China Plays Down South China Sea Exercises

By Reuters 2015-07-25 21:22:47

The Chinese navy played down recent military drills in the South China Sea and criticized other countries for “illegally” occupying islands in the area, the official Xinhua news service reported on Saturday.

China has launched a naval drill in waters to the east of Hainan Island, a largely unpopulated region of reefs and shoals in which a number of countries maintain contradictory and overlapping territorial claims.

“Holding sea drills is a common practice for navies with various countries. The annual drill by the Chinese navy aims to test the troops’ real combat abilities, boost their maneuverability, search and rescue power and the abilities to fulfil diversified military missions,” Xinhua quoted Chinese navy spokesperson Liang Yang saying.

China’s recent assertiveness in the South China Sea has increased military and diplomatic tensions between it and rival claimants including Vietnam, the Philippines, Brunei, Malaysia and Taiwan.

China’s naval stance also clashes with the air and sea movements of units of the U.S. Pacific Fleet, which aims to protect sea lanes critical to U.S. trade with Southeast Asia and the oil-rich Middle East.

Beijing has been building up uninhabited reefs in the area in recent months, constructing airports, defenses systems and even civilian administrations on rocks with no access to fresh water but seen as bolstering legal arguments around its territorial claims by converting uninhabitable reef into defended, populated Chinese islands.

The United Nations Convention on Laws of the Sea says countries can’t claim sovereignty over land masses submerged by tides or previously submerged but which have been raised above high tide levels by construction.

China has also approved guidelines that would make civilian vessels quickly convertible for military use, according to state media. Many of China’s confrontations with neighbors have been conducted with a mixture of military and civilian vessels, including fishing boats.

Other claimants have also built facilities on reefs, they claim.

“Some neighboring countries have long been illegally occupying some of the islands, building facilities there such as airports and even deploying heavy offensive weapons,” Liang said.

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China says U.S. Trying to Influence Philippines’ Case

By Reuters 2015-07-24 19:04:41

China’s Foreign Ministry said on Friday the United States was trying to influence a South China Sea arbitration case filed by the Philippines after a senior U.S. official said China would be obligated to abide by the tribunal’s decision.

China has for years insisted that disputes with rival claimants to the South China Sea be handled bilaterally.

But this month, its claims came under international legal scrutiny for the first time when the Permanent Court of Arbitration in The Hague began hearing a suit the Philippines filed in 2013.

China has refused to take part in the case.

U.S. Assistant Secretary of State Daniel Russel told a conference in Washington this week that as both Beijing and Manila are signatories to the U.N. Convention on the Law of the Sea, legally they have to abide by the tribunal’s decision.

China issued a position paper in December arguing the dispute was not covered by the treaty because it was ultimately a matter of sovereignty, not exploitation rights, and the Foreign Ministry said it stood by that.

“Attempting to push forward the arbitration unilaterally initiated by the Philippines, the U.S. side just acts like an ‘arbiter outside the tribunal’, designating the direction for the arbitral tribunal established at the request of the Philippines,” it said.

“This is inconsistent with the position the U.S. side claims to uphold on issues concerning the South China Sea disputes,” the ministry added, calling on Washington to live up to its promises and not take sides.

China claims almost the entire South China Sea, believed to be rich in energy deposits, where about $5 trillion in ship-borne goods pass every year. Brunei, Malaysia, the Philippines, Vietnam and Taiwan also have conflicting claims.

China has become increasingly assertive in the South China Sea with rapid reclamation around reefs in the Spratly archipelago in particular sparking concern, both in the region and in the United States.

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Iran Already Making Shipping and Oil Deals

By MarEx 2015-07-24 18:44:46

Iran has outlined plans to rebuild its main industries and trade relationships following its nuclear agreement with world powers.

According to the agreement, all economic and financial sanctions against Iran will be removed and all bans on Iran’s Central Bank, shipping, oil industry and many other companies will be lifted.

Container Shipping

An Iranian official has already indicated that the French shipping company CMA CGM is arranging to start calling at the southern Iranian port Shahid Rajaei, reports Iran Daily.

