Media Focus on Multinational Corporations [2022.11.07]




Berkshire Hathaway

Warren Buffett's firm reports $2.7B loss on investment drop
Warren Buffett's company again reported a loss — this time only $2.7 billion — because of a drop in the paper value of its investment portfolio in the third quarter, but most of its operating businesses performed well with the notable exception of Geico.
Berkshire Hathaway reported a quarterly loss Saturday of $2.7 billion, or $1,832 per Class A share. That's down from a $10.3 billion profit, or $6,882 per Class A share, a year ago when the stock market was soaring. In the second quarter of this year, Berkshire reported a $44 billion loss.
Buffett has long said he believes Berkshires operating earnings are a better measure of the companys performance because they exclude investment gains and losses, which can vary widely quarter to quarter. By that measure, Berkshires operating earnings jumped 20% to $7.76 billion, or $5,293.83 per Class A share. That's up from $6.47 billion, or $4,330.60 per Class A share.
The four analysts surveyed by FactSet expected Berkshire to report operating earnings per Class A share of $4,205.82 on average.
Berkshire said its revenue grew 9% to $76.9 billion.

Twitter begins layoffs, cuts to affect 50% of staff
Twitter began layoffs on Friday that will cut roughly half of its 7,500-person workforce, the company announced in an email.
“Today is your last working day at the company,” the email said, which ABC News has reviewed. The subject line read “Your Role at Twitter” and was sent to the personal email addresses of those laid off.
The email reiterated that about 50% of the workforce at Twitter has been impacted.
Those laid off will remain employed by Twitter and receive compensation and benefits until the first week of January 2023, though the date may vary for employees. Affected employees were already locked out of their Twitter systems, such as email and Slack.
These employees should receive their non-negotiable severance offer within the week, the email said. At that time, they will be required to hand in their badges and company laptops or computers.

China National Offshore Oil Corp further expands with global peers
China National Offshore Oil Corp said its purchase agreements signed at the China International Import Expo (CIIE) during the past five years have accumulated to $50 billion, which illustrates the company's determination in stepping up international cooperation, the company said on Sunday.
The company has signed purchase agreements with 18 global suppliers during the ongoing fifth China International Import Expo (CIIE), the company said on Sunday.
This is the fifth year the company participated in the CIIE, it said.
The company, currently the country's largest offshore oil and gas producer, has so far signed 230 foreign cooperation contracts with 81 international oil companies during the past four decades. It has attracted more than 250 billion yuan of foreign investment and, meanwhile, offshore oil and gas has long been among the industries that attract the most foreign investment in China, it said.
CNOOC has accumulated rich experiences in expanding global cooperation during the past forty years of development and the company is willing to further expand cooperation with global peers in the years to come, said Wang Dongjin, chairman of CNOOC.

ConocoPhillips China
ConocoPhillips China, CNOOC Limited announce windfarm project
The Penglai offshore wind farm pilot project signing ceremony is held during the fifth China International Import Expo in Shanghai on Nov 6, 2022. [Photo/]
ConocoPhillips China Inc and CNOOC Limited announced the commencement of the Penglai offshore windfarm pilot project on Sunday during the fifth China International Import Expo held in Shanghai.
As a joint low carbon energy development effort, the project will harness wind energy to supply power to the Penglai oilfield, China's largest offshore oil and gas production base under a production-sharing contract, located in Bohai Bay, Northeast China.
'This pilot project represents a first-of-its-kind integration of offshore wind power being harnessed solely for offshore oil and gas facilities in China,' said Bill Arnold, President of ConocoPhillips China Inc.
'We believe it will become a benchmark for future low carbon emission offshore oilfield developments'.
The newly launched wind farm project offers an optimal solution in meeting the Penglai oilfield's power demand, which is expected to increase year by year as development continues, said the company.
Featuring four wind turbines with a total installed capacity of 34 MW, the wind farm will have the potential to cover over 30 percent of the power needed for the Penglai oilfield's operations at full capacity and achieve tens of thousands of tons of annual carbon dioxide reductions, it said.
In addition to offshore wind power, the two companies are closely evaluating opportunities in power from the shore, as well as carbon capture and storage (CCS) and carbon capture, utilization and storage (CCUS).
If proven to be technically and economically viable, these low carbon energy solutions will help transform Penglai into a net-zero offshore oilfield, in line with China's energy, sustainable development and carbon neutrality goals, said ConocoPhillips China Inc.

