2024-05-16 12:22

South Africa suffering from crippling power shortfall Needs to balance power generation with climate commitments Coal plant closures provoking social, economic disruptions KOMATI, South Africa, May 16 (Reuters) - In a ward South Africa's governing African National Congress (ANC) won handily in local elections three years ago, party campaign worker Poppy Vilakazi has been getting a decidedly frosty reception lately. "Mostly they are angry," she told Reuters, speaking in Komati, a village in the shadow of a shuttered power plant in Mpumalanga province, an ANC stronghold in the country's coal belt. "They feel the ANC let them down by allowing this power station to close." South Africa's creaky power sector and the economic fallout from state utility Eskom's struggle to keep the lights on are top issues in a May 29 election that polls predict could see the ANC lose its 30-year parliamentary majority. But as President Cyril Ramaphosa seeks to balance the need to boost energy output against dwindling funding for coal - which generates 80% of the country's power - and global demands that South Africa decarbonise, the issue is dividing his party. Nowhere is that more evident than in Komati, where the conversion of a 60-year-old, 1,000-megawatt coal power plant has triggered a local and national backlash. Eskom is installing 370 megawatts of solar, wind and battery storage at Komati. It is meant to be a blueprint for future coal station closures and create new jobs and training programmes in the renewable energy sector. But local residents like Dumisani Mpungose - laid off from his maintenance job at the plant - say so far, they've seen nothing but unemployment, poverty and rising crime. "Komati was a place of happiness, of life," said Mpungose, 37, whose wife returned to her parents' home after he lost his job, taking their daughter with her. "It's been two years I haven't seen them now. Two years that I haven't been working." Ramaphosa's ministers have piled on the criticism. Mineral Resources and Energy Minister Gwede Mantashe labelled Komati's closure a disaster. Electricity Minister Kgosientsho Ramokgopa called it a mistake and has successfully lobbied cabinet to delay future closures. "If you can't make your pilot work, it's going to send a very bad message. It means you've failed," said Chris Yelland, an energy expert who believes South Africa must pivot to renewables but worries Komati risks undermining that shift. The ANC's main rivals - and potential coalition partners if it loses its majority - are proposing their own solutions. The left-wing Economic Freedom Fighters want to stop decommissioning coal plants and add new nuclear capacity, while the centre-right Democratic Alliance wants to liberalise the sector and break Eskom's monopoly. HEFTY BILL Years of mismanagement, corruption, and neglect crippled Eskom. Near daily blackouts have curbed economic growth and contributed to one of the world's highest unemployment rates. Eskom is pushing its ageing fleet to the limit. But that's undermining commitments South Africa, the world's 14th biggest producer of carbon emissions from energy production, made under the Paris climate agreement. South Africa's global partners are not the only ones concerned. A youth survey released this month by the Johannesburg-based Ichikowitz Family Foundation, which backs wildlife conservation and youth empowerment projects, found that 63% of South African respondents were "very concerned" by climate change, a 26-point jump in just two years. However, funding a shift away from coal could cost up to $46 billion. That is too hefty a bill for the government, so it's turning to the United States and wealthy European countries, who have pledged an initial $8.5 billion in financing, most of it loans. South Africa has committed to cutting emissions to between 350 and 420 million metric tons annually by 2030, from 442 million tons this decade. "We will prove that this can work," Thevan Pillay, Komati's managing director, told Reuters. "We'll do that in the rest of the fleet. And it will change the mindset of people." Residents in Mpumalanga, which produces the bulk of South Africa's power and is the heart of a coal industry employing over New Tab, opens new tab 90,000 people, are sceptical. "What are we going to eat if all the coal mines are closed, and all the power stations are closed?" said Anna-Marth Ott, who heads the chamber of commerce in Middelburg, one of Mpumalanga's commercial hubs. "How are we going to sustain the economy?" With thousands of unionised miners and Eskom workers, Mpumalanga is a bastion of organised labour, the bedrock of ANC support. Black coal entrepreneurs are key ANC financial backers. Neither group is happy. Despite the internal dissention, few doubt the ANC will carry Mpumalanga at the polls. But in an election where it needs every vote it can get, many like Dumisani Mpungose do not see the point in turning up for a party they feel has betrayed them. "This seems like a sell-out," he said of the Komati plant closure. ($1 = 18.3814 rand) Sign up here. https://www.reuters.com/world/africa/south-africas-anc-walks-political-tightrope-over-coal-plant-shutdowns-2024-05-16/

