Friday, March 16, 2018

Ghana is 'about to have an oil boom'

French President Emmanuel Macron (2nd R) and Ghanaian President Nana Akufo-Addo in Accra, Ghana, on November 30, 2017.
  • Ghana's economy is seen expanding by 8.3 percent this year, making it one of the world's fastest growing.
  • The rapid growth is due to new oil coming online.
  • Meanwhile Ghana's cocoa industry, for which it is world famous, could face headwinds due to climate change and urbanization.

Ghana, the west African nation known as one of the world's largest cocoa producers, is on course for skyrocketing economic growth this year thanks to an entirely different commodity.

Ghana is "about to have an oil boom," Imad Mesdoua, senior consultant for Africa at Control Risks, told CNBC via telephone.

"This will primarily be driven by rising oil prices, expanding production and new deals which are likely to come online in the coming six months," Mesdoua explained.

The U.K.'s Tullow Oil and Italy's Eni have both expanded their operations in the former British colony in recent years. Tullow started a multiyear drilling program on TEN, its second field in Ghana, in February of this year, having pumped its first oil from the site in 2016. Eni, meanwhile, began production on its Sankofa field in mid-2017.

Earlier in March, Ghana's President Nana Akufo-Addo announced that the country's economy was set to grow by 8.3 percent in 2018, above the 6.8 percent initially estimated in its annual budget. The figure is demonstrative of a significant economic uptick, given that the annual growth figure for two years earlier was just 3.6 percent according to Akufo-Addo, as reported by Reuters.

Ghanaian President Nana Akufo-Addo at a press conference in the Federal Chancellery, Berlin, Germany, on February 28, 2018.
Simone Kuhlmey | Pacific Press | LightRocket via Getty Images
Ghanaian President Nana Akufo-Addo at a press conference in the Federal Chancellery, Berlin, Germany, on February 28, 2018.
Ghana's anticipated growth falls well above the World Bank's average for the African continent. This was calculated at 3.2 percent for 2018, as released in January of this year.

Despite the impressive figures, Philip Walker, Ghana analyst at Economist Intelligence Unit, added the caveat that the non-oil segment of Ghana's economy was seeing a "decent level of growth but not spectacular."

Gold was Ghana's top export product in 2016, according to the Observatory of Economic Complexity, accounting for 42 percent of the total. This was followed by cocoa, at 18 percent and then crude oil, at 9.1 percent.

Political promise

Ghana's positive economic news is supported by the country's political backdrop.

Akufo-Addo was elected in December 2016 on an economic agenda which includes cutting corporate taxes, fighting corruption and formalizing the economy.

Farmers extract cocoa beans from the fruit on November 11, 2015, in Akyekyere, Ghana.
Melanie Stetson Freeman | The Christian Science Monitor | Getty Images
Farmers extract cocoa beans from the fruit on November 11, 2015, in Akyekyere, Ghana.
Mesdoua described Akufo-Addo's "eagerness to diversify the economy" and "intent to modernize policy making."

But despite the promising growth prospects, Ghana remains a lower middle income country. Its gross domestic product per head was $1,610 last year, according to the International Monetary Fund, below the emerging market average of $4,960.

"Ghana's democracy is a benefit to its economy," Walker said, but explained that "Ghana has had strong growth in the past but that hasn't translated into jobs." According to the Central Intelligence Agency's 2015 estimate, unemployment in the country is 11.9 percent.

Ghana is also in the final year of a $918 million IMF aid program intended to lift growth while tackling public debt and reducing inflation.

Akufo-Addo has signaled an intention to distance his country from Western aid, speaking of the need to "move Africa away from being cap in hand and begging for aid, for charity, for handouts," during a December press conference with French President Emmanuel Macron in the capital Accra.

Moving on from cocoa

While Ghana's oil industry may be ascending, clouds could be on the horizon for its reputation as a world famous cocoa producer.

A farmer opens up a cocoa pod with a machete to extract the beans on November 11, 2015, in Akyekyere, Ghana.
Melanie Stetson Freeman | The Christian Science Monitor | Getty Images
A farmer opens up a cocoa pod with a machete to extract the beans on November 11, 2015, in Akyekyere, Ghana.
Ghana and neighboring Ivory Coast supply 60 percent of the world's cocoa. According to Vincent Manu, country director for Ghana at the World Cocoa Foundation, the crop is worth 25-30 percent of the country's agricultural gross domestic product and 28-30 percent of foreign exchange.

