ABERDEEN — The energy industry has to continuously demonstrate its excellence in order to maintain a ‘license to operate’, says the newly appointed conference chair of SPE Offshore Europe 2019 Michael Borrell, senior V.P., North Sea and Russia at Total.

‘Our license to operate: breaking through to excellence’ will form the theme of the biennial conference and exhibition which will take place in Aberdeen from Sept. 3-6, 2019. Michael Borrell has been appointed conference chair and will lead a committee of international oil and gas industry leaders to develop the plenary, keynote and technical programs.

“SPE Offshore Europe 2019 will allow the industry to come together and discuss what really matters,” said Mr Borrell, SPE Offshore Europe 2019 conference chair. “It will be important to talk about keeping our costs low, pushing the boundaries of innovation and focusing on excellence in our operations.

“Offshore Europe presents a great opportunity for us to challenge ourselves in the North Sea basin. It’s a harsh and demanding environment that has seen the industry overcome the odds and achieve feats of engineering that will go down in history. But we don’t always get it right and we certainly don’t have a monopoly on good ideas. I want OE2019 to not only look at what is going well in the North Sea but also to engage with the best of what is happening around the world. It is only by sharing best practice and being open to new ideas that we can truly break through to excellence.”

Darcy Spady, 2018 SPE president, said: “We are very pleased to welcome Michael Borrell as conference chair for OE2019. Michael brings extensive leadership, operational and technical expertise from his experience working with an international operator for more than 30 years. More than ever our industry’s operations have to demonstrate levels of excellence in order to maintain a ‘license to operate’; this theme will form the cornerstone of an exciting and relevant conference program for OE2019 that will be formulated over the coming months by a global committee of industry leaders.”

Vasyl Zhygalo, portfolio director, Offshore Europe Partnership commented: “We will be launching several new features and partnerships in the coming months to deliver more content to different parts of the industry. These will include a Late Life element to the Decommissioning Zone that debuted so successfully in 2017 as well as a Start-up Village and initiatives with a focus on exploration and operator involvement.”

Approximately 36,000 people and 900 exhibitors representing 130 countries attended SPE Offshore Europe 2017.

Details on the free-to-attend conference and its plenary, keynote and technical program will be announced later this year.

Michael Borrell was appointed senior V.P., North Sea and Russia at Total in September 2017. A Cambridge University graduate in chemical engineering, he joined Total in 1985. He has worked with its affiliate companies and has held senior managerial positions in the Total group since 1995 working in regions including South-east and Central Asia, South America, Canada, Europe and the Caspian. In July 2010, he was senior V.P., Continental Europe and Central Asia. In January 2015, he was appointed senior V.P., Europe & Central Asia before taking up his current role.

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RIYADH/DUBAI, June 14 (Reuters) – Saudi Arabia and the United Arab Emirates announced a five-point aid plan for Yemen’s Hodeidah port and surrounding areas on Wednesday, after a Saudi-led alliance of Arab states launched an attack on Yemen’s Houthi-held main port city.

As part of the plan, the two coalition states aim to establish a shipping lane to Hodeidah from the UAE capital, Abu Dhabi, and Jizan, a city in southern Saudi Arabia, officials told a news conference in Riyadh.

They will also distribute food, provide medical supplies, equipment and staff to hospitals, sustain electrical stations and provide economic support, they said.

“We have several ships stationed, and we have storage capacity very close to Hodeidah fully stocked up,” Reem al-Hashimy, the UAE minister of state for international cooperation, told Reuters in Riyadh.

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• PEC will debate whether to raise oil output in Vienna Friday
•  China, U.S. trade friction weighed on Treasury yields

Asian stocks declined amid investor concern the exchange of threats between China and the U.S. is the precursor of a full-blown trade war. Oil dropped, while the dollar edged higher as Treasury yields steadied just above 2.90 percent.

Stocks fell in Japan as the yen advanced, while S&P 500 Index futures pointed to losses. South Korean equities also slipped , while they fluctuated in Australia. China and Hong Kong, markets more sensitive to deepening trade tensions, were closed for holidays. Oil extended a decline as Saudi Arabia and Russia prepared for a clash with other OPEC members and allies over whether to raise production. The pound ticked lower ahead of a parliament debate on the Brexit withdrawal bill.