2024-05-16 12:10

MOSCOW, May 16 (Reuters) - Gazprom (GAZP.MM) New Tab, opens new tab CEO Alexei Miller was not on Russian President Vladimir Putin's state visit to China because he was holding talks with the Iranian leadership, the world's biggest natural gas company said on Thursday. Gazprom, which holds about 16% of global gas reserves and employs hundreds of thousands of people, was once one of Russia's most powerful corporate empires - so powerful it was known as a state within the state. But the loss of much of the European market due to Russia's war in Ukraine has hit it hard. "Alexei Miller held talks with the Iranian leadership on the dates of Putin's visit to China," Gazprom said. It was not immediately clear what else Miller, 62, a close ally of Putin who has run Gazprom since 2001, was talking to Iran about. Gazprom said on Wednesday that Miller was on a working visit to Iran, a major producer of natural gas, where Miller met Iran's First Vice President Mohammad Mokhber and Iranian Oil Minister Javad Owji. Gazprom's gas exports to Europe have fallen to post Soviet-lows amid political fallout from the war in Ukraine and after the major Nord Stream pipelines were damaged by mysterious blasts. Gazprom plunged to a net loss of 629 billion roubles ($6.9 billion) in 2023, its first annual loss in more than 20 years, amid dwindling gas trade with Europe, once its main sales market. Russia has been in talks for years about building the Power of Siberia-2 pipeline to carry 50 billion cubic metres of natural gas a year from the Yamal region in northern Russia to China via Mongolia. Its capacity would be almost as much as the now idle Nord Stream 1 pipeline under the Baltic Sea that was damaged by explosions in 2022. Sign up here. https://www.reuters.com/world/gazprom-ceo-miller-is-not-putins-trip-china-gazprom-says-2024-05-16/

2024-05-16 12:08

BENGALURU, May 16 (Reuters) - Indian metals-to-oil conglomerate Vedanta (VDAN.NS) New Tab, opens new tab on Thursday said its board approved a fundraise of up to 85 billion rupees ($1.02 billion). The company also declared its first interim dividend amounting to 40.89 billion rupees. The billionaire Anil Agarwal-led company said that its committee of directors will decide on the structure of the fundraise, where the proposal includes the issue of equities and other financial instruments. The company did not mention what the proceeds will be used for. This is the second time that the company is raising funds in the current fiscal year. Last month, it said it would raise up to $300 million through debt securities. Vedanta is the midst of splitting into six different units, a move that analysts have said would unlikely alleviate the cash-strapped group's debt concerns. The company's net debt rose about 25% from a year ago to 563.38 billion rupees as of March 31, while its full-year cash and cash equivalents fell to 28.12 billion rupees from 69.26 billion rupees a year earlier. ($1 = 83.4833 Indian rupees) Sign up here. https://www.reuters.com/markets/commodities/indias-vedanta-approves-1-bln-fundraise-2024-05-16/

2024-05-16 11:48

LONDON, May 16 (Reuters) - Chevron (CVX.N) New Tab, opens new tab said it is set to launch the sale of its remaining UK North Sea oil and gas assets, in a move that would mark the U.S. energy giant's exit from the ageing basin after more than 55 years. The planned divestment, confirmed to Reuters on Thursday, comes as Chevron prepares for the $53 billion acquisition of rival Hess which it previously said will include $10 billion to $15 billion in asset sales around the world. The exit will be the latest step in a steady retreat of top oil and gas companies from the declining British basin which pioneered deepwater production in the 1970s, as they focus on newer assets around the world. Chevron's assets include a 19.4% stake in the BP-operated (BP.L) New Tab, opens new tab Clair oilfield in the West of Shetland region, the largest in the British North Sea with production of 120,000 barrels per day. BP has said it is considering a third development phase for the field, known as Clair South, which is one of the largest remaining untapped fields in the North Sea. UK oil and gas production has dropped from a peak of around 4.5 million barrels of oil equivalent per day (boed) in the late 1990s to around 1.2 million boed in 2023. Chevron is also seeking to sell its marginal interests in the Sullom Voe oil terminal, as well as its stakes in the Ninian and SIRGE pipeline systems which are both linked to the hub, it said in a statement. The sale could raise up to $1 billion excluding tax benefits, one industry source said. The process is expected to be formally launched in June, industry sources told Reuters. It will not impact the operations of Chevron's international headquarters in London or its technology centre in Aberdeen, the company said. The exit follows a review of Chevron's global portfolio as CEO Mike Wirth seeks to focus on the firm's most profitable assets, Chevron said. In 2018, Chevron sold its stake in the Rosebank New Tab, opens new tab field development to Equinor. A year later it sold many of its North Sea assets to Ithaca Energy (ITH.L) New Tab, opens new tab. Other major oil companies, including Exxon Mobil (XOM.N) New Tab, opens new tab, ConocoPhillips (COP.N) New Tab, opens new tab and Shell, have sold assets in the basin since the 2000s. "Chevron continues the trend that has seen the North American majors seek to exit the UK," David Moseley, analyst at consultancy Welligence said. Potential acquirers for Chevron's assets include independents looking to grow, he added. Chevron has said it would sell up to $15 billion in assets as part of its planned acquisition of Hess, which has hit a stumbling block due to a legal conflict with rival Exxon over assets in Guyana. It said the North Sea sale process is not related to a 35% windfall tax the British government imposed on North Sea producers following the surge in energy prices in 2022. "As part of Chevron's focus on maintaining capital discipline in both traditional and new energies, we regularly review our global portfolio to assess whether assets are strategic and competitive for future capital," it said. The process is expected to take months, it added. Sign up here. https://www.reuters.com/markets/commodities/chevron-prepares-north-sea-exit-after-more-than-55-years-2024-05-16/

