President Donald Trump launched a veiled attack on environmental “alarmists” in a speech to business and political leaders in Davos, taking a swipe at the World Economic Forum’s key focus this year. Speaking at the Swiss resort town on Tuesday, Trump invoked those who predicted an “overpopulation crisis” and the end of oil, saying: “These alarmists always demand the same thing, absolute power to dominate, transform and control every aspect of our lives.” He also said: “This is not a time for pessimism, this is a time for optimism. Fear and doubt is not a good thought process, because this is a time for tremendous hope and joy and optimism and action, but to embrace the possibilities of tomorrow, we must reject the perennial prophets of doom and their predictions of the apocalypse.” The World Economic Forum audience included 17-year-old climate activist Greta Thunberg, who brought a stark message to the business elite gathering in Davos: Everybody is talking about climate change, but nobody is doing anything. Trump has mocked Thunberg on Twitter. The forum is sounding alarm bells on climate change. This year and for the first time on record, environmental risks occupy the group’s top five long-term concerns, while corporate executives say they’re increasingly concerned about environmental issues. Trump’s remarks were largely focused on America’s economy as an example to other nations, which he urged to cut regulations and taxes. Trump sought to take credit for a booming economy, repeating his reelection arguments just hours before the US Senate was set to formally start his impeachment trial. “I’m proud to declare that the US is in the midst of an economic boom, the likes of which the world has never seen before,” Trump said. “We’ve regained our stride, rediscovered our spirit.” Later in the speech, he said “pessimists” can’t be allowed to reverse course: “We will never let radical socialists destroy our economy, wreck our country or eradicate our liberty.” The president’s record on the environment is under attack from Democratic challengers ahead of November elections. Some are calling for significant policy changes to deal with climate change. Trump claims credit for overseeing an economy enjoying its longest-ever expansion, with an unemployment rate that fell to a five-decade low after tax cuts and spending increases. The Standard & Poor’s 500 Index, which Trump regularly cites as a marker of success, is up about 25% from a year ago. Trump described low unemployment rates for African Americans and women. But his fight with China over trade and other protectionist policies have created uncertainty among businesses, especially manufacturers. Despite last week’s interim trade deal with Beijing, the International Monetary Fund on Monday predicted economic growth will moderate to 2% this year and 1.7% in 2021 from 2.3% in 2019 as fiscal stimulus wanes. In his speech at the Swiss resort, Trump said: “The American dream is back, bigger better and stronger than ever before.” President Trump comments on the state of the US-China trade relations during his address at the World Economic Forum’s annual meeting in Davos. The president repeated his grievances with the Fed, saying it raised rates too quickly and lowered them too slowly. Trump said in his speech that he and Chinese leader Xi Jinping “love each other” even after their fight over trade. “He’s for China and I’m for the US, but other than that, we love each other,” Trump said. Trump is due to hold bilateral meetings with Iraqi President Barham Salih, Paki- stan’s Prime Minister Imran Khan, European Commission President Ursula von der Leyen, Swiss President Simonetta Som- maruga and Nechirvan Barzani, president of the Kurdistan Regional Government, according to the White House. Trump will also meet with the forum’s executive chairman, Klaus Schwab, and has said he’ll meet with business leaders, too. He leaves Davos on Wednesday. This is Trump’s second visit as president to the annual gathering of business chiefs, central bankers and foreign leaders. Hanging over the trip this time, however, is his impeachment trial set to formally begin in the Senate. Trump will almost certainly be acquitted by the Republican majority in the Senate, but the trial may produce surprises.

