Petrofac to plead guilty to 7 counts of bribery in Mideast oil projects

Petrofac to plead guilty to 7 counts of bribery in Mideast oil projects
Petrofac, which has struggled to secure key contracts in the Middle East and has seen its shares battered during the SFO investigation.
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Updated 26 September 2021

Petrofac to plead guilty to 7 counts of bribery in Mideast oil projects

Petrofac to plead guilty to 7 counts of bribery in Mideast oil projects

LONDON: British oil services group Petrofac said on Friday it would plead guilty to seven counts of failing to prevent bribery to secure projects in Iraq, Saudi Arabia and the UAE between 2012 and 2015, calling it a “deeply regrettable period.”

The company indicated its plans at London’s Westminster Magistrates’ Court after being formally charged by the UK Serious Fraud Office, drawing a line under a four-year criminal investigation. Its shares surged 25 percent in relief.

Petrofac, which has struggled to secure key contracts in the Middle East and has seen its shares battered during the SFO investigation, will formally enter its pleas and await sentencing at London’s Southwark Crown Court on Monday.

Petrofac said offers or payments to agents to help secure projects were made between 2011 and 2017 but that all employees involved had left.

“This was a deeply regrettable period of Petrofac’s history,” said Chairman Rene Medori in a statement, adding that the company’s “comprehensive program of corporate renewal” had been acknowledged by the SFO.

“Petrofac has been living under the shadow of the past, but today it is a profoundly different business, in which stakeholders can be assured of our commitment to the highest standards of business ethics, wherever we operate,” he said.

Former executive David Lufkin, who has separately pleaded guilty to 14 charges of bribery to secure billions of dollars worth of contracts for Petrofac in the Middle East, is also expected to be sentenced on Monday.

His lawyer did not immediately respond to a request for comment.

In March, the UAE’s state-backed oil firm, ADNOC, barred Petrofac from competing for new contracts in the country.

It is the second corporate guilty plea secured by the SFO in five months.

Former Airbus subsidiary GPT Special Project Management pleaded guilty to corruption over military contracts for Saudi Arabia in April.


Greenhouse gas levels reach new record high: UN

Greenhouse gas levels reach new record high: UN
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Updated 5 sec ago

Greenhouse gas levels reach new record high: UN

Greenhouse gas levels reach new record high: UN
  • The organisation said that as long as emissions continue, global temperatures will continue to rise

Greenhouse gas concentrations in the atmosphere reached new record levels last year, the United Nations said Monday in a stark warning ahead of the COP26 summit about worsening global warming.


The Greenhouse Gas Bulletin from the UN's World Meteorological Organization said the annual rate of increase last year was above the yearly average between 2011 and 2020 - and the trend continued in 2021.


The WMO said the economic slowdown caused by the Covid-19 pandemic triggered a temporary decline in new emissions, but had no discernible impact on the atmospheric levels of greenhouse gases and their growth rates.


The organisation said that as long as emissions continue, global temperatures will continue to rise.


And given the long life of carbon dioxide (CO2), the temperature level already observed will persist for several decades even if emissions are rapidly reduced to net zero.


COP26, the UN Climate Change Conference, is being held in Glasgow from October 31 to November 12.


"The Greenhouse Gas Bulletin contains a stark, scientific message for climate change negotiators at COP26," said WMO chief Petteri Taalas.


"At the current rate of increase in greenhouse gas concentrations, we will see a temperature increase by the end of this century far in excess of the Paris Agreement targets of 1.5 to two degrees Celsius above pre-industrial levels.


"We are way off track."


The report said that roughly half of the CO2 emitted by human activity remains in the atmosphere, with the other half ending up in the oceans and the land.


"The last time the Earth experienced a comparable concentration of CO2 was 3-5 million years ago, when the temperature was 2-3C warmer and sea level was 10-20 metres higher than now. But there weren't 7.8 billion people then," said Taalas.

The WMO said that with continued rising greenhouse gas emissions, alongside rising temperatures, the planet could also expect more weather extremes.