Shell buys Asia-based waste oil recycler to boost biofuels output
Shell has acquired Singapore-registered waste oil recycling firm EcoOils via wholly-owned subsidiary Shell Eastern Petroleum for an undisclosed fee, said Reuters.
This acquisition is part of Shell’s ambition to increase production of sustainable low carbon fuels for transport, including sustainable aviation fuel, it said in a statement. The deal includes all of EcoOils' Malaysian subsidiaries and 90% of its Indonesian subsidiary, Shell said.
EcoOils' operations include five plants with a current production capacity of 65,000 tonnes/year of spent bleaching earth oil. EcoOils uses its technology to recycle the waste material and produce spent bleaching earth oil, an advanced biofuels feedstock that can then be used to produce sustainable low carbon fuels.
By 2030, Shell aims to have at least 10% of its global aviation fuel sales as sustainable aviation fuel. Sustainable aviation fuel currently accounts for around 0.1% of global aviation fuel.

ExxonMobil going deeper for sweet oil in Guyana’s Stabroek Block – Kaieteur News
ExxonMobil Corporation is hoping to tally additional oil strikes in the Stabroek Block for the fourth quarter of 2022 with new exploration wells targeting deeper sands.
Making this revelation was its partner in the offshore concession, Hess Corporation. The company said the new exploration wells will be at Fish-1, Fish-2 and Lancetfish-1. Hess Corporation’s Chief Executive Officer (CEO), John Hess recently advised the market that Lancetfish is east of its Fangtooth discovery made in January, 2022. Additionally, it was noted that Lancetfish is tucked close to the Liza field, about three miles west of the Liza-1 well to be exact and is targeting deep sands that underlie that Liza complex.
Hess said Fish-1 and Fish-2 are a reasonable distance to the West and Northwest of Fangtooth. “So, there’s a lot of prospectivity to come. As we get more success in finding these deeper horizons, our ability to correlate the seismic new prospects are lighting up. Hopefully in the next six months we’ll be able to give updates on that,” the Hess Boss noted.
Hess Officials were also keen to note that the deep sands in Stabroek are very promising, adding that Exxon will certainly be encouraged to continue its exploration programme in the deeper plains.
Exxon’s latest discoveries in the Stabroek Block were at Sailfin-1 and Yarrow-1.
Thus far, two floating production storage and offloading (FPSO) vessels operating offshore Guyana — Liza Destiny and Liza Unity — have exceeded their initial combined production target of 340,000 barrels of oil per day.
A third project, Payara, is expected to produce 220,000 barrels per day. Construction on its production vessel, the Prosperity FPSO, is approximately five months ahead of schedule with start-up likely before year-end 2023.
The fourth project, Yellowtail, is expected to produce 250,000 barrels per day when the ONE GUYANA FPSO comes online in 2025.
Guyana’s Stabroek block is 6.6 million acres (26,800 square kilometres). ExxonMobil affiliate Esso Exploration and Production Guyana Limited is the operator and holds 45 percent interest in the block. Hess Guyana Exploration Ltd. holds 30 percent interest.

Pemex’s $1.79-bln Lakach project receives approval
Pemex has been given the green light to develop the abandoned Lakach deepwater natural gas project in the Gulf of Mexico, the Mexican hydrocarbons regulator decided on Monday.
The revamped plan approved by the National Hydrocarbons Commission (CNH) will see Pemex put USD 1.79 billion towards the asset, with USD 1.47 billion earmarked for development activities. The original plan’s estimated cost was USD 1.5 billion.
According to the CNH, USD 149 million will be put towards production and USD 170 million for decommissioning activities.
Pemex partnered with US energy company New Fortress Energy in July 2022 for joint development of the project.
Expected date of completion and production capacity levels were not disclosed.
The Lakach gasfield was discovered by Pemex in 2007 and sits 98 kilometres southeast of Veracruz in water depths of between 900 metres and 1,200 metres.
It is one of the largest non-associated gasfields in the Gulf of Mexico, with reserves of 28.3 bcm (1.1 tcf). Combined with the nearby undeveloped Kunah and Piklis fields, the area holds reserves of 93.5 bcm (3.3 tcf).
Pemex halted the original project in 2016 to reallocate spending.