Capturing carbon dioxide from the fossil-fuel industry is key to slowing dangerous global warming, energy chiefs said in Davos as climate concerns dominated the annual business forum more than ever before. Oil and gas producers are under mounting pressure to help prevent a damaging rise in temperatures, and carbon capture is increasingly luring investors as a tool to curb emissions. Whether pulled from the exhaust of smokestacks or from the open air, the CO2 can be buried underground or used to extract oil. “There are investors that care, that want to protect our environment; those investors are starting to make a diff erence for us,” Vicki Hollub, chief executive off icer of Houston-based Occidental Petroleum Corp, said on a panel in Davos. “Within two years we will be building the largest direct air capture facility in the Permian.” Occidental’s air capture site will separate carbon dioxide directly from ambient air. The CO2 can then be injected into oil reservoirs to boost output in Texas’s Permian Basin. “If we can perfect direct air capture, then we can use it anywhere,” Hollub said. Climate concerns dominated the panel discussion, and run through the entire program of this year’s World Economic Forum. Climate campaigner Greta Thunberg spoke to a packed room in the WEF’s opening session, issuing a sharp rebuke to leaders over the world’s failure to curtail emissions. Also addressing the climate challenges facing the oil and gas industry was Fatih Birol, executive director of the International Energy Agency. Birol, like Hollub, touted the potential of carbon capture to help curtail emissions. Fatih Birol, IEA executive director, discusses “peak oil” and the need for carbon capture and storage. He speaks with Bloomberg’s Francine Lacqua.

Greta Thunberg brought a stark message to the business elite gathering in Davos: Everybody is talking about climate change, but nobody is doing anything.

Her appearance at the opening of the World Economic Forum was a striking sign that the debate about how to stop the Earth warming has become mainstream in business circles. Yet only a handful of executives from the oil, gas and coal industries that are chiefly responsible for warming the planet were seen attending the panel at which Thunberg spoke on Tuesday.

Meanwhile, U.S. President Donald Trump used his speech at the event to tout the benefits of soaring American oil and gas production and make a thinly veiled attack on those who warn about looming environmental catastrophe.

“The climate and environment is a hot topic right now, thanks to young people pushing,” 17-year-old Thunberg said at the Swiss ski resort, where about 3,000 business and political leaders gather each year. “Pretty much nothing has been done, since the global emissions of CO2 have not reduced.”

The Swedish activist’s words came as the World Economic Forum sounds alarm bells on climate change. This year and for the first time on record, environmental risks occupy the group’s top five long-term concerns, while corporate executives say they’re increasingly concerned about environmental issues. But young activists at Davos said none of this is enough.

Thunberg is giving relevance to the Davos gathering, which for years has suffered from criticism that it was largely a billionaires’ playground where the rich debated among themselves without hearing outside voices. On Tuesday, there was a full room at this first 8:30 a.m. panel featuring young activists — something relatively unusual for a climate change event at Davos.

The debate on climate change is forcing businesses to respond to demands to stop carbon dioxide and other greenhouse gas emissions. While some have been slow in embracing the fight, executives at Davos highlighted that the overall views from within the business community have dramatically changed over the last decade or so, moving from denial and questioning science into complete acceptance.

“I have come to Davos for well over a decade and I see behind the scenes, among top executives, a huge change in perception of the risk of climate change,” said Marco Dunand, the head of Mercuria Energy Trading SA, one of the worlds’ largest oil traders. “It’s not just talk: it’s translating into billions of dollars in investments in the energy transition.”

Activists’ language has made its way to boardrooms across the world too. At another morning panel at Davos, Iberdrola SA Chief Executive Officer Ignacio Galan called on companies to close coal-powered plants in order to curb emissions.

“We are in a hurry, we have to move fast,” he said. “There is already money available, cheap money, cheap technology, competitive technology and political decision in many countries to do so. Let’s not continue delaying and postponing”

Trump Encounter

Trump landed at Davos on Tuesday morning and was welcomed by the words “Act on climate,” carved into the snow on a hill near the helicopter landing zone. He didn’t mention the topic in his speech at the forum later in the day, focusing instead on America’s growing economy and record oil and gas production.

“This is not a time for pessimism, this is a time for optimism,” Trump said as Thunberg watched from the audience. “We must reject the perennial prophets of doom and their predictions of the apocalypse. They are the heirs of yesterday’s foolish fortune tellers.”

The President and the activist’s first and only meeting last year became instantly viral as Thunberg was filmed furiously staring at Trump. While they’ve never spoken face to face, they both seem to follow each other closely on Twitter.