But, the industry is threatened due to urbanization in the country. "Young people are not interested because of profitability," he added.

Climate change is also playing a role. Ghana's cocoa production this season may be 700,000 tons, falling short of the forecast 850,000 tons due to poor rains, the head of the Ghana Cocoa Board told Reuters earlier this week.

Following the suggestion of diminished yields from Ghana and the Ivory Coast, cocoa prices hit more than one-year highs this week.

Thursday, March 15, 2018

OPEC Oil Production Drops to 10-Month Low

Oil drops as OPEC set to agree on oil cut extension to the end of 2018

Crude production from OPEC countries fell to a 10-month low in February, mainly due to maintenance at a field in the United Arab Emirates and continued output declines in Venezuela.

The Organization of Petroleum Exporting Countries and allies including Russia have defied the skeptics by going deeper than their pledged cuts and maintaining them for long enough to deplete bloated inventories and boost prices. While the group says it’s committed to the deal for the remainder of the year, it’s also contending with a record-breaking surge in U.S. output that could undermine its efforts.

Output from the 14 members of OPEC fell 80,000 barrels a day to 32.28 million a day in February, according to a Bloomberg News survey of analysts, oil companies and ship-tracking data. That’s the lowest since 31.89 million in April.
Venezuela’s output dropped by 30,000 barrels a day to 1.68 million barrels. The Latin American nation is a big part of the reason for OPEC’s stellar implementation of promises to curb production. Its industry is suffering from a lack of investment and looming U.S. sanctions, sending output last year to the lowest since the 1980s.

Oil production in the U.A.E. fell last month due to maintenance at fields that produce the Das Blend, according to a person with knowledge of the matter. The survey found the Persian Gulf country pumped 2.8 million barrels a day, a drop of 50,000 a day from January.

Production in Saudi Arabia, OPEC’s largest producer, fell 80,000 barrels a day to 9.88 million barrels, the survey found. Libya’s output rose 70,000 barrels a day to 1.05 million, the highest since 2013.

— With assistance by Julian Lee

Wednesday, March 14, 2018

Prince Alwaleed Bin Talal, long a favorite in tech circles, is reportedly still under armed guard

French President Francois Hollande Receives Prince Alwaleed Bin Talal Bin Abdulaziz Al Saud At Elysee Palace  In Paris

Shares of Saudi Arabia’s Kingdom Holding, an international investment company controlled by Prince Alwaleed Bin Talal, soared in January when he was freed after two months of being held captive at a Ritz Carlton in Riyadh, Saudi Arabia.

Turns out investors may have celebrated too soon.

As people following the story may recall, Prince Alwaleed was arrested in early November with hundreds of other businessmen and at least 10 other princes. The roundup was described as a sweeping corruption investigation but widely seen as an effort to consolidate power by Crown Prince Mohammed bin Salman, a son and the top adviser of King Salman, who succeeded his half brother and became king of Saudi Arabia in January 2015. Indeed, the crown prince had announced the creation of a new anti-corruption committee — which he headed up — just hours before the arrests were ordered.

New reports suggest that though most of those who were arrested have now been released, they are not in control of the holdings they once were, including Prince Alwaleed. A detailed weekend report by the New York Times, for example, states that “members of the royal family, and relatives, advisers and associates of the detainees” say those who were kidnapped were coerced and physically abused in some cases, and that billions of dollars in private wealth were transferred to Crown Prince’s Mohammed’s control.

Two associates of Prince Alwaleed also told the Times that he continues to live under armed guard and that his time at the Ritz is “something he wants to forget.”

That won’t be easy, according to a separate report in the WSJ yesterday that said the Saudi government now has final say over decisions at Kingdom Holding and that, further, the prince’s personal investment portfolio is also under government control.

Prince Alwaleed — who long maintained a high profile, even pledging in 2015 to give away $32 billion as part of investor Warren Buffett’s famous Giving Pledge — has also reportedly agreed to step back from his informal role as a broker for foreign businesses and governments looking to invest in Saudi Arabia, says the WSJ.

Before being ushered out of view in November, the prince was considered to be one of the world’s richest men, with Kingdom Holding owning or having owned meaningful positions in satellite TV networks, as well as in News Corp. (a stake it mostly sold), Citigroup (shares of which it has owned since 1991), and a growing number of tech companies.