That includes intense heat and rainfall, ice melt, sea-level rise and ocean acidification - all of which will have far-reaching socio-economic impacts.


"We need to transform our commitment into action that will have an impact on the gases that drive climate change," said Taalas.


"We need to revisit our industrial, energy and transport systems and whole way of life. The needed changes are economically affordable and technically possible. There is no time to lose."


Euan Nisbet, from the University of London's Greenhouse Gas Group, compared greenhouse gas measurements to "skidding into a car crash".


"The disaster gets closer and closer but you can't stop it. You can clearly see the crash ahead, and all you can do is howl."


Arab National Bank profits fall: Market Wrap

Arab National Bank profits fall: Market Wrap
Updated 12 min 52 sec ago

Arab National Bank profits fall: Market Wrap

Arab National Bank profits fall: Market Wrap

The Tadawul All Share Index, TASI, was down 0.2 percent at 11,845 points in early trade today. 

Here’s a wrap of market movements as of 10:30am Riyadh time:

Arab National Bank profits declined 0.6 percent in the third quarter to SR665 million ($117 million). This fall was due to an increase in salaries, employee expenses and other general and administrative costs, the bank said in a filing.

On a quarterly basis, Arab Bank's net profit increased by 40.59 percent, compared to a net profit of about SR473 million in the second quarter of 2021.

Alinma Bank’s profits rose 15 percent in the third quarter to SR822.9 million ($219.4 million), compared to SR715 million in the third quarter of 2020.

On a quarterly basis, the company's profits increased in the third quarter by 3.9 percent, compared to profits of SR792 million in the second quarter of 2021.

Alarabia launched the retail subscription for 10 percent of its shares on Tuesday.

Saudi Arabian Mining Company, Maaden, returned to a net profit of SR3.1 billion ($830 million) in the first nine months of 2021.

Alkhorayef Water and Power Technologies Company’s board approved establishing a subsidiary company, along with France’s Veolia, to focus on water services in the Riyadh region.

Dr. Sulaiman Al Habib Medical Services Group’s two subsidiaries signed two contracts worth SR599.6 million ($159.9 million). 

SIECO signed a Memorandum of Understanding with the International Development Bank to support Saudi exports to Iraq.

Zahrat Al Waha’s net profit soared 65 percent to SR44.1 million ($11.8 million) for the first nine months of 2021.

Mobile Telecommunication Company Saudi Arabia (Zain Ksa) posted a 36 percent decline in profit in the first nine months of 2021.

Taleem REIT Fund distributed a 1.2 percent cash dividend for Q3 2021. 

CMA announced the approval of the public offering of the "Riyad Opportunities Fund".


German business morale deteriorates further in October

German business morale deteriorates further in October
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Updated 55 min 18 sec ago

German business morale deteriorates further in October

German business morale deteriorates further in October
  • "Sand in the wheels of the German economy is hampering recovery"

German business morale fell for the fourth month running in October as supply bottlenecks held back factory output in Europe's largest economy, a survey showed on Monday.


The Ifo institute said its business climate index fell to 97.7 from an upwardly revised 98.9 in September.


The reading was the lowest since April and undershot the figure of 97.9 in a Reuters poll.


"Supply problems are giving businesses headaches," Ifo President Clemens Fuest said, adding that capacity utilisation in manufacturing was falling.


"Sand in the wheels of the German economy is hampering recovery."


The government is expected to slash on Wednesday its forecast for economic growth this year, after leading institutes last week cut their joint forecast to 2.4 percent from 3.7 percent. For 2022, the institutes predicted 4.8 percent growth. 


Saudi Arabia, Blackrock sign $53bn deal to finance Saudi infrastructure

Saudi Arabia, Blackrock sign $53bn deal to finance Saudi infrastructure
Updated 16 min 45 sec ago

Saudi Arabia, Blackrock sign $53bn deal to finance Saudi infrastructure

Saudi Arabia, Blackrock sign $53bn deal to finance Saudi infrastructure

Saudi National Development Fund (NDF) and US private equity giant BlackRock will launch a fund tasked with investing SR200 billion ($53 billion) in Saudi infrastructure, according to a statement on Saudi Press Agency.

