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Full speed ahead for UK Eurostar sale
(Reuters Business Report) - Bon voyage - the UK could soon be waving goodbye to its stake in Eurostar.It's planning to sell its 40 percent share in the fast-speed train operator that links Britain with the continent. The government has invited bidders to express their interest by the end of the month, in a deal that could raise 300 million pounds. Paul Deighton is Commercial Secretary to the UK Treasury. PAUL DEIGHTON, COMMERCIAL SECRETARY TO THE UK TREASURY, "Really this is just the financial assets, so if we can exchange those shares for good value, it makes perfect sense for the economy to pay down the deficit and use the financial flexibility that gives us to invest in bits of our infrastructure that do need public expenditure behind them." Some fear the move will lead to more UK railways being owned by foreign investors. But the government's not worried. It's all part of a plan to sell 20 billion pounds of assets over the next 6 years. PAUL DEIGHTON, COMMERCIAL SECRETARY TO THE UK TREASURY, "The kinds of things we are looking at over the next 5 years, would include student loans, of which we have a very big portfolio. So at some point it makes sense for us again to sell those into the private sector. There's not need for the government to continue to own those." Eurostar's other shareholders are French state-owned rail operator SNFC with 55 percent and the Belgian government with 5 percent. They have reportedly decided not to bid. Instead a minority share of Eurostar could get it's fist ever private owner. The train company has carried 145 million passengers since coming into service 20 years ago. And it's been fruitful for the UK. It paid an 18.6 million pound dividend last year, of which 7.4 million went to theBritish government. |
OPEC may adjust production if oil price falls further - J P Morgan
Brent crude oil fell below $88 a barrel on Monday after key Middle East producers signalled they would keep output high even if that meant lower prices. J. P. Morgan Regional Head of Oil and Gas Research Scott Darling says further oil price falls may lead OPEC to adjust production for winter months. HONG KONG, CHINA (REUTERS) - J. P. MORGAN, REGIONAL HEAD OF OIL AND GAS RESEARCH, SCOTT DARLING, SLATE: Brent crude oil prices slid to a 4-year low due to subdued global economic outlook, how low will the price go? DARLING: J. P. Morgan's long run, real Brent price is around $90 and that is based on sort of average costs and taxes to renumerate an oil company's cost of capital. So sustainably below that level we would expect most rational oil companies to further reduce costs and investments. SLATE: When do you think OPEC will start slashing output to support prices? DARLING: Well despite some of the mixed messages I have read this weekend from the Middle East we still believe Saudi Arabia as the swing producer would look to act if prices in the near term remain depressed. We have started to see over the August period that the kingdom has started cutting back on exports from sort of early summer. So I think further price falls may actually lead OPEC and particularly Saudi Arabia to look at adjusting production as we go into the winter months. SLATE: Do you think there is more downside for oil demand in China considering the slowing economy? DARLING: It is true that Chinese oil demand growth has been sluggish this year. There are good points, gasoline demand growth still remains essentially around double digit and then diesel has been sluggish. We could see a similar sort of demand picture to what we saw last year, having said that some of the big producers and refiners are pointing to some sort of stabilization in this quarter. SLATE: What is your view on oil demand in India? Do you see it picking up as the economy gets back on track? DARLING: Yes Indian oil demand growth has been reasonably robust this year. At the start of the year we were forecasting around sort of 2-3% or so growth and in and around that we stick with that forecast. |