Canadian oil and gas drilling activity expected to fall by 10 per cent in 2020

The association representing oil and gas service companies is predicting a 10 per cent fall from current depressed levels of drilling in Canada next year.

The Petroleum Services Association of Canada says it expects a total of 4,500 wells to be drilled in Canada in 2020, down from 5,000 wells this year and 6,950 in 2018.

The association had estimated a year ago that 6,600 wells would be drilled this year. It said 4,100 wells were drilled in 2016, when oil prices fell to as low as US$27 per barrel, compared with over 11,000 wells in 2014 and 5,400 in 2015.

PSAC CEO Gary Mar says the outlook for 2020 is worse than this year because producers are spending their cash on buying back their own shares, paying dividends and reducing debt rather than investing in growing production.

READ MORE: Calgary-based Encana moving headquarters from Calgary to the U.S.

Mar says there’s little hope of an upside following the election of a federal Liberal minority government that will need the support of parties that are hostile to the oil and gas industry.

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The association’s forecast shows fewer wells being drilled in all western Canadian oil and gas producing provinces and no change from modest drilling expectations in Eastern Canada.

READ MORE: Cenovus boosts oil output plans on Alberta move to curtailment relief for crude-by-rail


© 2019 The Canadian Press


Phone snoop: Govt asks WhatsApp to explain breach

NEW DELHI: The central government said on Thursday it had asked WhatsApp to explain how the Israeli spyware “Pegasus” had been used to infect the phones of many Indian human rights activists, lawyers and journalists to spy on them and how the company would protect the privacy of Indians.

The response, articulated by IT minister Ravi Shankar Prasad, came after a storm generated by the Facebook-owned messaging platform’s revelation that 1,400 people had been targeted worldwide, including in India, by surveillance technology so invasive that it can read and transmit the entire content of a phone as well as operate its camera.

WhatsApp did not name the entities behind the clandestine surveillance attempts but the Israeli company NOS Group, which developed the technology, has said it sells “Pegasus” only to vetted governments and their agencies.

“The government of India is concerned over the breach of privacy of citizens of India on the messaging platform WhatsApp. We have asked WhatsApp to explain the kind of breach and what it is doing to safeguard the privacy of millions of Indian citizens,” IT minister Ravi Shankar Prasad tweeted on Thursday. The government has sought WhatsApp’s response by November 4.

Ministry of home affairs officials, responding to charges from the opposition Congress and NCP that government agencies had conducted the high-tech surveillance, said statements about the breach of people’s privacy were “an attempt to malign India” and “completely misleading”. It also promised strict action against anyone found responsible for a breach.

Congress spokesperson Randeep Surjewala had earlier urged the Supreme Court to take suo motu cognisance of the “brazen and blatant illegal hacking of telephones and introduction of spyware by BJP government agencies and conduct a court-monitored inquiry”, while Congress leader Rahul Gandhi had tweeted that the government asking WhatsApp about Pegasus was like Prime Minister Narendra Modi asking Dassault Aviation who had made money in the sale of Rafale jets to India.

Those targeted in India were people of similar persuasion, mainly human rights activists, lawyers and journalists fighting for or speaking out for tribals, Dalits and people fighting the government in court.

They included Bela Bhatia, a human rights activist in Bastar, Chhattisgarh; former BBC journalist Shubhranshu Choudhary; Nihalsing B Rathod, who represents several people in the Elgar Parishad case; Degree Prasad Chouhan, a rights crusader for Dalits and adivasis; Anand Teltumde, a writer, academic and civil rights activist; and Sidhant Sibal, a TV journalist covering foreign affairs and defence. WhatsApp had contacted these people by sending them special messages to warn them their devices and been compromised.

The snooping scandal was revealed after WhatsApp had filed a case in California’s Northern District federal court on Tuesday against the NSO Group saying the Israeli company had developed the software used to infect 1,400 “target devices” with malware and illegally obtain information from WhatsApp users without their knowledge. The social messaging platform said at least “100 members of civil society” had been targeted across four continents and that the number may grow.

Will Cathcart, who heads WhatsApp, said in an OpEd in the Washington Post that his company had first detected this new form of cyberattack in May 2019 and that it exploited a vulnerability in the app’s video-call option.

