China’s CCPC said to take center stage in Iran, Venezuela oil trade: Reuters

An oil tanker is docked while oil is pumped into it at a PDVSA terminal in Venezuela. (Reuters)
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Updated 22 July 2021

China’s CCPC said to take center stage in Iran, Venezuela oil trade: Reuters

  • Many refineries worldwide, including state-run players in China, stopped buying crude from Iran and Venezuela after the US imposed sanctions, cutting millions of barrels per day from exports and billions of dollars from their income

LONDON: A Chinese logistics firm has emerged as a central player in the supply of sanctioned oil from Iran and Venezuela, even after it was blacklisted by Washington two years ago for handling Iranian crude, seven sources with knowledge of the deals told Reuters.
The more prominent role of China Concord Petroleum Co, also known as CCPC, and its expansion into trading with Venezuela, have not previously been reported and highlight the limitations of Washington’s system of restrictions, analysts say.
The details of the deals were described to Reuters by a range of individuals including one China-based source familiar with CCPC’s operations, Iranian officials and a source at Venezuela’s state-owned oil company PDVSA.
CCPC got involved in the Venezuelan oil trade this year through deals with small independent Chinese refineries known as teapots, according to monthly loading schedules, export schedules and invoices from April and May this year from PDVSA, as well as tanker tracking data and the PDVSA source.
The Hong Kong-registered firm has quickly become an important partner for Caracas, chartering ships in April and May carrying over 20 percent of Venezuela’s total oil exports in that period or nearly $445 million worth of crude, the PDVSA documents and tanker tracking data showed. CCPC did not charter any ships carrying Venezuelan oil in June, according to the documents.
Many refineries worldwide, including state-run players in China, stopped buying crude from Iran and Venezuela after the US imposed sanctions, cutting millions of barrels per day from exports and billions of dollars from their income.
Dependent on oil revenues to run their countries, Tehran and Caracas have since engaged in an elaborate game of cat-and-mouse with Washington to keep exporting crude, employing numerous techniques to avoid detection, including ship-to-ship transfers, shell companies and middlemen who operate outside the US financial sphere.
In the past year, CCPC has acquired at least 14 tankers to transport oil from Iran or Venezuela to China, two of the sources said.
A person reached by Reuters on CCPC’s registered phone number said she was unaware of any business activities of CCPC. She declined to be named. An email sent to an address for the company listed on the US Treasury’s website did not get a response.
PDVSA and Venezuela’s oil ministry did not respond to a request for comment. Iran’s oil ministry also declined to comment.
“China maintains normal, legitimate trades with Iran and Venezuela under the framework of international law that shall deserve respect and protection,” a spokesman for China’s foreign ministry said in response to questions about the role of Chinese companies in the trading of sanctioned oil.
“China strongly opposes unilateral sanctions and urges the United States to remove the ‘long-arm jurisdiction’ on companies and individuals.”
US officials, typically, do not move to interdict Iranian or Venezuelan oil shipments bought by Chinese or any international customers. But they can make it difficult for those involved in the trade to operate by barring US citizens and companies from dealing with them, making them pariahs for western banks.
In 2019, Washington added CCPC to a list of entities under sanctions for violating restrictions on handling and transacting Iranian oil. The company has not commented publicly on the sanctions and Reuters could not determine what impact the US blacklisting has had on CCPC.
CCPC supplies half a dozen Chinese teapot refineries with Iranian oil, three China-based sources said.
The sources declined to disclose the identities of these refineries or to be named due to the sensitivity of the matter. The documents reviewed by Reuters did not include the names of the refineries.
Iranian officials familiar with the matter confirmed that CCPC was a central player in Tehran’s oil trade with China.
China received a daily average of 557,000 barrels of Iranian crude between November and March, or roughly 5 percent of total imports by the world’s biggest importer, according to Refinitiv Oil Research, returning to levels last seen before former US President Donald Trump re-imposed sanctions on Iran in 2018.
China’s imports of Venezuelan crude and fuel averaged 324,000 barrels per day (bpd) in the past year to end-April, according to cargo-tracking specialist Vortexa Analytics, below pre-sanctions levels, but still more than 60 percent of Venezuela’s total oil exports.
The sanctions on Venezuela’s PDVSA were introduced in 2019 as part of a bid to topple that country’s socialist president, Nicolas Maduro.
The US Treasury declined to comment when asked about CCPC’s critical role in facilitating oil trade from Iran and Venezuela, but said that the agency pursues actions on an ongoing basis.
Julia Friedlander, a former senior sanctions official with the US Treasury, said the growing trade in blacklisted oil showed how those opposed were getting better at evasion.
“It shows there are limitations as to what US sanctions can do especially when you target multiple like-minded or selectively like-minded actors like oil traders. So, you incentivise these alternative axes of resilience,” said Friedlander, who is now a senior fellow at the Atlantic Council’s GeoEconomics Center.
The sanctions have battered the economies of Iran and Venezuela and dealt a serious blow to their tanker fleets, which are overstretched and in need of an overhaul, according to analysts and publicly available data on PDVSA’s fleet.
The 14 tankers acquired by CCPC have a capacity of around 28 million barrels of oil. At least one other tanker is also linked to CCPC, boosting their capacity to some 30 million barrels, the two sources said.
Iran exported more than 600,000 bpd of crude in June, a Reuters survey showed. That compares with a high of 2.8 million bpd in 2018, before sanctions were imposed, but up from 300,000 bpd in 2020, according to assessments based on tanker tracking data.

