- Compromise seal climate meeting
Delegates at the UN climate change conference in Buenos Aires have reached agreement on how to address the issue of global warming. They approved a compromise proposal on the format of future discussions agreed by the US and the EU overnight. Some developing countries (India supported by China, Pakistan and Saudi Arabia) had threatened to derail the deal, insisting on guarantees that they would not be subjected to emission cuts – they called for an amendment at the start of the final session on Saturday (18th December 2004). But the demand was rejected by the EU and a new compromise emerged. The differences between the EU and the US centred on talks on emission cuts when the Kyoto Protocol expires in 2012. The Europeans insisted on a series of informal meetings. In the end the US won its demand for one meeting, next May, but agreed it would be held over several days. The meeting will be held in Germany and “promote an informal exchange of information” on cutting harmful emissions and adapting to climate change.The Europeans have been seeking to involve the US and major emerging economies, such as China and India, in a post-Kyoto agreement on further emission reductions. The objections to the draft deal were not shared by all developing countries. (Source: BBC News).
Corus struck an innovative deal worth an estimate of $7 Bn over 10 years to lock in sales of unfinished slab steel from Teeside to a Swiss led metal consortium headed by Duferco. Philippe Varin, CEO of Corus, said the agreement to sell most of Teeside production over the next 10 years to an outside group fitted with the company’s aims to focus its energies on three other UK sites and one in The Netherlands. It also secures the future of 1700 jobs in the UK. The price of the steel is being set according to the formula privy to Corus and Duferco that takes into account the running cost of the plant. This may involve payment of $148 Mn for the priviledge of getting steel from the plant and contribute some 72% of Teeside expected capital cost. Meanwhile, in a separate article, Duferco and partners has raised some worries regarding the deal with Corus – who will maintain the management control and ownership of assets of Teesides – might not do enough to reduce production costs of the plant. (Source: Financial Times).
A previously unknown company called Baikal Finance Group became the official owner of one of the country’s largest oil production companies, which accounted for 60 per cent of all Yukos output. It was unclear who was behind Baikal or its finances. This confirmed Russia’s reputation as one of the world’s most opaque business environments. Moscow was rife with speculation last night that Baikal Finance Group is a front for Gazprom, the state-backed oil and gas monopoly. Gazpromneft, the oil arm of the monopoly had publicly declared its intention to buy Yukos’s assets, But Gazpromneft was subject to an injunction by a US court which ordered it not to participate in the sale, after Yukos filed for bankruptcy protection in the US. The court ruling also mentioned two other prospective bidders, but not Baikal Finance Group. Gazprom, which had been widely expected to win the auction, denied any affiliation to the group. Some analysts suggested that Baikal could be linked to Surgutneftegas, a private oil company which operates in the same region as Yukos. Surgut also denied any knowledge of the company. The Ministry of Justice, which led the attack on Yukos, said it would continue claiming up to $27.5bn in back tax from the company. This means that other Yukos assets could also be sold at auction. (Source: Financial Times)
EdF sought to resolve its costly Italian adventure by calling for arbitration with fellow shareholders in Edison, Italy’s second largest power group, to delay put options that could cost more than US $ 13 Bn. EdF due to be partly privatised next year said teh move was aimed at delaying the excercise of the put option until uncertainty was cleared up over a controversial new Italian law – “The Marzano Law” – which govern foreign investment in energy sector. However, fellow investors in the parent company of Edison seems to suspect that EdF is trying to wriggle out of buying their shares. They therefor rejected its call for arbitration. To recall, EdF acquired 18% stake in Italenergia, the holding company of Edison and a direct 2% ownership in the power group. Rome responded to the bid by imposing a 2% voting rights limit. This year, the Italian government introduced a law that threathen measures against state owned foreign investors in the energy sector if the Italian companies were not given reciprocal access to the overseas energy market. (Source: Financial Times)