A good morning. Ou are watching the pulse. We are here in london. I am guy johnson. Let me take you to the bloomberg exclusive. Rosneft hasnt made a has made a huge discovery. Ryan chilcote went to the site and spoke to the rosneft ceo on by asking and started houston they would see production. Production is going to start in 70 years. That is the mid range. Demands faster, we can speed it up. Tell me what price of oil will need for a return . I think it will be enough to provide our company with a stander return. Though feels in use around the world are declining. The oil is high quality. Ae markets should give us kind of price that justifies. Five70 years will be talking around 140 a barrel. Time will tell. Where to go from here . It was a joint project with exxon. U. S. Companiesr is barred from drilling in the arctic. Exxon has to leave from here. We will doext . It on our on. We are not going to stop our work. The projects operator is our joint venture. We are not planning on changing the ventures. Eu will continue drilling as soon as next year. Yes, of course. Will continue journaling next year. The opportunity look substantial but the obstacles, talk us through what he had to say. The message he is sending here is is exxon cannot do this because of the sanctions, they could do it themselves. If you look at the scale of this fine then they would want organizations, Oil Companies like exxon to take part and they need of funding and expertise. Fine makes its much more difficult for the Obama Administration to bar Companies Like exxon from working in the arctic. The think it is a it of frome to dissuade obama upping the ante. After the end of the day, it will be difficult now the oil has been found as far as rosneft is concerned to say exxon, you have to stay away. Exxon could be back as soon as a couple of years. He was saying they are now looking to produce per se and the next five or six years anyway but they think it is something that could turn the get of the National Corporation they want back on track. Ryan, a great interview and what of the most incredible things to do. Ryan chilcote joining us. After his trip into the arctic. Where been speaking exclusively to Russian Foreign minister, sergei lavrov, and he spoke to Olivia Sterns about how they havent been coping with sanctions. The economy is not in very good shape but these things happen. Not only in russia but other countries. I am not nervous about this. We will certainly survive. I can assure you. Will find ways to substitute for the loss which would be a loss of those. And we willre help more a little later on the pulse. Hong kong stocks have taken a margaretause of the do prodemocracy protests that have taken place. A hong kong stocks have taken tumble because of the prodemocracy protest that have taken place. This is the biggest crock down we have seen since we saw the return of the rule to china. In terms of what is happening now, what is the latest and how is it looking . What is the story outside . Just stepped back into the office and i was at one of the protest sites about five minutes down the road. In front of the government and as, the main complex few mins away from the financial district. The protest have been calm. Among thed moods protesters but did they been stepping gulf. During one point, the crowd berted and there are may seven times more people than earlier in the day. Many protesters stress and black wearing yellow ribbons to support the cause and tying yellow brigands all about around railings. Things are pretty peaceful. They are handed out food and drink and towels. The Hong Kong Government has said the riot police has with the drawn. And they are pulling back the force. You can see they used to grass teargas and pepper spray. Some quite remarkable scenes for summerlike hong kong which almost never sees of this type of ink. Type of thing. It seems like the protest are gathering pace. The atmosphere is setting up. , the situation could in fact it gets more intense the day goes on. These kind of events. Ros, give us a sense of the economic impact. The markets have taken a downturn today. Investors do not like uncertainty and political unrest. Sheer numbers of people on a major thoroughfare had it and to the financial district blocking traffic and access has meant many businesses have had to shut for a part of the day before opening off. That managed to block some businesses from opening. They said businesses went on as usual. Some walking into work to try to bypass. Certainly, the protesters a have had an impact and not business as usual today in hong kong. Thank you very much without rosalind thank you very much. Rosalind chin joining us. In the meantime, to birmingham, beforet Party Conference next years election is taking place. Torge osborne is expected reveal more policies. That is happening at little the later today. To comer a few rabbits out of hats at that event. We need to continue to build up to that speech. Lets go back to anna. She is in birmingham. Anna . Chris thanks so much, guys. Which rabbit will he pull out of his hat during that speech . What does businesses and london want to see . The chief economic adviser joins us and now. Thank you for joining us. What does london want to see from the conservatives and George Osborne . Goingbe london economy is pretty well of the london economy is joined very well, the level before the crisis. London is doing very well. There are specific issues for london such as more a for and need tovestment safeguard the economic sector for regulatory entries and from europe. There are issues