BP profits plummet 21% as Russia sanctions bite

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Oil giant BP (British Petroleum) has suffered a fall in profits from July to September amid lower oil prices and the decreasing value of the ruble.

Europe’s third-largest company said it made $3bn (£1.86bn) in the third quarter, down from $3.7bn (£2.29bn) in the same period last year – a fall of 21 percent.

BP has invested heavily in Russia and owns a nearly 20 percent stake in Rosneft, the Russian state-run oil company. It is now feeling the impact of Western economic sanctions on Russia over the Ukraine crisis.

The company’s net income from the Rosneft stake dropped considerably – down to $110m from $808m in the same period last year.

BP said the depreciation of the ruble against the dollar was the reason for the drop in profits. Lower Urals oil prices also hurt profits, the London-based company said in a statement.

Crude oil prices dropped over the past four months by 25 percent to a four-year low of around $85 a barrel, due to slowing global demand, especially in China, and ample supplies.

However, it said the latest sanctions imposed on Russia in July “have had no material adverse impact on BP.”

British energy giant BP CEO Bob Dudley (AFP hoto / Vasily Maximov)British energy giant BP CEO Bob Dudley (AFP hoto / Vasily Maximov)

In turn, BP’s underlying oil and gas production, which excludes Russia, rose 4.1 percent.

Despite the drop in oil prices and profits, BP raised its dividend to 10 cents per share.

BP’s chief executive, Bob Dudley, remains positive: “Growing underlying production of oil and gas and a good downstream [refining oil] performance generated strong cash flow in the third quarter, despite lower oil prices. This keeps us well on track to hit our targets for 2014,” he said in a statement.

Rosneft delayed the publication of its own third quarter profit results without giving an explanation.

During the third quarter, BP paid out $314 million over the Deepwater Horizon oil rig explosion and the massive oil spillage that followed in the Gulf of Mexico in 2010. BP has now paid out $20 billion in charges for the disaster.

UNESCO: CRIMEA PART OF UKRAINE, NOT RUSSIA

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UNESCO’s Executive Board voted Thursday to recognize Crimea as part of Ukraine, not Russia

KIEV, Ukraine, Oct. 24 (UPI) — The U.N. Educational, Scientific and Cultural Organization has affirmed Crimea’s status as part of Ukraine.
Ukrainian deputy Foreign Minister Sergey Kyslytsya announced on Twitter Thursday that “UNESCO has confirmed that Crimea belongs to Ukraine irrespective of what Russia says and how [it] tries to bluff its way [through the Russian-Ukrainian crisis].”

The Ministry of Foreign Affairs noted that UNESCO’s Executive Board convened Thursday, voting overwhelmingly in favor of recognizing Crimea as part of Ukraine. Three out of the 25 member countries voted against.

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The Ukrainian government continues to refute Russia’s claim of control over Crimea. On June 26, Ukrainian President Petro Poroshenko told a session of the Parliamentary Assembly of the Council of Europe in Strasbourg that “Our relations cannot be normalized [with Russia] without the return of Crimea.”

Read more: http://www.upi.com/Top_News/World-News/2014/10/24/UNESCO-Crimea-part-of-Ukraine-not-Russia/3201414166481/#ixzz3H5L3kCyH

MH17 victim found wearing oxygen mask – Dutch FM

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One of the passengers of the MH17 plane shot down over Ukraine was wearing an oxygen mask, Dutch Foreign Minister Franz Timmermans has said. This new revelation contradicts assumptions that all 298 people on board the plane died instantly.

Kiev seeks access to MH17 site to back ‘prefabricated’ crash version – Moscow

Timmermans’ comments suggest that the Boeing-777-200 shot down three months ago might not have fallen apart immediately after the aircraft was hit, killing all people aboard, if at least one passenger remained conscious and managed to pull an oxygen mask on.

“People hardly had time to notice the missile coming, but do you know that one of the victims was found with an oxygen mask over their mouth?” Timmermans said Thursday, HOC TV channel reported.

“This means that someone had time to do that,” he said. “At least, we cannot rule out this possibility.”

Dutch prosecutors have confirmed that one flight MH17 passenger, an Australian citizen, was found with the elastic strap of an oxygen mask around his neck.

It is not known “how or when the mask got around the victim’s neck,” AP quoted Wim de Bruin, a spokesman for Dutch prosecutors, as saying.

Dutch prosecutors said that no other MH17 victim was found with an oxygen mask on.

