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BP invested more money in Egypt than anywhere else in the last 2 years

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BP’s Dudley praised the “strong set of reforms” that had been implemented in Egypt in recent years.

“We’ve seen this big change over the last four or five years that has fundamentally changed things. You go back, five or seven, eight years ago and electricity wasn’t even assured each day and now the infrastructure’s here … You’re actually seeing Egypt move from a producing country into one that’s going to begin to export energy as well and become a Mediterranean hub, it’s very exciting.”

BP announced the first gas production from the second stage of its large gas venture in Egypt, the West Nile Delta development, on Monday.

Stage one of the project, which started producing in 2017, included gas production from the first two fields, Taurus and Libra. The second phase of the project — the Giza and Fayoum development — includes eight wells and is currently producing around 400 million cubic feet of gas per day (mmscfd) and is expected to ramp up to a maximum rate of approximately 700 mmscfd. The third stage of the West Nile Delta project will develop the Raven field and production is expected in late 2019, BP said in a statement Monday.

When fully onstream in 2019, combined production from all three phases of the West Nile Delta project is expected to reach up to almost 1.4 billion cubic feet per day (bcf/d), equivalent to about 20 percent of Egypt’s current gas production. All the gas produced will be fed into the national gas grid. BP has an operating stake of 82.75 percent in the development, the company noted.

Asked how much BP could spend in Egypt in 2019, Dudley said the amount would be significant. “There will be a third phase we’re spending on, we’re exploring today with other companies … (So we’ll be spending) $1.8 billion give or take. That’s a lot,” he said.

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Why Facebook, Tinder, Youtube, Twitter are launching lite apps

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The Facebook app is displayed on the screen of an iPhone.

Fabian Sommer | picture alliance | Getty Images

Facebook, YouTube, TikTok, Twitter and even LinkedIn have pushed out “lite” versions — smaller and simpler iterations of their platforms — and that has everything to do with emerging markets, analysts say.

Last month, Spotify Lite officially launched in 36 markets, while Tinder has announced plans to launch its own “lite” app.

With around 6.5 billion people living in developing economies, there’s a lot of potential for technology firms to tap on — but they need to take a different approach because of technological limitations in those markets, according to analysts.

Users in the developing world typically use basic mobile phones, instead of larger or more advanced devices, but that poses a problem amid increasingly advanced apps. Aside from taking up space in devices, full versions of apps have many features that take time to load, while others gobble up large amounts of mobile data.

“Smartphone penetration has been growing quickly in emerging markets … but the limits on data consumption and connectivity can be challenging for users,” said Jun Wen Woo, a senior analyst at IHS Markit.

A Pew Research Center survey reported that a median of 27% of adults in 11 emerging market countries say they have a smartphone, but not a tablet or computer at home. In the U.S., nearly 75% of adults own desktops or laptops, while around 50% own tablet computers.

The prevalence of fixed-broadband internet access is also lower in developing countries, while mobile data continues to be expensive for users in those markets, according to a 2017 GSM Association report.

“Tech companies are offering Lite apps to tailor their services to data-conscious users,” Woo said.

The type of device also matters, said Adrian Lee, a senior director and analyst at Gartner. Consumers in emerging markets generally use entry-level, slower smartphones which means users are likely to be limited in the number of applications they can download and run smoothly on a regular basis, he pointed out.

Network infrastructure also lags behind the developed world, leading to slower internet speeds and a less pleasant experience for users.

“When we travel, for example, when we use WiFi (in) different other places, you realize that some WiFis work better and some don’t,” said Naveen Mishra, associate director for ICT at Frost & Sullivan.

‘Less is more’

To get around those issues and to attract users in emerging markets, technology firms have been launching “lite” apps, which take up less space on devices, have fewer features and use less data — while still trying to provide a similar user experience.

However, some functions are usually sacrificed.

