Oil firm Nexen Petroleum UK has said its partners have given it the nod to extend the life of the North Sea’s biggest producing field.

Nexen, owned by the China National Offshore Oil Corporation, also said the Oil and Gas Authority (OGA) had approved the Buzzard field phase two development.

In November, Nexen’s UK managing director, Ray Riddoch, said production from Buzzard would be prolonged by up to 10 years as part of a £500-million-plus project.

A number of contracts have already been awarded to the supply chain, while work on the front-end engineering design was completed in June.

irst oil is expected in the first quarter of 2021.

Operator Nexen owns 43.21% of Buzzard, the largest UK North Sea oil discovery in the past two decades.

Its partners are Suncor Energy (29.89%), Chrysaor (21.73%), Dyas (4.7%) and Oranje-Nassau Energie (0.46%).

Nexen is working on the project with a host of oil field service companies including AGR Well Management, Baker Hughes, a GE company (BHGE), COSL Drilling Europe, Subsea 7 and Worley Parsons.

They have formed an integrated team which is based at Nexen’s office in Kingswells, Aberdeen.

The team is going after additional reserves with a subsea development in the northern part of the Buzzard field.

Buzzard, which lies 60 miles north-east of Aberdeen, was discovered in 2001 and produced first oil in 2007.

The latest figures of the OGA show the field is producing more than 140,000 barrels of oil equivalent per day.

A production and water injection subsea manifold will be installed and tied back to the existing Buzzard complex.

A new module will also be added to the complex for processing and export.

Last week, Subsea 7 said it had won a contract worth between £38-£115m to build and install a three mile pipeline bundle and provide a heavy lift vessel for transporting and installing a new topside module.

BHGE has been chosen to supply a range of subsea infrastructure and topside control systems.

Zvonimir Djerfi, Europe president, BHGE, said the formation of the integrated team was a prime example of companies taking an unconventional approach to collaboration and project development.

The GCC as we know it today would not be the same were it not for the discovery of oil in the region in the early years of the last century.

Now, new data has surfaced that predicts the GCC will break its dependence on fossil fuels by 2050, emerging in the new decade with an economy whose fate is no longer tied to the fickle fluctuations of oil prices.

The question remains, however: How effective will the GCC’s attempts to wean off hydrocarbons be, and which non-oil sectors will be able to keep it afloat?

Speaking to Arab News, New York-based firm Fitch Solutions shared information from their latest report covering global trends through to 2050. Their data shows that countries in the GCC like Kuwait, UAE, Saudi Arabia and Bahrain will achieve their goal of a diversified economy by 2050 following their acts of reform.

Initiatives like Dubai’s Vision 2021, Saudi’s Vision 2030, the implementation of VAT, and the lifting of the ban on women driving are all heralds of this long-awaited change. As it currently stands, the UAE is ahead of its neighbors, having announced their reformatory Vision 2021 for Dubai back in 2010. According to Trading Economics, 40% of current UAE exports come from oil and natural gas, the lowest in the region.

Other countries, however, such as Kuwait and Oman still have a lot of ground to cover, with the Kuwaiti oil sector accounting for 40% of the country’s GDP, 90% of total exports and 80% of state revenues, according to Trading Economics.

These Gulf nations cannot afford to rely solely on oil anymore, as the recurring drop in oil price has shown. The 2014 oil price crash gave these rich countries a pang of reality. During that year, the price of a barrel dropped from around $115 in June 2014 to under $27 in February 2016, according to CNBC.

Are other sectors enough to support the entire region?

The possibility of oil running out has always existed.

Sooner or later, these countries will need to take action. The question remains, however: could non-oil sectors truly support a region that has been so reliant on fossil fuel revenues?

Tourism and hospitality staples of the region’s economy

In recent years, the UAE has continued to nurture and grow its tourism industry. Dubai International Airport (DXB) was not named the world’s busiest airport for no reason. Passenger numbers at the airport topped 43.7 million in the first half of 2018, according to a traffic report issued last month by operator Dubai Airports, up 1.6% from the same period last year.