German Tech Firm To Launch $25,000 Solar Car Next Year
First, there were electric vehicles (EVs), and then there were hydrogen fuel cell vehicles (HFCVs), could the next innovation be solar-powered vehicles? According to one German company, solar cars are just around the corner with a release date set for 2023. While powering a car with the sun has long been talked about, Sono Motors appears to be the nearest to making this dream a reality, and at an affordable price.
German automotive firm Sono Motors expects to release its first commercially available solar-powered EV, the Sion, in Europe in mid-2023. The car is also set to tour the U.S. to establish a potential market for the vehicle in North America. The Sion will be priced at $25,000, making it significantly more affordable than many EVs. It requires 465 integrated solar half-cells on its exterior to provide its power and it is expected to run for 70 miles a week on solar power alone. The new solar car is fitted with a lithium iron phosphate battery for longer journeys, giving it a 190-mile range, with the ability to charge it to 80 percent in 35 minutes using a fast-charging station.
Sono announced that it already has 42,000 reservations for the Sion in Europe, and it hopes to produce 257,000 of the model by the end of the decade. The automotive firm cut costs in manufacturing by offering only a black version of the car and will further reduce costs by following a direct online sales model. Further, it is fitted with an aluminium space frame instead of steel to cut costs and requires no paint due to its extensive solar panelling.
The solar panels used by Sono use a polymer-based solar technology that is still under development. CEO Laurin Hahn explains, ″We have several patents, over 30 patents on that… And it’s a big difference because all other companies who try to integrate solar are using mostly glass. Glass is heavy, slow in production and very cost expensive.” The car will also be fitted with a dashboard app that offers the driver information on the power status and when to charge. It will also have the ability to charge other electrical devices, even other EVs. Hahn believes that fitting EVs with solar panels will become the norm in the future, as it does not add a significant cost to the manufacturing process, and it can diversify the car’s renewable power sources.
But Sono is not the only company hoping to power vehicles with solar panels, as several companies around the world have released prototypes and concept cars boasting solar power capabilities. In June this year, Dutch startup Lightyear announced its Lightyear 0 EV, fitted with 5m2 of solar panels across its roof, bonnet, and boot for additional charging while driving. The car can be powered at a traditional EV charging station and receives additional power from the sun, with a range of up to 40 miles per day from solar power and a 388-mile range from a traditional charge. Lightyear expects a sale price for the car to be around $247,000.

ConocoPhillips signs up for QatarEnergy’s North Field South LNG expansion
Qatar’s state-owned oil and gas company QatarEnergy has selected the US energy giant ConocoPhillips as its third and final international partner in the North Field South (NFS) expansion project.
The NFS project comprises two liquefied natural gas (LNG) mega trains with a combined capacity of 16 million tons per annum (Mtpa).
Under the partnership agreement, ConocoPhillips will have an effective net participating interest of 6.25% in the NFS project, out of a 25% interest available for international partners. QatarEnergy will hold the remaining 75% interest.
As reported previously by Offshore Energy, the other two international partners in this project are energy majors TotalEnergies and Shell.