Trade has been thrust back into the limelight, with investors concerned about the intensifying confrontation between the U.S. and China. China swiftly responded to President Donald Trump slapping tariffs on $50 billion of imports, putting an additional 25 percent levy on $34 billion of U.S. agricultural and auto exports starting July 6.

Meanwhile, OPEC meets in Vienna Friday to debate maintaining current oil output cuts. Iran said Venezuela and Iraq will join it in blocking a proposal to increase oil production that’s backed by Saudi Arabia and Russia when the cartel and its allies meet in Vienna.

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MELBOURNE, June 15 (Reuters) – Chevron Corp has started producing liquefied natural gas (LNG) at the second unit of its $34 billion Wheatstone development, marking the completion of its two megaprojects in Australia after cost-blowouts and delays.

Wheatstone Train 2 is the last of five LNG production units built by Chevron in the state of Western Australia over the past decade at a combined cost of $88 billion.

“With the Chevron-operated Wheatstone and Gorgon LNG facilities now operational, we are delivering a significant new source of energy for customers in the region,” Chevron Australia Managing Director Nigel Hearne said in a statement on Friday.

Wheatstone LNG, with a total capacity of 8.9 million tonnes a year, is the eighth LNG project to be completed in Australia. That puts the nation on track to challenge Qatar as the world’s biggest LNG exporter when the two remaining ongoing projects – Inpex Corp’s Ichthys and Royal Dutch Shell’s Prelude floating LNG – are finished.

At full capacity, Wheatstone is expected to make up about 6 percent of the Asia Pacific region’s LNG production, Chevron said.

The first cargo from Wheatstone was shipped from Train 1 in October, 2017, a few months behind target, following hiccups in the start-up of Chevron’s $54 billion Gorgon project, which slowed work on Wheatstone.

Its partners in Wheatstone are Kuwait Foreign Petroleum Exploration Company (KUFPEC), Australia’s Woodside Petroleum , Kyushu Electric Power Co, and a joint venture part-owned by the world’s top LNG buyer, Japan’s JERA .

For Woodside, Wheatstone’s ramp up is key to achieving targeted annual production of around 100 million barrels of oil equivalent in 2020.

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Privacy and security still mar open banking adoption.

Two in five (40%) of Malaysians have expressed openness to having their personal banking data shared, according to a survey by Unisys.

However, a greater number are still hesitant in adopting AI for their banking needs, citing privacy and security concerns.

“Malaysians are keen to use digital services but they seek a seamless Omni channel relationship so that they can start a transaction in one place and pick it up in another without having to start over,” said Unisys Asia Pacific vice president for financial services Richard Parker.

Nearly half (47%) of Malaysian respondents listed long bank queues as their top annoyance which could be solved by greater adoption of technology. A fifth of respondents are annoyed at having to repeat themselves to customer service representatives whilst 12% have expressed frustration over inability to complete a service online.

However, their attitudes towards tech may change depending on the type of transaction offered. Half (52%) of customers are comfortable with banks deploying software for online credit card applications. A lesser percentage (39%) are willing to use it for larger life events like home loan transactions which have higher financial and emotional involvement.

“For Open Banking to take off in Asia, banks must address customer concerns about how they protect customer data, not just in the bank, but across all of the departments, partners and agencies in the value chain. Doing business in the 21st century requires dynamic software that adapts to business trends and evolves with security concerns,” he added.

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Assets under management grew 15.2% which is almost double Europe’s 7.5%.

Asia’s wealth managers registered the largest gains in the global private banking scene as assets under management (AUM) grew 15.2% in 2017, according to a report from research firm Scorpio Partnership.

The expansion was almost double that of Europe whose AUM only grew 7.5% and Americas at 13.8% as several wealth managers expanded their focus in the region last year.

Chinese banks are also steadily muscling their way into the global private banking rankings with China Merchants Bank (CMB), ICBC, and Bank of China snagging 13th, 22nd and 24th place respectively.