Cathcart said they were “certain” about NSO’s involvement because “we learned that the attackers used servers and Internet-hosting services that were previously associated with NSO”. He added that WhatsApp had also managed “to tie certain WhatsApp accounts used during the attacks back to NSO”. He said the attack was “highly sophisticated” but the attackers’ attempts to erase their tracks had not been successful.

The University of Toronto’s Citizen Lab, which assisted WhatsApp’s investigation said the attackers used “operators” and that the one for India, Pakistan, Bangladesh, Brazil and Hong Kong was named “Ganges”.

target

The technology involved is so high-tech that the target for surveillance would not even have to answer a call. A simple video call that went unanswered would be enough for the attacker to transmit the malware into the targeted device. The injected software would then be capable of secretly transmitting the phone’s contents to the attacker and of manipulating its camera and recording functions.

That 100 human rights activists, journalists and others were targeted “should serve as a wake-up call for technology companies, governments and all Internet users,” Cathcart said in the Post. “Tools that enable surveillance into our private lives are being abused, and the proliferation of this technology into the hands of irresponsible companies and governments puts us all at risk,” he added.

NSO responded to the furore by saying, “In the strongest possible terms, we dispute today’s allegations and will vigorously fight them. The sole purpose of NSO is to provide technology to licensed government intelligence and law enforcement agencies to help them fight terrorism and serious crime. Our technology is not designed or licensed for use against human rights activists and journalists. It has helped to save thousands of lives over recent years.”

It said strongly encrypted platforms are often used by paedophile rings, drug lords and terrorists. “Without sophisticated technologies, law enforcement agencies meant to keep us all safe face insurmountable hurdles. NSO’s technologies provide proportionate, lawful solutions to this issue,” it said. NSO said any use of the product other than to prevent serious crime and terrorism was a misuse.

“We take action if we detect any misuse. This technology is rooted in the protection of human rights… and that’s why we have sought alignment with the UN Guiding Principles on Business and Human Rights…,” it said.

Pratt team meets DGCA after engine stall row

NEW DELHI: The snag-prone Pratt & Whitney (PW) engine of yet another IndiGo Airbus A320 Neo stalled with a “big bang” and high vibration during take off from Kolkata to Pune on Wednesday (Oct 30). Since twin-engine aircraft can land safely on one engine, this Neo (VT-ITM) returned to do so at Kolkata and is now grounded there. This is the fourth case of PW engine on an IndiGo Neo stalling during take off within a week.

Hours after this fourth engine stall, Director General of Civil Aviation (DGCA) Arun Kumar on Thursday afternoon met PW’s top brass, who had flown in from the US following the spate of incidents.

Kumar “told PW in no uncertain terms to comply with the orders (for replacing an engine each on 29 A320 Neos of IndiGo and GoAir that have more snag-prone engines under both wings within 15 days or else be grounded) by providing sufficient modified engines. After this meeting, the PW team and Kumar met aviation secretary P S Kharola who also reiterated the same to the PW,” said a person who attended the meetings.

“PW was told India is a very important market for them (IndiGo is the world’s largest A320 Neo customer) and that they should somehow expedite modified engine deliveries to the country and help avoid grounding of some or any of the 29 planes of IndiGo and GoAir. PW team will return to the US and inform Indian authorities of their replacement engine delivery schedule early next week,” said sources.

Meanwhile, the latest engine stall of Wednesday saw IndiGo’s A320 Neo operating as 6E-862 saw one of its engines stall with a big bang sound and experience high vibration while climbing through 10,000 feet. Crew reduced thrust of this engine to idle and to reduce vibration. Ground inspection on landing revealed that engine one’s third stage low pressure turbine had been damaged.

An IndiGo spokesperson said: “IndiGo A320 Neo operating from Kolkata-Pune as 6E-862… During flight pilot observed engine 1 caution message. Pilot carried out the necessary checklist and returned the aircraft to Kolkata. The aircraft is currently withdrawn from operations and is under maintenance inspections. Alternate arrangements for all the passengers have been made.”