SABIC posts 67% fall in Q3 profit on higher costs, impairment
Saudi petrochemicals major SABIC posted a 67.1% year-on-year drop in its third quarter net profit on the back of higher costs despite an increase in sales volumes, said Reuters.
The company's third-quarter net income was weighed by higher cost of sales and an increase in selling and distribution costs, SABIC said in a filing to the Saudi bourse, Tadawul on 30 October.
The company said that an impairment provision of SR510m 'was recognised in financial assets', without elaborating further.
On a quarter-on-quarter basis, SABIC's net profit fell by 76.8% in July-September this year as sales dropped by 16.3% amid lower selling prices.
The average sales prices in the third quarter of 2022 decreased by 15% compared with the second quarter, it said.
Sales volumes also decreased by 1% in the third quarter of 2022 compared with the second quarter.
For the first nine months of this year, SABIC said that the year-on-year drop in its net income was due to the rise in costs and higher feedstock prices, on top of higher selling and distribution costs.

Saudi Aramco
The World’s Largest Oil Company Posts Record-High Free Cash Flow
Saudi Aramco posted a 39% yearly surge in net income for the third quarter and generated record free cash flow as higher oil prices and higher production helped it beat the analyst consensus.
Aramco, the world’s biggest oil firm in terms of both production and market capitalization, said on Tuesday that its third-quarter net income jumped by 39% year over year to $42.4 billion, while free cash flow surged to a record
$45.0 billion from $28.7 billion for the third quarter of 2021.
The profit from this past quarter is Aramco’s second-highest as a listed company, following the record $48.4 billion net income for the second quarter this year.
“Market conditions slightly softened in the third quarter as continued economic uncertainty driven by inflationary pressures slowed crude oil demand growth. Despite this, Aramco delivered strong earnings and record free cash flow reflecting its ability to generate significant value through its low-cost Upstream production and strategically integrated Downstream business,” Aramco said in a statement.
“While global crude oil prices during this period were affected by continued economic uncertainty, our longterm view is that oil demand will continue to grow for the rest of the decade given the world’s need for more affordable and reliable energy,” Aramco’s president and CEO Amin Nasser said, commenting on the Q3 results.
The top executive of the Saudi state oil giant also noted that “Against the backdrop of global underinvestment in our sector, we are extending our long-term oil and gas production capabilities while also working towards our previously stated ambition to achieve net-zero Scope 1 and Scope 2 greenhouse gas emissions from our wholly-owned operated assets.”
Aramco declared a cash dividend of $18.76 billion for the third quarter, in line with its dividend policy to pay shareholders, the biggest of which with 98% is the Kingdom of Saudi Arabia.
With robust profit and record free cash flow, Aramco joins the international majors who reported strong and – in some cases – record earnings for the third quarter.

BP Boosts Buybacks As Q3 Profit Doubles To $8.2 Billion
BP announced a further $2.5 billion share buyback after more than doubling its Q3 profit from a year earlier, thanks to what it described as an “exceptional” gas marketing and trading result and higher gas realizations.  
BP joined other international oil and gas majors in reporting very strong earnings after it reported on Tuesday an underlying replacement cost profit - its metric for net profit - of $8.2 billion for the third quarter. This was slightly lower than the $8.5 billion for the previous quarter, which saw the highest quarterly profit for BP in over a decade, but more than double the $3.3 billion in earnings for the third quarter of 2021.
“Compared to the second quarter, the result was impacted by weaker refining margins, an average oil trading result and lower liquids realizations, partly offset by an exceptional gas marketing and trading result and higher gas realizations,” the UK supermajor said in a statement. BP said its oil trading performance in Q3 was “average” after an “exceptional” result in Q2.
“Net debt fell for the tenth successive quarter; we are investing with discipline; and we are delivering on our commitment to shareholder distributions – announcing a further $2.5 billion share buyback,” chief financial officer Murray Auchincloss said.
Chief executive officer Bernard Looney said, “This quarter’s results reflect us continuing to perform while transforming. We remain focused on helping to solve the energy trilemma – secure, affordable and lower carbon energy. We are providing the oil and gas the world needs today – while at the same time - investing to accelerate the energy transition.”
Based on BP’s current forecasts, at around $60 per barrel Brent and subject to the board’s discretion each quarter, BP continues to expect to be able to deliver share buybacks of around $4.0 billion annually and have the capacity for an annual increase in the dividend of around 4% through 2025.
BP, the last of Big Oil to report earnings for Q3.