Announced on the eve of the Future Investment Initiative in Riyadh, the deal will set up a National Infrastructure Fund that will help deliver some SR200 billion of essential investment in assets such as schools, hospitals, transport and the digital foundation, between now and 2030.

It is a significant step for the National Development Fund (NDF), the lesser-known of the Kingdom’s agents for economic development, in comparison to its high-profile collaborator, the Public Investment Fund.


HSBC bucks China property worries with 74% profit jump, $2bn buyback

HSBC bucks China property worries with 74% profit jump, $2bn buyback
Image: Shutterstock
Updated 25 October 2021

HSBC bucks China property worries with 74% profit jump, $2bn buyback

HSBC bucks China property worries with 74% profit jump, $2bn buyback
  • HSBC was ranked Europe's biggest lender by assets until last year, when French rival BNP Paribas claimed the title with $3 trillion in assets

HSBC Holdings reported a surprise 74 percent rise in third quarter profit as it shrugged off concerns about pandemic-related bad loans and property problems in its key market of China, allowing it to announce a share buyback of $2 billion.

The British lender reversed potential credit losses it had previously expected due to pandemic-induced defaults, with CFO Ewen Stevenson telling Reuters on Monday that the worst of that impact is likely behind HSBC.


"You should also look at the buyback as a measure of the confidence that we have at the moment that we are not unduly concerned about our exposures in China," he said.


The bank said in its results presentation that it had $19.6 billion in lending to China's property sector, where China Evergrande Group is grappling with a $300 billion debt pile, stoking fears of further defaults and contagion risks.


HSBC CEO Noel Quinn, who was confirmed in the role in 2020 just as the pandemic-induced economic crisis began, is betting on Asia to drive growth, by moving global executives there and ploughing billions into the lucrative wealth business.


The bank could spend up to $1.5 billion more on acquisitions in that space after it bought insurer AXA's Singapore assets for $575 million in August, CFO Stevenson said.


"While we retain a cautious outlook on the external risk environment, we believe that the lows of recent quarters are behind us," Quinn said in the results statement.


HSBC posted pretax profit of $5.4 billion for the quarter to September, versus $3.1 billion a year earlier and the $3.78 billion average estimate of 14 analysts compiled by HSBC.


The bank's Hong Kong-listed shares rose as much as 1.8 percent to the highest in four months. Its London-listed shares have gained 15 percent so far this year versus a 5 percent rise in shares of Asia-focussed rival Standard Chartered, while Barclays is up 35% and U.S.-listed Citi has put on 16 percent.


HSBC was ranked Europe's biggest lender by assets until last year, when French rival BNP Paribas claimed the title with $3 trillion in assets.

Despite the overall positive results, HSBC said its cost projections for 2022 had increased to $32 billion from $31 billion, due to global inflation pressures which would push up its $19 billion wage bill.


Major companies worldwide have in recent weeks warned of the impact on their businesses from rising costs driven by spiralling energy prices and supply chain disruption.


"A little bit of inflation is good for us as it should drive policy rates higher," Stevenson said.


"However, we have a cost base of $32 billion of which $19 billion is compensation... so it doesn't take much (to push up costs), 2 or 3 percent inflation on the cost base is $400 to $600 million of additional costs," he said.


Set against those concerns, HSBC released $700 million in cash it had put aside in case pandemic-related bad loans spiked, as opposed to the same time a year earlier when it took an $800 million charge in expectation of such soured debts.


Another headache for HSBC compared to its peers is its investment banking performance, where rivals such as Citigroup are riding a M&A boom.


HSBC's investment bank however saw income fall this year as it paid the price for its bias towards debt markets, which have been patchy amid low interest rates that crimped trading, while rivals' equities and merger-focused businesses have thrived.


It is the second big British lender to post strong results for the quarter, after Barclays reported on Thursday it had doubled profits on the back of a strong performance from its investment bank advisory business.