Month: February 2008
Refinery losses and costs hit BP profit
Refinery losses and costs hit BP profit
Reuters Published: February 05, 2008, 23:41
London: British Petroleum (BP) reported a big drop in profits due to refining losses, rising costs and service station write-downs but higher production, planned job and cost cuts and a more generous dividend policy pushed its shares higher.
The third-largest Western oil company by market capitalisation said yesterday that full-year replacement cost (RC) profits fell 22 per cent to $17.29 billion, despite crude prices soaring in 2007 before hitting a record above $100 per barrel in January.
Fourth-quarter RC profit, which strips out unrealised gains on fuel inventories, fell 24 per cent to $2.97 billion. Underlying profits were below analysts’ forecast range.
“Our fourth-quarter results were very disappointing,” chief executive Tony Hayward said.
Last week, rival Exxon Mobil reported a 14 per cent rise in net income, while Chevron reported a 29 per cent rise and Royal Dutch Shell’s profits, calculated on a comparable basis, rose 11 per cent.
Weak crude processing margins led to a $1.3 billion loss at BP’s mainly US-based refining division while the planned sale of its US service station network forced the London-based company to take a $600 million charge.
However, there were signs of recovery in the quarter, with an almost two per cent rise in production to 3.907 million barrels of oil equivalent per day (boepd) compared to the same period in 2006, the first rise after nine quarters of falling output.
The company said it expected output to grow in 2008 and average four million boepd in 2009.
Excluding non-operating items, which amounted to a net charge of $1.03 billion, the fourth-quarter replacement cost profit was $4.002 billion.
BP investors also cheered a planned reduction in corporate overheads by 15-20 per cent, which will be achieved by axing 5,000 jobs and outsourcing another 9,500 jobs to franchisees.
BP announced a 31 per cent rise in its fourth-quarter dividend compared to 2006, and said in future it would have a bias for distributing cash to shareholders via dividends, rather than buybacks.
This is in line with the strategy followed by rival Royal Dutch Shell Plc.
The company has also raised the forward oil price it uses when deciding whether to invest in projects to $60 from $40 per barrel, suggesting it may be more aggressive in pursuing opportunities.
BP has suffered a series of problems in recent years. A blast at its Texas City refinery in 2005 which killed 15 workers, and which regulators blamed on cost cutting, ended up costing the company billions in settlements and lost profits.
Quality Energy to build $13b refinery
Quality Energy to build $13b refinery
Bloomberg Published: February 05, 2008, 23:41
Abu Dhabi: Quality Energy Petro Holding International, which is owned by a member of Abu Dhabi’s Al Otaiba family, plans to build a $13 billion oil refinery in the UAE and seek Iranian crude as feedstock.
Quality Energy will construct the 500,000-barrel-a-day plant with the government of Russia’s Chel-yabinsk region, in which the company plans to invest $100 billion between now and 2012, according to chairman Adil Al Otaiba.
“The Chelyabinsk government is negotiating with the Iranian government to provide the crude for the UAE refinery,” Al Otaiba said.
Quality Energy is in talks with the rulers of one of the UAE’s northern emirates about building the plant, he said, without giving a date for the start of construction.
Iran has made several overtures in recent months to pursue joint ventures with other countries, including Russia, amid international sanctions over its nuclear programme.
The nation’s foreign minister said on December 13 that Iran and Russia would collaborate to develop gas deposits.
The UAE already has a gas-supply contract with Iran signed by Sharjah-based Crescent Petroleum. The fuel has been delayed since November 2005 while Iran, holder of the world’s second-largest gas reserves after Russia, demands a higher price.
Quality Energy will start building a $4.5 billion refinery in Chelyabinsk in 2009, once the region’s government concludes talks with oil companies including Itera Holding, Rosneft Oil and Lukoil to secure one million tonnes of crude a month.
“The Russian government will guarantee crude supplies to the refinery for 15 years,” Al Otaiba said.
The 180,000-barrel-a-day plant, slated for completion in 2012, will be fully funded by Quality, which has already secured a loan for 70 per cent of the total amount.
The Chelyabinsk government will supply the crude in return for a 25 per cent stake in the refinery, Al Otaiba said.
How a boat could sink the internet
How a boat could sink the internet
By Scott Shuey, Chief Business Reporter Published: February 02, 2008, 01:39
For those of us who grew up listening to stories about how the internet was invented with the goal of establishing a communications network that would even function in the event of a nuclear war, we have to ask: How did a boat off the coast of Egypt manage to destroy internet access to every continent in the Northern Hemisphere?