Ebrahim Idani, director general of Hormozgan Ports and Maritime Department, indicated that CMA CGM’s Andromeda will be the first container ship to berth at the port as a result of the lift in sanctions. It is anticipated to arrive in early August with 11,500 teu of containers.

Idani stated that the Andromeda has already started its journey from the Far East and is bound for the Persian Gulf. He also said that recent developments at Shahid Rajaei port mean it is suitable for large container vessels. The port is equipped with 18 gantry cranes and 41 docks, making it the biggest and most modern container port in Iran.

Oil and Gas

Iran is also targeting oil and gas projects worth $185 billion by 2020.

Iran’s Minister of Industry, Mines and Trade Mohammad Reza Nematzadeh said the Islamic Republic would focus on its oil and gas, metals and car industries with an eye to exporting to Europe after sanctions have been lifted, rather than simply importing Western technology.

“We are looking for a two-way trade as well as cooperation in development, design and engineering,” Nematzadeh told a conference in Vienna.

“We are no longer interested in a unidirectional importation of goods and machinery from Europe,” he said.

Global Interest

Many European companies have already shown interest in reestablishing business in Iran, with Germany sending its economy minister Sigmar Gabriel on the first top level government visit to Tehran in 13 years together with a delegation of leading business figures.

Iran’s deputy oil minister for commerce and international affairs, Hossein Zamaninia, said Tehran had identified nearly 50 oil and gas projects worth $185 billion that it hoped to sign by 2020. OPEC-member Iran has the world’s largest gas reserves and is fourth on the global list of top oil reserves holders.

In preparation for negotiations with possible foreign partners, Zamaninia said Iran had defined a new model contract which it calls its integrated petroleum contract (IPC).

“This model contract addresses some of the deficiencies of the old buyback contract and it further aligns the short- and long-term interests of parties involved,” he said.

He said the deals would last 20-25 years – much longer than the previously less popular buybacks, which effectively were fee paying deals with global oil majors such as France’s Total for services they performed on Iranian oil fields.

He said Iran would introduce the projects it has identified and the new contract model within 2-3 months.

Projects Approved

Deputy Economy Minister Mohammad Khazaei said Iran had already completed negotiations with some European companies wanting to invest in the country.

“We are recently witnessing the return of European investors to the country. Some of these negotiations have concluded, and we have approved and granted them the foreign investment licences and protections,” Khazaei told the conference.

“Even in the past couple of weeks we have approved more than $2 billion of projects in Iran by European companies,” he said, without naming the firms or providing further details.

Most European oil majors and oil service companies have so far expressed caution about the prospects of a windfall of deals in Iran, saying their compliance departments will want to first see sanctions being fully removed before any meaningful work can start on projects.

Looking for Joint Ventures

Beyond oil, Nematzadeh said Iran was looking to move away from state ownership in many sectors, creating joint ventures for auto parts manufacturers with the aim to produce 3 million vehicles by 2025, of which a third would be exported.

Central bank deputy governor Akbar Komijani said Iran’s financial sector was offering opportunities for cooperation between domestic banks and foreign investors.

Nematzadeh said Iran aimed to join the World Trade Organization once political obstacles were removed and would be interested in trade deals with Europe and central Asian countries.

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Shell BG Merger Gets Brazilian Clearance

By MarEx 2015-07-24 17:50:02

Royal Dutch Shell has announced that its recommended combination with BG Group has received unconditional merger clearance from the Brazilian competition authority (CADE), satisfying the first of the pre‐conditions to the combination. Other pre‐conditions include merger clearances in Australia, China and Europe.

Commenting on CADE clearance Shell CEO, Ben van Beurden, said: “The addition of BG’s competitive deep water Brazil position to Shell’s global portfolio is one of the main strategic drivers for the combination. Securing CADE approval at this early stage is a significant deal milestone and reflects not only Shell’s thorough preparation but also the professionalism and efficiency of the Brazilian authorities.”

Following comments made in June, when the recommended combination cleared its first anti-trust hurdle in the United States, van Beurden also re‐confirmed the filing process is well underway in the remaining pre‐conditional and other jurisdictions, and the recommended combination remains on track to complete in early 2016. The pre‐conditions and conditions to the combination are set out in the April 8 deal announcement.

