Tag Archives: Integrated Oil & Gas (TRBC level 4)

Breakingviews – The Italian sovereign fund is a force to be reckoned with | Instant News


MILAN (Reuters Breakingviews) – When Cassa Depositi e Prestiti (CDP) was founded 170 years ago this week, Italy didn’t exist as a nation yet. The main task of the agency was to finance basic infrastructure such as roads and waterways for the King of Sardinia-Piedmont, Victor Emmanuel II, who later became Italy’s first king. Fast forward to 2020 and the once sleepy nation’s lender has turned itself into a nervous deal-making machine, leveraging 474 billion euros in total assets to build corporate champions in sectors ranging from telecommunications to financial technology.

An Italian flag flies in front of Piazza Navona, as Italians remain in isolation to prevent the spread of the Corona virus (COVID-19), in Rome, Italy, April 4, 2020.

Such activism has arguably a lot to do with the ambitions of its chief executive, Fabrizio Palermo, and to the desire of Prime Minister Giuseppe Conte’s government to reshape Italy’s industrial landscape. Since taking the top spot in 2018, former deputy general manager of shipbuilder Fincantieri and banker Morgan Stanley has worked to transform CDP’s mission. In just the last few months, the sovereign wealth fund has secured a deal to build a huge stake on the pan-European exchange Euronext, rising payments star Nexi and domestic developer Webuild.

Rome-based CDP is also working to combine the ruling Telecom Italia broadband network and the challenger to Open Fiber, both of which claim CDP as a shareholder. Responding to a government dictate following the fatal bridge collapse in 2018, the CDP is also vying to replace the humiliated Benetton dynasty’s control of domestic highway operator Autostrade per l’Italia. These endeavors are on top of pre-existing holdings in local heavyweights such as oil group Eni and mail-and-package player Poste Italiane.

“We decided to rationalize our portfolio but also to shore up the companies within it with a strategy of trying to create champions on the one hand and continue to develop infrastructure on the other,” Palermo told Breakingviews on the eve of the group’s 170th anniversary. CDP’s invested capital is “permanent, patient and dynamic,” he said.

This focus on infrastructure – albeit by an expanded definition – is at the root of CDP. The group, which is 83% owned by the Italian treasury with the remainder in the hands of a banking foundation, finances itself primarily through postal savings and bonds. This helped build Italy’s first telegraph network and its first highways; it still costs one day of schooling, said Palermo.

Today, however, the focus on equity investment is a priority. With an estimated 23 billion euros holdings in listed companies – or 5% of the June FTSE MIB blue-chip index – CDP is already Italy’s biggest stock picker. That compares to the French state’s investment in both listed and unlisted companies, at more than 100 billion euros at the end of June, according to data provided by the CDP. With its cheap funding providing a greater tolerance for lower returns than, say, private equity funds, CDP wants to become a bigger actor of the Italian economy, explained Palermo.

CDP arguably filled the void. Excluding state-backed groups, most of the listed Italian companies are dwarves compared to European or American rivals. Local entrepreneurs often do not have the capital or courage to increase the global scale through acquisitions. On the other hand, well-known brands such as Bulgari jewelery shop and tyremaker Pirelli have been caught by foreign predators. With Covid-19 likely to shrink Italy’s economy by about 10% this year, the need for cash will be even more acute, and the role of the state is expanding.

With a 10% average return on equity, CDP’s past track record looks impressive to country-related investors. But taking bigger stakes carries an element of risk. These funds, according to the law, are prohibited from investing in companies that are financially fragile. And the banking foundation can de facto veto the deal. But political pressure to shore up losing companies such as Alitalia airline has increased. Rome’s decision to create a 44 billion euro fund to inject capital into the Italian company, which will be managed by the CDP but remain separate from its accounts, has raised concerns that state money could be funneled to keep the politically connected zombie company alive.

Nonetheless, professional investors appear relatively comfortable with the CDP’s new role. The Blackstone and Macquarie purchase fund has joined forces with Palermo to possibly offer 9 billion euros for Autostrade per l’Italia. And Euronext’s € 4.3 billion in cash purchase of Borsa Italiana, which is supported by the CDP, is highly valued despite a potential conflict of interest in Rome wanting the offer to work. The Italian fund paid the market price when it agreed to inject 700 million euros into the exchange operator registered in Paris, along with Milan bank Intesa Sanpaolo. And while Euronext provided CDP board representatives in exchange for its support in the Borsa deal, CDP’s request to dominate the pan-European stock exchange headquarters in Italy was rejected, according to someone with direct knowledge of the deal.