“(Tech firms) need to figure out that in this market, this particular feature of the application is the most used, or some of the other features are not needed,” said Mishra. They can then cut out those features in order to make it lighter, he said.

For example, Tinder Lite will take up 25 times less space on smartphones and consume less mobile data, according to Tinder CEO Elie Seidman. But the app will still have “all core functionality that has made Tinder so popular,” Seidman said.

That includes “the ability to Like or Nope profiles, match, and chat with new people who are mutually interested in connecting,” he added.

Frost & Sullivan’s Mishra said the concept for “lite” apps is that “less is more.”

An app won’t be successful just because it is complex with many capabilities included, he said. In fact, a lighter app has a higher chance of more customers being able to use it, he added, citing trends.

Gaining traction

There have been a growing number of downloads for “lite” applications in major developing regions, according to Sensor Tower, an app analytics platform.

Facebook Lite has been downloaded more than 650 million times in India, South America and Southeast Asia, and is the most downloaded “lite” app in those regions.

In India and Southeast Asia, TikTok Lite is the fifth most popular “lite” app, and is targeted at “first time smartphone users who may not have access to high-speed internet connection,” said a spokesman. It has been downloaded more than 35 million times in India and Southeast Asia since the start of this year.

Other popular “lite” apps include YouTube Go, Messenger Lite and Opera Mini, a web browser similar to Google Chrome and Internet Explorer.

In fact, while the full versions of apps still have more downloads, their “lite” equivalents are seeing a higher rate of adoption, according to Sensor Tower.

Sensor Tower’s co-founder, Alex Malafeev, said: “Lite versions of popular mobile apps should continue to outpace adoption of their fully featured counterparts in developing markets … where constraints on data and a prevalence of lower-end devices are driving their popularity.”

“Any reasonably popular app can benefit from a lite version in these markets, and developers should be thinking about offering them from the outset there,” he said.

Tinder, meanwhile, is preparing to launch its “lite” version as part of its “sharpened focus on the APAC region,” the company’s CEO, Elie Seidman, said.

“There are roughly 300 (million) singles in the APAC market and a growing population of tech-savvy young people looking to meet new people,” he said, adding that technology adoption is high.

Match Group, Tinder’s parent company, expects Asia will make up 25 percent of its portfolio’s total revenue by 2023.

How ‘lite’ apps compare to full versions

  1. Facebook versus Facebook Lite
    Users who are tired of having many different apps would be happy to have Facebook Lite, which allows access to Messenger functions without exiting the app.
    The lighter version of the app also retains many classic Facebook features, but Facebook Lite doesn’t have the option of letting videos play automatically on mobile data. Facebook users can set this in their preferences, but videos on Facebook Lite can only be set to autoplay on WiFi.
  2. YouTube vs YouTube Go
    One big difference between these two apps is that YouTube Go allows users to download videos so they can be accessed on the app later, even without an internet connection.
    That allows each video to be viewed over and over without consuming more mobile data. The videos can also be shared offline via Bluetooth technology. YouTube Go also informs users how much data is required to stream or download any video.

— CNBC’s Chloe Taylor and John Schoen contributed to this report.

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Singapore steps up scrutiny of shell firms to combat money laundering

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Signage for the Monetary Authority of Singapore (MAS) is displayed outside the central bank’s headquarters in Singapore.

Sam Kang Li | Bloomberg | Getty Images

Singapore’s central bank is raising its guard against money launderers increasingly using onshore shell companies to mask their transactions, a senior official said.

Valerie Tay, who heads the anti-money laundering department at the Monetary Authority of Singapore (MAS) said banks had closed accounts of several onshore shell companies over the past year, after detecting unlawful transactions.

“When we looked deeper into the risks, we realized that while criminals may still be using offshore companies, actually they have shifted to using onshore companies to evade detection,” Tay told Reuters in an interview, adding that this trend was also noticed in other financial centers.

“And that’s when we started to be concerned. Because when the modus operandi of criminals shifts to evade detection and the industry isn’t vigilant enough, the criminals can get their way,” she said.

