2024-05-28 19:20
HOUSTON, May 28 (Reuters) - Houston-based investment fund Amos Global Energy is waiting for a license from the U.S. Treasury Department to complete the purchase of Chinese Sinopec's stake in a shallow-water oil and gas project in Venezuela, the company said on Tuesday. Washington last month did not to renew a broad license that had allowed Venezuela to freely export its oil and take in new investment following Venezuela's failure to meet a pact for a competitive election. The U.S. instead has begun issuing individual authorizations to companies wanting to resume or start operations in the South American country. The U.S. recently granted France's Maurel & Prom (MAUP.PA) New Tab, opens new tab and Spain's Repsol (REP.MC) New Tab, opens new tab licenses to continue and expand oil and gas projects in Venezuela. More than 20 other firms are waiting for green light. Companies willing to do business in the sanctioned country's energy industry need the licenses for specific transactions, including investments. Amos, which in 2022 formed a joint venture with a unit of Venezuela's engineering firm Inelectra to gain access to minority stakes in the Petroguiria and Petroparia projects in Venezuela's promising Paria Gulf area, is now looking to expand its influence there. If its proposal to buy Sinopec's 32% in Petroparia is completed and cleared by the U.S., Amos and its partners would control 40% of that project and 16% of neighboring Petroguiria, said Ali Moshiri, Amos' chief executive. "We applied for the license a year and a half ago, and we are hopeful that will get it in the coming weeks," Moshiri told Reuters. Amos has made initial contact with Italy's Eni (ENI.MI) New Tab, opens new tab to negotiate its possible participation in a third project in Paria, Petrosucre. All of the company's targeted private sector transactions in Venezuela are expected to be backed by the U.S. license. "The three projects must be developed together," the executive said. Crude output is planned to be a priority, but gas has a large potential, he said. Petrosucre is the only active project in Paria, but crude production there has dwindled to less than 3,000 barrels per day (bpd) since U.S. sanctions in 2019 froze the joint venture's exports to the United States. Crude and associated gas reserves have been proven in Paria, but Moshiri - a former Chevron top executive in Venezuela - believes the shallow-water area can anchor a large gas project. "Investors looking at Venezuela now are more excited with the possibility of putting money for gas, especially for liquefied natural gas (LNG)," he said, explaining that gas well productivity is high and the country does not have major transportation issues. Venezuela has about 30 trillion cubic feet of non associated gas reserves, which remain largely undeveloped due to lack of investment, and more recently US sanctions. "The country's strategy has shifted to focus on the possibility of processing the gas at Trinidad and Tobago's LNG facilities, but Venezuela has gas enough of its own for a LNG development," Moshiri said. Sign up here. https://www.reuters.com/business/amos-global-awaits-us-license-expand-venezuelas-shallow-waters-2024-05-28/
2024-05-28 19:09
HOUSTON, May 28 (Reuters) - Hess Corp (HES.N) New Tab, opens new tab on Tuesday approved the company's $53 billion merger with the No. 2 U.S. oil company Chevron, according to preliminary results of the vote. The merger required a majority vote to approve the deal by a majority of Hess' 308 million shares outstanding to pass. The company did not immediately provide the vote tally. Chevron offered to acquire Hess last October in a move to gain a foothold in oil-rich Guyana's lucrative offshore fields. The deal has been stalled by an ongoing review by the U.S. Federal Trade Commission and clouded by an arbitration claim filed by Hess' partner in Guyana, Exxon Mobil (XOM.N) New Tab, opens new tab and CNOOC (0883.HK) New Tab, opens new tab. The result is a win for Hess CEO John Hess and puts to rest claims by some shareholders who wanted additional compensation for the delay in closing the sale. Exxon's arbitration could push the deal's closing into 2025. "Assuming Chevron wins the arbitration from Exxon or finds a settlement, the transaction is now going to happen," said Mark Kelly, an analyst with financial firm MKP Advisors. (This story has been refiled to remove the extra word 'some' in paragraph 4) Sign up here. https://www.reuters.com/markets/deals/hess-shareholders-approve-merger-with-chevron-2024-05-28/
2024-05-28 18:41
Canadian dollar falls 0.1% against the greenback Touches a one-week high at 1.3615 Price of U.S. oil settles 2.7% higher Bond yields rise across the curve TORONTO, May 28 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Tuesday as investors awaited domestic GDP data this week that could guide expectations for Bank of Canada interest rate cuts. The loonie was trading 0.1% lower at 1.3645 to the U.S. dollar, or 73.29 U.S. cents, after earlier touching its strongest level since last Tuesday at 1.3615. Canadian gross domestic product data, due on Friday, is expected to show the economy expanding at an annualized rate of 2.2% in the first quarter. That would be slower than the 2.8% pace that the Bank of Canada forecast in April. "With the population surging, output likely contracted for a seventh consecutive quarter on a per-capita basis, further widening Canada's performance gap relative to the United States," Karl Schamotta, chief market strategist at Corpay, said in a note. Canadian Finance Minister Chrystia Freeland said that last month's federal budget had created conditions for interest rates to come down. The swaps market sees a 64% chance the BoC would begin an interest rate-cutting campaign at a policy decision on June 5. The price of oil, one of Canada's major exports, rose on the expectation that OPEC+ will maintain crude supply curbs at its June 2 meeting. U.S. crude oil futures settled 2.7% higher at $79.83 a barrel. Canadian government bond yields moved higher across the curve, tracking moves in U.S. Treasuries, after a U.S. consumer confidence report showed unexpected improvement in May. The 10-year was up 7.5 basis points at 3.701%. Sign up here. https://www.reuters.com/markets/currencies/c-pulls-back-1-week-high-investors-eye-gdp-data-2024-05-28/