The answer to that question is rather disturbing and quite complex. For starters, internet access wasn’t destroyed; it was just that the capacity of the remaining connections was severely strained. While the internet may have been designed to withstand global thermonuclear war, it wasn’t really designed to make sure you could access MySpace on the Day After.
etisalat and du, by all appearance, did a good job of rerouting the internet to where they could. That doesn’t mean that internet access was still available to all, but it did mean that essential communication still happened, just via different routes.
The problem is that the internet has evolved beyond just being a means to communicate. It is now how we do business and share our lives with our friends and family. The original concept behind the internet as envisioned back in the 1960s centred mainly on sending e-mail. We still do that, but we also shop, send pictures, bank, play games and a host of other things that eat up more bandwidth than was even imaginable back in the ’60s.
But despite advancements in software, the physical structure of the internet is still ’60s technology. It’s still an array of servers connected by chords. That’s vastly simplifying things, because these chords are more complex than most things we encounter during the day. According to one Cisco engineer whom I spoke with, these cables break down light and use the individual colour of the spectrum as virtualised cables to carry information. It other words, these cables turn all your data into waves of red (just to pick a colour at random) light and send it on its way. The whole thing is amazing, but still somewhat fragile since it can all be brought down by someone trying to do something as crazy as stopping a boat.
That’s a huge problem. It’s impossible to gauge the amount of money lost since Wednesday, but even some basic guessing shows loss is huge. The internet interruption meant there was no tech support from India, downloads from iTunes were stopped, and business deals didn’t get signed. I listened to one person yesterday having a nervous conversation with a colleague because a contract that had been sent via e-mail was apparently lost. “Why didn’t you send it by fax?” he asked. His colleague apparently gave him an answer along the lines of “because no one does that anymore.”
We’ve become so dependant on the internet that we never consider what could happen if it goes down, and now we’re losing money because of it.
It’s obvious that the internet’s infrastructure needs an upgrade. e-commerce cannot afford to let itself be subject to the whim of the boating industry. Laying new anchor-proof cables will be a multi-billion project for every existing cable, but it may become a necessity if we want to continue to have confidence in the new industry we’ve created.
Relatives cannot be reported ‘absconding’
Relatives cannot be reported ‘absconding’
By Ahmed Abdul Aziz (Our staff reporter) KHALEEJ TIMES 5 February 2008
ABU DHABI — The employers who hire their relatives in their firms are not allowed to file ‘absconding’ reports with the Ministry of Labour (MoL) in case the relative stops reporting for work, according to a senior official at the ministry.
Ahmed Al Besher, Legal Advisor to the Disputes Department in the MoL, told Khaleej Times that companies’ owners who recruit their relatives (uncles, nephews, brothers or sisters) have no right to file ‘absconding’ report against them, according to the Labour law.
“If the relative is not a reference, so who will be?,” asked Al Besher, noting that the MoL’s legal advisers refer to the relatives in some cases to find the labourers or get information about them to investigate the reports of absconding.”
“Hence, the ministry doesn’t receive any ‘absconding’ report because we consider it as incorrect reports so it would not be acceptable to receive from employers,” added Al Besher.
The statement came after an Egyptian owner of a services company filed an ‘absconding’ report against his employee who is also his nephew.
“The employee took emergency leave for a week and he travelled to his country without informing his employer and spent more than 15 days,” said Al Besher.
The employer believed that the employee had left the company forever because there were some problems between them so he had filed the ‘absconding’ report.
“The employers should be careful when they take the step of filing an ‘absconding’ on their employees because if it is a false report they will face penalties such as a fine of Dh10,000, downgrading the company’s category as well as suspending the firm’s activities for three months,” said Al Besher.
“In that case we have the employer remove the ‘absconding’ report because he confessed that it was by mistake,” added Al Besher.
He explained that if any employee who is the employer’s relative, does not resume work after emergency or annual, the employer seek cancellation of the visa with a six-month ban.
Opec keeps all options on output open in March
Opec keeps all options on output open in March
Reuters Published: February 04, 2008, 20:19
London, Kuwait City: Senior Opec officials downplayed talk of a change in oil output when the group meets again in a month’s time, saying a decision would hinge on the health of the global economy.
