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Iraq strikes deal with Iran to secure summer gas imports

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Iraq depends on imports from neighbouring Iran for a third of its gas needs
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Iraq has agreed to pay $1.6 billion in debt to Iran by June 1 to secure a steady gas supply for power generation through the summer, its electricity minister said.

Chronic underinvestment through decades of war and sanctions has left Iraq dependent on imports from its eastern neighbour for a third of its gas needs.

But US sanctions on Iranian oil and gas have complicated Iraq’s payments for the imports, leaving it in heavy arrears and prompting Iran to respond by periodically switching off the taps.

The result has been extended power cuts across much of the country, particularly during the summer, when temperatures routinely reach 52 degrees Celsius (126 degrees Fahrenheit) sending demand for refrigeration and air conditioning soaring. 

“We have reached agreement on supply in sufficient quantities. We have agreed on 50 million cubic metres (per day) during the four summer months,” acting electricity minister Adel Karim told state television late Wednesday.

During winter, Iraq will import between 10 million and 20 million cubic metres per day of Iranian gas, he added.

“They agreed to supply us with the gas but they had conditions. They are demanding… $1.6 billion,” Karim said, adding the payment will have to be made “by the start of June”.

The figure represents Iraq’s arrears for 2020, which have yet to be settled because of the arcane payment method Iraq is obliged to use to comply with an exemption from US sanctions on Iran.

Iraq is not allowed to simply hand over cash to Iran. Payments must be used to fund imports of food and medicines.

Karim said gas imports from Iran are currently flowing at 38 million cubic metres per day.

Alternatives under consideration include a connection to the Turkish national grid to supply electricity to Iraq’s second city Mosul and a link to Kuwait and Saudi Arabia to help power the south.

Karim said imports of liquefied natural gas were also expected to begin from Qatar in the “next few months” but underlined that no alternative source was likely to replace Iranian gas soon.

“In my humble opinion we will depend on Iranian gas for five or 10 years to come,” he said.

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Crisis-hit Sri Lanka set for new PM, unity government

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Respected five-time former premier Ranil Wickremesinghe was the frontrunner to head a 'unity government' in Sri Lanka
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Sri Lankan President Gotabaya Rajapaksa was set Thursday to name a new prime minister, hoping to assemble a unity government after weeks of anti-government protests triggered by a dire economic crisis turned violent.

However, while the mooted new prime minister — five-times ex-premier Ranil Wickremesinghe — and his cabinet can be appointed without a vote, it was unclear if he will be able to get any legislation through parliament.

In a televised address to the nation on Wednesday night, Rajapaksa stopped short of yielding to weeks of nationwide protests calling for him to resign over the country’s worst economic downturn since independence.

But in a bid to win over the opposition demanding he quit before agreeing to any new government, the 72-year-old pledged to give up most of his executive powers and set up a new cabinet this week.

“I will name a prime minister who will command a majority in parliament and the confidence of the people,” Rajapaksa said in the televised speech.

Mahinda Rajapaksa, the president’s brother, resigned as prime minister on Monday after his supporters attacked anti-government supporters who had been protesting peacefully for weeks.

This marked a turning point and unleashed several days of chaos and violence that killed at least nine people and injured more than 200, with dozens of Rajapaksa loyalist homes set on fire.

Security forces patrolling in armoured personnel carriers with orders to shoot on sight anyone engaged in looting or violence have since largely restored order.  

A curfew was lifted Thursday morning but only to be reimposed after a six-hour break allowing Sri Lanka’s 22 million people to stock up on essentials.

– Opposition split –

Sri Lankans have suffered months of severe shortages of food, fuel and medicines and long power cuts after the government, short on foreign currency to pay its debts, halted many imports.

The South Asian island nation’s central bank chief warned Wednesday that the economy will “collapse beyond redemption” unless a new government was urgently appointed.

Wickremesinghe, 73, is seen as a pro-West free-market reformist, potentially making bailout negotiations with the International Monetary Fund and others smoother.

The main opposition SJB party was initially invited to lead a new government, but its leader Sajith Premadasa insisted that the president first step down.

In recent days the party has split, with a dozen MPs from the SJB now pledging support to Wickremesinghe.

With many from Rajapaksa’s party having defected in recent months, now no group in the 225-member assembly has an absolute majority, making parliamentary approval of the unity government’s legislation potentially tricky.

Rajapaksa was set to meet with party leaders later Thursday as more names have been suggested for the post of prime minister, an official close to the negotiations told AFP. 

However, Wickremesinghe has already been working closely with Rajapaksa to shake up the finance ministry and the central bank to make sweeping fiscal and monetary policy changes, the source said. 

The central bank almost doubled key interest rates and announced a default on Sri Lanka’s $51-billion external debt as part of the policy shift, officials said. 