that probably will not be addressed in birmingham but to their ongoing. Beyond that, the other cities in the u. K. Are faced in london, one in five people last of them living wage. Of the issue shared by other cities are shared by london. A give us your thoughts on away just. This is not just a question. Give us your thoughts on away es. T on wag wages are pretty sluggish. The you are right. Needs to seeide more momentum. The best way is to have a much longer economic growth. Reflection we have been in the past six years. Instead of unemployment and rising sharply as most economists predicted, the shock absorber is not employment but wages. Wages were low. On top of that, energy price and inflation. It has made in the cost of living a big a problem for people. As the economy gather more momentum, wages are likely to pick up. To start expect wages picking up. Of the preoccupations into this Conference Center as politically speaking the threat of the business party. It has implications a because of the shift of policy we might see from the main party in westminster. How do you view that . In terms of the economics, you are right, the relationship is important. Especially people from the financial side, the most important care he a in recent years has been the inch rouge into the financial sector. Important factor in recent years has been the into the financial sector. If mba problem if not planned for. It can be a problem if not planned for. How the relation of whether europe comes into that. It needs to be confronted. Maybe the most important is inshore the economy has an off momentum to see some pickup. We know all about his political ambitions. His capableleft in hands to the future, the conservative party, would we be in safe hands . A boris is a fantastic mayor of london. He is taking many strategic positions. Some of the reports say he is infrastructure. Indeed, the independent london of finance commission which looks at and parent citizens shows he knows all looks at him parent cities and shows he knows it. Cities and shows he knows it. Thank you. Thank you very much. Anna edwards back a little bit later. Great guests. Lets talk construction. Ons. Ave heard from jerod ly the biggest loser. Shares are down more than 20 were six. Thanares are down more 20 . Caroline hyde has the story. The latest in a long line of warnings. The third warning and the second chief executive. He is the interim. This is quite astonishing what is going on in all because of this company did not weather the financial crisis very well. We are seeing a pickup and construction. Britains biggest builder after the moment and we are seeing Andrew Mcnaughton left in may. They have not had anyone after the home. They have not had anyone at the helm. See the Construction Unit down by another 75 Million Pounds. Also, the minute they have another chief executive, he says he is out. Are rolling. Heads they cannot get past the bleak picture. The inconsistent operational delivery in some parts of the , delays. Resources, skills shortages. They had an opportunity to do a merger that did not take. Theymember the problem was wanted to sell a u. S. Unit, it meansunit and investors will get 250 Million Pounds coming their way. It does not mean they do not have the powerhouse lined up. A 3 billionorm Dollar Company and they said, no several times. They are saying the buyer to their chief executive interim and a third profit warning. Korean shareholders are very happy about the turn of events. Should they want to revisit that one. Thank you. We will be back in a couple of minutes. Cheesed should he stay or should he go . That is what many Financial Advisors are asked themselves. Our International Correspondent has the story from berlin. Have outflows start to happen and what are we hearing from the german angle, what is the story . Outflows, neither pimco has given a firm number on of the record. The wall street journal said days saw 10 billion leave the pimco fund. They are bracing for a 100 10 30 ofwhere from outflows from pimco. The more recent one at cap letter put it at 15 and it got be 150 billion flowing out. The fund has been under pressure. And some ways, it may force some of the Asset Managers to make a decision. Make a decision about what they want to do. If you look at what it happened, they are down 65 billion. Andfund in 2013 lost 1. 3 finish in the 62nd percentile. Make sure that people do not leave their funds and people spent a lot of time flying around the world assuring investors. Competitiveof the landscape, what does it look like now . Is changing significantly and a bond on land. What does that mean for the competitive story . As there are a lot of competitors out there. You have seen the short end of the, goldman sachs, j. P. Morgan. The 25 have money in billion range. Pimco has an offering. Be one of their offering points. You look at his record. His record was quite good. He was in the 99th percentile. Its fundst some of and they have shown performance. The question is our Asset Managers switching the kind of fund they are investing . Wind out shortly. It will be great when we see the redemption of for the month of september. It will be fascinating to look at the data. Genuinely looking forward to see what the fallout from all of this is, what a one amandas decision means. Thank you very much in dean indeed. Break. To take a we will ahead back to the conservative Party Conference out of birmingham. We are waiting for the chancellor to speak. What kind of rabbit will he pull out of what kind of hat . We will be back at the conference very shortly. Good morning. 