong-based financial services regulatory partner at law firm Norton Rose Fulbright.