Kuwait MPs launch probe into Airbus deal

Kuwaiti lawmakers agreed to set up a committee to look into whether Airbus’ aircraft orders involved alleged corruption. (File/Reuters)
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Updated 19 February 2020

Kuwait MPs launch probe into Airbus deal

  • The decision came after a debate on allegations that Airbus paid kickbacks to secure a deal 6 years ago
  • The parliament also asked the finance ministry to review recent aircraft deals involving state-owned Kuwait Airways

KUWAIT CITY: Kuwait's parliament on Wednesday formed a fact-finding panel to probe alleged kickbacks in a deal between the national carrier and Airbus, which last month paid massive fines to settle bribery scandals.
The parliament's decision came after a special debate on allegations that Airbus paid kickbacks to secure a 25-aircraft deal six years ago.
It also asked the Audit Bureau, the state accounting watchdog, to investigate the deal, which was reportedly worth billions of dollars, although exact figures were never released.
Kuwait Airway Co. in 2014 ordered 15 Airbus 320neo and 10 Airbus 350, with delivery beginning last year and continuing until 2021.
Opposition lawmaker Riyadh al-Adasani told the session that Kuwait was mentioned in a settlement struck by Airbus in a British court on January 31, along with the names of some Kuwaiti officials and citizens.
Under the settlement, Airbus agreed to pay 3.6 billion euros ($3.9 billion) in fines to Britain, France and the United States to settle corruption probes into some of its aircraft sales.
Days after the settlement, Sri Lanka ordered an investigation into a multi-billion dollar aircraft purchase from Airbus after the deal was named in the settlement.
The former chief of Sri Lankan Airlines, Kapila Chandrasena, was arrested on February 6 for allegedly receiving bribes relating to the deal.
Earlier this month, two senior officials of the Malaysia-based AirAsia stepped aside while authorities probe unusual payments at the carrier, as the fallout from the Airbus scandal reverberated across the industry.
Kuwait in recent years also initiated criminal investigations into two large military aircraft deals involving Airbus -- a $9 billion Eurofighter Typhoon warplanes deal and a contract for 30 Caracal military helicopters costing $1.2 billion.


Virtual oil summit planned amid ongoing market volatility

Updated 04 April 2020

Virtual oil summit planned amid ongoing market volatility

  • Meeting follows call from Saudi Arabia for urgent meeting and telephone diplomacy between Kingdom, Russia and the US

DUBAI: Leaders of the global oil industry are planning a crucial “virtual” summit next Monday amid ongoing volatility in crude prices and falling energy demand.

The meeting follows a call from Saudi Arabia on Thursday for an urgent meeting and a round of telephone diplomacy last week involving the Kingdom, Russia and the US, as well as meetings between policymakers and oil industry executives.

The summit is expected to involve the 11 members of OPEC as well as other oil producers from the OPEC+ group.

But exactly which countries will take part in the summit was still up in the air last night. 

Russian President Vladimir Putin was holding talks with executives from the country’s major oil companies before deciding whether or not to participate. The Russian leader has previously indicated his willingness to get involved in talks to help resolve the crisis in the global energy industry, but Russia was also the country that refused to take part in a round of deeper production cuts proposed by Saudi Arabia in Vienna last month, sparking the current price war.

In response to that refusal, the Kingdom increased production and lowered its selling prices. On Sunday, Saudi Aramco, which has pushed output to a record 12.3 million barrels per day, is scheduled to announce its “official selling prices” (OSP) for the month of May, expected to show a continuation of the deep levels of discount to attract customers, especially in Asia, in the battle for global market share. 

Brent crude continued its rollercoaster ride on global markets on Friday, dipping nearly 5 percent before hitting a high of 17.5 percent up at $34.91, before paring gains to about $33.

The options for the producers at Monday’s meeting are limited, in the face of an unprecedented drop in global oil demand. By some estimates, more than 20 million barrels of daily demand was lost last month, the biggest ever contraction in oil history.

Saudi Arabia and Russia, which between them produce around 23 million barrels per day, are unlikely to be willing to take all the pain of bigger cuts without an offer from the Americans.

US President Donald Trump tweeted on Thursday that he expected between 10 million and 15 million barrels of oil to be taken out of supply, but he did not specify where this would come from. Meetings were expected to take place at the White House with oil industry executives and policymakers on Friday.

Daniel Yergin, Pulitzer Prize-winning oil expert, said: “The ‘when,’ ‘how’ and ‘who’ of the potential deal remain unclear. And the larger the universe of players the more difficult it will be to implement an agreement.”

OPEC+ consists of the 11 OPEC members, led by Saudi Arabia, plus 10 non-OPEC producers, of which Russia is by far the biggest.

The involvement of the US in the Monday meeting is also unclear. America is not an OPEC member, but US oil executives have attended OPEC deliberations in the past. American participation in any new rounds of output cuts will be constrained by the fact that the US oil industry is made up of private companies — as opposed to state-directed corporations — whose interests diverge.

While big players including Exxon Mobil and Chevron might be willing to take some advice from the White House, the smaller companies in the Texas shale fields are more focused on the immediate financial repercussions of the past month’s volatility.