India’s Essar Oil picks Trafigura, BP for $1 billion oil-backed loan

Essar Oil has long relied entirely on funding from Indian banks. (Reuters)
Updated 20 March 2018

India’s Essar Oil picks Trafigura, BP for $1 billion oil-backed loan

LONDON: Essar Oil has picked Trafigura and BP to lend it $1 billion to be repaid with cargoes of refined products as the Indian refiner’s new owners seek to diversify the firm’s financing base, sources with direct knowledge of the matter said.
Russian oil major Rosneft, fund UCP and Swiss commodities trader Trafigura bought Essar Oil’s large refinery, 3,500 fuel stations and infrastructure for $12.9 billion last year.
Essar Oil has long relied entirely on funding from Indian banks while the new shareholders want to reduce exchange costs by adding alternative financing sources and directly use dollars to buy its oil instead.
Late last year, the refiner began talks with traders to raise cash in exchange for refined products such as gasoline and gasoil delivered over three to four years. It would be the refiner’s first major multi-year prepayment.
The sources said that Trafigura and BP were jointly working to structure and then syndicate the loan with banks in the next few weeks.
BP and Trafigura declined to comment, while Essar was not immediately available.
Existing and possible new US sanctions will complicate discussions, banking sources said.
Kremlin-owned Rosneft has been under US sanctions since Russia’s annexation of Crimea in 2014 and the refiner also runs significant oil volumes coming from Iran and Venezuela.
While the international oil embargo on Iran was lifted in early 2016, US restrictions on dollar use in connection to Iran remain. President Donald Trump has also repeatedly criticized the nuclear pact with Tehran and threatened to stop extending US sanctions relief.
Trump’s nomination of Iran hawk Mike Pompeo as the new secretary of state has fueled fears of an end to sanctions relief.
The US has also considered oil sanctions on Venezuela.


China aims for sustained and healthy economic development

Updated 30 October 2020

China aims for sustained and healthy economic development

  • Beijing to let market forces play decisive role in resources allocation, report says

BEIJING: China is targeting sustained and healthy economic development in the five years to 2025, with an emphasis on a higher quality of growth, the Xinhua news agency said on Thursday, citing the ruling Communist Party’s Central Committee.

President Xi Jinping and members of the Central Committee, the largest of the ruling party’s elite decision-making bodies, met behind closed doors from Monday to lay out the 14th five-year plan, a blueprint for economic and social development.

China’s external environment “is getting more complicated,” the agency said, adding, “There is a significant increase in instabilities and uncertainties.”

BACKGROUND

China aims to boost its gross domestic product (GDP) per person to the level of moderately developed countries by 2035, while GDP is due to top 100 trillion yuan ($15 trillion) in 2020.

However, the country’s development was still in a period of important strategic opportunities, despite new challenges, it said.

It added that China aims to boost its gross domestic product (GDP) per person to the level of moderately developed countries by 2035, while GDP is due to top 100 trillion yuan ($15 trillion) in 2020.

China will also deepen reforms and let market forces play a decisive role in resources allocation, the agency said.

China will promote a “dual circulation” model, make self-sufficiency in technology a strategic pillar for development, move to develop and urbanize regions, and combine efforts to expand domestic demand with supply-side reforms, it added.

The “dual circulation” strategy, first proposed by Xi in May, envisages that China’s next phase of development will depend mainly on “domestic circulation” or an internal cycle of production, distribution and consumption, backed by domestic technological innovation.