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Hello welcome to World Business Report on the BBC World Service I'm Will Bain great to have your company as we kick off another business week here on the programme.
Today two of the world's biggest energy companies are battling it out in court over a potential one trillion dollar oil windfall in the Caribbean.
We'll have more on Exxon, Chevron, and the fight for Guiana's oil riches very shortly.
Also on the programme today, a race for the supply of critical minerals.
Two days after Donald Trump did his big liberation day, China put an export restriction on certain rare earths.
And that is a really potent export restriction.
Yeah, a warning about the potential supply of them so critical for everything from the transition to electric vehicles to greener energy as well things like wind turbines to so we'll be taking a look at that latest report and we'll have more on how Disney's bumper cricket tyre with Indian Premier League cricket has led to a surge in paid subscribers that beating out the likes of Netflix and other rivals as well another twist in the streaming wars story if you like all that to come on World Business Report today but we're going to kick off in the courtrooms of London in a fierce fight between two
of the world's biggest energy firms desperate to get their hands on a gigantic new oil project that analysts believe could be worth a trillion dollars in reserves.
That field is off the coast of the Caribbean nation of Guyana.
You might remember our reporter Gideon Long spoke to the country's president, Irfan Ali, about the Starbrook Field as it's known back in 2023.
Here's a reminder of their chat.
The country at this moment is in and transformation gear.
It's a lot of energy, a lot of infrastructure work, a lot of investment in education, in health and housing, a number of hotels being constructed, apartment buildings, apartment complexes, but from the government perspective, we are also investing in some very key areas that would fuel the future of Ghana.
And the future of Ghana is not set in oil and gas.
It is set in a very diversified economy.
And one that looks at the way the The world is going, because the transformation for Ghana now is not only to have the revenue from oil and gas used to diversify our economy, but also we are part of the energy transition that the world is talking about.
Q. Can you just run me through some of the figures, because the reserves have been increasing all the time during that period – what are the reserve figures, what are the production figures now and what are the forecasts for production?
Right now we have proven reserve of about 11 billion barrels.
Production is about 400 ,000 barrels.
And by 2027, we are projected to have production figures of about 1 .2 million barrels per day.
Based on the numbers now, we are maybe number 17 globally, in terms of our reserves, and in Latin America and the Caribbean, number three.
So that's the president of Guyana, Erfan Ali, talking to Gideon a couple of years ago now in fact.
Well for more on today's events and what might come next, of course, equally critically, we're joined by Cornelia Meier, founder of the energy consulting Meier Resources, former NSG Industry board member herself.
Cornelia, always great to have you on World Business Report.
Thanks for being back with us.
Well thank you so much Will for having me.
Talk us through where this court case here in London then centres on today.
What's the argument all about?
Well the argument is about the Joint Operating Agreement, which is the JOAs, that's known as HOAs and the field has 45 % are owned by Exxon, 30 % are owned by Hess and 25 % are owned by the Chinese major, Sinuk.
So, what this joint operating agreement says is if somebody goes out, if somebody sells his stake, that the other parties, Edest, Exxon and Zenock have a right of first refusal.
Now, this is not an outright sale, because what's happening here is Chevron is purchasing the whole company.
So, it's a mergers' and acquisition.
It's an acquisition of Amorada HES.
That bit is important, isn't it?
So Chevron come into this because they're trying to buy HES, the company mentioned, who own a big stake in this already.
And generally, you know, when you buy something, we saw that, for instance, in the 1990s, or when BP bought ARCO, they couldn't buy the Alaskan assets big for anti -competition reasons from U .S. authority because they were deemed to have too much clout in Alaska as a company, so usually when you buy a company you have the anti -competition authorities that can put the spanner in the wheels but not other companies, because what the agreement says is if somebody buys the asset, the asset in the field, the parts of the field, that's when they have to write the first refusal, people.
So buying the whole company is not the same thing.
So that's why they went to court.
Right. And so that is what the lawyers, the highly paid lawyers will be arguing about in the International Chamber of Commerce arbitration that's being held here in London.
What's the kind of time frame, do we think, for a decision on all of that, Cornelia, because I guess that's a key part to all of this?