Dubai, for example, has been seeing a hotel construction boom in anticipation of Expo 2020.

Foreign investment is key

These countries are also looking outside their borders for investment opportunities. Saudi’s Public Investment Fund (PIF) currently has stakes in several major companies abroad, such as $72 billion ride-hailing company Uber and future-oriented Tesla.

The PIF’s investment in Uber is reported to be worth $3.5 billion, according to the New York Times. The fund’s latest investment has been in Tesla, reported at a 5% stake. The fund has also staked a $400 million sum in American augmented reality startup Magic Leap.

The country has been intent on investing in technology companies they believe will have a key role in the future of economy as well as mankind.

Inward FDIs are also key, with the UAE and Saudi currently at the forefront of the GCC.

The future is green

Saudi is also looking at green energy ventures. Earlier this year during March, Saudi Arabia and the SoftBank Group Corporation announced a $200 billion solar energy project, set to produce 200 GW by 2030. Saudi’s vast open deserts permit a project of this scale, and this new project will produce an excessive amount of energy that will eclipse Saudi’s needs. This means that the kingdom could become one of the world’s greatest exporters of solar energy, distributed using mass batteries.

It seems that 200 hundred years later after it was first invented, we are still relying on age-old technology such as the battery.

The UAE has some solar plans of its own. Its Mohammed bin Rashid Al Maktoum Solar Park in the desert south of Dubai spans 16.2 km². By 2030, it will have a capacity of 5,000 MW, offsetting 6.5 million tons of CO2 emissions and generating enough energy to power 800,000 homes, Smithsonian Magazine reports.

Bahrain’s prospects are not as ambitious just yet. The country has set a target of 10% of total energy consumption to be met through renewables by 2035, doubling the 5% goal by 2025, Electricity and Water Affairs Minister Dr. Abdulhussain Mirza has said.

The GCC prepares for a future with blockchain

The rise of cryptocurrencies and blockchain has already sent ripples through the region’s banking sector. For the GCC to survive without oil, it will be instrumental that these countries adapt and embrace these upcoming changes.

The National Bank of Abu Dhabi has become the first bank in the MENA region to introduce real-time, cross-border payments on blockchain, Medium reports. The bank has formed a partnership with Ripple.

Saudi’s central bank has also signed a deal with Ripple for an upcoming project.

Freight transportation industry in GCC needs an update if it will survive

Freight transportation and logistics (T&L) is a critical industry in the GCC, yet revenues have been on the decline in recent years. Pricewaterhouse Coopers (PwC) analysts blame this on the GCC lagging behind the technological advancements of T&L industries abroad.

If the GCC’s T&L industry is to catch up and survive post-oil, they will need to adopt digitization practices to update their services to a more demanding international clientele.

• Shares in Interserve slumped as it revealed debts of £614.3million 
• Half-year sales fell from £1.64billion to £1.5billion while it made a £6million loss
• Bosses said revenue from Qatar was down £31.2million over last year 
• Interserve’s work in Qatar includes some work on World Cup projects 

Troubled outsourcer Interserve has blamed the blockade against Qatar for some of its woes as it swung to a loss and debts spiralled.

Shares slumped as it revealed debts of £614.3million – more than six times its market value – a near-60per cent increase on last year.

Half-year sales fell from £1.64billion to £1.5billion while it made a £6million loss compared to a £24.9million profit during the same period last year.

Bosses said revenue from Qatar was down £31.2million over last year as a trade blockade against the country by its neighbours delayed contract awards and made getting supplies harder.

Interserve’s work in Qatar includes some work on World Cup projects, other construction projects and support services. It is not building stadiums for the 2022 tournament.

Interserve employs 80,000 around the world and about 25,000 in the UK, with sales of around £3.7billion. Its work includes security, probation, healthcare and construction services, as well as cleaning the London Underground and managing army barracks.

It has been struggling financially since last year partly due to losses on a waste project in Glasgow, and issued two profit warnings late last year.