Lebanon sells cheapest Big Mac in the world as currency collapses

Updated 18 min 38 sec ago

Lebanon sells cheapest Big Mac in the world as currency collapses

  • Lebanese pound is 70 percent undervalued according to the Big Mac Index
  • A split is emerging between those paid in Lebanese pounds and those in dollars

RIYADH: Lebanon is home to the world’s cheapest Big Mac after the pound slumped in value, leaving it more than 70 percent undervalued against the US dollar, according to the Economist Intelligence Unit.

At 29,904 Lebanese pounds, a Big Mac is not cheap for those being paid in local currency, but with an exchange rate of 17,800 to the dollar, it costs just $1.68 for tourists and those lucky enough to get paid in dollars.

The slump in the Lebanese pound is exacerbating and accelerating inflation on a basic basket of goods, such as rice, sugar and flour, on a daily basis, said Lebanese economic analyst Bassel Al-Khatib.

Most people are paid in the local currency in Lebanon, where the national minimum wage stands at 675,000 Lebanese pounds per month, which was once worth almost $450 at the official exchange rate, but today barely fetches $30 on the black market, according to the Crisis Observatory at the American University of Beirut (AUB).

The Observatory said the cost of food has soared by 700 percent over the past two years, and this increase had picked up pace to 50 percent in the past few weeks alone.

Most Lebanese people are getting poorer on a daily basis, pushing some of them to sell their gold, cars and even furniture to survive, while others wait for US dollar transfers from their relatives abroad, or wait for civil society aid, Al-Khatib told Arab News.

This is all reflected in Lebanese social media, which is flooded with donation requests for new-born baby milk and medications that are not available anymore in the markets or are sold for extremely high prices. There are also numerous donation requests for people in need of food.

At the same time, others are sharing their expensive restaurant bills, such as Babel Baher who spent 5 million Lebanese pounds on a meal and posted the cheque on Facebook.

“$250 is almost nothing for someone coming from abroad,” a Facebook user called Rania wrote under the post. “This is a very cheap bill for someone who has US dollars and this dinner is not expensive at all compared to abroad.”

Al Khatib said that those paid in US dollars are living an affordable life with only $300 out of their salaries while before they needed $3,000 to have the same quality of life.

“The patchwork policies to support some commodities is not helping as all commodities that are subsidized are smuggled, ” said Al Khatib.

The country’s mismanagement with no plan or economic vision to save Lebanon from its worsening crisis, led us here, and there are no positive prospects as long as there are no radical solutions in the country, he said.

PIF-backed Lucid Motors makes trading debut on Nasdaq

Updated 26 July 2021

PIF-backed Lucid Motors makes trading debut on Nasdaq

  • will make itsLucid to make trading debut on New York’s Nasdaq Global Select Market on Monday
  • Lucid merged with special purpose acquisition vehicle Churchill Capital Corp. IV

RIYADH: Lucid Motors, the Californian electric vehicle (EV) carmaker majority-owned by Saudi Arabia’s Public Investment Fund (PIF), will make its trading debut on New York’s Nasdaq Global Select Market on Monday.

Listed under the new ticker symbol “LCID”, the listing came about following the merger of Lucid and Churchill Capital Corp. IV — a special purpose acquisition company — on July 23. The EV firm will begin trading by ringing the Nasdaq opening bell on July 26.

The deal will help Lucid raise $4.4 billion, which will be used to fast track its production growth plans. The firm has over 11,000 paid reservations for its Lucid Air vehicle, which is on scheduled to start deliveries in the second half of this year.

“We are on track to meet our projected deliveries for the next two years, and we look forward to delighting our customers around the world with the best electric vehicles ever created,” Peter Rawlinson, CEO and CTO of Lucid Group, said in a press statement.

Michael S. Klein, chairman and CEO of Churchill Capital Corp. IV, said ahead of the merger: “Lucid has industry-leading technology, clear demand for its products, and is on track to deliver revenue-generating cars to customers in the second half of this year. We are excited to support Lucid’s transition into a public company and confident in its ability to address unmet needs in the automotive industry, which is moving toward electrification at a rapid pace and on a global scale.”

PIF announced its investment in Lucid Motors in Sept. 2018. The Lucid Motors CEO told Arab News in January that his team were scrutinizing possible locations in Saudi Arabia to open retail outlets — what Lucid calls “studios” — for their luxury EVs.

“We are already looking,” he said. “My retail team just returned from a scouting trip in the Kingdom, and that is very much on the road there. Hopefully, we can get a retail outlet there right at the tail end of 2021, probably early 2022.”