The AUM of Chinese private banks grew at a compound annual growth rate of 25.5% from 2013 to 2017, easily outstripping the growth of Asia which rose by only a mere 7.4% over the same period, according to The Asian Private Banker.

CMB posted double-digit growth (14.81%) in AUM after hitting $292.85b amidst enhanced customer developed client profiles and proposition enhancements. ICBC and BOC held $205.97b and $184.45b respectively.

“2017 has been the second year of great refocusing with many operators looking to increase exposure in existing markets of operation and divesting assets in non-core markets,” said Caroline Burkart. Director at Scorpio Partnership.

“Cost-cutting drives have clearly been effective when firms have efficiency of scale, however, our conversations with many smaller firms indicate that they may still be struggling to balance the cost income equation.”

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• Mining sector lacks basic infrastructure to transport minerals and a dearth of geological data

Ilesa, Nigeria – LOCALS have always known that a vast deposit of gold sits underneath the cocoa trees and towering thickets of bamboo in the tropical jungle of Osun state in southwest Nigeria.

The country’s focus on oil has meant the gold has been ignored for decades. But the government is now looking to revive the moribund mining sector as it seeks to diversify revenues following the 2014 crash in global crude prices.

A few companies are already venturing into the sector, hoping to repeat the success of mining in nearby west African countries Ghana, Senegal and Sierra Leone.

On a humid morning, Segun Lawson, chief executive of gold mining firm Thor Explorations, leads a site visit of his proposed mine. “No one has a clue about mining in Nigeria,” said Mr Lawson, dressed in a white shirt, chinos and construction boots as he walked down a red dirt road swatting away tiny insects. The Nigerian government mined the vein in the 1980s “but oil was so prolific they just left it”, he added, stopping at an abandoned 20-metre deep trench. “The gold runs 210 metres deep,” the geologist said, rattling off statistics about the deposit to the group of investors.

One British broker sounded impressed by the numbers. Mr Lawson hopes to start production at Nigeria’s first large-scale gold mine in early 2020. “This is the low-hanging fruit. This is a small gold province that no-one has explored with modern technology,” he said.

Gold-mining has a long history in West Africa. The region was home to the powerful Asante and Mali empires, who were a major source of bullion to the Mediterranean and Islamic worlds in medieval times. The trade took a back seat to slavery before being ramped up again in the late 1800s, when Europeans introduced industrial mining techniques. In the 2000s, a commodity “super-cycle” drove another boom, with technical advances helping to discover new sites and make mining more efficient. But this new technology has been slow to come to Nigeria.

Down the road from Mr Lawson’s mine is a small gold market in the city of Ilesa, where artisanal miners sell alluvial gold extracted from the earth with backbreaking labour. People can only dig so deep. “We’ve always had the gold but we haven’t had the people to mine it,” said traditional ruler Adeyeye Bamidele Adeniji at his house in Ilesa. My mind is very clear, I want to start the work.” “My expectation for you people is to let us benefit,” he told Mr Lawson and his team.

Across Nigeria and West Africa, tens of thousands of people work in dangerous open pit mines, digging everything from gold and tin to sapphires. “Their sheer numbers combined with the weak regulatory framework surrounding their work has alarmed many environmentalists in the region,” said Cassandra Mark-Thiesen, Africa researcher at the University of Basel. “The use of child labour, accidental deaths among miners and the smuggling of winnings are other troubling aspects.”

But this is what most mining looks like in Nigeria, which has a sophisticated oil and gas industry at the expense of everything else. Africa’s largest economy depends on oil for 70 per cent of its government revenue and almost all its foreign currency, despite being rich in iron, bitumen and gold.

Since coming into power in 2015, President Muhammadu Buhari’s government has tried to wean the economy off crude. Last year, the World Bank approved a US$150 million credit to support growth in Nigeria’s mineral sector, which currently represents less than one per cent of gross domestic product.

Nigeria’s mining sector faces big problems, including lack of basic infrastructure to transport minerals and a dearth of geological data. “You have to be long-term greedy to make it in Nigeria,” said Gabriel Olumide Odediran, head of investment at the Lagos-based Asset and Resource Management Company. “Trying to make money quickly won’t work here.”