The prince and Kingdom Holding — of which he was believed to own 95 percent — first invested $300 million in Twitter in 2011, two years before the company went public. In 2015, he invested another $50 million to increase his ownership in Twitter and, as of 2016, remained one of the company’s largest shareholders.

In 2013, Kingdom also acquired 2.5 percent of China-based retailer JD.Com, which went public on the Nasdaq the following year and whose shares have more than doubled since.

Prince Alwaleed and Kingdom further acquired a stake in the car-hailing company Lyft in early 2016, buying some of the shares of its earlier investors Andreessen Horowitz and Founders Fund.

What happens to Kingdom’s stakes in these companies now is an open question. It’s far from the only one, either.

For example, an investor conference in Riyadh last October that was organized by Crown Prince Mohammed and attended by several thousand people — including billionaire investor Peter Thiel, Blackstone Group cofounder Stephen Schwarzman, SoftBank founder Masayoshi Son, and United States Treasury Secretary Steven Mnuchin — was designed to showcase Saudi Arabia’s growing influence in the business world.

Yet a newly delayed initial public offering of the world’s largest oil company, Saudi Aramco, has some wondering who, exactly, is in charge. Crown Prince Mohammed has been pushing Saudi Arabia to sell 5 percent of Saudi Aramco as part of a broader economic reform program. He also reportedly wants to list its shares in New York, as well as on Saudi Arabia’s Tadawul exchange.

But according to a weekend report in the The Financial Times, those assessing the company are struggling to arrive at the $2 trillion valuation sought by the crown prince. Further, senior Saudi ministers and Saudi Aramco executives have said privately that London might be a better fit than New York, says the FT’s report, which suggests the offering, once expected this year, could now be delayed until 2019.

Hours after being fired, emotional Tillerson tells his side of the story

Just hours after his very public firing Tuesday, an emotional Secretary of State Rex Tillerson came to the State Department briefing room to tell his side of the story, saying he had received a call shortly after noon from the president aboard Air Force One, and had spoken as well with White House chief of staff John Kelly.

He did not otherwise mention or thank President Donald Trump.

Tillerson first learned he was being dismissed when Trump tweeted this morning that he was nominating CIA Director Mike Pompeo as his new secretary of state.

PHOTO: Staff members including Deputy Secretary of State John Sullivan, second from right, watches as Secretary of State Rex Tillerson speaks at a news conference at the State Department in Washington, March 13, 2018. (Andrew Harnik/AP)

Tillerson announced he was delegating all his responsibilities to Deputy Secretary of State John Sullivan effective at the end of the day Tuesday and that his commission as secretary of state would terminate at midnight March 31. In the interim, he will deal with a few administrative issues and work toward a "smooth and orderly transition" for Pompeo.

Sullivan was in the room with Tillerson when he spoke, with a half dozen other top aides, including his chief of staff Margaret Peterlin. It's unclear now if Peterlin and other top officials with close ties to Tillerson will lose their jobs, too, but Tillerson encouraged "those confirmed [by the Senate], as well as those in acting positions, to remain at their post and continue our mission at the State Department and working with the inter-agency process."

PHOTO: Secretary of State Rex Tillerson listens as President Donald Trump speaks during a meeting in the Cabinet Room of the White House in Washington, Sept. 12, 2017. (Doug Mills/New York Times via Redux, FILE) 
Noticeably absent was Under Secretary of State for Public Diplomacy and Public Affairs Steven Goldstein, who earlier in the day released a statement refuting the White House's narrative on when and how Tillerson found out he was being fired. Just hours after that, Goldstein - the fourth-highest-ranking official at State and one of the only Trump appointees - was fired as well, after three months on the job.

With Tillerson and Goldstein gone, nearly all the top positions at the State Department will be left vacant. Among the six Under Secretary roles, four have been vacant, a fifth now is open with Goldstein's firing, and the sixth is filled by career diplomat Tom Shannon, who announced last month he is retiring. Shannon, the Under Secretary for Political Affairs, has said he will stay on until a replacement is found. More than a dozen assistant secretary roles remain vacant or filled by senior diplomats in an acting capacity, and overseas, more than three d
ozen ambassadorships are empty, with the mission's number two leading the embassy day-to-day.

Tillerson was visibly emotional in the briefing room, especially when he first walked up to the podium and began addressing the press, with his voice cutting out at times and his face red.

