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Before OPEC meeting, Russia is cagey about more oil cuts – Aljazeera.com

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With a critical meeting of the Organization of Petroleum Exporting Countries (OPEC) just days away, the cartel’s most crucial ally, Russia, remains cagey about its willingness to cut oil production to buoy prices hit by the coronavirus outbreak.

The cartel’s de facto leader, Saudi Arabia, has reportedly been leading the charge for OPEC and its allies, a grouping known as OPEC, to lower production by as much as one million barrels per day in response to the outbreak. But Russia has yet to get on board with that strategy.

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On Monday, Russian energy minister Alexander Novak told reporters in Moscow that he is still evaluating a proposed production cut of 600,000 barrels per day made by an OPEC technical committee last month.

“We are looking at the recommendation made by the technical committee,” said Novak, adding that he had not yet received a proposal to deepen cuts by one million barrels per day (bpd). 

OPEC and its allies are scheduled to meet in Vienna on March 5-6 to discuss whether to extend their current production cuts of 1.7 million bpd that were agreed in December and run to the end of March.

The OPEC technical committee will meet again on Tuesday to iron out details in advance of the Vienna talks.

Global pandemic fears continued to intensify over the weekend with additional coronavirus cases reported in ChinaItalyIran and the United States, rattling markets and threatening a global economic slowdown.

Last week, Saudi Arabia’s energy minister expressed confidence that OPEC would respond in a timely matter to the spread of the virus. The kingdom needs oil to fetch approximately $83 per barrel to “break even” or balance its state budget, according to the International Monetary Fund

Russia needs oil to fetch less than $50 a barrel to break even.

“In Moscow, Energy Minister Novak has expressed scepticism that the virus will dent demand as much as others say. This may be a holding position, or reflect a desire not to rush into policy change,” Laura James, senior Middle East analyst at Oxford Analytica, told Al Jazeera.

Global benchmark Brent crude fell below $50 per barrel last week, its lowest since July 2017. On Monday, it bounced back to above $51 on hopes for a new deal among OPEC and its cartels. 

And OPEC’s oil output plunged again in February, according to a Reuters survey, as a conflict in Libya further restricted supplies. 

“There are technical drivers for a reluctance to slow production and Russian energy companies have commercial concerns, although on the government side, fiscal pressures are currently manageable,” James added.

With $500bn in state coffers, Russia has room to mull over further cuts. It has in the past resisted proposals to cut production only to get on board at the last minute and has yet to indicate whether it will support additional joint cuts.

“The 2020 fiscal breakeven price for Russia is down to $42.4 per barrel. In the last decade state finances were more of an issue, but in 2019, the focus was actually on managing to disburse budgetary allocations,” she added.

On Sunday, Russian President Vladimir Putin met with oil companies to discuss the impact of coronavirus on global oil prices, the Kremlin said. Putin said while Russia is mostly protected from the oil price fall “this does not set aside the need for action, including together with foreign partners.”

Still, analysts say there will be added pressure on Saudi Arabia to bring all partners to the negotiating table and fast as pandemic fears intensify, factories in China remain shuttered and health officials warn that the virus may get worse before it gets better. 

“The Saudis are responding appropriately to the coronavirus. OPEC has already cut production by 1.7 million barrels a day. Now, the Saudis are asking for another big cut, up to another million barrels per day,” Jim Krane, Wallace S Wilson Fellow for Energy Studies at Rice University’s Baker Institute, told Al Jazeera.

“It’s not easy to align a slow-moving global industry with a fast-moving virus, but that is what seems to be happening,” Krane added.

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Telus prioritizing ‘most important customers,’ avoiding ‘unprofitable’ offers: CFO

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Telus Corp. says it is avoiding offering “unprofitable” discounts as fierce competition in the Canadian telecommunications sector shows no sign of slowing down.

The company said Friday it had fewer net new customers during its third quarter compared with the same time last year, as it copes with increasingly “aggressive marketing and promotional pricing” that is prompting more customers to switch providers.