The Organisation of Petroleum Exporting Countries agreed at a meeting on Friday to keep output unchanged, but Gulf producer Kuwait acting oil minister Mohammad Al Olaim said Opec would discuss increasing crude oil production levels when its ministers meet in March, the official Kuwait News Agency reported while Iran and Venezuela have suggested a cut may be in order at the March 5 meeting.
“Everything is possible according to the market. We really cannot decide at this time,” Opec Secretary-General Abdullah Al Badri told reporters on the sidelines of a London energy conference.
“Come March, we will see what we can do.”
The group’s president, Chakib Khelil, who is also Algeria’s energy minister, said it was premature to predict what Opec would decide in March in Vienna.
“It’s too early,” he told Reuters.
Al Olaim said Opec was keen to maintain oil market stability and supply the world with enough oil but in response to market needs rather than speculation and geopolitical factors that the group cannot influence.
Nagging at the minds of ministers is the risk of the United States, the world’s biggest oil consumer, tipping into recession and eroding demand for fuel.
“We don’t know what’s going to happen … We don’t know whether the economy is going to pick up or get worse. We don’t know what non-Opec is going to do. All of those aspects are going to have an impact on our decision.”
The leading Opec producer Saudi Arabia said on Sunday that oil output policy would depend on the level of world oil inventories at the time of the March meeting.
While the latest indicators showed that while global economic growth was retreating, growth in some developing countries such as China and India was providing some balance, Kuwait acting oil minister said.
The United States had raised concerns last month that world markets needed more oil. Oil prices steadied at below $89 a barrel yesterday, after worries over a potential US recession knocked prices three per cent lower late last week.
Comment: Kuwait eyes supply rise
Kuwait acting oil minister said Mohammad Al Olaim said the producer group would review oil markets closely ahead of the meeting, the agency added.
But Iran wants the group to discuss cutting crude oil output at its March meeting, as stocks are expected to increase.
Iran and Venezuela said Opec may need to curb output in March to defend prices against a drop in demand, should the United States slip into recession.
Health and work stress: The link
Health and work stress: The link
By Carole Spiers, Special to Gulf News Published: February 04, 2008, 23:31
In the wake of last week’s biggest-ever health conference in the Gulf, I notice a new report from the UK confirming what many stress consultants have suspected for years, but never been able to prove – that stress is a factor in coronary heart disease (CHD).
As this, in turn, follows last month’s statement by UAE health official Dr. Ali Ahmad Bin Shakar, that 41 per cent of the country’s deaths are caused by heart disease, with a tripling of the problem expected over the next 20 years, the new findings should be essential reading by corporate managements.
Based on a 12-year study of more than 10,000 civil servants, this major research project demonstrates the strongest link yet between work stress and the biological mechanisms underlying CHD.
The most significant finding was that stress directly activates the pathways controlled by the nervous system, the endocrine glands and their hormones. Workers who suffered greater stress at work were liable to have lowered heart-rate variability, poor vagal tone and abnormally high morning levels of the stress-hormone, cortisol.
Significantly, these effects were independent of stress-linked behaviours – unhealthy lifestyles of little or no exercise and poor diet, with their effects on the metabolic system – which accounted for only 32 per cent of the syndrome.
As a professional stress consultant, I would naturally remind corporate businesses that they have plenty of opportunity to train their HR departments in the many specialist areas of stress management (organisational change, time-management, diversity, bullying behaviour etc.), as well as providing their other employees with seminars and presentations that generate a culture of stress awareness.
For those who are not ready to make the necessary investment, however, let me suggest how you may be able to relieve employee stress through a few everyday interventions that cost nothing.
These are the little acts of good manners, appreciation, common decency and consideration that can lubricate workplace life out of all proportion to the effort involved. This is how to generate a spirit of ‘give’, not just ‘get’. It’s done by encouraging people to love their work – or indeed to work with love, as in the words of Khalil Gibran, ‘Work is love made visible’.
The chairman or MD in particular firm should take a little time to ‘walk the talk’, showing an interest in people’s jobs, always remembering names correctly (which carries far more impact than you may think), and generally making every person feel valued.
Certainly, employee health in the UAE faces many side-effects arising out of its breakneck commercial growth. That’s a constructive thought to leave you with, as stress management moves firmly one step higher up the national agenda.
– The writer is a BBC broadcaster and motivational speaker, with 20 years’ experience as CEO of Carole Spiers Group, an international stress consultancy based in London.