Members of the Ukrainian Emergencies Ministry gather and place bodies at the crash site of Malaysia Airlines Flight MH17, near the village of Hrabove, Donetsk region (Reuters / Maxim Zmeyev)Members of the Ukrainian Emergencies Ministry gather and place bodies at the crash site of Malaysia Airlines Flight MH17, near the village of Hrabove, Donetsk region (Reuters / Maxim Zmeyev)

Magomed Talboev, Russia’s former top test pilot, told Slon.ru that finding one MH17 victim with an oxygen mask on does not necessarily contradict previously assumptions about the immediate death of everyone aboard.

“A couple of seconds could pass before the plane disintegrated,” Talboev said. “This is enough to grab a mask that falls automatically in front of your face and put it on – this is [survival] instinct.”

The Malaysian Airlines plane was shot down on July 17, flying from Amsterdam in the Netherlands to Kuala Lumpur, Malaysia. It crashed near Torez, a settlement 60 kilometers from the Russian border, in the warzone where Ukrainian troops were fighting Donetsk self-defense forces. All 283 passengers and 15 crewmembers died.

Because most of the victims, 196 passengers, were Dutch citizens, the Dutch Safety Board (DSB) is leading and coordinating the investigation of an international group of experts.

One month ago, on September 9, the DSB issued a preliminary report into the crash, saying that the plane “broke up in the air, probably as the result of structural damage caused by a large number of high-energy objects that penetrated the aircraft from outside.”

Everyone onboard died instantly because of immediate decompression, the report said, without mentioning any use of oxygen masks.

Because active military operations were continuing near the MH17 crash site, forensic experts were unable to recover evidence on the ground, and not all the bodies have been recovered three months on. After the Sept. 5 ceasefire agreement was reached between the warring parties, investigation activities at the crash site zone resumed.

So far, the bodies of 251 MH17 victims have been identified by Dutch officials in The Hague.

Biden says US ‘embarrassed’ EU into sanctioning Russia over Ukraine

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America’s leadership had to embarrass Europe to impose economic hits on Russia over the crisis in Ukraine – even though the EU was opposed to such a motion, US Vice President Joe Biden revealed during a speech at Harvard.

“We’ve given Putin a simple choice: Respect Ukraine’s sovereignty or face increasing consequences,” Biden told a gathering at the John F. Kennedy Jr. Forum at Harvard University’s Institute of Politics on Thursday.

The consequences were the sanctions which the EU imposed on Russia, first targeting individual politicians and businessmen deemed responsible for the crisis in Ukraine, then switching to the energy, defense, and economic sectors.

“It is true they did not want to do that,” Biden admitted.

“It was America’s leadership and the president of the United States insisting, oft times almost having to embarrass Europe to stand up and take economic hits to impose costs,” the US vice president declared.

Those costs deemed behind the ruble’s historic plunge not only forced America’s ExxonMobil to retreat from Russia’s Arctic shelf, but also provoked counter-measures from Moscow, which suspended certain food imports from the EU.

Russia’s counter-sanctions have hit many of the EU’s agricultural states. EU members, particularly those close to Russia, were the most affected by the loss of the Russian market.

For instance, the Netherlands – the world’s second-largest exporter of agricultural products – is set to lose 300 million euro annually from canceled business with Russia, as it accounts for roughly 10 percent of Dutch exports of vegetables, fruit, and meat.

At the same time, Poland was hit hard by the Kremlin’s sanctions, as its food exports to Russia totaled $1.5 billion in 2013.

Spain, a large exporter of oranges to Russia, is estimated to miss out on 337 million euro ($421 million) in food and agriculture sales, while Italy has estimated its losses at nearly 1 billion euro ($1.2 billion).

Following pressure from local farmers, a 125 million euro EU Commission Common Agricultural Policy fund was established, from which the growers are expected to get some cash, while Amsterdam is willing to cover the cost of transporting excess produce to eight food banks across Holland.

Overall, Moscow’s one-year food embargo against the EU, the US, Norway, Australia, and Canada will block an estimated $9 billion worth of agricultural exports to Russia.

With European countries now at a loss with apple and dairy surplus, it is not exactly clear whether EU producers will be able to return to the Russian markets after the one-year ban expires.

However, this is no secret to the US, as Assistant Secretary of State Victoria Nuland remarked on Thursday.

“Implementing sanctions isn’t easy and many countries are paying a steep price. We know that. But history shows that the cost of inaction and disunity in the face of a determined aggressor will be higher,” Nuland said.

U.S. Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland (R) and U.S. Ambassador Geoffrey Pyatt (2nd R) distribute bread to riot police near Independence square in Kiev December 11, 2013. (Reuters / Andrew Kravchenko)U.S. Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland (R) and U.S. Ambassador Geoffrey Pyatt (2nd R) distribute bread to riot police near Independence square in Kiev December 11, 2013. (Reuters / Andrew Kravchenko)

Nuland’s reference to necessary action against the “aggressor” might be taken with a grain of salt by the Europeans, as the “F**k the EU” leak is still fresh in their memory.