24 minutes past the hour. You are watching the pulse. We are streaming on your phone and we are at bloomberg. Com. Conservative party before next years election is underway. George osborne is expected to release more reform. His keynote speech later today. To the first back conference. Anna edwards is in birmingham. Thank you so much. What this means for the u. K. Relationship. It is a key concern in this conference. A researcher by director right now. Thank you for joining us. The do you make all the threat to the conservative party . It is not a really correct. , not a big, highprofile candidate. They are still looking for answers. It cut cost of the election next year. Abouty are talking staying in europe but having a reformed relationship. For manyor a reform years. What kind of a reform do you think is likely. It includes conservatives. Hole, about being more competitive and more democratic. It is about changing across europe and export the terms and go to other parts of europe and making an example that the eurozone, it does not [indiscernible] including the u. K. And include financial services. There are a number of reforms. The Crucial Point which is about the decisions made closely. We restore some of the democracy in europe and national parliament. British business, we spoke to and britishbci business and wants to stay in britain. How did we made decisions if we want to stay in europe . It is a very tricky one. On. S what it drives they like to point it out. What exactly do you have a mind . We do not know what he europe will look like in a few years. It is right to set out ambition. Once you have it in place, tried to work and get as close to it as possible by 2017. What do you make by the nationalist movements . We have been talking about the Scottish National party and catalonia about to the movement of air. There are movements elsewhere driven by different attitudes toward in the cash award europe. Toward europe. It seems to play differently depending on what movement you are talking about. It does. When you are taught by National Independence from an existing country, the eu is quite convenient. The bigger club you can join if you leave the one club. The security argument but for of partiesold range as a whole range the whole range. Away. Further and further a you are right. It depends on where we are and what we are looking at. It is what makes the populist for incredibly coming that complex a couple kate it for politicians to deal with and complicated for politicians deal went. They will be mindful of the week growth we are seeing the rest of europe . Week of growth weak growth we are seeing in the rest of europe . There is a school of thought that the answer is simply for the European Central bank to fire up across confidence. Lookss a popular sort of across the mediterranean and that would help some. It will not go all the way. Germany for example hit on a lot of cash. More money for the German Economy will not stimulate the demand. Efforts are very complex. It comes down to very tough decisions and taking on some of which, at the two go back to the stone age. Tt, thank you very much without one of many views after the conference in birmingham. Thank you very much indeed. We will have more a little bit actr including the speech of the conservative Party Conference. Well take you live a little later. Outline theed to economic platform for the next election and will hereby pension reform. I suspect we are not done yet. More to come from the chancellor. Talking of headlines, the Bloomberg Top headlines. Hong kong stop sinking their stocks sink in after the prodemocracy protest threatening the city. They are angry about chinas plans to control the 20 15th leadership election. 20 15 leadership election system getting a little bit more tense. More walkouts. Representing the pilots of the union, they are going back on strike for most of tomorrow. Expected to affect a long call after first talks produced no results. Well be back to check. ,alking of airlines, air france they are going to a schedule. Worst in more the than a century as part of a plan and theyre looking at a bandit in the low price unit. Looking to abandon the low price unit. Carrie joins us. One in, one out. Theyis at the same issue are concerned about, pensions. Chris Retirement Benefits and retire early and will they continue to get 60 pay until their pension kicks in . There are other issues about 15 other issues that have been raised and a big one is Retirement Benefits. Not a big block of stripes we are seeing from air france, every few week, a strike here and that is quite painful. You are trying to book a flight. Are they going to strike the day or not . One, they pull to the strike at 8 00 p. M. After management had rejigged the whole schedule to make a possible for many of the planes to get off the ground. They thought it would not have the effect we want so scrap it. Frankfurt and the main hub, targeting the jumbo. Main longhaul filigh flights, very embarrassing. With air france. The pilots are going back to work. It will take time to get the full schedule up. The fact we do not have a deal is concerning. You saw the government at the beginning of last week getting involved putting pressure on management and you saw them changing their proposals to pilots. Where the end of the week, you side them say the pilots coming you need to get on board. The Prime Minister said i will not get involved. You need to do your negotiations. On sunday, they say we need a better environment and they said it would be a little bit off calm