12/10/2016 World Business Report

Critical negotiations between oil producers could pave the way

Oil prices are going up in anticipation, but will

And the smoke hasn't cleared yet - shares of Samsung take another

beating as senior managers grapple with the crisis surrounding

the discontinued Galaxy Note7 smartphone.

We will reveal the true value of second-hand snickers. You will be

surprised. Stay with us for that -- sneakers.

The price of oil is in the spotlight again today

as the World Energy Congress meets in Istanbul.

Ministers from oil producing nations will be hammering out how to ensure

the continued recovery in the price of crude after hitting record lows.

This meeting follows last months announcement from OPEC that the oil

cartel would cut production for the first time since 2008

That left one unanswered and very tricky question of which countries

would reduce their output - and by how much?

In other words, how will OPEC share the burden among its members?

And that is expected to be the focus of a lot of horse trading

at the World Energy Congress today - this ahead of OPEC's next official

Still, despite the lack of clarity about the OPEC production cut,

oil prices have been bouncing back in recent weeks.

In fact, they've risen by about 15% since its announcement in September.

Prices have also been boosted by President Putin's

announcement that Russia will also limit production.

With me is James McCullagh, oil analyst at Energy Aspects.

Good morning. Soak the devil is in the detail, and in a sense, we don't

know the detail. I wonder if we will get any more clarity today at the

World Energy Congress? I think the World Energy Congress has probably

been overplayed in terms of its importance as a 1-off event. The

process, as you mentioned, for hammering at the individual

allocations will be iterative, and that iterative process will go right

to the wire. Who is there from OPEC at this Congress in Istanbul? All of

the key players have representatives, not necessarily oil

ministers. Iran and Iraq do not have oil ministers there. In terms of the

key players at the moment, Russia is there. Saudi Arabia is there. It is

represented by ministers. The big news out of the Congress is that

Russia has committed to chip in with production cuts. I know one of your

colleagues is there as well. It is quite funny. The wires overnight are

saying Russia is perhaps not committed to that suggestion it made

at the beginning of the week and now the price of oil is going down. It

will be like that now until the end of November, every twist and turn

will cause the price to spike awful? I think it will be very volatile as

it was in the run-up to Algiers in September. Crude came down 1%

overnight. That was following concerns perhaps at a potential lack

of substance in Russia's commitment. We need to remember that Russia has

no history in implementing cuts. Russia is not a member of OPEC.

There is no precedent, if you like. Will this meeting going on in

Istanbul that has been going on for several days, the World Energy

Congress, will it help in getting some kind of unity together among

OPEC members before that meeting in Vienna? As we all know, they

announced the production cut, which was the big news that the price to

spike. But we don't know if around, Iraq, Saudi Arabia, they will agree

on who will carry the burden -- Iran. We do note the time being that

OPEC as a group has committed to cutting 700,000 barrels a day. The

problem you have is that the goalposts are continually moving. We

have just had OPEC production data out for September, and they are

pushing at record highs. The amount they will need to cut any potential

amount that Russia may need to cut is in our opinion growing. So the

Congress is one step in a long process that will go on right down

to the wire. One would expect Saudi Arabia to take more than half of the

burden. But as we saw in the run-up to Algiers, Iran might not Sarah Lee

agreed to freeze at a certain baseline level. -- might not agree.

That will have to be hammered out. We will see in the coming weeks.

Thank you for your time. Interesting. If we do get any

announcements out of Istanbul, we will fill you into day. But let's

move on to the other big story, send some. -- Saint-Saens. -- Samsung.

Samsung shares opened down a further 3% at the start of the trading

The share price has since recovered a little since then,

but the turmoil at the South Korean tech giant is putting renewed

Samsung has ordered a permanent halt to production of its newest flagship

smartphone because of continued reports the devices can catch fire.

It's also told retailers worldwide to stop selling the Galaxy Note7,

and told people with the phones not to turn them on.

The share price has fallen on top of an 8% fall yesterday. People are

realising the ramifications of this are wired and unknown. -- wide. The

cost to the company of replacing and reimbursing people for 2.5 million

smartphones, you could put a figure on that. And you can also try to put

a figure on the lost sales. This was meant to be the big seller for the

next 18 months. It now will not be. Those sales will go to other Samsung

models and also to Apple and Chinese models. You can estimate that. But

you can't really estimate the damage to the brand. I think people are now

realising that they are big questions for Samsung. Do they give

up on Alex? It had been very strong. -- galaxy. It was starting to

challenge Apple as an iconic objective desire. Those kind of bids

of jewellery that also do electronic things. Samsung was starting to win

in that battle over the high end build of the slide phone market.

Does it now give up on that because the successor to that successful

model has clearly failed? -- smart phone. Investors are starting to

realise it is not just a simple matter of a recall of one model of a

friend. Questions are being asked how Samsung is being run and who is

at the top -- model of a phone. I know there is an activist investor

pushing for change at the top. How is that playing out? The big problem

is that like all of the businesses in South Korea, it is a family firm.

The project of the family has been serious the ill now and is

incapacitated -- patria. He is not coming back, but he is still the

patriarch. His son is in charge, de facto. Though not formally. The

question really is what kind of authority has he got? What kind of

experience has this and got? Is he the right man for the job? And then

the wider question, if you pass leadership on from father to son,

automatically, is that a good way of doing business? That question is

there. From the outside, it is absolutely impossible to understand

or answer how that power structure actually works. If you can't

understand the power structure at the top, you have big questions

about the company. All right. Thank you very much. So Samsung one of the

biggest losers for the markets certainly in South Korea. As you can

see, we have markets falling across-the-board in Asia. It follows

a similar story on Wall Street the night before. We have a week yen and

announcements of them the exact further stimulus in Japan, but

Federal Reserve minutes will be released later today which will give

more information as to when they will lift interest rates in the

United States. All attention on that. We have seen the pound rise a

bit. We will explain why were we look through the stories in the

press. That is in just a moment. See you then.

Sally will be back in a moment as we look through some of the

international news.