It was just last week that Tillerson got choked up when addressing why he took the role in the first place. At George Mason University Tuesday, he recounted his father's and uncle's military service - and how he missed the draft during the Vietnam War by three numbers. Instead, he went off to college and worked 41 1/2 years for Exxon Mobil, and "as I reflected on things at that point, I said I hadn’t really done anything yet. It’s my time to serve, and that’s why I’m doing it," he told the audience.

The former CEO, who says he still thinks of himself as an Eagle Scout, said he saw the job as a form of serving his country. Despite his disagreements with Trump on policy, personnel, and leadership style, he remained committed to the role.

"I look forward to having a very, very successful 2018," he told CNN in January. "I intend to be here for the whole year."

Tillerson's father passed away the week before his comments about his father's military service. He had been home for a week dealing with that, before his speech Tuesday and a week-long trip through Africa.

It was in the middle of the night in Nairobi, Kenya, that he was awakened by White House chief of staff John Kelly. While the White House says Kelly told Tillerson then that he was fired, a senior State Department official said that Tillerson was only warned that such a tweet may be coming.

But Trump has tweeted about his cabinet secretaries before, only to keep them in place. For months now, he has pilloried Attorney General Jeff Sessions, but has not yet fired him.

Tillerson cut short the trip to Africa, returning early Tuesday morning at 4 AM.

It was hours later that the news officially came in Trump's tweet.

PHOTO: Secretary of State Rex Tillerson walks down a hallway after speaking at a news conference at the State Department in Washington, March 13, 2018. (Andrew Harnik/AP)

In his goodbye address, Tillerson pointed to progress on North Korea, Afghanistan, and Syria as some of his accomplishments and thanked his State Department colleagues, as well as Pentagon officials and members of the military, for the "privilege" of serving with them.

"To the 300-plus million Americans, thank you for your devotion to a free and open society, to acts of kindness toward one another, to honesty, and the quiet hard work that you do every day to support this government with your tax dollars," he said.

"I'll now return to private life, as a private citizen, as a proud American, proud of the opportunity I've had to have serve my country," he finished, leaving the room with a wave and without taking questions.

Tuesday, March 13, 2018

Trump ousts Tillerson, will replace him as secretary of state with CIA chief Pompeo

Dems urge Tillerson to rein in Trump on North Korea

President Trump has ousted Secretary of State Rex Tillerson and plans to nominate CIA Director Mike Pompeo to replace him as the nation’s top diplomat, orchestrating a major change to his 

national security team amid delicate outreach such as possible talks with North Korea, White House officials said Tuesday.

Trump last Friday asked Tillerson to step aside, and the embattled diplomat cut short a trip to Africa on Monday to return to Washington.

Tension between Trump and Tillerson has simmered for many months, but the president and his top diplomat reached a breaking point over the past week, officials said. 

The reason for the latest rift was unclear, but Trump and Tillerson have often appeared at odds over policies such as the nuclear deal with Iran and the tone of U.S. diplomacy. A spokesman for Tillerson said the secretary of state “had every intention of staying” in his job and was “unaware of the reason” for his firing.

Tillerson cut short his trip to Africa on Monday to return to Washington. “I felt like, look, I just need to get back,” he told reporters aboard his plane home. The White House, however, had told him the previous Friday that he would be dismissed, according to two administration officials. The news was not conveyed in person by Trump.

Trump: 'I think Rex will be much happier now'
President Trump spoke March 13, after it was announced he ousted Secretary of State Rex Tillerson and planned to tap CIA Director Mike Pompeo to replace him.
At the White House on Tuesday, Trump said the move had been considered for “a long time.”

“We disagreed on things . . . the Iran deal,” Trump told reporters. “So we were not thinking the same. With Mike Pompeo, we have a similar thought process.”

Trump selected Gina Haspel — the deputy director at the CIA — to succeed Pompeo at the CIA. She would become the first woman to run the spy agency.

Both would need to be confirmed by the Senate at a time when the closely divided chamber has stalled on confirming dozens of Trump nominees.

In a statement issued to The Washington Post, Trump praised both Pompeo and Haspel.

“I am proud to nominate the Director of the Central Intelligence Agency, Mike Pompeo, to be our new Secretary of State,” Trump said. “Mike graduated first in his class at West Point, served with distinction in the U.S. Army, and graduated with Honors from Harvard Law School. He went on to serve in the U.S. House of Representatives with a proven record of working across the aisle.”