2024-05-28 18:20
BUENOS AIRES, May 28 (Reuters) - Argentina's financial markets dipped on Tuesday after libertarian President Javier Milei, traveling on a U.S. tech tour, shook up his Cabinet, firing his chief of staff and bringing on board the architect of his government's key economic reform package. The financial markets, which have rallied hard since Milei took office in December, saw bonds dip around 1% and the S&P Merval (.MERV) New Tab, opens new tab stock index lose around 1.5%, as investors digested the first major government overhaul. On Monday night, Milei fired his Cabinet chief Nicolas Posse and replaced him with current Interior Minister Guillermo Francos, seen as a more outgoing and aggressive deal maker, which is key as Milei's main reform package faces a hold-up in Congress. "Francos' appointment is a very welcome political opening, he's strong on dialogue, something Posse lacked," a private financial trader at local bank Macro said on Tuesday, citing the need for results on Milei's reforms to boost sentiment. "The market needs laws to come out to begin deregulating the economy once and for all." Milei will also bring economist Federico Sturzenegger into a new ministry focused on economic deregulation, new Cabinet chief Francos announced at a press conference, a move to try to bolster the reform package currently heading to the Senate. Argentine political analyst Juan Mayol said the appointment of Francos was a bold step for Milei, an economist and former TV pundit with little political experience who won a shock election last year pledging to slash state over-spending to overturn a deep fiscal deficit and bring down triple-digit inflation. "He is a complementary opposite to Milei," Mayol said, a reference to Francos' political savvy versus Milei's showmanship. Milei recently sang in a rock concert, and he has traveled regularly overseas and built ties with global figures like billionaire Elon Musk. In radio comments, Francos said he had been tasked with handling the political juggling act needed for the government to push laws through, a challenge as Milei only controls a small minority in Congress and relies on winning over allies. "The president does not have an easy relationship with politics because he does not understand politicians," Francos said, a nod to Milei's regular criticism of the political elite. "He sought in me someone to facilitate that dialogue." Sign up here. https://www.reuters.com/markets/argentina-markets-dip-globetrotter-milei-shakes-up-cabinet-2024-05-28/
2024-05-28 15:32
MOSCOW, May 28 (Reuters) - Russian President Vladimir Putin rejected U.S. Treasury Secretary Janet Yellen's concerns over the global economic fallout from China's excess manufacturing capacity and overproduction of cars as wrong. Putin, a close ally of China, said that the market balances itself. Yellen and other Biden administration officials are growing increasingly concerned about China's overproduction of electric vehicles, solar panels, semiconductors and other goods that are flooding into global markets in the face of a demand slump in China's domestic market. Sign up here. https://www.reuters.com/business/autos-transportation/russias-putin-rejects-us-assessment-chinas-overproduction-2024-05-28/
2024-05-28 14:38
SAO PAULO, May 28 (Reuters) - Consumer prices in Brazil rose less than expected in the month to mid-May, data from statistics agency IBGE showed on Tuesday, as the impact on food inflation from recent floods turned out to be lighter than initially feared. The latest inflation reading, economists say, might ease pressure on the central bank to halt its ongoing monetary easing cycle. Prices as measured by the IPCA-15 index were up 0.44% in the period, IBGE said, picking up from 0.21% in April but below the 0.48% rise expected by economists polled by Reuters. Annual inflation slowed down to 3.70%, the statistics agency added, slightly below the 3.72% forecast by economists and hitting the lowest level for a mid-month reading in Latin America's largest economy since October 2020. Eight out of the nine groups surveyed by IBGE posted price increases in the month to mid-May, with healthcare and transportation leading the way, driven respectively by higher pharmaceutical and fuel prices. The mid-May figures maintain Brazil's inflation index within the central bank's target, which currently stands at 3%, plus or minus 1.5 percentage points. The latest reading was the first to reflect deadly floods in Rio Grande do Sul state earlier this month, which killed nearly 170 people and affected food output in the farming state, a top meat and grain producer. "In a scenario where the market is concerned about whether the central bank will continue its cycle of rate cuts or not, this IPCA-15 reading shows that so far the Rio Grande do Sul effects are not pressuring inflation," said Jefferson Laatus, chief strategist at broker Grupo LAATUS. Food and beverage prices rose 0.26% in the month to mid-May, according to IBGE data, down from a 0.61% increase in the previous month. Helena Veronese, chief-economist at B.Sides Investimentos, said the mid-May inflation data had a "benign composition" and is consistent with another 25-basis-point interest rate cut at the next central bank meeting in June. She cautioned, however, that the full extent of the flooding's impact on inflation is still uncertain, as additional pressures are still expected to stem from products such as rice and wheat. Interest rates futures still price in a nearly 75% likelihood of a pause in Brazil's central bank easing cycle in June. The monetary authority reduced its benchmark interest rate by 25 basis points to 10.50% earlier this month, after six straight cuts twice that size. Policymakers have committed to work to bring inflation back to the 3% target and have voiced concern about inflation expectations sitting above that level for this year and the next. Sign up here. https://www.reuters.com/markets/emerging/brazil-consumer-prices-rise-less-than-expected-mid-may-2024-05-28/