In January it emerged Interserve was being monitored by the Government amid fears of a repeat of the collapse of builder and outsourcer Carillion.

Its shares have fallen nearly 70per cent since last year, slumping further yesterday, valuing the company at around £96million. Operating profits for the first half rose by £11.5million to £40.1million.

Chief executive Debbie White, 56, has spent £32.1million on financial advisers including PwC before reaching a rescue deal with creditors in March.

She said trading during the first half had been in line with expectations and the business was on a better footing to move forward. She added: ‘Whilst there remains a significant amount of work to do, we have energy and momentum.’

The escalating trade battle between Canada and Saudi Arabia highlights the need for more pipelines to move oil and natural gas around the northern nation to improve its energy security, according to the Canadian oil industry’s largest trade group.

“Geopolitical tensions, whether they be with our largest trading partner, the U.S., or with other countries, illustrate the opportunity we have to improve energy security within our own borders and to expand our exports to global markets to ensure we are getting the best price for our products,” Brunnen said in an emailed statement.

Despite sitting on an ocean of oil, Canada still buys $300 million per month of Saudi crude

As Saudi Arabia aggressively severs ties with Canada, the two countries’ trade relationship hangs in the balance. On one hand, Canada will lose out on Saudi foreign students, military contracts and sales of wheat and grain. On the other, Saudi Arabia will lose the billions of dollars it earns every year by selling oil to Canada.

For years, it has been an oft-repeated Alberta grievance that these imports exist at all. Despite sitting atop an ocean of proven oil reserves, Canada continues to spend a small fortune every year buying oil from a country that executes homosexuals, flogs dissidents and has a nasty habit of funding Islamic extremism.

Below, a quick guide to why Canadians are still gassing up their cars with Saudi crude.

Over the last 10 years, Canada has spent $20.9 billion on Saudi crude
Between 2007 and 2017, Statistics Canada figures show that Canada imported a total of $20.9 billion of Saudi Arabian petroleum oils. For context, this is almost precisely what Canada spends on its military per year. It’s also way more than the expected $15.7 billion cost of the Energy East pipeline. On average, in recent years, Saudi Arabia supplies about 10 per cent of Canada’s oil imports. Canada, in turn, is responsible for buying roughly 1.5 per cent of total Saudi oil exports. What’s more, Saudi Arabia is climbing the leader board of countries that Canada’s relies upon for its foreign oil. As recently as 2010, Saudi Arabia ranked as Canada’s fifth largest supplier of foreign oil (behind Algeria, Norway, the U.K. and Kazakhstan). Now, Saudi Arabia is second only to the United States.

Right now, all the Saudi oil is coming through a single New Brunswick refinery
All of the Saudi oil imported into Canada in 2017 and 2018 came through New Brunswick, which only has one oil import facility: The massive Irving Oil-owned Saint John refinery. Between January and June of this year that refinery has imported $1.8 billion of Saudi oil — roughly $10 million per day. The amount of U.S. oil entering the refinery, for comparison, is equivalent only to about $3.8 million per day. Unlike most Canadian refineries, Saint John has no access to a pipeline; every barrel of oil it processes either comes by tanker or train. (The oil train that caused the Lac-Mégantic rail disaster, in fact, was headed to the Saint John refinery). “We source crude oil from all over the world for our refinery in Saint John, N.B.,” a spokesman for Irving Oil told the National Post in 2016. And whenever someone is seeking out the cheapest product from the world market, it’s not unusual that a lot of it is going to come from oil-rich Saudi Arabia. It’s like turning to the world market to buy the cheapest possible t-shirts: Chances are that they’re going to come from Bangladesh.

