Down Mexico way
Shares in Premier Oil (PMO) were up a third after the driller announced a “world class” oil discovery offshore Mexico. Premier, along with joint-venture partners Talos Energy and Sierra Oil & Gas, confirmed a potential resource of more than 1bn barrels of oil on initial estimates over an interval spanning 335 metres, with up to 200 metres of net oil bearing reservoir. Initial tests of hydrocarbon samples contain – potentially high-margin – light oil. The find vindicates the decision by Mexico’s government to deregulate the country’s oil industry.
Open for business
Independent trader
Figures published by the Department for International Trade revealed that Britain attracted more foreign direct investment (FDI) than ever before during the 2016-17 year. The US retains top billing, initiating 577 of the 2,200 projects undertaken in the post-referendum period, followed by China. The impact of Europe’s largest contributor, France, was in line with that of India, Australia and New Zealand. According to the World Bank, the UK attracted $300bn in FDI funding during 2016, against $320bn for the eurozone economies as a whole.
The Sun King decrees
Three Colours: Green
One day on from Volvo’s statement on electric/hybrid motoring, France’s new president, Emmanuel Macron, revealed that Le République will ban the sale of all petrol and diesel vehicles by 2040 as part of a major push to meet its climate change targets. France’s ability to pursue this policy objective should be aided by the level of state ownership in Peugeot, Citroën and Renault, giving it a considerable amount of clout in any decision-making process.
LME gets precious
Load of bullion
As part of a joint venture backed by Goldman Sachs, Morgan Stanley and Natixis, the London Metal Exchange (LME) has launched gold and silver futures contracts for the first time since the mid-1980s. Since launch, 1,640 lots (8.2m ounces) of silver and 5,562 lots (556,200 ounces) of gold have been traded. The joint venture aims to secure a share of the multi-billion dollar market currently dominated by the London Bullion Market Association (LBMA). The LBMA is taking measures to improve transparency following pressure from regulators, particularly with regard to how much physical bullion is stored in London.
Looming oil shock?
Crude analysis
Saudi Aramco’s chief executive has warned of a looming oil shortage as new production streams dry up in line with industry capital expenditure. Amin Nasser said that an additional 20m barrels a day (a fifth of current demand) will be required to meet projected demand growth and offset natural field decline over the next five years. Although Mr Nasser hardly qualifies as an independent voice, particularly with a partial float of Aramco on the agenda, crude volumes from conventional oil discoveries have more than halved since 2012 – at some point that’s got to tell.
Notes from a scandal
The net widens
It’s been confirmed that the UK’s Serious Fraud Office (SFO) has opened an investigation into Amec Foster Wheeler (AMFW) linked to the corruption scandal enveloping Monaco-based consultancy Unaoil. Midway through May, the SFO turned the spotlight on Amec’s fellow FTSE 250 constituent Petrofac (PFC), after publicly rejecting the results of an internal investigation report provided to it by Petrofac. Amec’s management said that the investigation shouldn’t have an impact on the planned merger with John Wood Group (WG.), on track for completion in the fourth quarter of 2017.
Conflicting interest
Every fiddle helps
The Competition and Markets Authority (CMA) has referred Tesco's (TSCO) proposed £3.7bn bid for wholesaler Booker (BOK) for a detailed investigation, granting a request from the companies to "fast track" the process. The CMA thinks that high street consumers could end up paying through the nose in 350 local areas where an overlap exists between Tesco shops and Booker-supplied independent grocery retailers – the likes of Londis and Budgens. The argument runs that Booker could offer inferior terms to the independents, effectively driving custom to local Tesco's stores.
Chart of the week
New French President Emmanuel Macron will have been pleased to see Wednesday’s figures from Eurostat, following his pledge to stimulate the French economy. Industrial production across the euro area grew by 1.3 per cent. France’s industrial growth was up 1.9 per cent – a turnaround from the -0.6 per cent reported a month earlier. The standout figures came from Lithuania (+3.8 per cent) and Romania (+3.5 per cent). Factories in the eurozone rounded off the first half of 2017 by ramping up at the fastest rate for over six years.