Singapore’s position as one of the world’s leading financial centers and a trade hub make it particularly vulnerable to money laundering due to large cross-border flows.

Traditionally, money launderers and tax evaders have used shell companies in offshore centers worldwide. But the relative ease of starting a business in Singapore renders it potentially more vulnerable to misuse of shell firms, which otherwise have many legitimate purposes.

Tay, a 20-year veteran at MAS and former journalist, said red flags at shell companies included disproportionately large or high velocity transactions and unusual patterns in dealings.

She said the MAS has told banks to “actively look for shell companies that can be abused for illicit financing. So there’s a supervisory expectation for pro-active detection and disruption of illicit finance.”

Data analytics and network analysis had helped banks map out relationship linkages to detect unlawful transactions at shell companies in the past year, Tay said.

The MAS’ anti-money laundering department, set up three years ago to conduct functions that were carried out by different units, has grown to 30 specialists from 20. It works closely with the Commercial Affairs Department.

In 2015, Singapore discovered that funds linked to a scandal-ridden Malaysian state fund, 1Malaysia Development Berhad, had been laundered through its banking system. As a result, MAS shut down the local units of two private banks in 2016, froze millions of dollars in bank accounts, charged private bankers and imposed fines on banks.

“It was a wake-up call for everyone,” said Tay.

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People’s Bank of China sets RMB midpoint at 7.0326 per dollar

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U.S. banknotes and Chinese yuan notes.

Paul Yeung | Bloomberg | Getty Images

China’s central bank set the official midpoint reference rate for the yuan at 7.0326 per dollar on Tuesday, stronger than what analysts were expecting.

It was the fourth consecutive session where the People’s Bank of China fixed the midpoint at a level weaker than the psychologically important 7-yuan-per-dollar level.

Analysts were predicting the midpoint to be set at 7.0421 per dollar after the yuan last traded at 7.0578 in Monday’s session, according to Reuters estimates.

The yuan has become a focal point among investors because of the ongoing trade war between the United States and China, which escalated earlier this month when President Donald Trump said the U.S. is putting 10% tariffs on another $300 billion worth of Chinese goods starting Sept. 1.

The PBOC lets the spot rate trade with a range of 2% above or below the day’s official midpoint fix and this is known as the onshore yuan. The less restrictive exchange rate used outside mainland China is known as the offshore yuan. Investors usually look at the difference between the onshore and offshore exchange rates to determine if the Chinese central bank is willfully manipulating the yuan.

The yuan depreciated past 7 per dollar last week for the first time since the global financial crisis of 2008, which prompted the U.S. Treasury Department to designate China as a currency manipulator. A weaker currency makes a country’s exports cheaper and the Trump administration has consistently complained that a cheaper yuan will give China a trade advantage.

Since the end of July, the onshore yuan weakened more than 2.5% while the offshore rate fell 2.81%. The offshore yuan last traded at 7.0959 against the greenback at 8:58 a.m. HK/SIN on Tuesday.

“The recent sudden devaluation of the (yuan) sounds like a deja vu and brings us to review the August 2015 experience,” Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis, wrote in a note dated Aug. 12. “This is in line with our view that there is no point of defending a psychological level under the priority of growth.”

Garcia Herrero said that given the risk of additional tariffs from the U.S. and China being labeled a currency manipulator, the Chinese currency, which is also known as the renminbi, is “likely to face higher depreciation pressure and hence potential capital outflows.”

“We believe that a large depreciation will be avoided as it will push too much capital out of China and put further constraints on liquidity, and thereby growth,” Garcia Herrero said, adding in the onshore market, volatility will be guided by a gradual change in the daily midpoint fix. In the offshore market, “the liquidity pool is much smaller and more China’s central bills will be issued to mop up the liquidity to avoid speculation.”

Reuters and CNBC’s John Schoen contributed to this report.

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