Energy This Week: Turkish elections, Climate Tech, & UAE energy company profits

Iraq pipeline remains closed as Turkey’s tight election goes to second round

Opec has?maintained its forecast ?for 2023 oil demand growth at 2.3 million barrels per day, despite economic worries. It slightly boosted estimates for China and cut back equivalently in the rest of the world. The International Energy Agency?boosted its demand estimates ?to 2.2 million from 2 million bpd, citing recovery in China.

But oil prices?closed lower ?for the fourth consecutive week on Friday, with Brent crude at $74.17 per barrel. Markets are worried about weakening economic data from the US, Germany and China, and the impending crunch over America’s debt ceiling. Prices?steadied ?on Monday. Russia, which had promised to cut production by 500,000 bpd, has actually hit its highest exports since invading Ukraine last February.

Turkey’s election is heading for a run-off on May 28. Whether current President Recep Tayyip Erdogan, who outperformed expectations, or challenger Kemal Kilicdaroglu win, the outcome is?crucial for global energy ?for three reasons.

One of these is Iraq. It hoped to?resume exports ?of oil through its pipeline via Turkey on Saturday after the federal Baghdad government reached an agreement with the semi-autonomous Kurdistan region. But Ankara does not yet seem to have given its consent, following an unfavourable arbitral judgment. Iraq also hopes to attract more international investment by?offering eight oil and gasfields and five exploration blocks ?spread across its territory.

Dana Gas, which operates in Kurdistan and Egypt, reported?slightly lower profits ?for the first quarter, as lower prices more than offset a rise in production. The company is also chasing overdue receivables in both areas, which could be further affected by financial problems in Kurdistan caused by the pipeline closure.

Supplies of drinking water ?to Basra, Iraq’s second-largest governorate, are threatened by delays to a crucial treatment plant.

The G7 and the EU plan to?ban gas imports ?on routes where Russia has cut supplies. This would mean Moscow would permanently lose markets such as Poland, Germany and Finland.

Finland’s Olkiluoto 3 nuclear power station began operating in April and has helped?bring down electricity bills ?by over 75 per cent. The country is also investing heavily in wind and expects it to be its largest power source by 2027, as it aims to be the first developed country to reach net-zero carbon, by 2035. Meanwhile, Britain?joined a 16-member “nuclear alliance” ?in Paris to push for more use of fission to meet low-carbon energy targets. But it has?lost its early lead ?after years of government dithering on new reactors.

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Adnoc listed subsidiaries see higher quarterly profits

Adnoc Logistics & Services will?sell a 15 per cent stake ?on the Abu Dhabi Securities Exchange to raise up to $607 million. The unit provides shipping and other logistics solutions to its parent. The final offer price will be announced on May 25.

Adnoc L&S will join a stable of other listed subsidiaries of the state oil corporation which reported their latest quarterly earnings over the past week. Adnoc Gas, the gas processing unit which listed its shares in March, reported a?9 per cent year-on-year increase ?in quarterly earnings. Revenues dropped to $5.2 billion from $6.2 billion due to lower hydrocarbon prices, but reduced costs supported profitability. Adnoc Drilling saw its profits?up 25 per cent ?as it added new land rigs. Adnoc Distribution notched a?5.5 per cent gain in earnings ?after inventory movements, as fuel sales and non-fuel transactions grew.

Taqa, which bought a 5 per cent stake in Adnoc Gas, a key supplier of the fuel it uses in its power stations, said its first-quarter profit?soared to $3.15 billion ?from $540 million a year earlier, supported by higher tariffs. Profits at cooling provider Tabreed?jumped 168 per cent , as both customers and consumption rose.

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UAE Climate Tech forum brings progress on clean energy

Cop28 President-designate Dr Sultan Al Jaber told the inaugural UAE Climate Tech gathering that?more investment was required ?in technology to double their contribution to global growth and remove 25 billion tonnes of carbon dioxide emissions per year. He called for the oil and gas industry to aim for zero methane emissions by 2030 and net-zero overall operational emissions by 2050.

At a meeting in Muscat, Dr Al Jaber, who is also the UAE Minister of Industry and Advanced Technology and managing director and group chief executive of Adnoc, urged GCC countries to?allocate more capital ?to energy transition and decarbonisation.