Sinomach signs 19 purchase agreements at 5th CIIE
China National Machinery Industry Corporation, or Sinomach, has signed 19 purchase agreements with a total contract worth $2.03 billion during the fifth China International Import Expo (CIIE) in Shanghai, the company announced on Sunday.
Sinomach has signed contracts with 19 cooperative partners from across the globe, including Japan's Marubeni Techno-Systems Corporation and Germany's Rolls-Royce Power System AG, with purchasing categories covering technology and equipment, bulk commodities, green energy conservation and other manufacturing-related businesses, the Beijing-headquartered State-owned enterprise said in a statement.
This is the fifth year the group has participated in the CIIE, with an accumulated purchase amount reaching nearly $17 billion in 61 big-ticket deals over the past four CIIEs, the company said.
Thanks to the joint efforts of both Sinomach and its partners, a number of signed agreements have been effectively implemented. They have not only achieved win-win results for both sides, but also promoted the energy reform of domestic companies from manufacturing sector, boosted the transformation and upgrading of related industries, and ensured the stability of industrial and supply chains in China, said the statement.

Huaneng Group 
China Huaneng Group signs multiple agreements to promote clean development
China Huaneng Group has signed 14 purchase agreements with a total contract worth of almost 2.9 billion yuan ($403.7 million) during the fifth China International Import Expo (CIIE), the company said on Sunday.
The purchase agreements; signed with cooperation partners including Hitachi Energy, Schaeffler and Exxon Mobil; cover intelligent high-end equipment and bulk commodities, and the products purchased will be applied to projects in Yunnan, Sichuan, Gansu and Inner Mongolia autonomous region to better promote clean development in the regions, it said.
According to Wen Shugang, chairman of China Huaneng Group, the company will continuously step up international cooperation on energy towards better energy security.
This is the fifth year the company participated in the CIIE, it said.

COFCO Group signs large purchase contracts with multiple foreign partners
COFCO Group, China's largest foodstuff producer and grain trader by sales revenue, has signed over $10 billion worth of purchase contracts with various foreign partners during the fifth China International Import Expo (CIIE) in Shanghai, the company said on Sunday.
In addition to importing edible oil, sugar, meat, alcohol and dairy products from overseas markets, the company purchased grain and bulk commodities such as wheat, corn, sorghum and cotton to meet the demand of domestic food processing enterprises. It will introduce high-quality agricultural and grain products with different tastes from more regions around the world into the home market, the Beijing-headquartered State-owned enterprise said in a statement.
These foodstuff and agricultural products will be supplied from countries including Thailand, Cambodia, the United States, Canada, Australia, France, Kazakhstan, Russia and Brazil, said Luan Richeng, COFCO's president.
This is the fifth year the company has participated in the CIIE, said the statement.

Silkwings Jet
Silkwings Jet officially established in China
Silkwings Jet, the first business aviation joint venture between Chinese and French investors, was officially established on Friday in Hangzhou, Zhejiang province, and the corporate jet operator is hoped to serve as a silk road in the air, said its executives.
Different from conventional operation, the Hangzhou-based JV will adopt a jet sharing program mode that provides tailor-made private flight solutions according to the varied requirements of their customers.
'Silkwings Jet is targeting the shared ownership business aviation market, a choice that will provide future owners of these aircrafts with the highest level of service, at an optimized cost,' said Joan Valadou, Consul General of France in Shanghai.
'By sharing the cost with more people, you do not have to be a millionaire to enjoy the safe and efficient service of business jets,' said Wei Yan, vice-chairman and partner of Silkwings Jet.
Given the similar economic scale of China and the US, the gap means great market prospects for business jet consumption, added Wei.