“Greta must work on her anger management problem, then go to a good old fashioned movie with a friend! Chill Greta, Chill!”, Trump tweeted in December shortly after the activist was named person of the year by Time magazine. Thunberg didn’t directly answer, but changed her Twitter biography to “A teenager working on her anger management problem.”

Three-day March

Hundreds of climate activists are due to arrive at Davos on foot on Tuesday following a three-day march across the Swiss Alps. Protesters will gather at the ski resort and stage a demonstration calling for the end of the World Economic Forum. Companies attending Davos for the past five decades bear a great responsibility for today’s climate crisis, activists say.

“We are tired of empty promises. But we have hopes,” said Puerto Rican activist Salvador Gomez-Colon. “We’re not waiting years to see the change that we want to see.”

Thunberg urged businesses, governments and the media to listen to scientists. She cited research by the Intergovernmental Panel on Climate Change from 2018 that concluded that the carbon budget– the amount that can be released while still keeping global warming limited to a specific level — stands at 340 gigatons of carbon dioxide and that, at current emission levels it will be gone in less than eight years.

“Since last summer I have been repeating these numbers over and over again in every speech,” she said. “I know you don’t want to talk about this. I assure you I will continue to repeat these numbers until you do.“

— With assistance by Jeremy Hodges

LONDON – BP has pulled out of Iraq’s giant Kirkuk oilfield after its $100 million exploration contract expired with no agreement on the field’s expansion, dealing a fresh blow to Iraq’s hopes to increase its oil output, three sources told Reuters.

The move came as Western energy companies are reassessing operations in Iraq amid political turmoil following months of anti-government protests and a flare-up in tensions between the United States and Iran in the country.

BP informed Iraqi authorities in December that it was removing its staff from the oilfield in the north of the country after its 2013 service contract expired at the end of 2019, the sources familiar with the matter said.

A senior source at Iraq’s North Oil Company (NOC), which oversees the Kirkuk operations, confirmed BP’s withdrawal.

“The results of its field study for Kirkuk oilfield development have been handed over to the North Oil Company and unfortunately it was below expectations… at least for us,” the official said.

“It’s very obvious study results were not encouraging for BP to extend its operations,” he added.

The Iraqi government did not reply to a request for comment.

BP confirmed it had completed field work and studies and said it gave its recommendations for the development of the field to the NOC. The London-based company did not comment on staff movements.

“In 2013, BP signed a letter of intent with the North Oil Company of the Iraqi Ministry of Oil to support field activity studies in Kirkuk. As planned, in December 2019 BP completed field work, studies and recommendations,” it said.

Another senior NOC engineer said BP staff members left their laptops with the NOC after completing the survey and technical study of the field.

Iraq was hoping BP would help it triple output from the field to 1 million barrels per day (bpd) — more than one-fifth of Iraq’s current production and 1% of global output.

BP’s contract was put on hold in 2014 when the Iraqi Army collapsed in the face of Islamic State’s sweeping advance in northern and western Iraq, allowing the Kurdish regional government (KRG) to take control of the Kirkuk region.

Baghdad regained full control of the deposit from the regional government in 2017 after a failed Kurdish independence referendum, at which point BP resumed its studies on the field.

Kirkuk, where oil was discovered in 1927, is the birthplace of Iraq’s oil industry. BP and Iraq’s Oil Ministry signed in 2013 a letter of intent to study the development of the field with a planned spending of $100 million.

BP’s work included a 3D seismic study of the field’s reservoir to expand on the existing 2D data.

Kirkuk is estimated to contain about 9 billion barrels of recoverable oil, BP said.

Most of Iraq’s crude is produced from areas managed by the central government of Baghdad, in the south, and exported from southern ports on the Gulf. The KRG exports about 300,000 bpd of crude from northern Iraq through a pipeline across Turkey.

Oil majors are at the sharp end of the climate debate and face a bewildering balancing act to secure their futures.

It’s a Catch-22 situation: to meet ambitious emissions targets by investing in low-carbon technologies, they will have to rely on revenue from expanding their businesses in oil and gas, for which there is still growing global demand.