There has been a spurt in cases of PW engines staling with high vibration on IndiGo Neos during climb phase and then the flight returning to where it took off from in last one week. Last Thursday (Oct 24) 6E-563 Kolkata-Chennai returned to Kolkata; a day later 6E 375 Mumbai-Coimbatore returned to Mumbai and then on Saturday (Oct 26) 6E 329 Delhi-Goa landed back in Delhi.

The DGCA found unmodified or older engines of PW that had flown for over 2,900 hours on the Neos were facing this issue. Accordingly, the regulator directed IndiGo and GoAir to change one engine on 16 and 13 of their Neos respectively which had both unmodified engines that had done over 2,900 hours within 15 days. These 29 A320 Neos — that have the old PW engines which have flown for over 2,900 hours under both their wings — will be allowed to fly after 15 days only if one of their engines are replaced. This decision was taken after studying the pattern and evaluating the risk.

“The engine on Kolkata-Pune flight which suffered stall on Wednesday was also one of the old engines that needs to be replaced,” said sources.

2/3rd of tenure under BJP: Rajan reminds Sitharaman

NEW DELHI: Former Reserve Bank of India (RBI) governor Raghuram Rajan, who faced a stinging attack from finance minister Nirmala Sitharaman for presiding over the “worst phase” of the Indian banking sector, on Thursday reminded her that two-third of his tenure as the head of the central bank was under the BJP government.

Rajan, who was governor of the RBI from September 5, 2013 to September 2016, said during his term a clean up of the banking sector that was “clogging” with bad loans had begun and the job remains unfinished.

He said the country needs a new generation of reforms to accelerate economic growth. At 5 per cent GDP growth rate, India was witnessing substantial economic slowdown.

“I had just over eight months in the previous (Congress) government and I had 26 months under this (BJP) government. So much of my term (as RBI governor) was under this government,” he told a news channel in an interview.

He was asked about Sitharaman’s comments in New York earlier this month where she said that the Indian public sector banks had the “worst phase” under the combination of former Prime Minister Manmohan Singh and Rajan.

Indian public sector banks had ‘worst phase’ under Manmohan, Rajan: Sitharaman

Delivering a lecture at Columbia University, USA, Finance minister Nirmala Sitharaman said that the Indian public sector banks had the “worst phase” under former PM Manmohan Singh and RBI governor Raghuram Rajan. She said, “…loans were given just based on phone calls from crony leaders,” due to which, she added, banks are still depending on govt’s equity infusion.

Rajan, however, hasten to add that he doesn’t want to get into a political debate on the issue.

“Let me not get into a political back and forth. The reality is, there is a clean-up which we started, which is underway, which needs to be completed fast. The recapitalisation has been done, but it also has to be done in the non-bank financial sector which is ceasing up and you need to clean-up, get the financial system going again if you want stronger growth,” he added.

Sitharaman’s comments at the Columbia University were in response to a question on Rajan in his previous statements apparently mentioning that in its first term, the Narendra Modi government had not done better on the economy because the government was extremely centralised and the leadership does not appear to have a consistent articulated vision on how to achieve economic growth.

She had retorted back saying instead there were major issues with bank loans during Rajan’s tenure as the central bank head. “I’m taking a minute to respond… I do respect Raghuram Rajan as a great scholar who chose to be in the central bank in India at a time when the Indian economy was all buoyant,” Sitharaman had said.

“It was in Rajan’s time as governor of the Reserve Bank that loans were given just based on phone calls from crony leaders and public sector banks in India till today are depending on the government’s equity infusion to get out of that mire.”

The former RBI governor, however, said the seeds of problems were sown in “euphoria” in the pre-2008 global financial crisis. “A lot of investments were made and those slowed down. Those created the bad loans which we needed to clean up. And we started the process of cleaning up,” he said.

“There are people who say why did we clean up, we could have gone on. We simply couldn’t have gone on because banks were stopping lending because their balance sheets were getting clogged with non-performing loans. So, you had to force the recognisation and recapitalisation to set them back on track.”

That job, he said, “half-finished right now”.

“It has to be finished,” he said. “Now, could it have been done faster, absolutely. We needed to do it faster but we are where we are. We need to clean up but also clean up new risks that have emerged for example in the non-bank financial system. If we don’t do, the financial system is going to be an overhang over the economy.”