Bristol Myers Squibb
Bristol Myers Squibb keen to contribute more to China's development
US-based pharmaceutical company Bristol Myers Squibb has brought 12 innovations in the areas of oncology, hematology, and immunology to the ongoing 5th China international Import Expo and will continue to help patients with unmet needs in China by introducing up to 30 innovative medicines or indications by 2025, said its China president.
'The 5th CIIE fully demonstrates China's firm determination to further open up and share market opportunities with the world,' said Chen Siyuan, president and general manager of BMS China.
'It also brings strong confidence to multinational enterprises like Bristol Myers Squibb, which will continue to contribute to China's economic development. The act of increasing imports fully showcases China's responsibilities as a major country and reflects its commitment to building a community with a shared future for mankind.'
China is now the second largest pharmaceutical market in the world and has been making efforts, including increasing patient needs and expanding healthcare infrastructure and regulatory and reimbursement reforms, that open the door for innovative medicines to reach more patients who urgently need them, Chen added.
As such, Bristol Myer Squibb, the first Sino-US pharmaceutical joint venture following China's move to enact reform and opening-up, will ride the current momentum and continue to drive innovation and increase investments in the country over the next 10 years, Chen said.
The company is planning to bring up to 30 innovative medicines or indications to China by 2025 and will be keenly involved in global early development programs to achieve simultaneous development in the areas of high unmet needs in China.
'We are also advancing our commitment to broadening patient access in the multi-layer medical security system of China and striving to become a trusted partner in the healthcare ecosystem in China,' she said.

Over 320m Huawei devices equipped with HarmonyOS
The number of Huawei devices equipped with HarmonyOS, the operating system developed by Chinese telecom giant Huawei, has exceeded 320 million, up 113 percent year-on-year, the company said on Friday.
On Friday afternoon, the company held its Huawei Developer Conference in Dongguan, South China's Guangdong province. The HarmonyOS operating system has matured gradually and has become an ecological base with vitality after four years of development, according to the company.
HarmonyOS, or Hongmeng in Chinese, is an open-source operating system designed for various devices and scenarios, including intelligent screens, tablets, wearables and cars. It was first launched in August 2019.

Lenovo delivers 10th straight quarter of improved profitability
Lenovo Group announced on Wednesday that its profitability was improving year-on-year for the 10th consecutive quarter, as its net income from July to September grew 6 percent year-on-year to $541 million (3.9 billion yuan).
Lenovo said its revenue also grew to $17.1 billion, up 3 percent year-on-year in constant currency, as its non-PC business achieved a robust performance despite challenges.
Yang Yuanqing, chairman and CEO of Lenovo, said, 'Our non-PC businesses are gaining momentum and now represent more than 37 percent of our revenue. Both solutions and services business and infrastructure business saw high double-digit revenue growth year on year.'
'For Lenovo, these results prove that our strategic foresight, operational resilience, and consistent investment in diversified growth engines, have prepared us well for challenging times. Whether our traditional markets are booming or contracting, Lenovo consistently delivers on its commitments and outperforms market expectations,' Yang said.
According to Lenovo, all main businesses contributed positive operating profit, demonstrating further progress towards the company's goal of doubling profitability in the medium-term. Lenovo also highlighted that its healthy cash balance means it remains committed to doubling investments in research and development in the medium-term, having grown R&D spending 15 percent year-on-year in the quarter.
While current external challenges persist, Lenovo said it remains agile and focused on pursuing its strategy and ensuring ongoing profitability by rebalancing resources towards its diversified growth engines and driving efficiencies and expense reduction through the business.

Boeing, GAMECO start delivery of 767-300BCF completed in China
The first 767-300 Boeing Converted Freighter (BCF) completed at the production line in China has been delivered, according to Boeing China.
Boeing and Guangzhou Aircraft Maintenance Engineering Co Ltd (GAMECO) jointly carried out the 767-300BCF project in south China's Guangzhou. The two sides will advance the production and delivery of more such converted freighters, according to Boeing China.
The 767-300BCF is a medium-widebody freighter that will mainly serve air cargo delivery for long-range and regional markets.
GAMECO is currently operating five production lines for converting retired passenger aircraft to freighters, of which two production lines are for 767-300BCF and three for 737-800BCF standard-body freighters.
China's booming air cargo market, sustained by the ever-increasing e-commerce sector, is expected to see its freighter fleet reach more than 800 airplanes through 2041, according to the Boeing 2022 Commercial Market Outlook for China.