Key points: Impact
* Stress has been shown to impact on heart disease.
* Stress management is vital in countries like UAE where heart disease is rising.
* Invest in specialist help or reduce stress through your own interventions.
Sharjah temperature will drop to 9C tonight
Sharjah temperature will drop to 9C tonight
By Mahmood Saberi and Binsal Abdul Kader, Staff Reporters GULF NEWS Published: February 04, 2008, 23:31
Dubai: Night-time temperatures will dip to 9C on Tuesday night with Sharjah recording the lowest and Abu Dhabi slightly higher at 12C, according to the Dubai met office.
A marine warning has gone out and will be valid until this morning, advising boats not to venture out to sea. This is because the winds are blowing rough offshore at 50 km/h or 27 knots, making the sea very choppy. Inland, the winds are mild at 28 km/h or 15 knots.
A high pressure system from Iran is blowing north-easterly winds across the emirates and driving down the minimum temperatures, according to Dr. S.K. Gupta, duty forecaster.
“There will be fine weather and sunny days ahead,” he said, as the clouds are dissipating towards the East Coast. There will be no rain for the next three days. On Monday, Dubai recorded 0.2 mm of rain and a “few spots of rain” in Sharjah.
“It will be partly cloudy with a chance of frosty conditions over the mountains and some Western areas”, according to the National Centre of Meteorology and Seismology in Abu Dhabi.
Supermarkets start charging for plastic bags
Supermarkets start charging for plastic bags
By Emmanuelle Landaisand Mahmood Saberi, Staff Reporters GULF NEWS Published: February 04, 2008, 23:31
Dubai: Geant became the first supermarket in the UAE to start charging for plastic bags on Monday as part of the celebrations for the UAE’s national Environment Day and two more hypermarkets will soon introduce similar charges.
Environmental protection is a top priority in spite of the UAE’s huge investment in the oil and gas sector said Shaikh Hamdan Bin Zayed Al Nahyan, UAE Deputy Prime Minister and Chairman of the Environment Agency-Abu Dhabi, in a statement for Environment Day, celebrated for the last 11 years on February 4.
Mohammad Numan, environment and health education department officer at Dubai Municipality did not name the other two hypermarkets, saying that an agreement will be signed with them next week. He said Dubai was the first emirate to initiate this campaign against plastic bags.
Geant has 70,000 tonnes of plastic leaving its store per year in the form of plastic bags according to Gabriel De Andrade, group merchandise manager.
Ordinary plastic bags will cost 25 fils each. Customers will be able to reuse the bags at any time. For each bag returned a credit note of the same value of the bags will be issued. An alternative reusable jute bag is also available to shoppers for Dh5.
The plastic-reducing campaign is being held under the umbrella of My Bag My Earth launched last year in collaboration with Dubai Municipality with the aim of reducing plastic bags in stores and providing shoppers with alternatives.
Shoppers had a mixed reaction to the new fee at Geant hypermarket yesterday. A group of volunteers from the International Association of Human Values was at hand to explain the move.
Ramiah, a construction worker, said he could not understand why he had to pay for the bags which he earlier got for free.
“We reuse them for throwing out our garbage,” he said, when told about the pollution hazards.
“I am paying more for everything else anyway,” said Mehta, a housewife from India.
Litter-free: 300 take part in clean-up
About 300 volunteers including fishermen, students and dhow workers took part in a voluntary clean-up of Dubai’s Al Hamriya Port to mark Environment Day.
The event was supported by professional divers as well as volunteers from oil firms and shipping companies
In conjunction with the UAE Environment Day the Middle East premiere of Leonardo DiCaprio’s environmental documentary film, The 11th Hour aired in Dubai last night and will be released on February 14 in the Grand Megaplex and Cinestar Mall of the Emirates.
Amrita TV Raga Ratnam Junior competition – comments by Mrs. Anuradha Krishna moorthy
The exclusive competition in the music world to test rigorously the talents of the children for Raga Ratnam Junior title. Here, Mrs. Anuradha Krishnamoorthy, eminent carnatic singer express her views about this programme.
More details of the programme, the judges and the remaning 9 contestants fighting it out for the title can be obained by visiting:
Raga Ratnam Junior – Manodharmam round – Performance by Arjun B Krishna
Excerpts of a performance by contestant Arjun B Krishna for the Manodharmam round of AMRITA TV Raga Ratnam Junior competition.
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