On the lifeline being extended by the government in the form of capital support, Rajan said that was needed but it has to accompany the cleanup.

“Because, without cleanup good money can go after bad. It is not only just clean up of legacy problems, it is also to make sure those don’t happen again which is by improving governance. That is work in progress that has to be accelerated to ensure it won’t happen again,” he said.

On economic growth, Rajan said the country was witnessing a substantial slowdown.

“The peak in 2016 was 9 per cent growth in one of the quarters, in the first quarter, now it is down to 5 (per cent). There are people who have raised a concern about whether 5 is really 5. The reality is there has been a substantial slowdown,” he said. “I think 5 is bad enough. So, you have to do something about it because 5 doesn’t get jobs given we are adding 1 million people to the workforce every month.”

“India needs far stronger growth but it is not going to come from tinkering. It really needs another generation of reforms. Good news, the government has political strength and the power to undertake those reforms. Bad news, [it] hasn’t done so so far,” he said.

Canadian economy ekes out modest 0.1% gain in August

Statistics Canada says real gross domestic product grew 0.1 per cent in August, following no change in July. Economists on average had expected growth of 0.2 per cent for the month, according to financial markets data firm Refinitiv.

READ MORE: Bank of Canada holds rate at 1.75%, says Canada’s ‘resilience’ will be ‘tested’

Statistics Canada says 14 out of 20 industrial sectors posted gains. A rebound in manufacturing helped goods-producing industries rise 0.2 per cent after two months of declines. The manufacturing sector grew 0.5 per cent as durable manufacturing rose 1.0 per cent, while non-durable manufacturing fell 0.2 per cent.

Services-producing industries edged up 0.1 per cent. This report by The Canadian Press was first published Oct. 31, 2019.

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© 2019 The Canadian Press


Fiat Chrysler and Peugeot to merge, create world’s 4th largest carmaker

Fiat Chrysler and France’s PSA Peugeot said Thursday they have agreed to merge to create the world’s fourth-largest automaker with enough scale to confront big shifts in the industry, including a race to develop electric cars and driverless technologies.

Italian-American Fiat Chrysler brings with it a strong footprint in North America, where it makes at least two-thirds of its profits, while Peugeot is the No. 2 automaker in Europe.

Both lag in China, however, despite the participation of Peugeot’s Chinese shareholder, Dongfeng, and are playing catching up in developing electric vehicles.

Fiat Chrysler shares were trading up 9% at 14 euros in Milan, while PSA Peugeot shares were down 3.2% to 22.84 euros.

READ MORE: Fiat Chrysler recalls over 660,000 trucks over concern about steering issue

The 50-50 merger is expected to offer savings of 3.7 billion euros ($4 billion), which the automakers expect to achieve without any factory closures — a concern of unions in both France and Italy where the carmakers have more overlap.

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Fiat Chrysler’s strongest brands are Jeep SUVs and Ram trucks and it is focusing on relaunching its premium and luxury brands, Alfa Romeo and Maserati, with a focus on hybrid engines. It still makes smaller cars under the Fiat marquee, mostly for the European and Latin American markets.

PSA Peugeot makes mostly small, city-friendly cars, family sedans and SUVs under the nameplates of Peugeot, Citroen and Germany-based Opel, which it bought in 2017. That is where the companies can expect to have the most overlap.

The new company would be worth $50 billion, with revenue of 170 billion euros ($189 billion). It would produce 8.7 million cars a year — still behind Toyota, Volkswagen and the Renault-Nissan alliance, which make over 10 million each.

Why did the government write off the Chrysler loan and should taxpayers be told?

Why did the government write off the Chrysler loan and should taxpayers be told?

Once a merger is finalized, PSA Peugeot CEO Carlos Tavares will be chief executive of the new company, with Fiat Chrysler Chairman John Elkann becoming chairman. Fiat Chrysler CEO Mike Manley will have a senior executive role.

“This convergence brings significant value to all the stakeholders and opens a bright future for the combined entity,” Tavares said in a statement.

Manley called it “an industry-changing combination,” and noted the long history of co-operation with Peugeot in industrial vehicles in Europe.