Microsoft co-founder Bill Gates, addressing Climate Tech by video, said Cop28 “needs oil and gas at the table ”.

“We need those that are most responsible for producing and using fossil fuels to step up and make serious commitments for a clean energy future,” he said.

Adnoc signed an agreement with American energy services firm Baker Hughes to?commercialise green and blue hydrogen and graphene . Adnoc Logistics and Services will partner SeaOwl, a French maritime company, to develop?uncrewed remotely-operated low-carbon vessels . The Adnoc unit will?list 15 per cent ?of its shares on the Abu Dhabi Securities Exchange later this month. The Ministry of Industry and Advanced Technology concluded four preliminary arrangements on?manufacturing decarbonisation and digitalisation , with Adnoc, Edge Group, Kezad Group and Dubai Industrial City. Octopus Energy, a British energy retailer and technology group, will?manage Masdar’s battery storage portfolio ?in the UK.

Oman and Etihad Rail Company, which is building the $3 billion rail link between the two countries, has signed with Brazilian mining major Vale to?transport iron ore ?and derivates between the port of Sohar and its planned complex in the UAE. Sheikh Mansour bin Zayed, Vice President, Deputy Prime Minister and Minister of the Presidential Court, hopes the railway will support the UAE’s ambition to be a?leader in global transport . Gottfried Eymer, the new chief executive of the Etihad Rail freight network, says it will cut road congestion and?save 8.2 million tonnes ?of carbon dioxide emissions annually.

Emirates Global Aluminium will buy alumina for its smelter under a long-term deal with US corporation Alcoa, which includes an option for “EcoSource” material with?half the carbon footprint ?of the industry average. Dubai-based Mensha Ventures has agreed with a number of Chinese corporations to?invest $1 billion in sustainable energy ?in the GCC. Siemens is looking for more opportunities in the UAE in the fields of?smart buildings, electrification and grids .

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'The sea is changing for the worse'

Round-the-world solo sailor Abhilash Tomy, who finished second in the prestigious Golden Globe Race in the UAE-sponsored Bayanat, said “the sea is changing for the worse ”, remarking on the changes in weather and sea life he’s seen over a decade.

Sheikha Shamma bint Sultan, president and chief executive of the UAE Independent Climate Change Accelerators, called for a combination of private and government funds to?deal with climate damage . By 2050, the world may face one and a half significant disasters daily.

This week’s G7 summit sees energy and climate as key topics of discussion.?Alignment on phasing out unabated fossil fuels ?would be a crucial step ahead of Cop28.

The world is?not making rapid enough progress ?on the energy transition, says a senior World Economic Forum official. To help tackle this, Masdar and the International Renewable Energy Agency (Irena) will team up on a research project aiming to?triple worldwide renewable energy capacity ?by 2030. And Emirates Development Bank has joined Irena’s programme, the?Alliance for Industry Decarbonisation , to accelerate net-zero carbon.?Lower costs of capital ?are essential for developing countries to meet their renewables targets.

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Clean generation, networks and fuels move on in the UAE

Minister of Economy Abdulla bin Touq said at Climate Tech conference that the UAE would?focus on a circular economy , which reduces the extraction of natural resources and prioritises recycling and re-use. Abu Dhabi waste management firm Tadweer will work with Greece’s Polygreen on its “just go zero” model for the circular economy. Sharjah’s waste-to-energy plant has completed its first year of operations,?powering 2,000 homes , saving 150,000 tonnes of carbon dioxide emissions, and recovering 250 tonnes of metals.

Taqa’s head of transmission and distribution, Omar Al Hashmi, said the utility was?looking for more deals ?after investing in Xlinks First, a company planning to build a subsea electricity connection from Morocco to the UK.

Emirates has announced a?$200 million effort ?to research advanced fuel technologies to reduce aviation’s emissions, while?Masdar agreed to collaborate with Airbus ?on sustainable aviation fuels, green hydrogen and direct air capture. Swedish start-up Wayout aims to bring?sustainable production of fresh mineral water ?to the UAE, avoiding plastic bottles. And Dubai has launched its?first self-driving electric wooden abra ?to ferry passengers across the Creek.

“Range anxiety” for electric vehicle drivers is fading as California builds more charging stations – making a?spectacular battery-powered tour ?of the state ideal. The UAE is introducing?faster and cheaper charging stations , aiming to have 800 outlets in the coming year.

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