On one hand, they must satisfy the big investors who are rewarding companies with progressive climate policies and dumping heavy polluters; yet on the other, they can’t risk cutting the generous dividends that keep shareholders sweet.

How energy companies navigate this maze could determine the winners and losers in a lower-carbon future, and help govern whether the world can rein in warming. So no pressure, then.

The confusion has been thrown into stark relief this week at the World Economic Forum in the Swiss ski resort of Davos, where oil majors, state oil giants and ministers have been debating behind closed doors in their biggest gathering of the year.

While climate activists, notably Greta Thunberg, have called for all fossil fuel production to be halted to avert catastrophe, U.S President Donald Trump has decried “prophets of doom” and hailed the economic importance of oil and gas.

“It feels like we are at the epicentre of this debate. We sit right there between energy needs and climate change,” said Al Cook, executive vice-president of Norway’s energy giant Equinor.

“If you listen to Davos speeches, you’ve got some people who say only economic growth and energy matter. Others ask to stop oil and gas immediately. We need to find a way to balance this but the challenge is that you cannot always be popular with either side,” Cook told Reuters.

CLEAN ENERGY: FRACTION OF CAPEX
Repsol is at the vanguard of an industry climate drive, announcing this year that it plans to become carbon neutral by 2050. As a result, Norway’s wealth fund has doubled its stake in the Spanish energy firm.

Equinor has meanwhile launched a target to reduce emissions to near zero in Norwegian offshore production by 2050, and is co-investing in a $10 billion wind farm in Britain, the world’s largest.

French oil major Total this year announced investments into one of the world’s largest solar power plants, in Qatar. It also plans to open 20,000 power charging points in the Netherlands and invest in planting millions of trees in Peru.

Europe’s top oil firms have all set carbon reduction goals of various breadth. Shell has set out an “ambition” to halve “Scope 3” emissions by 2050 from fuels and products sold to customers rather than from its own operations.

Reuters reported this week that BP is also looking to significantly broaden its targets.

Companies might tout green credentials to satisfy sustainable investors and activists, but how can they pay the bill?

Fatih Birol the head of the International Energy Agency, the energy watchdog for industrialised nations, said the reality was that industry investments in clean energy represented a small fraction of their spending.

“Last year only 1% of total capex went into clean technologies. But those investments will grow as companies have to balance their short-term profit goals with long-term social licence,” he said.

“Some companies won’t need to borrow more, some companies may need to borrow more, but no company will stay unaffected by the energy transition.”

He said the industry would focus in coming years on reducing methane emissions from their own operations, which constitute 15% of all global greenhouse emissions.

“This part can be done relatively inexpensively,” he added. “The more expensive part will include carbon capture and storage, offshore wind and increased use of hydrogen.”

THE TRUMP EFFECT
Another major challenge to climate action is a lack of a global consensus.

In the United States, where Trump is encouraging oil and gas production and has exited the Paris climate deal, oil majors lag their European rivals on emissions goals. Chevron has set limited reduction targets while ExxonMobil has no targets.

A U.S. energy boom has helped make the country one of the world’s biggest gas flarers.

“No-one has been able to fill the previous political leadership role on climate change that was played by the U.S. in the past,” said Majid Jafar, chief executive of UAE-based Crescent Petroleum.

Jafar argues that if the world replaced all coal with gas, it would achieve the Paris climate target of by keeping global warming to well below 2 degrees Celsius. The problem is that the biggest coal consumers, China and India, will not be able to do that for years if not decades, he said.

“The efforts of the West will be futile without bringing on board Asia and Africa, which are driving the growth in energy demand and emissions,” he added.

Richard Herrington, head of earth sciences at London’s National History Museum also said a speedy energy transition may simply be impossible.

“If the UK were to turn tomorrow all of its cars into electric ones, we would need twice the world annual cobalt and half of annual copper production,” he said. “You can imagine what happens if you scale it up to the whole world.”
Source: Reuters (Reporting by Dmitry Zhdannikov; Editing by Pravin Char)

ATHENS, Greece: Keeping the United States engaged in the Eastern Mediterranean is the surest way to help the region get the most out of its hydrocarbon resources, an industry veteran told a conference in Athens on Thursday.