Tillerson refuses to address report that he referred to Trump as a ‘moron’
Secretary of State Rex Tillerson did not directly respond to an Oct. 4 news report that he referred to President Trump as a “moron."
The president continued: “Gina Haspel, the Deputy Director of the CIA, will be nominated to replace Director Pompeo and she will be the CIA’s first-ever female director, a historic milestone. Mike and Gina have worked together for more than a year, and have developed a great mutual respect.”

Trump also had words of praise for Tillerson: “Finally, I want to thank Rex Tillerson for his service. A great deal has been accomplished over the last fourteen months, and I wish him and his family well.”

A spokesman for Tillerson said the secretary of state has not spoken directly with Trump about the move.

“The secretary had every intention of staying because of the critical progress made in national security and other areas,” Steve Goldstein, undersecretary of public diplomacy for the State Department, said in a statement. 

“He will miss his colleagues greatly at the Department of State, and the foreign ministers he’s worked with throughout the world,” Goldstein continued. “The secretary did not speak to the president, and is unaware of the reason. He is grateful for the opportunity to serve, and believes strongly that public service is a noble calling.”

The president has long clashed with Tillerson, who he believes is “too establishment” in his thinking. Trump felt it was important to make the change now, as he prepares for possible high-stakes talks with North Korean leader Kim Jong Un, as well as upcoming trade negotiations, three White House officials said. 

“I am deeply grateful to President Trump for permitting me to serve as Director of the Central Intelligence Agency and for this opportunity to serve as Secretary of State,” Pompeo said in a statement. “His leadership has made America safer and I look forward to representing him and the American people to the rest of the world to further America’s prosperity. Serving alongside the great men and women of the CIA, the most dedicated and talented public servants I have encountered, has been one of the great honors of my life.”

Haspel said in a statement that she was excited about her promotion.
“After 30 years as an officer of the Central Intelligence Agency, it has been my honor to serve as its Deputy Director alongside Mike Pompeo for the past year,” she said. “I am grateful to President Trump for the opportunity, and humbled by his confidence in me, to be nominated to be the next Director of the Central Intelligence Agency.”

On the flight from Nigeria, Tillerson appeared to break with the White House in his assessment of the poisoning of a former Russian spy in Britain. He singled out Russia as responsible for the attack, echoing the finger-pointing of the British government.

“It came from Russia,” Tillerson said, according to the Associated Press. “I cannot understand why anyone would take such an action. But this is a substance that is known to us and does not exist widely.”

Earlier Monday, White House press secretary Sarah Huckabee Sanders condemned the attack as “reckless, indiscriminate and irresponsible,” and expressed solidarity with Britain, but would not say whether the United States believes Russia was behind it.

Tillerson was especially frustrated when Trump last Thursday unilaterally agreed to the meeting with Kim while Tillerson was traveling abroad in Africa, according to officials familiar with his thinking. 

Tillerson had long expressed interest in a diplomatic solution to the nuclear standoff with North Korea, and was upset to have been left totally out of the loop when Trump decided to move forward, according to a White House official. 

Foggy Bottom was also acutely aware — and chagrined — that when Pompeo appeared on television shows this past Sunday to explain the North Korea developments, he did not mention Tillerson. 

Pompeo long has been mentioned as Tillerson’s most likely replacement. As CIA director, the former Republican lawmaker from Kansas developed a warm relationship with Trump, often delivering the President’s Daily Brief to Trump in person and racing over to the West Wing at a moment’s notice to field the president’s queries on a range of topics. 

Last November, the White House readied a plan to replace Tillerson with Pompeo, and Trump seriously considered making the move but was persuaded to keep the current team in place.

Pompeo often is found in a host of meetings that do not necessarily deeply involve his agency, simply because Trump likes him, said one White House official.

Sen. Tom Cotton (R-Ark.) was initially mentioned as a replacement for Pompeo, but Trump opted to promote from within by elevating Haspel.

Tillerson’s exit had been so widely expected that the rumors were given a nickname: Rexit. Speculation about his ouster has come in waves, including in October after NBC News reported that Tillerson had called Trump a “moron.” 

Tillerson, 65, spent his career at ExxonMobil, climbing the ranks at the oil giant to become chief executive officer, where he cut deals across the Middle East and in Mexico. Having never worked in government before being named secretary of state, he struggled to adapt to Washington’s ways and the administration’s culture of backstabbing.