2024-05-16 11:48

Starmer has targeted political centre ground Was cautious in his pledges His opposition Labour Party still ahead in polls LONDON, May 16 (Reuters) - Britain's opposition Labour leader Keir Starmer pledged on Thursday to "rebuild Britain", setting out what he called the first steps in government if his party wins a national election later this year. Starmer, who has pulled his party towards the political centre ground after it had veered to the left, set out his six priorities at a campaign launch, but was cautious in what he offered saying he would only promise what could be afforded. Labour suffered a heavy defeat at the last election in 2019, but is well ahead of Prime Minister Rishi Sunak's governing Conservatives in opinion polls, making Starmer favourite to be Britain's next leader. In a speech in Essex, Starmer said if in government Labour would focus on growing the economy while keeping tax, inflation and mortgage rates as low as possible, reducing waiting times in the state-run health service, cracking down on people smuggling gangs and boosting green energy supplies. The other priorities would be tackling antisocial behaviour with more neighbourhood police and recruiting thousands of new teachers paid for by ending tax breaks for private schools. "One card, six steps in your hand, a plan to change the country. This is a message that we can take to every doorstep across the country," he told the audience, referring to credit card-sized checklists - a tactic reminiscent of one used by former Prime Minister Tony Blair when he won office in 1997. "With patience, with determination, with these first steps we can rebuild our country with Labour," he said, standing in front of his policy chiefs. The six policies, alongside a picture of a stern looking Starmer with his sleeves rolled up, will be put on billboards, vans and published in regional newspapers in the party's biggest advertising campaign since the 2019 general election. With the next election due in the second half of the year, Britain's parties are setting out their solutions to issues including a healthcare system in crisis, years of slow growth, and rising threats from authoritarian states. Starmer, his deputy Angela Rayner and finance policy chief Rachel Reeves repeatedly referred to a "changed Labour Party" in their speeches, which came just days after Prime Minister Rishi Sunak called on voters to "trust him" and hand him another term. Conservative Chairman Richard Holden accused Labour of lacking a coherent plan and said families would only face a brighter future by sticking to the government's plan. Labour is running about 20 percentage points ahead of Sunak's Conservatives in the polls but some party officials are concerned their advantage is not as solid as it could be, fearing thousands of voters are still undecided. The party announced five "national missions" last year. But the six priorities now include tackling illegal immigration - an issue that is set to be a major battleground in the election. Asked if he was little more than a Blair tribute act, Starmer said the former prime minister had won three elections in a row to hand him power from 1997 to 2007. "It's not copycat," he said. "I am very conscious that we're facing the challenges that are now here in 2024 and have to provide the answers to those challenges." Sign up here. https://www.reuters.com/world/uk/uks-labour-sets-out-priorities-government-planning-election-win-2024-05-15/

2024-05-16 11:31

FRANKFURT, May 16 (Reuters) - The European Central Bank's new interest rates framework may discourage money-market lending because banks will find it cheaper to tap the ECB, policymaker Joachim Nagel said on Thursday. The ECB wants to wean banks off free cash after 10 years of money printing but it is trying to do so gently enough not to upset the financial system. Under a new framework unveiled in March, the ECB set a 15 basis-point spread between the interest rate that banks earn when they deposit money at the central bank and the one they pay when they borrow from it. "Interbank transactions might need higher spreads," the Bundesbank's president said. "But in the longer-term money market segments, a spread of 15 basis points might risk pricing many transactions out of the market which can still take place at a wider spread." He added that banks were also likely to turn to the ECB to swap illiquid collateral for reserves in order to meet some regulatory requirements. The ECB's new framework is up for review in 2026 at the latest and Nagel hinted that it might still change. "Is that framework now set in stone? I don’t know yet," Nagel said. "But in the past, we have shown our capability and flexibility to adapt to changing market conditions." He said his ECB colleagues would monitor money-market activity, any fluctuations in short-term interest rates, and the degree of collateral transformation. Sign up here. https://www.reuters.com/markets/europe/ecbs-rates-framework-may-discourage-money-market-lending-nagel-2024-05-16/