1 Saudi Arabia to sell oil assets to create $2trn
wealth fund (Terry Macalister in The Guardian) Saudi Arabia is planning to
establish a $2tn sovereign wealth fund by selling off its state petroleum
assets in preparation for a world beyond oil.
Greenpeace said it was a pivotal moment akin to
Switzerland abandoning banking, but others claimed Riyadh had long wanted to
diversify its economy and spread its wealth though it had failed to do so. If
the fund was built up to $2tn, it would be more than double Norway’s sovereign
wealth fund, regarded as the largest in the world by assets.
The move was revealed by the country’s powerful
deputy crown prince, Mohammad bin Salman, and would mean the desert kingdom
using its public investment fund (PIF) to buy up strategic financial and
industrial assets abroad.
The sale of a first tranche of shares to private
investors via an initial public offering (IPO) in the state-owned Saudi Aramco
could start as soon as next year, with the eventual aim of being big enough to
potentially buy some of the world’s largest companies such as Apple and
Google’s parent, Alphabet.
Plans to allow foreign investors to buy shares in
Saudi Aramco, the holder of the country’s oil wealth, were first revealed in
January. Analysts have struggled to put a value on the entire business, but say
it could be worth anything from $1tn to $10tn, the former being the combined
value of Apple and Alphabet.
2 Brazil’s Petrobras to cut 12,000 jobs (BBC) Brazil's
state-run oil producer, Petrobras, has said it will cut 12,000 jobs by 2020. The
voluntary layoff programme will help save $9bn at the company, which has
struggled with losses following a price-fixing and bribery scandal. It has also
been hit by the global slump in the price of oil.
Petrobras, which has reported losses for the last
two financial years, is expected to spend $1.23bn on implementing the job cuts
plan. Petrobras has long been one of the biggest employers in Brazil, with more
than 80,000 employees.
However, it has seen its business hit by the huge
falls in oil prices globally and one of the biggest corruption scandals in the
country's history, which has gone to the heart of the country's government. The
announcement that 12,000 jobs are to be cut over the next five years is part of
a investment plan to turn around the company's fortunes.
3 Chinese dams and the Southeast Asian drought (San
Francisco Chronicle) As China opened one of its six dams on the upper Mekong
River last month to help parched Southeast Asian countries down river cope with
a record drought, it was hailed as benevolent water diplomacy.
But to critics of hydroelectric dams built on the
Mekong over the concerns of governments and activists, it was the self-serving
act of a country that, along with hydropower-exporting Laos, has helped worsen
the region's water and environmental problems.
Much of Southeast Asia is suffering its worst
drought in 20 or more years. Tens of millions of people in the region are
affected by the low level of the Mekong, a rice-bowl-sustaining river system
that flows into Laos, Thailand, Cambodia and Vietnam.
Fresh water is running short for hundreds of
thousands of people in Vietnam and Cambodia, and reduced water for irrigation
has hurt agriculture, particularly rice growing in Thailand, where land under
cultivation is being cut significantly this year.
Vietnam estimates that 400,000 hectares have been
affected by saltwater intrusion, with some 166,000 hectares rendered infertile.
The affected land accounts for nearly 10 percent of the country's paddy
cultivation area in the Mekong Delta, its main rice-growing region. The water
level in the Tonle Sap river as it passes the royal palace in Cambodia's
capital, Phnom Penh, has fallen to a 50-year low.
Fingers are mainly pointed at the El Nino climate
phenomenon, which produces drier and hotter-than-usual weather globally. But
environmentalists and some officials say the situation is worsened by the 10
dams on the Mekong's mainstream built over the past two decades.
The Chinese move was hailed as progress because it
was the first time it had notified downstream countries of its plans for the
Mekong's water level. But it also underlined the power China holds over a
shared life-sustaining resource and the Mekong environment overall.
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