The 11-member board will be made up of five members from each company plus Tavares, who is locked in as CEO for five years.

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READ MORE: Ford motors to cut 450 jobs at Oakville assembly plant, halts production on Ford Flex, Lincoln

The combined company would be able to share in the cost of developing electric cars and autonomous driving, among other things, as well as to save on investments in vehicle platforms.

European automakers have been looking to mergers and alliances for years to share R&D costs and tackle the issue of overproduction on the continent.

“We have to face the challenges of electric cars and autonomous cars. To face this you need to have champions at the world level,” French Finance Minister Bruno Le Maire told a news conference.

The French government has a stake in Peugeot through its investment bank and just five months scuttled a similar deal between Fiat Chrysler and French automaker Renault. There were no signs of resistance to this deal, beyond concerns for jobs.

Le Maire also wants the new group to create a European electric battery industry, something the French government has pushed for to ensure that European carmakers can reduce their dependence on U.S. and Asian battery technology.

The French state investment bank currently has a seat on the PSA board; Le Maire declined to answer at a press conference whether it would be retained.

There was no immediate comment from Italian officials.

Ford says government stands behind FCA workers

Ford says government stands behind FCA workers

Because of the overlap in European operations and product, there is concern among unions about job cuts, though the companies have promised to not close any plants.

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The new company would continue to have offices in France, Italy and the United States, and shares would be traded in all three countries. The parent company would be based in the Netherlands, as is currently the case with Fiat Chrysler.

Both companies have strong shareholder participation by the founding families _ the Peugeots in France and the heirs to the Agnelli family in Italy, represented by Elkann.

As part of the agreement, the main shareholders — the Peugeots, the Agnelli family investment arm Exor, as well as the Chinese investor Dongfeng and the French state investment bank — agree to maintain their stakes for seven years. The only exception is that the Peugeots could increase their stake by up to 2.5% during the first three years by buying shares from Dongfeng and the French investment bank.

The next step in the deal is expected to be a signing of a Memorandum of Understanding, which could come before the end of the year.


© 2019 The Canadian Press


Spyware row: Centre asks WhatsApp’s response

NEW DELHI: With WhatsApp revealing that Indian scribes and human rights activists were among users targeted by an Israeli spyware, the government on Thursday asked the Facebook-owned messaging platform to explain the breach and list out measures that have been taken to safeguard privacy of millions of Indians.
IT minister Ravi Shankar Prasad tweeted that the government is committed to protecting the privacy of Indian citizens. He asserted that government agencies have a “well-established protocol for interception which includes sanction and supervision from highly ranked officials in central and state governments, for clear stated reasons in national interest”.

“The Government of India is concerned over the breach of privacy of citizens of India on the messaging platform WhatsApp. We have asked WhatsApp to explain the kind of breach and what it is doing to safeguard the privacy of millions of Indian citizens,” Prasad said.

Hitting out at the Opposition, Prasad said those trying to make political gain out of it should be reminded of bugging incidents in the office of former finance minister Pranab Mukherjee during the UPA regime, as also spying over then Army chief General V K Singh.

“Those trying to make political capital out of it need to be gently reminded about the bugging incident in the office of the then eminent Finance Minister Pranab Mukherjee during UPA regime. Also a gentle reminder of the spying over the then Army Chief Gen V. K. Singh,” Prasad said.

Earlier on Thursday, the Congress alleged that the Prime Minister Narendra Modi government has been “caught snooping” after WhatsApp said journalists and human rights activists in India have been targets of surveillance, and urged the Supreme Court to hold the Centre accountable over the issue.

Facebook-owned messaging platform said Indian journalists and human right activists were among those globally spied upon by unnamed entities using an Israeli spyware Pegasus.

WhatsApp said it was suing NSO Group, an Israeli surveillance firm, that is reportedly behind the technology that helped unnamed entities’ spies to hack into phones of roughly 1,400 users.

These users span across four continents and included diplomats, political dissidents, journalists and senior government officials.

However, it did not say on whose behest the phones of journalists and activists across the world were targeted.

The information technology ministry has meanwhile sought a detailed response from WhatsApp on the issue and asked the platform to submit its reply by November 4.