and they decided they would go back to work. Acta be and of the day, the main issues contracts at the end of the day, the main issues contracts and the lowcost carrier. We have to see. Kari, thank you very much indeed. As a result of all of this to russia. Rosneft has made one the biggest oil finds in a year. It happened this week. By discovery is, catered sanction is complicated by it in theand finding arctic. Ryan chilcote went to the rig to have an exclusive look. Theou are looking at northernmost well in the world on a good day. Here is what it looked like when we flew in. That rosneft and ask exxon mobil struck oil and may have found more oil than all of the gulf of mexico. It could be a while before they find a much more together. The United States has banned axon along with all American Companies and citizens from working with russia in the the arctic. Isneft and is ceo blacklisted. A friend of the russian, he rarely talks. Do you plan to continue drilling in the arctic as soon as next year . And yes, of course. Even without axon . This year and next year. Is really far away. Our journey included a four hour flight from moscow, a night in arthern tundra, an hour in helicopter out to see, two nights on eyes brace icebreaking ship. Getting all of this stuff in there is one reason the well cost 700 million. The rig isnt bent. [indiscernible] it will not be here long. After the you must apartment a axon exxonded mobil has a little while before they have to get out. To give you a sense of how difficult it is to work here, it took us 2 days to get permission to fly the last 2 minutes. We have been here half an hour and we are told we have to go but cousin the weather is getting worse again. Weather isthe getting worse again. The stakes are high for rosneft and exxon and they have a joint venture to discover arctic water. Biggest prospects outside of u. S. Are right here in russia and sanctions are in the way. Not everyone was thrilled by drilling. Oilman who asked not to be filled. Filmed. Igor is on his way back from the first well. To win the battle over sanctions. Anytime welcome back they say but if they are not allowed to return, russia will topple the jewel in and take the spoils of the arctic on their own. Ryan chilcote, bloomberg. The land of the journey tells you how difficult ryan but the opportunity, is with us now. Walk us through the journey. T is incredible it tells you that it must be a pretty big find. If you think about the magnitude of the journey there, it is only eclipsed by the scale of the find especially if you listen to rosneft and what they understand and how they understand their early tests. They think they found at least as many as eight in debt a oflion 8 Million Barrels oil and one reservoir and there are 30 more reservoirs that have as much oil. If you add it all up, its a lot of oil. Looking onif you are the outside especially if you are axon a because they have declining supplies like most companies. The local government do not want western Oil Companies in and there. So brush a is very important for them and they must be looking at this thinking interesting and we want to do more tests. It is russians are right massive. That if the message to the rest of the world and it needs to happen and sanctions need to be lifted to make this happen. , the a tough a message opportunity huge but the rest of the world is looking at it and saying that the ba pitch point and one way we exercise a little bit of influence. An interesting point. I think the russians are sending a veiled threat. Hey, if you do not like our politics and are going to keep the sanctions and not allow your Oil Companies to do business in the arctic, here is what you will going to miss. It is one thing from preventing exxon from trolling the arctic when they do not know what is under the seat is Something Else like after a find like that. Iran, chevron was active in iran and the u. S. Government still introduced tensions at chevrons expense when it had problems with the islamic republics politics. The thinking here in russia is it will put more pressure on the Obama Administration that will probably be applied by exxon to say you cannot deny us at this. We needed the oil. It is tax revenue. It affects is share prices. It is probably the strongest hand they have had at the russians have had for their arguments against of the sanctions scissor the conflict and showdown between russia and the west began months ago. Ryan, thank you facade joining us. The conservatives take center stage. We are live. Thank you for joining us. Welcome back. If are watching the pulse. You want to combine luxury with adventure, you should try a yacht. The factss racer ever made. He is selling his previous yacht this year. Carolina took a look. We have it listed for cell 475 million u. S. Dollars. We have had interest from europe. We have had it listed fpr u. S. Ale for 75 million dollars. W whoeed a crew, a deck cre is trained and has a sailing for background. Ve the speed is 18. 