Mr Lawson, who had been eyeing the mine for years before buying it, hopes to lead the gold pack. But he has to publish the definitive feasibility study before starting construction of the mine. Then there’s an issue about equipment: Nigeria currently doesn’t even have the proper machinery in the country so Mr Lawson will have to import crushers and mills from China. Yet the end is in sight. “Developing the mine is quite surreal,” said Mr Lawson. “We had no idea it would get this far.” AFP

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SINGAPORE (June 4): The European Union’s much-discussed General Data Protection Regulation (GDPR) kicked in on May 25. Companies now need to get consent to process personal data from all EU citizens they serve and make it easy for them to withdraw that consent. Companies also have to design systems that protect customer data, and inform customers promptly when a breach occurs.

These new rules could have implications on locally listed companies and, by extension, their shareholders. The GDPR applies not just to EU-based companies but to anyone serving EU citizens, which means local companies have to take data security much more seriously.

Organisations in breach of GDPR can be fined up to 4% of annual global turnover or €20 million ($31 million), whichever is greater. This is much more than the $100,000 maximum fine imposed in Singapore for breaches of the Personal Data Protection Act. The Cybersecurity Act — which was passed in February and requires critical information infrastructure owners in the energy, water, banking and finance, healthcare, transport, government, infocomm, media, and security and emergency services industries to report breaches — also has a maximum penalty of $100,000.

With the knowledge that potential penalties for breaches are higher now, will companies begin spending more on boosting their cyber defences? And will investors react more dramatically to security troubles? What implications will data concerns have for business models?

On Feb 20, Singapore Press Holdings announced that its online forum HardwareZone had been breached and 685,000 users’ email addresses and data stolen. The stock fell 1.1% that day — more than the 0.3% fall in the Straits Times Index. But local investors seem less concerned than foreign investors about security breaches. Shares in online portal Yahoo (now Altaba) declined more than 7% after news of a breach in 2016. Equifax, the US-based consumer credit reporting agency, suffered a loss of 31% after a data breach last year.

Cybersecurity breaches are expensive even without fines. A recent study by market research firm Frost and Sullivan, conducted for Microsoft, found that the average cost of a security incident in Singapore last year was US$447,000 ($600,181). Breaches at large organisations, with more than 200 employees, would tend to result in greater economic losses. Frost and Sullivan estimates that these companies incur an average of US$2.7 million in direct losses and a further US$3.4 million in indirect losses, such as a loss of reputation and customers.

There is also an induced cost of US$7.7 million from the impact on the broader economy such as the loss of jobs. According to the study, more than six in 10 organisations experienced job losses due to security incidents.

With GDPR, the losses are likely to increase significantly. Complaints of non-compliance were filed against Facebook and Google on the first day the law took effect. These complaints could see Facebook fined up to €3.9 billion and Google up to €3.7 billion. Smaller companies, including many of the locally listed small- and medium-sized enterprises, may not have to fork out as much. However, they will feel the pinch just as badly — or perhaps even harder.

Facebook and Google have faced such complaints even after taking measures to comply with the regulation. Facebook has updated its data policy and made its privacy controls easier to find in line with GDPR, and introduced these changes to its users.

“After updating our data policy and making our privacy controls easier to find, we’re now showing people an alert as they visit the news feed so that they can review details about advertising, face recognition and information they’ve chosen to share in their profile. We introduced a similar experience in the EU as part of our preparation for the GDPR, and now we’re making it available everywhere,” says Facebook in a statement.

Google too has been committed to getting in line with GDPR regulations and keeping its customers in line as well. The search giant has provided its cloud customers with guidelines and resources to understand what GDPR means for them.

“Finally, we recognise that the GDPR and privacy legislation will evolve. Our team of lawyers, regulatory compliance experts and ­public policy specialists are committed to working with regulators to understand and address any new requirements or implementation guidance,” says Google in a statement.

“Compliance is central to Google Cloud’s mission of protecting the privacy and security of our customers’ information. We’ll continue our work in this space, and are committed to helping you meet your GDPR compliance needs,” it adds.