Shell’s deal with BG Group to buy the UK-based company is worth £47 billion ($69.6 billion) in cash and shares.

Since taking over Shell in 2014, van Beurden had been trying to cut costs, and the deal is expected to enable the two oil and gas companies to reduce costs at a time when the industry is suffering from prolonged low oil prices.

Shell is one of the world’s largest energy producers, with a market value of about $192 billion.

Buying BG will add to Shell’s proven oil and gas reserves by 25 percent and to production by 20 percent, including BG’s offshore oil fields in Brazil’s Santos Basin, natural gas reserves in East Africa and the Queensland Curtis LNG project in Australia.

By applying its capabilities to BG’s assets, Shell believes that, by around 2020, the combined group will have two strategic growth businesses – deep water and integrated gas – that could potentially each generate $15-$20 billion in cash flow per annum. It will also have upstream and downstream capacity to generate a further combined $15-$20 billion in cash flow per annum.

With BG, Shell would be the leading foreign oil company in Brazil.

Shell is also expected to surpass Exxon as the world’s largest publicly traded oil and gas producer by 2018, with output of 4.2 million barrels of oil equivalent per day.

Global LNG production was 246 million tons last year. The new Shell-BG group would have 18 percent of world output.

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Shell‐BG Merger Gets Brazilian Clearance

By MarEx 2015-07-24 17:50:02

Royal Dutch Shell has announced that its recommended combination with BG Group has received unconditional merger clearance from the Brazilian competition authority (CADE), satisfying the first of the pre‐conditions to the combination. Other pre‐conditions include merger clearances in Australia, China and Europe.

Commenting on CADE clearance Shell CEO, Ben van Beurden, said: “The addition of BG’s competitive deep water Brazil position to Shell’s global portfolio is one of the main strategic drivers for the combination. Securing CADE approval at this early stage is a significant deal milestone and reflects not only Shell’s thorough preparation but also the professionalism and efficiency of the Brazilian authorities.”

Following comments made in June, when the recommended combination cleared its first anti-trust hurdle in the United States, van Beurden also re‐confirmed the filing process is well underway in the remaining pre‐conditional and other jurisdictions, and the recommended combination remains on track to complete in early 2016. The pre‐conditions and conditions to the combination are set out in the April 8 deal announcement.

Shell’s deal with BG Group to buy the UK-based company is worth £47 billion ($69.6 billion) in cash and shares.

Since taking over Shell in 2014, van Beurden had been trying to cut costs, and the deal is expected to enable the two oil and gas companies to reduce costs at a time when the industry is suffering from prolonged low oil prices.

Shell is one of the world’s largest energy producers, with a market value of about $192 billion.

Buying BG will add to Shell’s proven oil and gas reserves by 25 percent and to production by 20 percent, including BG’s offshore oil fields in Brazil’s Santos Basin, natural gas reserves in East Africa and the Queensland Curtis LNG project in Australia.

By applying its capabilities to BG’s assets, Shell believes that, by around 2020, the combined group will have two strategic growth businesses – deep water and integrated gas – that could potentially each generate $15-$20 billion in cash flow per annum. It will also have upstream and downstream capacity to generate a further combined $15-$20 billion in cash flow per annum.

With BG, Shell would be the leading foreign oil company in Brazil.

Shell is also expected to surpass Exxon as the world’s largest publicly traded oil and gas producer by 2018, with output of 4.2 million barrels of oil equivalent per day.

Global LNG production was 246 million tons last year. The new Shell-BG group would have 18 percent of world output.

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U.S. Representative Seeks To Honor Merchant Marines

By MarEx 2015-07-24 15:55:41

U.S. Representative Susan W. Brooks (R- Ind.) wants to grant World War II Merchant Mariners with the highest civilian honor. Brooks has introduced the Merchant Marine of World War II Congressional Gold Medal Act (HR 2992) to Congress. If passed, the bill would collectively award a Congressional Gold Medal to merchant mariners who served during World War II.