Earlier this month, the Wall Street Journal reported that Saudi Arabia stands to record a profit of nearly $20 billion on the back of its investment in Lucid.

PIF will own over 60 percent of the company, which is expected to have a market capitalization of about $36 billion.

Lucid’s expected market capitalization is nearly twice the valuation of Nissan Motor Co. and about two-thirds that of Ford Motor Co., which delivered more than 4 million cars last year. Lucid has yet to sell any cars.

Looking at the market for EVs, a report by the Pew Research Center found that 7 percent of respondents said they currently owned an electric or hybrid vehicle, and 39 percent said they were very or somewhat likely to buy an EV when they next came to purchase.

Interest has grown, with 1.8 million EVs registered in the US in 2020, more than three times as many as four years ago, according to the International Energy Agency.

While the US accounts for 17 percent of the world’s 10.2 million EVs, China is the biggest market, with 44 percent of all cars and Europe following with 31 percent.

Saudi Arabia to introduce insurance on domestic labor contracts in 2022

Updated 26 July 2021

Saudi Arabia to introduce insurance on domestic labor contracts in 2022

  • Move aims to increase attractiveness of Saudi labor market
  • Recruiters must carry the cost of insuring contracts for first two years

RIYADH: Saudi Ministry of Human Resource and Social Development is expected to start implementing insurance on the domestic labor contract early in 2022 in cooperation with the Saudi Central Bank (SAMA), Al Eqtisadia paper reported.

This decision guarantees the rights and benefits of the employer and the worker, including compensating the employer for the expense of bringing in a replacement domestic worker in the event of death, inability to work, or suffering from chronic or critical diseases, according to the ministry.

The move aims to increase the attractiveness of the Saudi labor market, improve the contractual relationship between workers and employers, and reduce risks in the domestic labor recruitment market, helping to cut costs.

“Recruitment companies and agencies used to provide a 3-month trial period for the worker, compensating families for any potential damage, but once the trial period ends, the two parties are not protected, causing lot of losses to Saudi families,” Saudi development and localization specialist Saleh Al-Anzi told Arab news.

“The insurance contract protects both the worker and the employer,” he said.

The insurance will be technically linked to the mediation contract for the recruitment of domestic workers through the Musaned platform, and the ministry will issue the implementation mechanism later in cooperation with the relevant authorities, including SAMA and the Ministry of Interior, sources familiar with the matter told the paper.

Recruitment companies must carry the cost of insuring the contracts of domestic workers they bring into the country for the first two years, the Saudi Council of Ministers decreed in May.

Saudi car rental facilities to issue e-contracts starting July 25

Updated 26 July 2021

Saudi car rental facilities to issue e-contracts starting July 25

  • Car rental facilities to issue all car rental contracts on the Naql portal

RIYADH: The Saudi Transport General Authority (TGA) started implementing the first phase of the unified electronic contract for car rental starting July 25, TGA announced on its Twitter account.
The unified electronic contract obliges car rental facilities to issue all car rental contracts on the Naql portal through the rental contracts service.
This service will enable the licensed establishments to issue a unified contract with complete statutory requirements and clauses, and will contribute to preserving the rights of the lessor and the lessee, enhancing the confidence in the services provided, and raising the level of quality of services, TGA said.
The unified electronic car contract will reduce disputes and the burden on the relevant authorities and will stimulate investment in the sector, according to the TGA.
TGA launched its Distinguished Transport Partner program in May to strengthen public-private partnerships in the sector.

Saudi PIF invests in Indian healthtech platform

Updated 26 July 2021

Saudi PIF invests in Indian healthtech platform

  • Healthifyme raises $75 million in Series C funding round
  • Khosla Ventures, LeapFrog Investment, HealthQuad and Unilever Ventures also invested in the round

RIYADH: The Saudi Public Investment Fund has invested in India-based healthtech Healthifyme’s $75 million Series C funding round, led by Khosla Ventures and LeapFrog Investment, Livemint reported.
HealthQuad and Unilever Ventures also participated in the round, along with existing investors Chiratae Ventures, Inventus Capital and Sistema Asia Capital, taking total investment in the startup to $100 million.
PIF assets have grown to about SR1.6 trillion ($426.6 billion) and it aims to expand this to SR4 trillion by the end of 2025, Deputy Governor Yazeed Al-Hamid said earlier this month.
The sovereign wealth fund aims to boost its local investments to account for 75-80 percent of the total, he said.
The Saudi sovereign fund has established 35 strategic companies since 2018, it announced on its Twitter account, on Sunday.
The companies are working to promote private sector growth and the diversification of the Kingdom’s economy, by launching new sectors and creating 366,000 direct and indirect jobs.
The Kingdom’s sovereign fund aims to generate approximately 1.8 million direct and indirect jobs by 2025.
The fund is focused on 13 strategic sectors including service utilities, renewable energy, aviation and defense, vehicles, transport and logistics, minerals and mining, financial services, health care, communications, media and technology, food and agriculture, and others.