The four-minute video – titled ‘Maidan puppets,’ referring to Independence Square in Ukraine’s capital – was uploaded by an anonymous user to YouTube.

READ MORE: ‘F**k the EU': Snr US State Dept. official caught in alleged phone chat on Ukraine

Nuland was recorded as saying the notoriously known phrase during a phone call with US Ambassador to Ukraine Geoffrey Pyatt, as the two were seemingly discussing a US-preferred line-up of the Ukrainian government. It apparently referred to Washington’s policy differences with those of the EU on ways of handling the Ukrainian political crisis, with Nuland suggesting to “glue this thing” with the help of the UN and ignore Brussels.

The US State Department did not deny the authenticity of the video and stressed that Nuland had apologized for the “reported comments.”

Ukraine hosts military drills led by US and joined by NATO

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A total of 1,300 troops from 15 nations, either active NATO members or would-be members, have come together for a military exercise in western Ukraine – even as the fragile truce in the east of the country barely holds.

NATO members start supplying weapons to Kiev – Ukrainian Defense Minister

The exercise, code-named “Rapid Trident” has been an annual event since 2006, and has been organized by the Germany-based US European Command (EUCOM). It was initially planned to have this year’s drills in mid-July, but they were postponed because of heavy fighting in eastern Ukraine.

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“This year’s exercise will involve command post exercises, patrolling, counter-IED training and a field training exercise,” the EUCOM Public Affairs Office said in a statement. It adds that “no live fire exercises” have been scheduled for the drills.

The exercise is being conducted near Yavoriv, 60 kilometers from the city of Lvov in north-western Ukraine, at the International Peacekeeping and Security Center (IPSC).

The US earlier pledged to send 200 troops to take part in the exercise.

US prepares military drill in W. Ukraine for mid-September

Earlier in September, Ukrainian and American naval forces held joint maritime drills in the northwestern part of the Black Sea.

The Russian Black Sea fleet simultaneously tested its new-generation Bastion coastal defense system, saying the test was pre-scheduled and was not a response to the US-Ukraine drills in the Black Sea.

Moscow has been particularly sensitive about NATO’s increased activity in Eastern Europe and has been thinking of reviewing its military doctrine due to this new situation.

Russia to adjust military doctrine due to NATO expansion, Ukraine crisis

Eastern Ukraine has meanwhile seen the fragile ceasefire there being put to a serious test on Sunday, when the city of Donetsk witnessed some heavy shelling.

A crew from RT’s video agency Ruptly working on the outskirts of Donetsk witnessed an episode when a family was forced to run for shelter to escape shelling.

A group of OSCE observers also came under fire near Donetsk the same day.

Ukrainian troops and the anti-government forces have blamed each other for the ceasefire violations.

US extends Russia sanctions, targets biggest lender Sberbank & gas giant Gazprom

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The US has introduced new sanctions against Russia’s biggest lenders – Sberbank, Gazprombank and Rosselkhozbank – and added some of the country’s state-owned technology firms and five energy companies, the Treasury said on Friday.

Another Russian lender, Bank of Moscow is also on the blacklist.

In the oil sector, there will be new limitations on exploration facilities for Gazprom, Gazprom Neft, Lukoil, Surgutneftegaz, and Rosneft.

The US also said it would prohibit “transactions in, provision of financing for, or other dealings in new debt of greater than 90 days maturity issued by two additional Russian energy companies, Gazprom Neft and Transneft.”

The US said it was joining European allies, as Russia keeps on with“direct military intervention and blatant efforts to destabilize Ukraine,”Treasury Secretary Jack Lew said in a press release.

READ MORE: EU publishes Russia sanctions list: Energy, finance, defense targeted

However, the US said it was ready to withdraw some of the sanctions against Russia, if Ukraine and the militia in the east of the country fulfill the Minsk agreement sealed in early September, as ITAR–TASS quotes a US spokesman.

While on paper sanctions have become tougher, in fact little will change for Sberbank, the lender’s head Herman Gref said.

“Given the fact that the [western debt] markets are de facto closed today, the financing for three months, or for even 30 days is no longer possible. Therefore de jure sanctions worsen the situation, but de facto – nothing new has happened,” Gref said.

Sberbank has also started exploring new capital markets, Gref added.

“We are exploring all possibilities. Our objective is to explore everything that can somehow be used in such a situation,” Gref added.

However, he declined to comment on whether Sberbank will place its securities on alternative capital markets this year.