Tillerson emerged as one of the strongest voices in the administration critical of Russia. For months, he has been saying Russia clearly meddled in the 2016 U.S. election, even as Trump shied away from any critical remarks.

Trump seemed to resent pressure to stay the course on such issues as China’s trade practices, the war in Afghanistan and the Iran nuclear deal, those people said.

Tillerson pushed Trump to preserve the Iran nuclear deal, at least for now, with a July pronouncement that Iran was meeting its end of the bargain. Trump said in a Wall Street Journal interview that he regretted making that determination and strongly suggested he would not go along with another such certification of compliance due in October.

Although Tillerson supported the approach to the war in Afghanistan that Trump announced last week, he felt no need to frame U.S. goals in the same maximal terms as the commander in chief. Where Trump proclaimed on Aug. 21 that “our troops will fight to win,” Tillerson laid out a much more modest agenda.

Josh Dawsey, John Hudson and Carol Morello contributed to this report.

UK officials told that Aramco IPO unlikely until 2019: Financial Times

An oil tank is seen at the Saudi Aramco headquarters during a media tour at Damam city November 11, 2007. REUTERS/ Ali Jarekji/Files

(Reuters) - British officials have been informed by their Saudi counterparts that oil giant Saudi Aramco's initial public offering is likely to be delayed until 2019, the Financial Times reported.

The Saudi government had targeted a market listing by the second half of 2018, but preparedness for the offering and also willingness for a simultaneous or sequential flotation on a foreign exchange had been questioned, the FT reported, citing sources.

London still had a good chance to secure the listing, which would value the company at $2 trillion, but a foreign flotation would likely happen only in 2019 at the earliest, according to the FT. 

New York and London have been front-runners to host the company's international flotation, alongside a Riyadh listing.

Saudi Energy Minister Khalid al-Falih said in an interview with CNN last week that he was concerned about the risks that Aramco would run into by choosing New York as the venue for its $100 billion market listing.

The state-run oil company is expected to sell about 5 percent of Aramco in what would likely be the world's biggest IPO.

Saudi Arabian Oil Co, known as Saudi Aramco, was not immediately available for comment.

(Reporting by Sangameswaran S in Bengaluru; Editing by Peter Cooney)

Monday, March 12, 2018

China's Two Big Oil Majors Urge Tax Breaks For Building Gas Storage & Imports

Top officials from China’s two largest oil and gas producers have urged the government to offer tax breaks for the building of gas storage facilities and importing liquefied natural gas (LNG) to help avoid another gas crunch in the winter ahead.

Vice President Ma Yongsheng said the central government should subsidize the construction of underground gas storage, LNG tanks and other facilities.

China National Petroleum Corp (CNPC) [CNPET.UL] President Wang Yilin urged the government to refund value added tax on LNG imports to lower gas costs for consumers.

Members of parliament and the Chinese People’s Political Consultative Conference, the Communist Party’s largely ceremonial advisory body, are encouraged to submit suggestions for future legislation during the current Parliament session.

Their chances of becoming legislation are minimal, but they can form part of future laws. The proposals from Sinopec and CNPC come as the nation looks for ways to increase storage capacity for natural gas to avoid a repeat of this past winter’s heating crisis.

Millions of households in northern China switched from using coal to natural gas for heating ahead of this past winter, leading to sky-rocketing gas consumption as well shortages across many regions.

The fuel shortages over the last three or four months deepened China’s worries over whether it can secure enough gas and LNG supplies in winters ahead.

CNPC’s Wang said China’s gas demand will grow 15 to 16 percent in 2018 and supplies will continue to be tight, according to a transcript of his speech to a parliament meeting session published in CNPC’s official newspaper.

Sinopec’s Kong Fanqun, who heads the Shengli Oil field said a lack of storage facilities also contributed to China’s gas shortages this winter, according to a transcript of his speech sent to Reuters by the Sinopec Group.

The country needs an additional 50 billion cubic meters (bcm) of storage facilities by 2020 to meet its own demand, Kong said. That is five times the size of China’s current gas storage facilities.

Kong asked the government to give gas producers subsidies as well tax breaks to build and operate gas storage facilities.

Both Sinopec and CNPC officials also proposed removing resource taxes on the development of shale gas, coalbed methane, high sulfur gas and tight gas reserves.