Roudi Baroudi, CEO of Energy and Environment Holding, an independent consultancy based in Qatar, told the first day of the Athens Energy Dialogues that peace and stability were prerequisites for sound development of the sector.

“This part of the world has long and painful experience of instability, and recent events indicate that the ingredients for more conflict are still very much on the table,” he told his audience. “In order to realize the potential offered by oil and gas, we need to learn from our shared history and avoid repeating it.”

While several East Med countries have discovered significant oil and gas deposits off their coasts in recent years, most of the region’s maritime boundaries are yet to be agreed, leaving ownership of the resources in dispute. The uncertainty threatens to discourage investment and delay development on multiple fronts, including the auctioning of offshore blocks for exploration and production, and the construction of processing and pipeline facilities for the export of liquefied natural gas (LNG) to Western Europe. Baroudi’s frequent advocacy of diplomacy to resolve these differences has made him something of an unofficial ambassador for dialogue and other peaceful means of dispute resolution under international law.

With more than four decades in the energy business, Baroudi has helped shape policy and investment choices for companies, governments, investors, and supranational organizations like the United Nations and the European Union. He said the UN and related institutions offered a variety of mechanisms by which countries might find ways to replace politico-military competition with at least tacit cooperation, but also warned that much of the internationalist playbook was under threat.

Citing former UN Secretary General Boutros Boutros-Ghali, he noted that UN institutions only work as intended when member states follow the rules and encourage others to do the same.

The effectiveness of the rules-based system developed after World War II, he argued, “stems primarily from the participation and goodwill of all member states, but especially the strongest and most influential among them – and in particular, therefore, the United States.”

“Much of this architecture has recently been undermined by some of the very countries that once championed its suitability for keeping the peace, maintaining stability, and otherwise providing peoples with the tools, the time, and the space they need to govern themselves and grow their economies,” Baroudi warned. “The UN itself can only promote the kind of preventive diplomacy that abets both peacemaking and peacekeeping; actual implementation depends very much on the policies and practices of member states. And then as now, no member state is more crucial to that reality than the United States. It alone has the requisite power, presence, and influence … It behooves all regional states, therefore, to keep the USA engaged in the Eastern Med.”

LONDON (Bloomberg) – OPEC’s latest forecasts suggested a weaker outlook for global oil markets this year as surging supplies from competitors from Norway to Guyana threaten the group’s efforts to defend crude prices.

The organization and its allies — which together account for about half the world’s oil output — are embarking on a fresh round of production cuts as another year of booming rival supplies threatens to unleash a new glut. OPEC’s latest monthly report shows their challenge extends far beyond the shale patch of Texas and North Dakota.

The Organization of Petroleum Exporting Countries boosted forecasts for growth in output from non-members in 2020 by 180,000 barrels a day to 2.35 million a day, as offshore projects once seen unfeasible in an era of lower oil prices take off. While the outlook for the U.S. was lowered, America will still account for almost two thirds of the new output.

Although the group raised estimates for world demand, rival supplies will grow about twice as fast, potentially derailing the coalition’s strategy to maintain oil revenues for its members. Crude futures are trading near $64 a barrel in London, close to the lowest in a month, even after flaring tensions between the U.S. and Iran rekindled fears of a major supply disruption.

OPEC and allies including Russia and Kazakhstan are deepening production cutbacks made last year in order to remove excess global inventories, pledging overall curbs of about 2.1 million barrels a day. This month’s report suggests those measures should be sufficient to deplete stockpiles during the first quarter, but that a surplus will probably return in the second.

Saudi Arabia, the group’s biggest member and de facto leader, rushed to implement almost all of the additional reductions pledged before the new agreement even took effect, the report showed. The kingdom reduced output by 111,000 barrels a day in December to 9.762 million a day.

As a result, the organization’s total production fell to 29.44 million a day last month. If other nations implement just part of their pledged reductions, output should be near the average of 29.19 million a day needed in the first quarter. However, even full compliance won’t prevent stocks building up in the second quarter, when the requirement for OPEC’s crude drops to 28.56 million a day.