Besides the potential fines, there will be other new costs for companies to consider. According to a Citi report published in May, many companies are already rethinking how they use consumer data because the use of such data ­carries higher compliance costs. Advertising-funded business models, in particular, may be at risk. Citi also highlights that the regulatory changes will favour large companies with strong consumer relationships. “It could lead to a shakeout of some industries, and those operating as non-essential third-party suppliers in an overcrowded industry will be most vulnerable,” Citi adds.

Shareholders should therefore start to pay more attention to the data use and protection policies of their portfolio companies. And they should more closely question directors and management at these companies on their data strategies.

This article appeared in Issue 833 (June 4) of The Edge Singapore.

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[SINGAPORE] The shipping industry will this year scrap the largest number of oil tankers in over half-a-decade, driven by weak earnings, firm prices for scrap steel and the need to prepare fleets for strict new environmental regulations.

The surge in scrapping underscores how the sector is grappling with one of its worst-ever crises, hit hard after rates for transporting oil plunged to multi-year lows in the wake of excess tanker supply and tepid demand as Opec production cuts bite.

“The tanker markets are definitely in a trough at the moment, with one of the worst years in a decade in terms of freight rates and returns,” said Ralph Leszczynski, head of research at ship broker Banchero Costa in Singapore.

The tough operating conditions are expected to persist until at least the second-half of 2019, analysts and industry sources said.Estimates on the number of tanker demolitions vary between the four shipping analysts that Reuters spoke to, with the most conservative standing at a seven-year high in 2018.

About 10.3 million deadweight tonnes (DWT) have been sold for demolition from January to April this year, compared with 11.2 million DWT for the whole of 2017 and 2.5 million for 2016, said Erik Broekhuizen, head of tanker research and consulting at ship broker Poten & Partners Inc.

“Opec production cuts are hurting the market, and as long as they are in place, the tanker market will remain challenged,” he said, adding that scrapping had picked up for large vessels in particular.

Since early 2017, members of the Organization of the Petroleum Exporting Countries (Opec), Russia and other non-Opec crude producers have curbed exports to fight a global oil glut.

The imposition of new US sanctions against Iran looks set to further reduce oil flows later in 2018, although Saudi Arabia and Russia have discussed potentially raising output to fill the subsequent void.

More stringent environmental regulations to be implemented by the International Maritime Organisation (IMO) in 2020 will make operating old ships uneconomical, said Mr Leszczynski at Banchero Costa.

Limited interest in using tankers to store oil, which has historically been a profitable option for shipowners during lulls in shipping volumes, is also curbing overall demand, analysts said.

Scrap steel prices in Shanghai, China – the world’s top consumer and producer of the material – have meanwhile nearly doubled from a year ago due to shutdowns of inefficient steel mills amid a widespread crackdown on industrial emissions.

Firms that have recently sent ships for scrapping include India’s Essar Shipping Ltd and Oslo-listed Frontline Ltd. The latter last month reported better earnings than analysts had expected, partly due to its increased scrapping.

The ships being scrapped are also getting younger, with the average age falling to 19.5 years in the first quarter of this year, compared with 2017’s average of 22 years, said Rajesh Verma, an analyst with shipping consultancy Drewry.

Most of the vessels are being scrapped in Bangladesh and India, although Pakistan has also returned to the demolition market after an 18-month ban, analysts said.

The uptick in demolition rates has come despite increased opposition from European regulators due to environmental concerns.

Despite the high scrap rate, tanker earnings will continue to be hit as fleet-growth is still too high, analysts said.

Banchero Costa’s Leszczynski expects the crude tanker fleet to expand 3.3 per cent this year, following growth of 4.6 per cent last year and 5.8 per cent in 2016.

With tanker rates still a long way from being profitable, there’s little prospect of a broad industry improvement until the second half of 2019 at the earliest, said Peter Sand, chief shipping analyst at industry lobby group BIMCO.

“Any recovery in rates in the tanker market will be hinged on the extent of scrapping in the coming years … we expect rates to start recovering in the second half of 2019 if scrapping remains strong,” said Mr Verma at Drewry.

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SINGAPORE (Reuters) – Almost lost in the din of the upcoming U.S-North Korea summit and fresh tension between Washington and Beijing last week, India cemented its diplomatic and security ties across Southeast Asia in a clear challenge to China.