Disclose NPA divergences within 24 hours: Sebi to banks

MUMBAI: Markets regulator Sebi on Thursday tightened the rules for banks to disclose any under-reporting of a bad loan that is flagged during an RBI inspection. Sebi said any net NPA divergence of 10% or more of the bank’s profit and any gross NPA divergence of 15% or more has to be disclosed within 24 hours of receipt of such a letter from the regulator.
Earlier, banks often had kept information about such divergences pending from its investors and would release those after a lag, usually with its annual financial statement.

The decision has been taken in consultation with the RBI, a Sebi circular said. This new framework will come into force with immediate effect, it added.

Cognizant plans to slash 13,000 jobs amid major rejig

CHENNAI/BENGALURU: In the largest layoff exercise ever in the Indian IT sector, Cognizant will part with some 13,000 employees in the coming months out of which some 5,000 would be reskilled.

Another 6,000 will be from the content moderation business that Cognizant does for Facebook. The company, which will exit this business, said it will try to find new homes for the employees involved.

The remaining are mid to senior level employees who the company indicated are not adding much value. While the company did not provide a split, most of the layoffs are likely to be in India, which has over 70% of Cognizant’s 2.9 lakh employees.

Cognizant CEO Brian Humphries, who took over in April and who has been taking major steps to revitalise the company, said they looked at the employee pyramid and found there had been excessive growth in the director plus population in Cognizant in recent years and also in non-billable resources.

The Facebook content moderation business has been a thorn in Cognizant’s foot. The Verge journalist Casey Newton in February investigated the working conditions of the employees in this business and found them severely wanting, and noted that while the median Facebook employee earns $240,000 annually in salary, bonuses, and stock options, a content moderator working for Cognizant in Arizona earns just $28,800 a year.

The work involves determining whether certain content violates client standards and whether they involve objectionable materials. “We’ve determined that this subset of work is not in line with our strategic vision for the company. We recognise cleansing the web is a worthy cause, and one in which companies have a role to play. For this reason, we decided to allocate $5 million to fund research aimed at increasing the level of sophistication of algorithms and automation, thereby reducing users’ exposure to objectionable content,” Cognizant management said in an investor call on Thursday.

Humphries said the company can work with its platform partners to review how it could potentially transfer the employees to a new home “once we complete our contractual obligations to our vendors.”

Cognizant started to simplify its structure at the top and mid-level earlier this year, with cumulative savings from actions taken in previous quarters of the fiscal resulting in annualised savings of over $100 million. The current cost optimisation drive will end by 2020 and result in total charges of approximately $150-200 million in severance and exit costs, and bring annualised gross savings run rate of around $500-550 million in year 2021, the company said.

Phil Fersht, CEO of HfS Research, believes layoffs in the mid/senior levels are tough, but necessary to compete on niche digital projects with mid-cap IT players with lesser mid management weight. “There is an excessive layer of middle management in Cognizant, not unlike several of its competitors, and this impedes the firm’s ability to price competitively in a cut-throat market,” he said.

Cognizant said it continues to recruit and hire talent around the world with a focus on its digital priority areas. It said it plans to hire 5,000 for its digital operations.

The exit from the content moderation business will result in a revenue loss for Cognizant of $240-$270 million on an annualised basis in its communications, media and technology (CMT) segment. Moshe Katri, MD of US-based Wedbush Securities, said the management is targeting adjusted operating margin in 2020 to be in the range of 16%-17%. “The new CEO’s ambitious `disruptive’ strategic plan effectively makes 2020 an investment year (sales, infrastructure, skill sets, acquisitions), which will likely also showcase a much more competitive Cognizant in the large deal space,” he said.

Core sector output shrinks by 5.2% in September

NEW DELHI: Output of core infrastructure industries shrank by 5.2 per cent in September 2019 as seven of eight sectors witnessed negative growth, according to official data released on Thursday.
The eight core sectors had expanded by 4.3 per cent in September 2018.

Production of seven sectors of coal, crude oil, natural gas, refinery products, cement, steel, and electricity contracted in September.

Fertilizers production increased by 5.4 per cent in September 2019 over the year-ago month.

During the April-September period, the growth of core industries fell to 1.3 per cent against 5.5 per cent in the year-ago period.