Park Jin Hyuk sat alone in the huge conference room.
DS Telecom's weekly executive meeting had ended. Usually he was the first to leave, but today he hadn't left.
Jin Junyu walked in hurriedly.
"Chairman, there are results."
Today is April 1st, April Fools' Day.
But because of the time difference, it is still March 31st in the United States.
Park Jin Hyuk has been waiting for news from the other side of the ocean.
“…No meeting was held.”
"Not open?"
Public opinion is paying attention to the meeting on the other side of the ocean today, but the news is that the meeting was not held.
"What's going on?"
"The reason is unclear. Either one party was unwilling to attend or the United States stopped mediating. In short, the meeting did not take place."
Throughout March, many people were eagerly hoping that Saudi Arabia and Russia would sit down and talk, but now their hopes have been dashed.
The inevitable consequence is that global oil production has fallen into a state of out of control.
In late March, Saudi Arabia and Russia increased their production, which is bound to trigger a chain reaction, with countries such as Algeria, Venezuela in South America, and the UAE and Kuwait in the Middle East also taking the same measures.
"Doesn't the United States have any response to this?"
With the continuous advancement of shale oil extraction technology, the United States became the world's largest oil producer last year, so Park Jin Hyuk once judged that it was the United States that had friction with Saudi Arabia.
"The US government has not given any response, except to deny that it had ever promised to mediate."
"Didn't they make a formal commitment?"
“…I checked, and the US government hasn’t made any formal commitment.”
The United States will mediate, which was the view of all media, and was eventually taken as an official commitment from the US government.
"Could it be that the United States had no intention of mediation from the very beginning?"
"This possibility cannot be ruled out."
Could it be that the United States wants the public to have this illusion?
“What is the current oil price level?”
“It’s gone all the way down to $31.”
Yesterday, oil prices once approached $40.
"How much has crude oil production increased so far?"
"Production is estimated to have increased by more than 5 million barrels per day."
"estimate?"
"Yes, these are all estimates. There is no official statistics yet."
“…the market will become more panicky.”
Having said that, Park Jin Hyuk stood up.
Guo Xiji has signed agreements with shipowners in Singapore and Greece to lease 15 VLCCs and has paid a 10% advance payment of 16 billion won (about 84.65 million RMB).
“The rental rate for oil tankers has reached 30% of the oil price?”
“Yes, because gas prices are so low.”
"This is my biggest investment to date, and I'd be lying if I said I wasn't nervous."
Park Jin Hyuk said.
"But fortunately, everything is developing as you expected."
"Um."
Even if the oil price really dropped to $10, this investment would still require 500 billion (about 2.65 billion yuan) in funds, and the funds would be obtained by mortgaging the equity of Asahi System Integration, so Park Jin Hyuk still felt somewhat nervous.
As expected, after the news that the United States had no intention of mediating came out, crude oil futures were sold off in large quantities and oil prices began to plummet.
Saudi Arabia's daily crude oil production has increased from 9 million barrels to 12 million barrels.
Although Russia's increased production has not been announced, industry insiders believe that it will not be less than Saudi Arabia's. In this case, the total increase in production has reached 10 million barrels.
"How low do experts think oil prices will fall?"
"It is believed that it will fall to more than $20, as some experts believe that Saudi Arabia will not continue to increase production."
"Why?"
"Because Saudi Arabia and the United States have a strong friendly relationship, once the United States exerts influence, it will change its strategy."
"Um……"
Li Zhongwu believes that it makes sense that Saudi Arabia will not fall out with the United States.
It is also unknown whether Saudi Arabia's production increase had the tacit approval of the United States in advance.
"Chairman, there are new developments within the group."
"What happened?"
"DS Heavy Industries has provided guarantees again."
"Didn't DS Energy just provide a guarantee for the Brazilian project?"
"The object of this guarantee is DS Energy."
"You mean, DS Heavy Industries guaranteed DS Energy?"
“Yes, DS Energy has run into cash flow problems due to the large amount of crude oil imported.”
"DS Energy originally had ample cash."
"…Part of its cash flow was invested in projects in Brazil, and coupled with the recent large-scale imports of crude oil, its cash flow has bottomed out."
Park Jin Hyuk sat down on the chair.
"Some public opinion pointed out that DS Heavy Industries' continuous provision of guarantees has affected its own credit."
“Why is there this sound?”
Park Jin Hyuk is worried that the crisis of DS Energy may bring fatal impact to the entire DS Group.
"Because the Brazilian subsidiary's capital is relatively small, while the amount of funds guaranteed for DS Energy is too large."
"What is the amount of the guarantee?"
"It is reported that the scale is around 2 trillion yuan (about 10.6 billion RMB)."
"so much?"
"Because...refining margins are falling very quickly."
"Could it be that DS Energy's main business has also run into problems?"
"Yes, the original gross profit of around $6 has dropped to more than $2."
"What's the reason?"
The gross profit of the refining business has actually fallen by half, which is very rare.
The reason why the refining industry can attract a lot of investment is the stability of its business.
The industry's break-even point is between $4 and $5. The industry's gross profit has always been stable at more than $6, which means that as long as crude oil is refined, money can be made.
Now, the industry's gross profit has fallen below the break-even point, meaning the more oil it refines, the more it loses.
DS Energy has stored a large amount of crude oil and even rented tankers. If it does not consume it quickly, it will have to pay $50,000 in ship rental fees per day.
In this case, it has no choice but to continue production even if it loses money.
"I didn't expect there would be problems in the oil refining process."
"The epidemic has caused a sharp contraction in the economy and market demand, and the continued decline in refined oil prices has led to this situation."
Park Jin Hyuk took out a cigarette and tapped it on the table.
"Hmm... the new antigen test kit has been put into use, right?"
“It has officially been put into use.”
The epidemic is what Park Jin Hyuk is most concerned about. The South Korean government originally thought that the domestic epidemic could be brought under control under various strict epidemic prevention measures.
However, unexpectedly, more than 500 patients were detected on the first day the antigen reagent was put into use.
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