Energy This Week: China oil wobbles, India Adnoc rupee payment, Saudi & Bahrain solar

Chinese wobbles undercut oil

Oil has seen its?first weekly decline?in seven weeks, undercut by?worries about the Chinese economy. Brent crude?rose on Thursday?and Friday but was down about 2.3 per cent over the week.

The People’s Bank of China?cut one-year interest rates?on Monday, but by less than expected, and kept the five-year rate unchanged.?Brent rose?in early US trading but had fallen by the end of the day, and?dropped further?on Tuesday to $84 per barrel. China’s oil imports, refining and agencies’ estimates for its petroleum demand have remained robust even as its economy has faltered –?but how long can that persist?

Turkish Foreign Minister Hakan Fidan?visited Iraq?on Tuesday. A key issue for his discussions in Baghdad and Erbil was the reopening of the Iraq-Turkey oil pipeline, closed in April following an arbitral judgment against Ankara. The return of some 400,000 barrels per day of exports would help ease tight oil markets.

Worldwide oil and gas exploration slumped after the 2014 price crash from nearly $80 billion annually to a low of less than $20 billion each year in 2020-22. Consultancy Wood Mackenzie expects a moderate recovery to an?average of $22 billion?annually over the next five years, encouraged by higher prices, energy security concerns and a recent run of good exploration results. Egypt’s oil production has been slipping for years, but on Tuesday independent company Cheiron?announced a significant find?in the Gulf of Suez.

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India settles Adnoc oil bill in rupees for the first time

India has?settled an oil purchase?from Adnoc in rupees rather than US dollars for the first time. The sale of about a million barrels was settled using the local currency settlement system, which should be quicker and save transaction costs. The Brics bloc of emerging economies wants to?introduce its own currency, partly inspired by hopes of weakening the dominance of the US dollar and Washington’s ability to enforce sanctions. But this is a?slow and difficult?process. Russia’s rouble has?fallen below 100 to the dollar?amid a weakening in commodity prices and restrictions on its oil exports.

The former petroleum minister of Nigeria and Opec president, Diezani Alison-Madueke, has been?charged in the UK?with receiving ￡100,000 worth of bribes in return for awarding oil and gas contracts.

The US has?begun to transfer oil?from a tanker accused of transporting Iranian oil, which was seized last year and has since then been waiting off the coast of Texas.

A?drilling rig has arrived in Lebanon?to explore the offshore Block 9. The block contains the Qana gas prospect. Lebanon reached an agreement with Israel in October over the block, which lies on the disputed border. A discovery could be vital for Lebanon, which is suffering through financial and energy crises. However, a parliamentary session which would have discussed the creation of a sovereign wealth fund to hold gas revenue has been delayed after the two main Christian parties?boycotted?it.

Protests have broken out in the Assad regime’s Alawi heartland in coastal Syria, with discontent over a?sharp rise in fuel prices.

With global gas security remaining shaky despite a moderation in prices since last year, Japex of Japan has agreed to?buy $450-550 million?worth of liquefied natural gas from Adnoc Gas over five years.

Turkey’s recently re-elected President Erdogan?visited Hungary?on Sunday, and Budapest agreed to buy gas from Turkey’s state pipeline company.

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Solar power presses ahead in Saudi Arabia and Bahrain

Abu Dhabi-based district cooling company Tabreed intends to?explore more geothermal projects?for air-conditioning, after announcing its first deployment in Masdar City in co-operation with Adnoc.

Fresh from awarding the latest phase of its solar park to Masdar last week, Dewa has?chosen Saudi company Acwa Power?as the preferred bidder for the first phase of the Hassyan desalination plant. Acwa bid a record low $0.36536 per cubic metre of water for the project, which will use reverse osmosis, a more energy-efficient and flexible technology than traditional thermal methods. Dubai Municipality plans to?recycle all the emirate’s wastewater?by 2030, up from 90 per cent today.