5 knots. She is set up to accommodate 1012 guests. The media lounge is always a big hit. One of the highlights two crows nest. They go from the base all the way up to the very top. The standing view of the entire ship undersell. Buildinge process of a right now the worlds fastest sailing yacht. A passionate sailor. Bc and theion to vessel to the sea and vessel. Quite a unique experience. Whence every time. We will take a break. Back in a couple of minutes. Good morning. Welcome back. This is the pulse. It is time for todays new energy. [indiscernible] smart hand dryer. Energy efficient. Will may be questioned that in a humans breeding system. We are joined by the man behind the invention. Tvsaid in the apprentice series. What have you been doing since then . We have been developing this technology for the washroom sector. I get a lot of random messages from friends all over the world. And im in the bathroom have one of your pieces in front of me. This is it. I get the point it looks more like a this. What does it do . Want onehrough why i of this on my bathroom wall. Is the most Energy Efficient and sustainable and in context, it uses three Times Less Energy than most dryers. It is drive your hands in 10 seconds. 10 seconds . Almost quiet. Almost quiet. [laughter] we can convert. Bei did i know if i need to covered when i drive my hands. Of the aspect of all of this, how important is it that you link these things up . How must you learn, the output is constant and the usage is probably quite hard to monitor in some ways . Whats a break me does it bring to me . Firstly, our target sector is the corporate sector. Sustainability. Everybodys gender. Having the ability to have data and it is Sensitive Data from sources. These dryers center data from the washroom to our service so the Business Managers can analyze the data and have a look at their expenditure and monitor and spot trends and their washrooms so the cleaners can go around cleaning up based on raw data. Of more than the claimant event Carbon Footprint . It is three things. Energy efficiency and Carbon Footprint and understanding your consumption so you can lower and benchmark and save. Resource efficiency. Giving data back to the business of managers. Not just data from the hand dryers. Other equipment within your washroom facilities like your light and heating are all connected to our technology. That the data is sent which you can analyze online to benchmark and save. One of the benefits is you can send your cleaners around fair enough. Most of the washrooms i go in and corporate these days, airports and wherever it is seem to have the where you put your hands in. How does it compare to that . And how difficult is it to go up against what is a fairly solid engineering story out of dyson . Absolutely. Dyson is a brand that brought a lot of innovation. They really ought the interest. From a completely different angle. We looked at her from sustainability point of angle. Our Technology Uses three Times Less Energy than dyson. 1 5 less compared to the industry leaders. It is a greener, cleaner, quieter, and faster. And give me a sense what is the installed base of these things . What is it . Ive not counted. One in 10, 1 in 20 have these . How do the two compare . What is the Energy Consumption of one of these things . How does it compare with other devices around me . It sounds like a strong fan . Basically, to answer your first question, the market size was quite interesting. 70 million washrooms around the world and 20 using powerhungry dumb dryers. Outdated technology. Of 550 watts. The market leaders and affect watts, but they take longer to dry your hands. Exciting opportunity. Our target being corporative crating lowers, carbon emissions. From Innovation Point of view, an exciting challenge. And corporative in 2006. We incorporated in 2006 and the reception has been strong. Export market potential for this, what would you like to see from the government . Had hasupport we have been really good. We got back from dubai and had a trip as you are aware. A lot of buildings out there. An exciting, bustling city. The right kind of environment. Hip into San Francisco we have been to San Francisco. All of our innovation through the funding. For us to have support from the government has been really positive. , eie isas i mentioned challenging. It is exciting opportunity. Congratulations. Thank you. Ahmed, talking about a government opportunity. To talk about government opportunity for. Back to birmingham. Thanks. The conservative Party Conference is underway. The last before the general election. It will be the main subject of most of the delegates. How to win the next election . Independents. The the second conservative mp to defect and just a month. It happened over the weekend. That is on peoples minds here. The laboureat of party as they would see it and what they can do to neutralize and that a threat also. Toring johnson, how Boris Johnson and how he is responding. He said that only boost ed milibands chances. He tried to call on others not to defect. He said i cannot believe it is true. Are many on the verge of joining another party. Recklessly spelled with a capital r. An mp did to defect. In with some of what room i hear from George Osborne. He will be addressing a conference later. David cameron of going into this talking about the strength of the u. K. Economy and the fact and is doing well in terms of gdp growth. Unemployment has come down as well. Many in the government would wages and increase so the deficit could be brought to further under control. We might hear osborne talk about pension. End of the socalled death tax. Interesting stuff. What he is going to do on the benefits as well. Anna, thank you. Join us on bloomberg radio. And also the second hour of the pulse. We will toggle by italy. We will see you in a moment. We will be talking about italy. Shot down. Hong kongs financial district the biggestong crackdown on protesters is the city returned to chinese rule. Tumble in britain. A bloomberg exclusive with the most powerful man in russias oil industry. T announces rosnef eight one billion barrel crude strike in the arctic. Good