Alberta and Saudi oil aren’t necessarily the same thing
On paper, Canada could become energy self-sufficient tomorrow. Every day we produce about 3.9 million barrels of oil per day, and use less than 2 million barrels. A study this year from the Canadian Energy Research Institute even calculated that energy self-sufficiency might reduce emissions. But think of oil like whiskey: There are many different types and qualities. A bourbon connoisseur probably isn’t going to be happy with a bottle of Old Crow and a Manhattan isn’t going to taste the same if it’s made out of Scotch. Similarly, Alberta oil is not interchangeable with the stuff coming out of Saudi Arabia. Andrew Leach, an energy economist at the University of Alberta, even said that comparing the two is like comparing apples and oranges. “Saudi crude and WCS (Western Canadian Select) doesn’t overlap much in terms of their markets,” he told the National Post. For one thing, most eastern Canadian refineries cannot process bitumen, the thick tar-like hydrocarbon that comes out of the Athabasca Oil Sands. Almost anybody can process Saudi Arabian crude, but only an elite fraternity of the world’s most complex refineries can turn Alberta bitumen into gasoline. To get to the east coast, Canadian bitumen also has to be shipped overland from more than 4,000 kilometres away, significantly adding to its total costs (Saudi Arabia is 10,000 kilometres away from the Canadian east coast, but tanker shipment is cheap). It’s also why Western Canadian Select, the industry name for most oil sands bitumen, sells at such a steep discount to more conventional oil types coming out of Saudi Arabia. In June, for instance, WCS sold at an average of USD$52.10 a barrel, compared to USD$67.87 for West Texas Intermediate (WTI), an oil category priced similarly to most Middle Eastern oils. “The oil Alberta produces is simply of a lower quality than … WTI, and is located farther away from customers,” writes the Alberta government in an online briefing note describing the WCS “discount.”

Even with a pipeline, it’s not a guarantee that refineries would buy Canadian
The cancelled Energy East pipeline, of course, would have pumped Saskatchewan and Alberta petroleum into New Brunswick. Politicians touted the pipeline as a way to supplant foreign suppliers such as Saudi Arabia. “We believe this nation-building project would have benefited all of Canada through new jobs, investment, energy security and the ability to displace oil being imported into Canada from overseas,” Alberta premier Rachel Notley said upon the project’s cancellation. However, refineries are no different than a driver cruising gas stations looking for a fill-up: They seek out whoever has the best price and buy accordingly. If Alberta can’t sell its oil on the Atlantic Coast for a lower price than Saudi Arabia, refineries aren’t going to buy it — particularly if they can’t process it. “Getting product from Western Canada, while conceptually sounding like a good way to push out Saudi oil, doesn’t fix everything,” said Jason Parent with the Canadian oil industry analyst Kent Group. As of press time, WCS is currently selling at an incredible $30 discount over more conventional oil types. While this would likely be enough to entice Atlantic buyers, the discount isn’t always so competitive — particularly if Saudi Arabia is actively trying to overproduce and drop oil prices in order to kneecap the Canadian and U.S. oil industry. This is part of the reason why Canada never built a pipeline to the east coast in the first place. A west-to-east pipeline was indeed considered soon after the discovery of oil in Alberta in the 1940s, but it was soon scrapped. “Eastern provinces did the math and found it cheaper to import foreign oil by tanker, rather than bother with the extra cost of domestic supply,” said Peter Tertzakian, director of the Calgary-based Arc Energy Research Institute. However, even if the business case is a little complicated, Tertzakian still advocates a pipeline as something Canada should do for strategic reasons. “We could be completely self sufficient if we wanted,” he said. “It’s just a question of how much we are willing to pay for it.”

Canada can’t really hurt Saudi Arabia’s bottom line
The easiest way for Canada to cut off Saudi Arabia imports would be simply to buy more American oil. It’s about the same price, it doesn’t require specialized facilities and considering that they already buy so much of ours, there’s a certain justice to it. The U.S. also has an excellent human rights record compared to the Saudis. But while such a move might assuage Canada’s moral compass, the practical effect would be almost nil. It’s a seller’s market for oil right now. Production of U.S. shale oil is slowing down, Iran is being hammered by sanctions and petroleum demand continues to tick upwards all over the world. All this means that if Canada could successfully prevent a drop of Saudi oil from ever entering our borders again, it’s unlikely that Riyadh would ever notice. Any oil tanker turned away at Saint John could simply set course for New Jersey. Unlike Canada, Saudi Arabia sells a product that is easy to transport and that can be processed by almost anyone. Said Andrew Leach, “Saudi oil will still sell at the world price.”