It’s not clear just how far New Delhi will take these relationships, given years of promise, and a general election due in 11 months that could be a distraction for Prime Minister Narendra Modi. And if India is already rattling China, it won’t want to spark open confrontation.

But Modi took several concrete foreign policy and security steps in Southeast Asia in recent days.

He signed an agreement with Indonesia to develop a port in the city of Sabang that would overlook the western entrance to the Strait of Malacca, one of the world’s busiest waterways, and agreed a pact with Singapore on logistical support for naval ships, submarines and military aircraft during visits.

Modi also flew to Kuala Lumpur for a late-scheduled call on Malaysian Prime Minister Mahathir Mohamad, who won last month’s general election, effectively cementing ties with three of the most influential Southeast Asian nations.

On Friday, Modi told the Shangri-La Dialogue in Singapore, Asia’s premier defense forum, that India would work with the Association of South East Asian Nations (ASEAN) to promote a rules-based order in the Indo-Pacific region.

“We will work with them, individually or in formats of three or more, for a stable and peaceful region,” he said in the keynote speech at the forum.

Several delegates, including U.S. Defense Secretary Jim Mattis, voiced support.

At the end of the forum on Sunday, Singapore Defence Minister Ng Eng Hen said: “I am sure many countries are delighted that India has indicated its firm commitment to the region.”

CHINA COOL

The term “Indo-Pacific” has grown in usage across diplomatic and security circles in the United States, Australia, India and Japan in recent years, shorthand for a broader and democratic-led region in place of “Asia-Pacific”, which some people have said places China too firmly at the center.

In a nod to India’s growing regional stature, the U.S. military’s Pacific Command in Hawaii formally changed its name to the U.S. Indo-Pacific Command in a ceremony on Wednesday.

Despite an outward show of friendship between China and India, and Modi’s comments about the strong relations between them, Beijing gave a distinctly cool response to his strategy.

The state-owned Global Times warned in an editorial last week: “If India really seeks military access to the strategic island of Sabang, it might wrongfully entrap itself into a strategic competition with China and eventually burn its own fingers.”

Senior Colonel Zhao Xiaozhou, research fellow at the Institute of War Studies Academy of Military Sciences of the People’s Liberation Army, told reporters on the sidelines of the Shangri-La Dialogue that Modi “made some dedicated comments on what he thought of the Indo-Pacific concept”.

He did not elaborate but the Global Times quoted him as saying: “The Indo-Pacific strategy, and the quasi-alliance between the U.S., Japan, India and Australia will not last long.”

WIDER FOOTPRINT

Indian foreign ministry officials said there was a strong element of self-interest in New Delhi’s efforts to secure open access to the Malacca Strait, since it carries about 60 percent of its foreign trade.

But India’s intended footprint looks to be wider. Late last month, three Indian warships staged exercises with the Vietnamese navy for the first time in the South China Sea, which is claimed almost wholly by China.

Vietnamese submariners are trained in India, while the two sides have significantly increased intelligence sharing and are exploring advanced weapons sales.

To the west, India signed an agreement for access to the port of Duqm on Oman’s southern coast, during a visit by Modi earlier this year. Under the agreement, media reports said, the Indian navy will be able to use the port for logistics and support, allowing it to sustain long-term operations in the western Indian Ocean.

In January, India finalised a logistics exchange arrangement with France under which it can use French military facilities in the Indian Ocean.

Analysts said a more assertive India would answer concerns in Southeast Asia about expanding Chinese influence in the region and a fear that the United States was disengaging.

The United States’ trade spat with China and a perceived U-turn in its foreign policy as it pursues peace with North Korea had shaken many assumptions in the region, they said.

“There is some pressure (in ASEAN) for diversification of security relationships, taking insurances,” said C. Raja Mohan, director of the Institute of South Asian Studies at the National University of Singapore.

“An active India then actually fits into this situation.”

But although Modi has started strongly, it was not clear how well his strategy would be sustained, he added.

“Implementation has always been a major challenge for India. (Modi is) struggling to improve the capacity of Delhi to do things outside borders. There’s been some advance but that is a structural challenge that will remain.”