China virus forces OPEC to weigh up extension to oil output cuts

Venezuela’s Oil Minister Manuel Quevedo, Saudi Arabia’s Minister of Energy Prince Abdul Aziz bin Salman and Russia’s Energy Minister Alexander Novak. (Reuters)
Short Url
Updated 29 January 2020

China virus forces OPEC to weigh up extension to oil output cuts

  • Slide in crude prices to three-month low alarms officials amid concerns over coronavirus’ impact on economic growth

LONDON: OPEC wants to extend current oil output cuts until at least June, with the possibility of deeper reductions on the table if oil demand in China is significantly affected by the spread of a new coronavirus, OPEC sources said.

The quick slide in oil prices over the past few days has alarmed OPEC officials, the sources say, as the new virus found in China and several other countries raised concerns about a hit to economic growth and oil demand.

Oil futures were on course for a sixth day of losses with Brent crude staying below $60 per barrel. On Monday it hit a three-month low of $58.50, as the virus outbreak triggered a global selloff of riskier assets.

Saudi Arabia, OPEC’s de-facto leader, joined by key oil producers such as the United Arab Emirates, Algeria and Oman, sought to calm market jitters on Monday — urging caution against gloomy expectations on the impact of the virus on the global economy and oil demand.

But OPEC officials have also started weighing their options and intensified internal discussion on how best to respond to the price slump, the sources said.

“A further extension is a strong possibility and a deeper cut is a possibility,” said one OPEC source, adding that the impact of the China virus outbreak on oil demand would be clearer over the coming week.

“Extension is highly possible until June,” another source said, adding that an additional preferable option is to extend the oil producers’ pact until end of 2020 and that a deeper cut was “possible” if there was a need for it.

A source familiar with Russian thinking, said that although Moscow had been keen earlier to exit from price cuts, it would stay on board if oil prices continued to trade below $60 a barrel

OPEC+, which includes Russia, has been reducing oil supply to support prices, agreeing in December to hold back 1.7 million barrels per day (bpd) of output until the end of March.

Russia had insisted it wanted the current deal to last only until March, while Saudi Arabia has been keener for the deal to last longer, according to OPEC+ sources.

This year, OPEC expects its world market share to fall further as output booms in non-OPEC rivals including the US, Brazil, Canada, Australia, Norway and Guyana while global demand is rising.


Saudi fund shells out to help US cellular seafood pioneer

Updated 27 February 2020

Saudi fund shells out to help US cellular seafood pioneer

  • KBW Ventures joins ‘visionary’ $20m backing for San Diego food innovator

JEDDAH: A California innovative food company that produces seafood directly from fish cells is stepping up expansion plans with backing from “visionary investors” including KBW Ventures, the Saudi investment fund founded by Prince Khaled bin Al-Waleed bin Talal.

BlueNalu, based in San Diego, on Wednesday announced the completion of its $20 million Series A round of funding.

The financing will allow the company to develop a pilot production facility in San Diego, expand its worldwide staff, implement strategic alliances for global operations and prepare for its market launch.

The Series A round is co-led by Stray Dog Capital, CPT Capital, New Crop Capital and Clear Current Capital, each of which took part in BlueNalu’s seed round. The company secured $4.5 million in 2018 and has attracted investors from 11 nations so far, demonstrating global interest in the firm’s potential.

New investors include KBW Ventures, which supports innovative companies, such as BlueNalu, that have potential for growth and can sustainably feed the world.

BlueNalu’s A round attracted a significant number of strategic investors offering expertise and infrastructure in supply chain, operations, sales, marketing and distribution.

Strategic investors include global supply chain leaders that will provide guidance and raw material expertise to BlueNalu. These include Nutreco, a global leader in animal nutrition and aquafeed, and Griffith Foods, a global product development partner to the food industry, with expertise in market insights, food science, culinary and sensory optimization.

Strategic investors also include organizations with expertise in operations, sales, and distribution, including Pulmuone, a leader in healthy lifestyle and sustainable food products with distribution in Asia and North America; Sumitomo Corporation of Americas, a global investor and supplier of goods and services, including foods; Rich Products Ventures, the corporate venture arm of Rich Products Corporation, a leading supplier of icings, cakes, pizza, desserts, appetizers and bakery products.

FASTFACTS

• BlueNalu announced the completion of its $20 million Series A round of funding.

• The financing will allow the company to develop a pilot production facility in San Diego, expand its worldwide staff, implement strategic alliances for global operations and prepare for its market launch.

• The company secured $4.5 million in 2018 and has attracted investors from 11 nations so far, demonstrating global interest in the firm’s potential.

“BlueNalu has made considerable progress toward bringing cell-based seafood products to the world,” said Lou Cooperhouse, the company’s president and CEO.

“We have designed and executed a platform technology in which we will ultimately offer a broad array of sustainable cell-based seafood products to consumers, and our team has been extremely focused on implementing systems and processes that will be needed for cost-effective, large-scale production.

“We are thankful to the committed group of visionaries who participated in our earlier financing round and have invested again in this round, and we are eager to form partnerships with these five strategic investors, so that we can launch our cell-based seafood products in nations around the world,” he added.

“BlueNalu has demonstrated global leadership in cell-based seafood, and has the team, expertise, strategy and networks that are key to its success,” said Chuck Laue, co-founder and chair of Stray Dog Capital.

“As global demand for seafood continues to increase, and our supply continues to be compromised, we are excited at the potential for BlueNalu to play a significant role in feeding the planet in the decades to come.”

“BlueNalu has achieved a number of milestones in a short period of time, and we are proud to have backed this company since its origins,” said Chris Kerr, chief investment officer of New Crop Capital.

“We have seen extremely rapid global growth in plant-based foods, and BlueNalu is clearly at the forefront of this next generation of alternative proteins that many are predicting will have considerable growth and significant market penetration in the coming years.

“BlueNalu will offer a sustainable solution to consumers, free of mercury and environmental contaminants that will support the health, sustainability and biodiversity of our ocean. This is clearly a win-win-win for human health, sea life and for our planet,” he said.