Energy This Week: Oil plunges despite Libya shutdown, Sidara gives Wood offer the chop, & restoring the pre-industrial atmosphere
Market turmoil takes oil down to near-low for the year
The funeral ceremony of Hamas leader Ismail Haniyeh in Tehran. Iran has threatened to retaliate, which could affect oil supply. AP
Oil prices dropped sharply on Thursday and Friday, losing nearly $4 a barrel, with Brent crude finishing at its lowest level since early January. It was dragged down by continuing worries over the Chinese economy, and weak US job figures. Prices fell further on Monday, with concerns about a US recession as unemployment rose. They were up slightly on Tuesday, closing 3 cents up at $76.33 a barrel, after news of a partial shutdown of Sharara, Libya’s largest oilfield, which had been producing 270,000 barrels a day. The interruption is a result of local protests and domestic political manoeuvres.
Prices had risen by more than $2 a barrel last Wednesday following Israel’s assassination of Hamas leader Ismail Haniyeh in Tehran, leading to worries about a regional conflict. A wider war involving Israel, Iran and Hezbollah would be disastrous for the economies of the countries involved, and would be likely to lead to more attacks on Red Sea shipping and possibly interruptions to Iranian oil exports and Israeli gas production. On Sunday, the Yemeni Houthi rebels made their first successful attack on a ship for two weeks. The shifting fortunes of the US presidential race also affect oil prices and markets for petroleum and clean energy stocks.
Despite these complications, Opec stuck to its output policy when it met on Thursday. The group plans to begin phasing out the voluntary cuts made by some members from October onwards. However, depending on market conditions, it could decide to halt these production increases.
UAE petrol and diesel prices increased about 2 per cent in August. Crude oil prices were down in July, but the summer travel period often pushes up world prices for road fuels.
Venezuela’s disputed election clouds its oil outlook
Venezuelan President Nicolas Maduro delivering a speech to supporters during a rally. AFP
Venezuela’s election has ended in a declared, but implausible, win for incumbent President Nicolas Maduro, leading to opposition protests. The country’s oil industry had begun to revive slightly after years of collapse, intensified by sanctions. Now, the outcome of its political turmoil matters for oil markets well beyond the country.
BP in an earlier incarnation was part of the consortium which discovered the giant Kirkuk oilfield in 1927, unbottling the genie of Iraq’s oil. The field is now mature and has been damaged by war and political tussles. Now the British major may return to Kirkuk and its neighbouring fields, to redevelop them and also invest in power generating and solar energy.
Sidara gives Wood offer the chop
Adnoc Drilling offshore platforms Photo: Adnoc
Sidara, the Dubai-based engineering company also known as Dar Al Handasah, has decided to pull out of a bid to buy John Wood Group, the British oilfield services company. This came after a global market sell-off, and Sidara also cited geopolitical risks. In May, it had increased its offer to 230p a share, which would have valued Wood at about ￡1.63 billion ($2.07 billion).
UAE-based fertiliser maker Fertiglobe expects to benefit from reduced Chinese exports of urea, leading to a tighter market. China is attempting to protect its farmers, who have suffered rising costs and extreme weather. Fertiglobe’s sales volumes dropped because of disruptions to its gas supply in Egypt. The company won Germany’s first auction to buy renewable ammonia, which it will supply from Egypt.
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Adnoc Drilling hopes to win drilling tenders in Kuwait, after it was approved for Kuwait Oil Company’s list of contractors. This would be its second market outside the UAE, after it began operating in Jordan last year. The company raised its profit forecast for the year to $1.15 billion to $1.3 billion, from $1.05 billion to $1.25 billion.
Masdar to make sustainable aviation fuels with TotalEnergies
The two companies conducted a 'successful test flight' during the Cop28 climate conference in December. Photo: Masdar
Abu Dhabi’s clean energy company Masdar will work with France’s TotalEnergies to examine a sustainable aviation fuel (SAF) project, based on converting methanol made from green hydrogen. The UAE plans to supply its national airlines with 1 per cent SAF by 2031 and produce 700 million litres of the low-carbon fuel.
Britain is seeking to attract investment in offshore wind and other clean energy, offering ￡1.5 billion ($1.92 billion) in budget. Offshore wind costs have risen because of higher interest rates and supply problems. A record 46.4 per cent of the UK’s electricity came from renewables last year. And the chief executive of Ignite Power, an Africa-centric renewable developer, argues that decentralised renewables will be more effective than traditional grid models in electrifying the continent.
Deep-sea mining is opposed by many environmentalists, but could be crucial to source critical metals for new energy systems while limiting damage to ecosystems on land. Leticia Carvalho, a Brazilian ocean scientist, won an election on Friday to lead the UN-affiliated International Seabed Authority. She defeated UK lawyer Michael Lodge, the previous secretary general, who was regarded as pro-mining.
DiCaprio brings climate-tech to Abu Dhabi
Set up in 2019, Hub71 is based within Abu Dhabi Global Market, the emirate's financial free zone. Photo: Hub71
Hub71 in Abu Dhabi is focusing on attracting global climate technology funds to the UAE. Princeville Capital, backed by Leonardo DiCaprio, will establish a presence in Abu Dhabi to support climate tech start-ups.
Wrangling over climate finance is a big test of the next UN climate conference. Cop29 in Baku, Azerbaijan, is just over three months away. Developed countries are supposed to come up with a new pledge to replace their commitment from 2009 to provide $100 billion annually, which eventually materialised years late and diminished by inflation. After progress at the UAE’s Cop28, now it is time to speed up climate finance to help vulnerable developing countries, writes Dr Nawal Al Hosany, permanent representative of the UAE to the International Renewable Energy Agency. The “loss-and-damage” climate fund, intended to compensate lower-income countries, set up at Cop28, is looking for an executive director, who will earn about $400,000 per year. And the Green Sheikh Abdul Aziz bin Ali Al Nuaimi, from the ruling family of Ajman, explains his mission of environmentalism.
Restoring the pre-industrial atmosphere
Steam billows from a coal-fired power plant in Craig, Colorado. AP
Rather than just cutting greenhouse gas emissions, Stanford University professor Rob Jackson thinks we should return the Earth’s atmosphere to its pre-industrial state. Among the usual solutions of electric homes and vehicles, his new book advocates cleaning up methane from cattle and gas leaks, removing carbon dioxide from the atmosphere and turning it into rock, and restoring peatlands.
A kind of wood found in tulip trees could help soak up carbon. The trees grow quickly and are intermediate between hardwood and softwood, a structure they may have evolved about 30 million to 50 million years ago, a period when the Earth’s atmospheric carbon dioxide levels dropped sharply.
Scientists studying melting glaciers in Antarctica lost a remote-controlled submarine, perhaps to curious seals. But for the first time, they have seen what is going on under the ice. This is crucial to predicting sea-level rise as the world warms up. New studies of fossils from Greenland show that ice from the centre of the island had melted for long periods within the last million years, suggesting the ice cap could melt with much less global warming than previously thought.
And Olympic podiums in Paris are made from recycled plastics from shampoo bottles and Coca-Cola caps.