Page 13 - bne_December 2018_20181207

bne December 2018 Companies & Markets I 13
Asia overtakes Europe as Russian Rosneft's main export market
Vadim Dumes in Paris
Russia's largest oil company Rosneft supplied 43.1mn tonnes of oil to Asia in January-September 2018, beating exports to Europe that amounted to 41mn tonnes. Rosneft supplied 15.7mn tonnes to Asia in the third quarter alone, or half (48%) of its total exports, and 13.1mn tonnes to Europe (40% of total).
Asia has been growing in importance as a market for Russian oil since 2003, when the Kremlin took over the privately owned Yukos oil company. As bne IntelliNews has already reported Russia is reorienting its supplies of low sulphur oil from the West to China, which upset European refineries receiving Urals oil blend of poorer quality.
The gap between European and Asian supplies has been closed fast, as in 2017 still Europe imported 65.3bn tonnes of oil from Rosneft versus 47.7mn tonnes for Asia. China is the major buyer of Rosneft's oil (a business started by Yukos), with about 40mn tonnes supplied in 2017, that is slated to increase to 50mn tonnes this year.
After the landmark deal signed between Russia's largest oil company Rosneft and China National Petroleum Corporation (CNPC) in 2013, Rosneft has extended cooperation with CNPC and CEFC China Energy. Most recently the contract of troubled CEFC has been overtaken by CITIC Resources (a subsidiary of the Chinese government fund CITIC).
Analysts surveyed by Vedomosti confirm the trend of increased output by Rosneft in Eastern territories and focus on long- term supply deals and joint extraction ventures with Chinese and Indian companies. In the meantime the European market is stagnating due to lower economic growth, renewable energy policies, and transition to a service-driven economy.
Recently bne IntelliNews reported that Rosneft gave a bullish capi- tal expenditure guidance for 2019 as it prepares to boost output. However, the company is trying to shield itself from possible future sanctions by revising contracts with its major buyers. Previous reports suggested that Chinese banks have so far comploied with the sanctions imposed by the US and the EU against Russia.
Star performers: Azerbaijan and Turkey shoot up the Doing Business rankings
bne IntelliNews
Azerbaijan has been in the business headlines for all the wrong reasons in the past couple of years, while the focus on Turkey is stuck on its seemingly inevitable slide into a recession, with companies up to their necks in debt because of the lira currency crisis – but the near neighbours have emerged as star performers in the latest World Bank Doing Business ranking.
Baku is celebrating an eyepopping leap of 32 places to 25th among the 190 ranked economies in Doing Business 2019 after carrying out a record eight business reforms, while Ankara must be chuffed with a gain of 17 places to 43rd. Turkey was praised by the survey assessors for achieving “top improver” status for the first time, after pushing through a record seven reforms.
Back in early October, Azerbaijan was a bit red in the face as the UK's first ever Unexplained Wealth Order (UWO) was
issued in an anti-corruption process brought against Zamira Hajiyeva, wife of Jahangir Hajiyev, a former chairman of state-owned International Bank of Azerbaijan. The past couple of years have also seen the South Caucasus country of 10mn beset by a slew of money laundering allegations including those made as part of the “Laundromat” affair which even
led to a rare demonstration on the streets of the capital. The Azerbaijani regime has also been busy fending off persistent allegations that it has paid bribes to burnish Azerbaijan’s image. In May this year, an ex-president of the Parliamentary Assembly of the Council of Europe (PACE) was banned from holding senior posts in the organisation for 10 years following an inquiry into suspected vote rigging in favour of the country.
Now, however, Azerbaijani officials dealing with unsettled foreign investors can instead point to how Doing Business 2019 – the data collection for which ended in May this year
www.bne.eu