Two major solar projects in Saudi Arabia have?reached financial close: Acwa Power’s Al Shuaibah PV 1 and 2 in Makkah province, with total capacity of 2.631 gigawatts and investment of $2.37 billion. The farms are intended to start generation in 2025 and are a key component of the kingdom’s plan to reach 50 per cent of electricity from renewables by 2030.

Next-door Bahrain will?build its first significant solar farm, a 72 megawatt plant in the southern area of Sakhir, which will power universities and sports and exhibition facilities. Germany is trying to accelerate solar power deployment and find readily available land. It has?eased regulations?on solar panels on balconies.

Oman is seeking to be a regional hydrogen leader and, last Wednesday, the?world’s first liquefied hydrogen ship, Japan’s Suiso Frontier, docked at Muscat as part of a Middle East tour.

Chinese-founded, UAE-based electric carmaker NWTN (“Newton”) has?launched a luxury passenger vehicle, the Rabdan Muse.

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First birthday of Joe Biden’s mega climate act

US President Joe Biden’s?Inflation Reduction Act?has just reached its first birthday. The landmark piece of legislation on climate and energy offers hundreds of billions of dollars in incentives for low-carbon technologies and domestic manufacturing. It could catalyse reductions in the costs of green hydrogen and sustainable aviation fuels that would have worldwide impacts. But the subsidies are so generous that they imperil clean energy investment elsewhere and may spur a race with Europe and China while squeezing out other countries.

The?100-day countdown?to UN climate conference Cop28 in Dubai has begun. Dr Sultan Al Jaber, President-designate of Cop28, says a new framework for climate finance needs to unlock private capital, with?$2.4 trillion required annually?by 2030.

UAE President Sheikh Mohamed told the Cop28 delivery team that, in hosting the event, the UAE is?building on the legacy of environmental stewardship?left by the late Sheikh Zayed bin Sultan Al Nahyan, the UAE’s Founding Father. Sheikh Tahnoon bin Mohammed, Abu Dhabi Ruler’s Representative to Al Ain,?visited Adnoc’s headquarters?to review its transformation and role in the economy.

British Prime Minister Rishi Sunak, who is under pressure from the right wing of his Conservative Party, has?rejected the idea of a referendum?on the country’s net-zero carbon goal, insisting he remains committed to it.?Dozens of motorcyclists protested in London?on Sunday against the expansion of the capital’s Ultra-Low Emission Zone. A candidate from the former Brexit Party, running for mayor, vows to scrap Ulez and freeze fuel taxes. But the UK’s current policy on taxing vehicles and charging for congestion is?inconsistent.

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Death toll from climate disasters “to rise unless Africa’s weather stations are updated”

Africa?needs to upgrade?its hydrometeorological monitoring to warn of increasingly dangerous inundations, heatwaves and droughts, warns Cambridge University’s Centre for the Study of Existential Risk. Floods in Africa cause proportionately four times more deaths than those in Europe or North America, and the continent has just 6 per cent as many radar stations over a larger land area. As climate change brings increasing extreme weather, from hurricanes, floods and thunderstorms to droughts and heatwaves, the UAE’s senior meteorologist, Dr Abdulla Al Mandous, says high-resolution weather models are essential to protect vulnerable countries.

The?role of dust?in global climate patterns is becoming better-appreciated, with a recent study highlighting the importance of dust storms originating from Alaska’s Copper River Valley, beyond the traditional attention given to the Sahara.

Syria’s war has devastated its environment, and led to desertification as?trees are chopped down?for firewood. The Mena region is already the world’s most water-stressed, and every nation there will?suffer extreme water scarcity?by midcentury.

Meat is a major and underappreciated?contributor to global warming. Beef is the worst offender, with more than twice the carbon footprint of lamb and mutton, because of deforestation and methane from cows’ digestive systems. A Dutch organisation, Clim-Eat, is promoting more climate-friendly food systems.

And financial firms?do not measure?their portfolio exposure to nature-related risks such as deforestation with the same priority as they give to climate risks.