Front-line opposition legislator Harin Fernando from the SJB said he decided to remain neutral because SJB leader Sajith Premadasa refused to form a government as long as Rajapaksa remained president. 

“We can’t be imposing conditions that cannot be fully met. First, we must address the economic crisis. We need at least $85 million a week to finance essential imports. We must collectively find a way to raise this money urgently,” Fernando said. 

He said he expected a unity government to be formed on either Thursday or Friday. “We can’t wait any longer,” he added.

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Nissan reports first full-year net profit in three years

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Nissan reported a positive full-year net profit for the first time in three years
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Nissan reported a positive full-year net profit for the first time in three years on Thursday, citing cost-saving efforts and a stronger US market, but issued cautious forecasts.

The Japanese auto giant was on a rollercoaster even before the disruption caused by the pandemic and, more recently, the conflict in Ukraine. 

It had battled slowing demand and the fallout from the arrest of its former chief Carlos Ghosn and is currently implementing a plan involving slashing models, cutting costs and restructuring operations.

It cited some of those efforts in reporting an annual net profit of 215.5 billion yen ($1.67 billion) — its first net profit since fiscal year 2018-19 — which surpassed its forecast of 205 billion yen.

But looking ahead, it warned of a market environment “more severe than in fiscal year 2021, due to semiconductor supply shortages, higher raw material prices and logistics costs, the crisis in Ukraine as well as the impact of lockdowns on parts supplies in China.”

It projects a net profit for the current fiscal year of 150 billion yen, following the conservative lead of other automakers facing headwinds caused by supply disruption.

“It is clear that our industry and therefore our performance was impacted by intensifying headwinds in the last fiscal year,” said chief operating officer Ashwani Gupta.

“These challenges, magnified in the fourth quarter with rising energy prices, continued supply chain shortages and ongoing Covid disruptions,” he said.

“While Nissan has put in place agile business continuity plans, these continuous changes in the market are creating unprecedented uncertainty.”

Its bottom line was helped by a recovery in demand and the effects of a weaker yen, which has hit 20-year lows against the dollar in recent months.

A weaker yen inflates the value of profits Nissan earns with overseas sales of its vehicles, and is a factor helping prop up earnings for many Japanese automakers as they battle supply chain disruption.

Nissan announced it would pay a dividend for the first time in three years, reflecting its positive results.

– Nissan’s difficulties –

Even before the global crisis, the firm was struggling with increasing sales costs and the saga surrounding its former chief Ghosn.

The one-time auto tycoon was detained in Japan in 2018, accused of financial misconduct charges that he denies, but jumped bail and fled to Lebanon the following year.

A Tokyo court in March handed a six-month suspended sentence to former Nissan executive Greg Kelly over allegations that he helped his boss attempt to conceal income.  

In April, French authorities issued an international arrest warrant for Ghosn, who has lived in Lebanon since his daring getaway from Japan in 2019, on allegations including corruption, misuse of company assets and money laundering. 

Like other automakers, Nissan has been working to bolster its electrification mix, with a goal of having more than 40 percent of its models be electric by 2026.

Gupta said the firm was also ramping up battery development, including developing solid state batteries in-house.

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Nissan reports first full-year net profit in three years

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Nissan reported a positive full-year net profit for the first time in three years
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Nissan said Thursday its full-year net profit to March 2022 returned to the black for the first time in three fiscal years, citing cost-saving efforts and positive US market conditions.

The Japanese auto giant reported an annual net profit of 215.5 billion yen ($1.67 billion), beating the company’s forecast of 205 billion yen and representing the first net profit since fiscal year 2018-19.

But looking ahead, it warned of a market environment “more severe than in fiscal year 2021, due to semiconductor supply shortages, higher raw material prices and logistics costs, the crisis in Ukraine as well as the impact of lockdowns on parts supplies in China.”

It projects a net profit for the current fiscal year of 150 billion yen, following the conservative lead of other automakers facing headwinds caused by supply disruption.

“It is clear that our industry and therefore our performance was impacted by intensifying headwinds in the last fiscal year,” said chief operating officer Ashwani Gupta.

“These challenges, magnified in the fourth quarter with rising energy prices, continued supply chain shortages and ongoing Covid disruptions,” he said.

“While Nissan has put in place agile business continuity plans, these continuous changes in the market are creating unprecedented uncertainty.”

The Japanese auto giant has faced a series of trials in recent years, from weak demand to the fallout from the arrest of former boss Carlos Ghosn, now an international fugitive in Lebanon. 

But the crisis-hit company has clawed its way back, helped in part by a recovery in demand for cars, and the effects of a weaker yen, which has hit 20-year lows against the dollar in recent months.

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