Senior Italian and foreign executives who have dealt with CDP said that CDP is run professionally, with many financial executives from international banks such as Citigroup and Deutsche Bank. They also note that Palermo is highly skilled at cultivating political support, particularly of the 5 Star Movement, an anti-establishment but pro-state party that is the government’s largest coalition partner. Such a relationship is sure to raise questions about Palermo’s ability to withstand political interference when choosing investments or choosing company directors.

It’s up to Palermo, 49, to allay those concerns if he gets Roma’s backing for another three-year term next year. Board reforms at state-backed companies including Telecom Italia and Eni, and institutions such as CDP, sparked an intense political horse trade. Palermo, however, is clear about wanting to stay: “In my career I haven’t changed many jobs,” he said. “I hope I can stay here for a long time because this institution can do a lot for the country.”

Breakingview

Reuters Breakingviews is the world’s leading source of agenda setting financial insights. As the Reuters brand for financial commentary, we dissect the big business and economic stories that are scattered around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides real-time expert analysis.

Register for our full service free trial at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and on www.breakingviews.com. All opinions expressed are those of the authors.

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Italy drafts guidelines for a national hydrogen strategy, the document shows | Instant News


MILAN, Nov 16 (Reuters) – Italy has set guidelines for a national hydrogen strategy to help decarbonize the economy as it gradually phases out coal and increases production of renewable energy to meet long-term climate targets.

In a draft document called the National Hydrogen Strategy Preliminary Guide, seen by Reuters, the Ministry of Industry said it was targeting investment in the sector at around 10 billion euros ($ 12 billion) by 2030, with half of that coming from European funds and private investment. .

To help increase “green” hydrogen production, about 5 gigawatts of electrolysis capacity to extract gas from water will be introduced during the period, the document says.

Electrolysis can be a carbon-free process if the power used is generated from renewable energy. Hydrogen is now mostly produced from fossil fuels or other carbon emission processes, because electrolysis is too expensive because of the large power required.

By 2030, hydrogen could account for 2% of Italy’s final energy demand and help remove up to 8 million tonnes of CO2, the document said. As the scale of the industry goes up and costs fall, this could reach up to 20% by 2050, he said.

The document, when published, will form the basis of consultations before a final hydrogen strategy is approved, possibly early next year.

Brussels mapped out plans this year to promote hydrogen as it strives to achieve net zero emissions by 2050. France, Germany and Spain have set their own targets.

Hydrogen is currently too expensive to be widely used but as costs go down, governments around the world see it as a substitute for fossil fuels in areas where electrification is not an easy solution.

The ministry document, which says the plan could create more than 200,000 jobs and generate up to 27 billion euros in Italy’s gross domestic product, said hydrogen could be used in transportation, heavy industry and natural gas pipelines.

Italian gas group Snam has been experimenting with a 10% hydrogen mixture in part of its natural gas network, while power company Enel and energy company Eni both have hydrogen plans.

$ 1 = 0.8458 euros Reported by Stephen Jewkes; Edited by Edmund Blair

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Petrobras Brasil opens sales processes for the old Marlim oil cluster | Instant News


FILE PHOTO: The logo of the Brazilian state-owned Petrobras oil company is seen at their headquarters in Rio de Janeiro, Brazil October 16, 2019. REUTERS / Sergio Moraes / Photo File / Photo File / Photo File

RIO DE JANEIRO (Reuters) – Petroleo Brasileiro SA from Brazil PETR4.SA is preparing to sell a 50% stake in the marine oil cluster in its legacy, the company said Monday in a filing.

In production since the 1980s in the Campos Atlantic Ocean basin, the giant Marlim cluster has four fields – Marlim, Voador, Marlim Leste and Marlim Sul – producing 217,000 barrels of oil per day, or nearly 10% of the company’s total production.

The sale, at an early stage, is part of Petrobras’ plan to sell non-core assets to cut debt and focus investment in the world’s largest deepwater discovery this century, in the so-called pre-salt region.

Newer pre-saline deposits, found under a thick layer of salt on the seabed in Brazilian waters, have increased rapidly in the last decade and are responsible for more than 70% of Petrobras production.

Marlim was once the largest oil field with more than 500,000 barrels per day, Marlim has experienced a decline in production in the last decade. At present, Marlim Sul and Marlim are Brazil’s sixth and eighth largest oil fields, respectively. Marlim Sul has the largest number of producing wells in Brazil, 67.

The four fields which also produce 3.6 million cubic meters of natural gas are located between 90-150 kilometers offshore and up to 2,500 meters below the seabed.

Petrobras shares rose more than 4% in Sao Paulo following the announcement.