Telus said it added 347,000 net new customers, down around 14.5 per cent compared with last year. The figure includes 130,000 mobile phone subscribers and 34,000 internet customers, down 30,000 and 3,000, respectively, year-over-year.

The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.09 per cent in the third quarter, up from 1.03 per cent in the third quarter of 2023. That included a postpaid mobile phone churn rate of 0.90 per cent in its latest quarter.

Telus said its focus is on customer retention through its “industry-leading service and network quality, along with successful promotions and bundled offerings.”

“The customers we have are the most important customers we can get,” said chief financial officer Doug French in an interview.

“We’ve, again, just continued to focus on what matters most to our customers, from a product and customer service perspective, while not loading unprofitable customers.”

Meanwhile, Telus reported its net income attributable to common shares more than doubled during its third quarter.

The telecommunications company said it earned $280 million, up 105.9 per cent from the same three-month period in 2023. Earnings per diluted share for the quarter ended Sept. 30 was 19 cents compared with nine cents a year earlier.

It reported adjusted net income was $413 million, up 10.7 per cent year-over-year from $373 million in the same quarter last year. Operating revenue and other income for the quarter was $5.1 billion, up 1.8 per cent from the previous year.

Mobile phone average revenue per user was $58.85 in the third quarter, a decrease of $2.09 or 3.4 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.

It said customers are increasingly adopting unlimited data and Canada-U.S. plans which provide higher and more stable ARPU on a monthly basis.

“In a tough operating environment and relative to peers, we view Q3 results that were in line to slightly better than forecast as the best of the bunch,” said RBC analyst Drew McReynolds in a note.

Scotiabank analyst Maher Yaghi added that “the telecom industry in Canada remains very challenging for all players, however, Telus has been able to face these pressures” and still deliver growth.

The Big 3 telecom providers — which also include Rogers Communications Inc. and BCE Inc. — have frequently stressed that the market has grown more competitive in recent years, especially after the closing of Quebecor Inc.’s purchase of Freedom Mobile in April 2023.

Hailed as a fourth national carrier, Quebecor has invested in enhancements to Freedom’s network while offering more affordable plans as part of a set of commitments it was mandated by Ottawa to agree to.

The cost of telephone services in September was down eight per cent compared with a year earlier, according to Statistics Canada’s most recent inflation report last month.

“I think competition has been and continues to be, I’d say, quite intense in Canada, and we’ve obviously had to just manage our business the way we see fit,” said French.

Asked how long that environment could last, he said that’s out of Telus’ hands.

“What I can control, though, is how we go to market and how we lead with our products,” he said.

“I think the conditions within the market will have to adjust accordingly over time. We’ve continued to focus on digitization, continued to bring our cost structure down to compete, irrespective of the price and the current market conditions.”

Still, Canada’s telecom regulator continues to warn providers about customers facing more charges on their cellphone and internet bills.

On Tuesday, CRTC vice-president of consumer, analytics and strategy Scott Hutton called on providers to ensure they clearly inform their customers of charges such as early cancellation fees.

That followed statements from the regulator in recent weeks cautioning against rising international roaming fees and “surprise” price increases being found on their bills.

Hutton said the CRTC plans to launch public consultations in the coming weeks that will focus “on ensuring that information is clear and consistent, making it easier to compare offers and switch services or providers.”

“The CRTC is concerned with recent trends, which suggest that Canadians may not be benefiting from the full protections of our codes,” he said.

“We will continue to monitor developments and will take further action if our codes are not being followed.”

French said any initiative to boost transparency is a step in the right direction.

“I can’t say we are perfect across the board, but what I can say is we are absolutely taking it under consideration and trying to be the best at communicating with our customers,” he said.

“I think everyone looking in the mirror would say there’s room for improvement.”

This report by The Canadian Press was first published Nov. 8, 2024.

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TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:TRP)

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BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

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BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

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