The full alliance is due to meet in early March, when the agreement is due to expire, to decide whether to continue with the strategy.

ISLAMABAD: 

Pakistan has managed to secure broad-based interest in the privatisation of multibillion-dollar liquefied natural gas (LNG)-fired power plants as a dozen global and local companies, including a military-backed local consortium, have shown interest by the end of the extended deadline.

As traditional aspirants, China and Saudi Arabia, have stayed away from the process, non-traditional investors from Japan, Thailand, the United Kingdom and Malaysia have come forward and submitted statements of qualification.

The Privatisation Commission had floated Expressions of Interest (EOI) in November last year, inviting local and global investors for the acquisition of nearly 2,500-megawatt two power plants, fuelled by Qatar’s LNG.

“Till the expiry of the deadline on Friday, 12 reputed international and local firms have submitted statements of qualification,” Privatisation Secretary Rizwan Malik told The Express Tribune. “We have secured sufficient competition and once pre-qualified, these companies can make four to five competitive consortiums,” said the secretary.

National Power Parks Management Company Limited (NPPMCL) owns the two power plants located at Balloki and Haveli Bahadur Shah with combined generation capacity of 2,453 megawatts. The government wants to sell NPPMCL in the hope of fetching a minimum of Rs300 billion or $1.5 billion in non-tax revenue.

In the next step, the Privatisation Commission will evaluate the prospective investors and pre-qualify them for taking part in the bidding process. Pre-qualified firms will have around two months for conducting due diligence of the power plants.

Once the due diligence is done, the Privatisation Commission will announce the bidding date. “We expect to announce the bidding date by the end of March,” said the privatisation secretary.

Adra Power, Malaysia’s second largest independent power producer, has submitted documents. Adra was the only company that had submitted the statement of qualification before December 23 – the original deadline, which was subsequently extended for three weeks. Out of 12, nine companies are from Europe and Asia, depicting broad-based interest in one of the largest privatisation transactions in the history of Pakistan.

Two companies from Qatar have submitted the statement of qualification. Nebras Power, Qatar, is a global power development and investment company. The other party is Qatar Investment Authority.

The two power plants are run by LNG that Pakistan imports from Qatar under a 15-year deal, signed in 2015. However, the Power Division has claimed that due to the availability of cheap alternative fuels, the consumers will have to pay extra Rs471 billion from 2019 to 2025, if these power plants are run on imported LNG.

Three Japanese companies have also shown interest in acquisition of the power plants. Marubeni is a major Japanese integrated trading and investment business conglomerate. Jera is a joint venture between Tepco FP and Chubu Electric Power and Mitsu and Co Japan has also submitted documents.

ASMA Capital Partners BSC of Bahrain has also shown interest. It is a multi-fund asset management firm incorporated in Bahrain. Global Power Synergy Company Limited, Thailand and Contours Global UK have also submitted documents.

Three local firms have submitted documents. A consortium of Fauji Fertiliser, Fauji Foundation and Mari Petroleum has come forward for the acquisition of the two power plants. Kot Addu Power Company and Atlas Power have also submitted bids.

However, China and Saudi Arabia have stayed away and their companies did not submit the statement of qualification till the closing time. In a bid to convince Chinese investors, the privatisation secretary met with the Chinese ambassador in Islamabad this week.

Chinese investors were reluctant to come forward due to the usual bureaucratic inefficiencies that had also delayed the sale of a majority stake in K-Electric to a Chinese company. The sale of Abraaj Group’s stake in K-Electric to Shanghai Electric has been delayed by over three years.

About 19 companies procured documents from the Privatisation Commission including around 14 foreign firms after the government invited the EOI.

The Rs300-billion revenue is very crucial for the finance ministry, which is already struggling to manage budget books due to an anticipated shortfall of Rs700-Rs800 billion in Federal Board of Revenue’s annual tax collection target of Rs5.5 trillion. The FBR has already suffered a shortfall of Rs284 billion in six months of the current fiscal year.

Published in The Express Tribune, January 18^th, 2020.