Well, I think they want to have it done within about three months.
And what's really interesting here as well, is that you have, sort of, you know, funds.
Hedge funds, arbitration funds who actually bet very strongly that Chevron will win its case.
Because if they don't, all the joint operating agreements on this Earth would have to be rewritten.
And that would be quite something.
But even even if Chevron wins and everybody will have to look at those clauses and see how they really how they really hold firm.
So massive ramifications for the oil industry kind of regardless of what happens here zoom out a little bit for us as well.
Cornelia we heard Gideon talking to Erfan Ali the Guianan president there contextualized this find you know why is it exciting these two big companies through the biggest players on the planet in this space quite as much as it seems to be.
Well you know it's it's 11 billion barrels that's a lot I mean when you think the daily consumption of oil in the world is somewhere between a a hundred and a hundred five million barrels a day so you can imagine just how how very big this field is.
And you know it is, when you look at it from an OPEC perspective, OPEC plus perspective, it is the Brazil, the Guiana and the US who've come up with more and more and more new fields which bring more oil to the world, which makes it harder for OPEC to sort of maneuver and ensure the stability that that is that is their mandate.
So in that sense, it's important because it's very, very big.
indeed, fascinating story.
I'm sure we'll come back to again on the programme.
Cornelia, thanks as always for talking us through it.
Cornelia Meyer, the founder of the energy consultancy, Meyer resources.
Well, we're joined as always, well, for the first time, in fact, sorry, on a Monday, by Bill Dining chief investment officer at Waiverton investment management to look through what's moving financial markets today, Bill, great to have you with us on World Business Report.
I know a lot of financial markets are closed today for various public holidays, for example here in the UK and in the United States as well, but just give us a quick thought on that oil tie up story.
Is it interesting investors in those particular companies?
Oh sure, it's going to be very much of interest to the shareholders in those companies.
I think obviously fines like this are pretty rare.
This also looks like it's a field that's going to be by the standards of oil not particularly difficult to actually harvest if I can put it that way.
So it's a fascinating story.
And it's the backdrop of kind of falling oil prices this year as well, isn't it?
And that's kind of what the excitement in terms of if you're an investor in those big oil majors that's getting people excited, I guess as well.
Yeah, and I think the issue for the oil market, I think in the short term is whether or not they look like they're likely to do that, and that's already having an impact on the price.
So, the price of oil is down something like 15%, 20 % over the last 12 months.
That's also got some macro implications.
The price of energy, particularly of oil and of petrol, is very important in terms of market expectations for inflation.
So, well, there's a lot of worries about inflation with Trump's tariffs, things like that.
But actually, the weakness in oil prices has been helpful as a as a counterpoint to that.
Yeah, and oil of course being a truly global commodity in a way some of those are the things that move around and shift inflation may or may not be as well.
Elsewhere markets wise Bill, as I say, closed in the UK kind of the biggest stock market in Europe, has there been much reaction?
We were talking a lot about this on the programme on Friday because it was sort of breaking President Trump's new tariffs on the European Union.
It appeared and we were we were urged caution, not just Shanti Kellerman, who was playing your role on the program that day, by our correspondent, Erin Delmore, as well in terms of the wait and see nature of all that, and surprise, surprise, a delay today to those tariffs coming in.
What impacts that had?
Yeah, well, certainly the physical markets are closed in the U .S. and in the U .K. but the U .S. futures markets are open.
And they're up as indeed are the share prices of the European markets that are open.
You know, the the sort of, I'm going to slash in all, they put in all his tariffs up and then not do it are, you know, how much how often he can pull that off?
I don't really know.
I wondered that as well.
These people are savvy, right?
Like a lot of these people who are in the Trump administration are ex kind of Wall Street people to at what point to you guys in the market start going?
We don't believe you, actually.
And we stopped seeing kind of the reaction that we have seen to the twists and turns of the tariff story.
Well, that's, I think that's a good point.
I mean, I haven't quantified it, but my guess is suspiciously that the positive reaction to the delay of the EU tariffs has probably been more muted than the positive reaction we had, much more muted than the positive reaction we had after he had paused the so -called liberation day tariffs until early July.
