OPEC’s oil revenue plunges $438 billion to 10-year low

Ibe Kachukwu, Nigeria’s minister of state for petroleum, shakes hands with OPEC’s incoming Secretary-General Nigeria’s Mohammed Barkindo in the presence of President Mohammadu Buhari in Abuja. (AFP)
Updated 22 June 2016

OPEC’s oil revenue plunges $438 billion to 10-year low

VIENNA: OPEC said its oil revenue plunged by $438 billion to a 10-year low last year, as an increase in export volumes failed to compensate for the collapse in prices.
The Organization of Petroleum Exporting Countries earned $518.2 billion in 2015 from the sale of crude and refined fuels, the lowest figure since 2005, the group’s Vienna-based secretariat said in its annual statistical bulletin.
It boosted exports by 1.7 percent to 23.6 million barrels a day, maintaining its share of global markets.
Oil futures tumbled by 35 percent last year as US crude production held up despite a strategy to pressure OPEC’s competitors with lower prices.
Crude has since recovered, rising almost 90 percent in London from the lows reached in January, as US output retreats and disruptions from Canada to Nigeria help whittle away a global surplus.
The organization’s exports increased by an average of 400,000 barrels a day in 2015, raising its share of global production for the first time in four years, by 0.2 percentage points to 43 percent.
Still, that wasn’t enough to compensate for the price rout. As a result of the lost revenue, OPEC nations recorded their first current account deficit since 1998, at $99.6 billion, compared with a surplus in 2014 of $238.1 billion, according to the report.
Exports from Saudi Arabia, which has steered the group’s policy often in defiance of poorer members like Venezuela and Algeria, were steady last year at 7.163 million barrels a day.
The Kingdom’s production rose by 4.9 percent to 10.193 million a day, according to the report.
While drilling activity declined in OPEC nations last year, with the number of rigs dropping by 60 to 887, the drop-off in other parts of the world was far more severe, the report showed.


Trump advisers urge delisting of US-listed Chinese companies that fail to meet audit standards

Updated 34 min 50 sec ago

Trump advisers urge delisting of US-listed Chinese companies that fail to meet audit standards

  • Growing pressure to crack down on Chinese companies that avail themselves of US capital markets but do not comply with rules
WASHINGTON: Trump administration officials have urged the president to delist Chinese companies that trade on US exchanges and fail to meet US auditing requirements by January 2022, Securities and Exchange Commission and Treasury officials said on Thursday.
The remarks came after President Donald Trump tasked a group of key advisers, including Treasury Secretary Steve Mnuchin and SEC Chairman Jay Clayton, with drafting a report with recommendations to protect US investors from Chinese companies whose audit documents have long been kept from US regulators.
It also comes amid growing pressure from Congress to crack down on Chinese companies that avail themselves of US capital markets but do not comply with US rules faced by American rivals.
“We are simply leveling the playing field, holding Chinese firms listed in the US to the same standards as everyone else,” a Treasury official told reporters in a briefing call about the report.
The US Senate unanimously passed legislation in May that could prevent some Chinese companies from listing their shares on US exchanges unless they follow standards for US audits and regulations.
Democratic Senator Chris Van Hollen, who sponsored the bill described the recommendations as “an important first step,” but said that “without the added teeth of our bill, this report alone does not implement the requirements necessary to protect everyday American investors.”
The administration’s recommendations, if implemented via an SEC rulemaking process, would give Chinese companies already listed in the United States until Jan. 1, 2022, to ensure the US auditing watchdog, known as the PCAOB, has access to their audit documents.
They can also provide a “co-audit,” for example, performed by a US parent company of the China-based affiliate tasked with auditing the Chinese firm. However, companies seeking to list in the United States for the first time will need to comply immediately, the officials said.
A State Department official told Reuters the administration plans soon to scrap a 2013 agreement between US and Chinese auditing authorities to set up a process for the PCAOB to seek documents in enforcement cases against Chinese auditors.
China said on Friday that the two countries have “good cooperation” in monitoring publicly listed firms.
“The current situation is that some US monitoring authorities are failing to comply with their obligations, and what they are doing is political manipulation — they are trying to force Chinese companies to delist from US markets,” foreign ministry spokesman Wang Wenbin told a media briefing.
The PCAOB has long complained of China’s failure to grant requests, giving it scant insight on audits of Chinese firms that trade on US exchanges.
The report also recommends requiring greater disclosure by issuers and registered funds of the risk of investing in China, as well as mandating more due diligence by funds that track indexes and issuing guidance to investment advisers about fiduciary obligations surrounding investments in China.
The moves come amid rising tensions between Washington and Beijing over China’s handling of the coronavirus and its moves to curb freedoms in Hong Kong, among other issues.