Rebirth of England.

Chapter 576 Big Oil Order
"Mr. Alekperov, we are very sincere. If you can agree, then we can directly buy enough of your production at a fixed price..."

Duane Hurst, CEO of British Fortune Times (BFT) Fund, said to the Russians in front of him.

He is now in Moscow, the capital of Russia, at the headquarters of Lukoil. The Russian in front of him, Vagit Alekperov, is the president and CEO of Lukoil, Russia's largest oil company. CEO.

"If it is true as you say, this will involve nearly half of our annual production, so we need to verify whether it is feasible."

Hearing Wadjit's words, Duane Hurst smiled and said:
"This is a rare opportunity, sir. You should know that although international oil prices have been rising, at the same time, oil-producing countries around the world are increasing their efforts to exploit oil, so no one knows the critical point of the decline in oil prices. When will the point come, but this order of ours will allow you to lock in profits from high oil prices without risk."

This time when he came to Russia, as the head of the BFT Fund, Duane Hurst's task was to negotiate with Russian oil companies and sign a long-term large purchase with them.

His first stop was Lukoil, Russia's largest oil company and one of the top ten oil companies in the world at this time.

Duane's words also made Vagit Alekperov very excited. As he said, no one can predict what the future oil price will be like. The current international oil price has reached 90 US dollars per barrel. , maybe next year, oil prices will reach another level, breaking through $100 as never before?

But it is also possible that international oil prices will reach a peak and then start to fall rapidly...

Who knows?

Wadjit also understood that if they increased their mining output, they could barely reach an agreement on this order...

Of course, Lukoil is not Duane's only target. Other large oil companies, including Rosneft, are also the ones Duane will negotiate with next.

But is such a gamble necessary?

What the other party offered was a super order of up to 200 billion U.S. dollars, and there was enough funds as a guarantee. If this contract could be signed, then it can be said that Lukoil would be able to fix their oil prices at the already high level. Huge profits.

At this time, Lukoil's annual production volume was only over 7000 million tons, and its $200 billion order was already close to half of their production volume!

It doesn't seem like there will be much loss...

Of course, the provisions of the agreement are very specific, including the amount of crude oil they need to deliver each month, the mode of transportation, etc...

The liquidated damages for this agreement were set at 20%...

But out of caution, Vagit Alekperov still needs to discuss with the board of directors, and even if he decides to sign this agreement, the orders of their original customers... still need to be adjusted and coordinated.

Starting in November, Duane, CEO of BFT Fund, traveled around the world, from Russia to Indonesia to Africa. They signed crude oil purchase agreements with eight large oil companies, stipulating that starting from March next year, until Within six months from September, crude oil will be purchased from these companies at a fixed price of US$11 per barrel, with a total value of US$8 billion.

In order to persuade the other party to agree to this agreement, the BFT Fund will deposit 50% of the transaction amount, or US$300 billion, as a guarantee in the bank accounts designated by these oil companies.

Is Barron’s really prepared to buy so much crude oil spot?
Of course not - at least in the early stages, the refining and chemical projects he invested in, including Colo and Huaxia, will have no problem consuming a certain amount of crude oil spot.

But compared to when oil prices continue to rise, especially in July next year, when crude oil prices rise to the highest price in history, close to 7 US dollars per barrel, no oil company will foolishly continue to implement this agreement. They would rather pay 150 % liquidated damages will also make your crude oil sell at a higher price. Therefore, there is no need to wait until July next year. By mid-March, the price of crude oil has risen to US$20 per barrel. After the contract price of US$7 per barrel exceeds the 108% critical point, I am afraid these oil companies will begin to consider whether they need to Breach of contract...

Calculated in this way, the BFT fund has a total of 550 billion U.S. dollars. In addition to the part used to buy gold, the other 300 billion U.S. dollars anchor orders worth 600 billion U.S. dollars. Even if there is a partial default, I am afraid that it will be able to get 100 billion U.S. dollars. Liquidated damages...

Of course, if the other party would rather not breach the contract but still deliver crude oil spot...

That's not bad. If most of the orders are resold to major energy importers like China, Japan and South Korea, the price difference that can be obtained will be much higher than this amount.

Anyway, BFT funds will make money no matter what.

And most importantly, this will not delay BFT funds’ investment after the large-scale subprime mortgage crisis broke out...

……

In early November, Citigroup, JPMorgan Chase and Bank of America announced the formation of a $11 billion reserve fund to support SIVs (structured investment vehicles).

According to information obtained by Barron's, Citigroup is currently facing a liquidity crisis in its $1000 billion SIVs.

On November 11, HSBC announced that it would invest US$26 billion to rescue its two SIVs.

Under this circumstance, Citigroup's stock price fell another 6% that day, closing at $29.80, a new low in five years.

According to statistics, Citigroup's share price has fallen by 46% since the beginning of this year, and its market value has shrunk by US$1290 billion.

Also on this day, Citigroup officially announced that the Abu Dhabi Investment Authority (ADIA), the UAE's sovereign fund, will invest US$75 billion to purchase 4.9% of the group's equity.

The injection of funds will enable the group's capital adequacy ratio to return to the established target in the first half of next year.

The statement stated that Citigroup will sell equity units that can be converted into ordinary shares to the Abu Dhabi Investment Authority. At the same time, the Abu Dhabi Investment Authority agrees to hold ordinary shares of no more than 4.9% of Citigroup’s total share capital, and in Citigroup has no privileges in its management, ownership and corporate control.

In addition, the Abu Dhabi Investment Authority does not have the power to appoint directors to Citigroup's board of directors.

Although the shares purchased by the Abu Dhabi Investment Authority account for less than 5% of Citigroup's total share capital, it is enough to exceed the shareholding ratio held by Citigroup's largest individual shareholder, Prince Al-Waleed of Saudi Arabia.

At this time, Barron has returned to Lanai. Soon, they will end their vacation on Lanai and go to Australia.

He also knows that it is not the best time to invest in the U.S. banking industry - everything has just begun.

(End of this chapter)