About 215,000 merchant mariners served during the war, entering deadly environments as they delivered supplies to U.S. armed forces in Europe and the Pacific. Merchant Marines suffered higher casualty rates than any other branch of the military, losing between 6,500 to 9,000 seamen.

“The brave actions of the Merchant Marine during World War II proved instrumental in securing victory for the Allied Powers,” Brooks said. “These loyal and courageous men put their lives on the line for the cause of freedom and selflessly answered their nation’s call to duty.”

Brooks is also a co-sponsor of Representative Janice Hahn’s (D- Calif.) “Honoring Our WWII Merchant Mariners Act of 2015 (HR 563). The bill would grant a one-time $25,000 benefit to the roughly 5,000 living WWII mariners.

Merchant Mariners have never received full veteran benefits and were excluded from Veterans and Memorial Day celebrations until 1970.

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Greek Customs Seize Panamanian Vessel

By MarEx 2015-07-24 15:19:42

Greek customs officials have seized 16 armored vehicles from the Panama-flagged roll on, roll off (Roro) carrier Tychy, which was stopped at the Keratsini port in Libya. The roro carrier was bound for the Libyan Khalid port. The illegal cargo consisted of eight armored Typhoon GSS-300 military vehicles, five armored Toyota Land Cruisers, one armored Mercedes and one BMW and another unnamed vehicle.

Shipping these vehicles into Libya is a violation of paragraph nine of United Nations decision 1970/2011 which prohibits the supply, sale or transfer of military or paramilitary equipment into the country.

The vessel is owned Maritime Operators Inc and is commercially managed by Reefer & General Ship Management, both of which are based in Greece.

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Bermeo Group Echebastar Will Receive New Vessel

By MarEx 2015-07-24 14:58:12

The Bermeo Group Echebastar will receive the Euskadi Alai Saturday. The Euskadi Alai is a next generation tuna freezer vessel and is being delivered to Astilleros Zamakona, which is owned by Zamakona Yards. President Pedro Garaygordóbi and Deputy Director of the Echebastar Group, Kepa Echevarria will preside over the ceremony, which takes place in the Port of Bilbao.

The Euskadi Alai was built by the Santurce Shipyard as part of a new design project. The vessel features the most modern technology, aluminum superstructure, ultra-freezing tunnels and safe areas with anti-piracy media. The Alai will join its sister vessels the Izaro and Jai Alai in the Indian Ocean where they will perform fishing activities. The Alai is Santurce’s 738th construction.

The event will be attended by representatives of the Basque Government and Central Government of Seychelles and Port of Bilbao and Zamakona Yards staff and suppliers.

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Carnival settles disability case

Carnival Corp has reached a comprehensive agreement with the US Department of Justice (DOJ) to settle allegations that it violated the Americans with Disabilities Act (ADA).
“This landmark ADA agreement will enable individuals with disabilities the opportunity to equally enjoy a full range of
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Coastal Contracts Reaches Vessel Agreements

By MarEx 2015-07-24 11:17:59

Coastal Contracts Bhd secured contracts valued at RM130 million (about $34,002,944 million) for the sale of two offshore support vessels (OSV) and six low-end vessels.

Coastal Contracts bagged these contracts through its wholly-owned subsidiaries, Coastal Offshore (Labuan), Thamaus Marine Ltd and Pleasant Engineering Sdn Bhd. All of the vessels are expected to be delivered in 2015 and should positively contribute to the company’s bottom line.

“The revenue stream from the latest contracts is expected to contribute positively to the earnings per share and net assets per share of Coastal Group for the financial year ending Dec 31, 2015,” Coastal Contracts said in a statement.

The netted contracts raise Coastal Contracts’ order book to about RM3.8 billion (about $9,880,000,000 billion). Vessel and rig sales constitute RM1.97 billion of their order book.

Coastal Contracts executive chairman Ng Chin Heng also said the lifting of US sanctions on Iran could benefit the company because some of its customers have strong relationships working with Iranian oil and gas companies. Post-sanction, Coastal Contracts believes Iran can create more opportunities in the OSV market.

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