Reporting by Sabrina Valle, editing by Louise Heavens and Steve Orlofsky

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Australian stocks ended lower as traders avoided risks from the surge in the virus | Instant News


(Reuters) – Australian stocks closed lower on Friday as risk sentiment slumped after major central banks warned that near-term economic risks remained as a result of the accelerating coronavirus infection, which led to heavy selling in travel and energy stocks.

FILE PHOTOS: An investor is reflected in a window in front of a board displaying stock prices on the Australian Stock Exchange (ASX) in Sydney, Australia May 5, 2017. REUTERS / Steven Saphore

S & P / ASX 200 Index .AXJO fell 0.2% to close the trade at 6405.2 points. However, the benchmark index recorded a weekly gain of 3.5%.

As the initial euphoria of the vaccine news subsided, global equities dragged further after the US Federal Reserve and European Central Bank said the economy was still in difficult times, while the Bank of England said there was still a long way to go for drugs. testing.

“You have not just one, but three heads of central banks around the world just commenting on the fact that the economic picture is still pretty bad at the moment, so it will definitely weigh on investor sentiment,” said James Tao, market analyst at CommSec.

More than 52.45 million people have been reported infected by the new coronavirus globally and around 1.3 million have died, according to a Reuters tally.

Back home, Australian energy stocks .AXEJ down as much as 2.4% as crude oil prices fell on short-term fuel demand, while up 14.2% for the week.

Santos STO.AX and Cooper Energy COE.AX each lost more than 2% when in Coastal Energy BPT.AX fell 3.2% to the worst session since October 29.

Travel and tourism stocks also fell, with Flight Center Travel Group FLT.AX, and Corporate Travel Management CTD.AX each fell by more than 1%.

Against the trend, gold stocks .AXGD rally 4.5% as gold prices edged up amid fears of an economic slowdown. Gold stocks, however, posted their worst week since the week ended September 25. [GOL/]

In New Zealand, the benchmark index S & P / NZX 50 .NZ50 reverse direction to finish 0.2% higher. Benchmark recorded its best week since the week ended October 9.

Medical device maker Fisher & Paykel Healthcare Corp. FPH.NZ and the logistics company Mainfreight MFT.NZ is the biggest percentage gainer.

Reporting by Deepali Saxena, Editing by Sherry Jacob-Phillips

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The Australia-China row broke Woodside’s talks to sell shares in the gas project to Chinese companies | Instant News


MELBOURNE (Reuters) – Woodside Petroleum suspended talks to sell a stake in a gas field and liquefied natural gas (LNG) project to Chinese companies several months ago due to a growing diplomatic row between Australia and China, the company chief said on Thursday.

FILE PHOTO: The logo of Woodside Petroleum, Australia’s leading independent oil and gas company, adorns a promotional poster displayed at an investor briefing in Sydney, Australia, 23 May 2018. REUTERS / David Gray

Chief Executive Peter Coleman said he hoped to revive the talks when the fighting died down.

Woodside has been negotiating with China’s national oil companies, including PetroChina Co. 601857.SS, and a second tier company to sell a “modest” stake in the connected Scarborough gas field and the Pluto 2 LNG Train project, which will cover a portion of the gas sale.

“They told us a few months ago that they cannot continue at this time because of the relationship between China and Australia,” said Coleman.

“So we were a little frustrated and disappointed by that. But we hope things will get better and we will be able to bring them back to the standings, ”he said in an interview.

Diplomatic relations with China, Australia’s main trading partner, have deteriorated after Canberra called for an international investigation into the source of the coronavirus.

The damaged relationship has hit exports of Australian coal, barley, wine, timber and lobster, but analysts expect LNG to be immune because Australia is the largest LNG supplier to China.

“The restrictions, so far, do not appear to be affecting Australian LNG exports to China,” research firm EnergyQuest said in a report on Thursday.

EnergyQuest estimates China imported 23.5 million tonnes of Australian LNG in the first 10 months of this year, in line with the first 10 months of last year.

Coleman said the diplomatic spat did not hurt Woodside’s existing partnerships with Chinese companies in Australia and Myanmar, where he said relations were “very good”.

Woodside also wants to sell its recently enlarged stake in the Sangomar oil project in Senegal.

CNOOC China has ties to Woodside’s former Senegal partner, FAR Ltd. FAR.AX, for a project in West Africa. Coleman said he did not see any diplomatic spatter stopping CNOOC from offering for shares in Sangomar.

“No. The Australia-China thing is very specific for investment in Australia. This is not a general problem,” Coleman said.

The collapse of Woodside’s talks with China was first reported by the Australian Financial Review on Wednesday.

Reporting by Sonali Paul; Edited by Christian Schmollinger and Michael Perry

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