I think from the markets point of view though, you know, July the ninth isn't that far away.
You know, we're sort of halfway through the period since Liberation Day on the 2nd of April and that's a looming date now.
I'm going to make this point on the programme on Friday as well that companies don't really have the benefit that we perhaps have, or even market investors might have, of sort of second guessing and waiting, they have to kind of go on the worst case, don't they?
And prepare for what may, you know, prepare for those two circumstances.
A good one, a bad one.
Yeah, and I mean, what little data we've got suggests that that actually hasn't been a big reaction.
You can track things like container traffic from China into the US and that doesn't seem to have picked up, so it's very difficult to be drawing definitive conclusions, but it may well be that actually people are just on hold at the moment if you're running a business, this.
Whether it's in terms of investment, whether it's in terms of ordering new goods, I think the level of uncertainty here is so great that basically I think people are probably on hold and the question then will be if that starts to show up in in weaker high frequency economic data that too hasn't yet happened.
But you've got to believe that this would be having some impact and probably not necessarily a good one.
One of the other great market talking points Bill of this year and probably the back end last year as well has been the kind of battle in electric cars, hasn't it as well, and particularly the impact it's had on those longer term, what they call legacy manufacturers of petrol and diesel electric cars.
And we saw an interesting move today, BYD, the biggest of the Chinese stock market listed electric vehicle makers saying it's going to slash prices of its cars.
You'd think it'd be great news.
You think sell loads more of them.
Investors didn't like it much. Why not?
Well, it's because they've cut some of those prices significantly and their competitor firms will have done the same.
The issue I think that they've got is that although the electric car market is quite exciting in China, they haven't been selling them as quickly as they've been producing them.
So it's always been the case even with the legacy vehicles that the level of inventory in the auto industry is incredibly important because these things are backing up in showrooms, and if they continue to do that, then that becomes a big problem.
And I think they probably did it because they're trying to reduce those entry levels, which are running at close to 60 days, I think.
So that just shows that there is some pressure.
You know, the enthusiasm for electric vehicles certainly in the West has slowed, let's put it that way.
So probably not great for profits, but BYD is a profitable business.
So it might be harder for some of its competitors than for BYD.
Bill, thanks for interrupting your public holiday today to chat us through all of that there.
Bill Didding, Chief Investment Officer at Waverton Investment Management in London.
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You're listening to World Business Report on the BBC World Service.
Now, an interesting warning from the International Energy Agency in the past week or so, they're saying that the world is becoming too dependent on just a few countries for the critical minerals that power many of the clean technologies, like electric cars that we've been talking about a lot on the programme is something Sam Fenwick has been looking at as part of a series we're going to be running all week on the Business Daily podcast looking at, I guess, the global race for these minerals and how we're using them around the world.
And Sam's here to chat to us a little bit about those concerns from the IEA and the rest of that series.
Sam, great to have you on the programme.
Tell us the concerns from the IEA in a bit more detail.
What are they? So the IEA is the organisation that advises countries like the US, the UK, China, most of Europe on energy policy and security.
And it says that while we are trying to diversify how we produce energy, how we produce those cars that you were talking about just a moment ago, the supply of the materials that we need to do that is becoming too concentrated.
So we're talking about things like lithium and cobalt and copper, key ingredients for batteries, wind turbines, electric cars.
But what's happening is the refining and processing of those minerals is increasingly controlled by just a few countries, and especially China.
The IEA's message is pretty clear, it is saying that governments need to act quickly.
Here's their chief economist, Tim Gould.
So there are various elements in play.
You know, some of them are longer term around increasing supply and also looking more on the demand side, technology innovation.
I mean, ways to substitute in other elements that may be more plentiful in their supply.
But there's also some very short term issues there about what to do in the case of disruption.
There may be a case in some sectors for stockpiling, some of these metals and minerals in order to have some sort of emergency reserve in case of a shortfall.
I'm no economist, the level of Tim Gould's level, but stockpiling doesn't that mean potentially even higher prices of people trying to stockpile these goods?
