Americas: Brazil’s Petrobras cancels diesel price hike amid ongoing divestment efforts

Sectors: gas and oil
Key Risks: political interference; business disruption

In Brazil, state-owned oil company Petrobras cancelled a planned 5.7 per cent diesel price hike, causing its shares to fall by 8 per cent as uncertainty increased amongst investors over political interference in Petrobras’s pricing strategy. President Jair Bolsonaro demanded the cancellation for keeping fuel prices fair for truckers and to avoid a repeat of the nationwide truckers’ strike, which paralysed Brazil in May 2018. Meanwhile, on 9 April the Energy Minister Bento Albuquerque announced that the government would pay Petrobras US$9bln after revising a transfer-of-rights oil contract, which ended a five-year contract dispute. On 5 April Petrobras agreed to sell a 90 per cent stake in its TAG gas pipeline to a consortium including France’s Engie and Canada’s Caisse de Depot et Placement du Quebec for US$8.6bln in the largest single asset divestment so far amid ongoing efforts to reduce debt.

Asia-Pacific: Tensions high as Indonesia enters ‘calm period’ before elections on 17 April

Sectors: all
Key Risks: political stability

On 14 April Indonesia entered a three day ‘calm period’ before presidential and parliamentary elections are held on 17 April. Incumbent President Joko ‘Jokowi’ Widodo is leading the presidential race against Prabowo Subianto by about 15 to 20 per cent according to recent polls. However, Prabowo is ratcheting up political tensions by threatening widespread discontent and civil unrest if he is not elected. Supporters of Prabowo have continued to accuse the Jokowi camp of electoral fraud and insist they will not accept another term for the incumbent. The incendiary narrative may prompt unruly supporters of Prabowo to take to streets across the country in anti-Jokowi protests over the next few days. The climate of distrust and risk of unrest will likely continue beyond election day, with Subianto highly likely to challenge results favouring Jokowi, as was the case in 2014.

Eurasia: Uzbek president raises nepotism concerns; Turkmen gas sale to Russia may resume

Sectors: primarily energy
Key Risks: corruption; nepotism

On 12 April the daughter of Uzbekistan’s President Shavkat Mirziyoyev. Saida Mirziyoyeva, was appointed Deputy Director of the State Media and Information Agency. Mirziyoyev’s younger daughter serves in a junior role in the Education Ministry. The appointment raises concerns that the nepotism that proliferated under late ex-president Islam Karimov – which lead to multinational telecommunications firms paying nearly US$3bln in fines to foreign prosecutors for bribing Karimov’s daughter – continue under Mirziyoyev despite his economic liberalisation agenda, which has seen FDI increase exponentially since he assumed office in 2016. One Turkmen media outlet reported on 15 April that the country had resumed gas sales to Russia after months of talks with Gazprom but no price or quantity has been announced.  If confirmed, the move could be a boon to the country’s long-suffering economy.

Europe: Kuciak fallout in Slovakia continues; Serbian protests gain steam again

Sectors: all
Key Risks: political stability; civil unrest

On 12 April a former Slovakian soldier, Miroslav Marcek, admitted to assassinating journalist Jan Kuciak and his fiance in February 2018. The murder led to mass protests and helped fuel anti-corruption activist Zuzana Caputova to the presidency in March. Kuciak had been investigating ties between elites, the ruling Smer-SD party, and the ‘Ndrangheta organised crime group. Three others are in custody and Marcek reportedly admitted their involvement. Police also charged businessman Marian Kocner with ordering the attack but many activists claim politicians are being protected. Further political fallout from the case is likely. In Serbia, anti-government demonstrations were held on 13 April, the latest in a weekly iteration of such protests that began last August. So far the government has been able to wholly ignore them without consequence, but there are some signs they may be gaining support even as there remains a latent risk they will fracture amid tensions between leftist and far-right backers.

MENA: Expectations of escalation in Libya as LNA targets Tripoli, may move on northern oil terminals

Sectors: all
Key Risks: political stability; war on land; confiscation risks

During a House of Representatives session on 14 April, the speaker confirmed the Libyan National Army’s (LNA) intentions to “liberate” the capital Tripoli from the UN-backed Government of National Accord (GNA). LNA General Khalifa Haftar met Egypt’s President Abdul Fatah al-Sisi in Cairo on 13 April. No details were released regarding the conversation. The military operation, which started on 4 April, came before a planned national conference on 14 April which was to lay groundwork for 2019 elections but was cancelled as fighting escalated, displacing thousands. The LNA will likely move for al-Sidr and Ras Lanuf oil terminals giving Harfar control over the majority of the country’s oil infrastructure and thus its revenues. G7 and GCC countries back opposing sides. Fighting will escalate given the LNA’s declared intent to “liberate” Tripoli.

Sub-Saharan Africa: Coup leader replaced but risk of further violence remains high in Sudan

Sectors: all
Key Risks: civil unrest

The new leader of Sudan’s transitional military council, Lieutenant-General Abdel Burhan, promised to overhaul state institutions, release political prisoners and engage in dialogue with the opposition. Burhan’s statement follows a tumultuous few days which saw Omar al-Bashir deposed by a coup and the military council subsequently accede to protesters’ demands by forcing key Bashir allies – including Ibn Auf, the coup leader, and security chief General Saleh Gosh – to resign. While the military has pledged to remain in charge for a maximum of two years and support the implementation of a civilian government, their precise intentions remain unclear. The principal organisers of anti-regime demonstrations, the Sudanese Professionals’ Association, have called for protests to continue until a civilian transitional council is established. A mass sit-in is ongoing outside the Defence Ministry. The security situation remains volatile and could escalate at short notice.