Exactly. I mean, when will have we ever talked or heard about someone encouraging stockpiling?
Absolutely. You're absolutely correct.
Stockpiling can push up prices, especially in a market like the Critical Minerals Market which is already really tight, if a major player starts hoarding it removes supply from the open market.
And that is exactly what has been happening over the past couple of years.
China has restricted exports and built up reserves of their own rare earths and that has sent prices soaring as other countries start to scramble to find alternatives.
Let's hear now to Ellie Saklatvada she's from Argus Media and she tracks the of some of these critical and rare earth minerals.
They've had an export control on hafnium, for example, for several years.
Hafnium goes into the aerospace industry and also electronics.
But then within just the past two years, China has also put export controls on gallium and germanium, which are really important for electronics.
China also put an export control last year on antimony.
Its primary function is to make fire retardant materials.
So think about every building that you're in.
anywhere that you put fire retardant materials need antimony.
And then more recently, on the fourth of April, two days after Donald Trump did his big Liberation Day, China put an export restriction on certain rare earths and high performance rare earth magnets.
And that is a really potent export restriction.
And those export restrictions that Ellie was talking about there will have caused huge price spikes for those particular minerals.
Yeah. Fascinating, isn't it, and some of those predating kind of the current trade tensions, as you were saying before, Sam, as well.
How did China then come to come to dominate this sector?
Well, this goes back way, way back to the 1980s because a big part of processing these minerals takes a huge amount of energy, and it's really dirty.
It's really polluting and many advanced economies, they didn't want that kind of environmental costs on their front door.
But in the early years of China's economic reforms, environmental concerns weren't that important.
So China ramped up capacity.
And over time, it's built dominance across a lot of the mineral supply chain.
And Zhong Yuanliu, who is from the Council on Foreign Relations says that it is really no surprise that China is now using its position to tighten up its grip.
as the power competition between China and the United States heightens China's using of its critical minerals as a way to retaliate against foreign coercive policies.
So, for example, a lot of U .S. jet fighters, over 60 percent of the several minerals used in the production of jet fighters come from China.
So China's dominance in this supply chain, give China a leverage, Dr. xiang yang, Lou there from the Council for foreign relations, just one of the most fascinating areas in global business at the moment, isn't it the scramble for mineral supply chain, something you guys are going to be looking at all week.
Tell us what else some people can look at.
We've wrapped a whole week of reporting on this, those minerals, as you say, they're at the heart of global trade deals there at the heart of diplomatic standoffs.
Remember that incident in the Oval Office between President Trump and President Zelensky.
And you can catch all five episodes of business daily on the BBC World Service all this week, and on BBC sounds.
And of course, wherever you get your BBC podcasts, Sam, thanks so much. Yeah, we'll definitely be listening.
We'll probably play some of the best bits I'm sure right through the week here on World Business Report as well.
But why not hit subscribe right now if you like, we hear tonight gonna be well worth a listen for the rest of the week to Sam Fenwick and the team there on business daily.
You're with World Business Report on the BBC World Service in an area where I'm sure those minerals are being used as in autonomous vehicles and an interesting tie -up in that space in the past week or so.
Ever been frustrated for example that your bag's gone missing at the airport or by being delayed on a flight because there's a lack of ground crew when they come over the tannoy and tell you what's going on.
Well the world's biggest ground handling firm so a firm that shifts your baggage around the airport or refills the plane, Swissport has joined up with Arrigo International, a British company, to try and make some of that a thing of the past and we spoke to Arrigo's boss, Professor David Kean.
Well, yeah, this is a really important moment, I think, for both companies.
Swissport, as you quite rightly say, world's leading provider of ground services across 270 airports around the world.
So they're looking to move into a new era of intelligent ground handling.
So they're using, they're working with us to bring that technology into their operations and of course demonstrate to their customers worldwide that they're a tech savvy and tech motivated company.
And great for us of course, because this gives us access to the Swiss port network and a fantastic company.
So it's all about partnerships in this game.
Do a bit of picture painting for us.
What are these autonomous kind of...
is robots the right word?
Vehicles? What do they look like and what are they going to be doing?
If you look out the window of a plane when you're sitting on it and there's a lot of activity outside and you can see people on the airside driving tugs and pulling your bags around, that's a very labour intensive job and very complicated and in some cases quite a dangerous operation.
So the people who are working in the ramp area are highly skilled and great people.
And what we're looking to do is to assist them with these vehicles that we've developed.
And these vehicles carry...
So they're gonna be like driverless tugs basically?
They are, yeah. They're driverless tugs.
They will pull and carry those bags around and they'll start to help the people in in the industry so we're not coming in to wipe out thousands of jobs.
Far from it. Since COVID the airports and airlines and ground handles have really struggled With the increasing passenger transport and the take off in that area and bringing people into support that has been difficult.
So what they want to do is they're bringing in automation to support the people on the ground.
And it takes a long time to get a person on the ground security cleared and trained.
So why not release some of those people into more value added jobs in the airport and bring these robots into to support it.
Interesting innovation, isn't it professor David keen, there of Arrigo International based commentary in the UK Midlands, I guess the key question there is, would you trust the robot woman human with your bag next time you're on a flight, email as world .business at bbc .co .uk on that?
Well, let's go to India now and talk about this.
Indian Premier League surf max.
Yeah, heading towards the climax of the Indian Premier League the IPL cricket's biggest competition and one of sports.
biggest competitions fans previously stream the matches for free, but not anymore.
Geo Hotstar, the newly merged streaming platform from Disney and Mukesh Ambani's Reliance Group, Mr Ambani, one of India's richest man.
Now has digital and television rights to the world's richest league and in the first three months, this season's competition, they've added 230 million subscribers.
Let's talk to Saurabh Samani, cricket journalist and broadcaster, usually based in Bengaluru, currently in Delhi at the moment.
So thanks for being with us on World Business Report.
It's a pleasure. Thank you.
I guess the whole idea right late, they hoped it was going to go well, they knew that there was money in this.
But do you think even the subscriber numbers have surpassed what Disney and Reliance's biggest hopes might have been when they bought the right?
I'm actually not sure because it has been a pattern with the IPL that whatever you think, you know, in terms of numbers, it has delivered more.
Like, for example, when the two new franchisees were sold, the Gujarat Titans and Lucknow super giants, that was in 2022.
So, people were expecting, you know, an upper limit of bids for 5000 crores.
And in fact, the winning bid was 7000 crore plus, and the second one was 5700 crore approximately.
So that was 1 .7 billion dollars total, that was like 30 % more than what was the most optimistic estimates.
So you know, it's just as recent as that.
And even the television rights deal at that time, it went for, you know, 5 .10 billion dollars US dollars.
But amazing that people are willing to, you know, for something that they were getting for free with advertising, but that they're willing to pay for it.
That is a game changer, isn't it for all of these big companies?
Yeah. I mean, paying for streaming platforms has you know, been more and especially since COVID, you know, when everyone was just sitting at home and they needed things to do.
So, paying for streaming stuff is not all that new.
Now. It has been happening and it has been steadily growing and a lot of, you know, streaming companies do charge premiums also sometimes to get ad free content is Amazon Prime has recently step up it's not tears being the next bit can't you as well we talked to her up on the program a few weeks ago about the pours in the IPL and the hit that I could have you know in terms of advertising and presumably subscriptions and things like that how's the tournament picked back up again now that it's been able to get back going again and as I was mentioning coming towards the the climax the big finale
yeah yeah I think the only loss in momentum has been for the teams that were playing well, you know, we had to take a break.
There's no, there's no slowing down in viewership or in, you know, advertising, money pouring in and everything.
The IPL is just India's biggest festival, not just cricket festival.
I think it's India's biggest festival it lasts for two months.
It comes every year, year and every year it just draws more and more eyeballs.
And yeah, you're right the climactic stages are coming.
So yeah, you were saying.
Enjoy it. And thanks so much for talking us through it.
And yeah, it's been one of sports big kind of success stories of the last decade or so hasn't it, the IPLs, Saurabh Samani, their cricket journalists, speaking to us from Delhi, bringing us just about as the close of this edition of World Business Report.
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