When I pulled my Hyundai out of the driveway two weeks ago and headed 450 miles north, it was only for a short vacation, but I was still excited to be leaving the Beltway after a confusing year for foreign-policy wonks. Freed from the obligation to make sense of the growing dysfunction of the United States and its rippling effects on the world, I took long runs on country roads, ate too much ice cream, lazed on the beach with my wife and young daughters, read a novel, and celebrated a birthday.

I returned to the office a few days ago and almost wish I hadn’t. The weirdness of 2018 continues. Upon reconnecting, I discovered that the odious former president of Iran, Mahmoud Ahmadinejad, tweeted in support of LeBron James (he also likes Michael Jordan), Toto covered Weezer, and the government of Saudi Arabia freaked out at Canada. Not Iran or Qatar, but Canada… the Great White North. The place that has bestowed such gifts to the world as John Candy, poutine, Wayne Gretzky, the Montreal bagel, and the 55-yard line.

Like most countries, Canada does have darker aspects. The way Canadians treated what they now refer to as the First Nations was horrific, for example—although they recently apologized and accepted responsibility for the near-destruction of those cultures. And even when Canadians are angry at you, they tend to be unfailingly polite about it.

So, what is the Saudi beef? Why have they thrown the Canadian ambassador out of the country, halted Saudi flights to Toronto (a lovely airport), and told anywhere between 7,000 and 16,000 Saudis enrolled in Canadian universities that they can’t go back to school in a few weeks? A tweet. More specifically, last Friday the Canadian foreign ministry tweeted: “Canada is gravely concerned about additional arrests of civil society and women’s rights activists in #SaudiArabia, including Samar Badawi. We urge the Saudi authorities to immediately release them and all other peaceful #humanrights activists.”

That’s it. The Canadian government did not impose sanctions, offend Islam, or make common cause with the Houthis in Yemen. As anyone with a passing interest in international affairs knows, Ottawa has publicly positioned itself—often in contrast to the United States—as a strong voice in defense of human rights. This is particularly the case under Liberal Party-led governments such as the one under Prime Minister Justin Trudeau, and Canadian Foreign Minister Chrystia Freeland has been (politely) forceful in her defense of a rules-based and liberal international order.

According to their Saudi counterparts, by expressing concern for the plight of peaceful activists in the kingdom, Canada’s diplomats were in egregious violation of Saudi Arabia’s sovereignty. This is the kind of response that one might expect from say, Egypt—though even the Egyptian leadership, which loathes civil society, activists, and their international supporters with great passion, would not throw an ambassador out of the country and cancel the scholarships of thousands of university students.

There are various theories to explain the Saudi reaction to Canada’s tweet. Some analysts have suggested that the episode is another example of Saudi Arabia’s reckless foreign policy under Crown Prince Mohammed bin Salman. Others see it as another warning to Saudis that the only reforms in the kingdom are those that the crown prince has articulated, and they are at their peril should Saudis demand more. Both explanations are plausible—and either way, Mohammed bin Salman comes out looking every bit the impetuous, petty, immature, tyrant that his critics say he is.

Arab leaders have some good reasons for responding poorly to activists and nongovernmental organizations that international supporters of these individuals and groups tend to overlook. But rounding up people who peacefully express a different vision of society from the Saudi leadership is weak. Not just weak in a vague moral sense, but as a basic description of the government’s political standing. General rule: If a leader is arresting people who disagree with them, it is a sign that this leader is well aware of a significant gap between the stories the government is telling its citizens about how good life is under its benevolent leaders and how people are actually experiencing it. The Saudi women in jail right now had to be arrested, because if they weren’t silenced, there would be an ever-increasing risk that they would expose the emptiness of the government’s sunny narrative about the future. Coercion of this sort is a demonstration of brute force and political weakness.

For all the Saudi government’s declarations about the “new Saudi Arabia” and how the country is moving forward thanks to the crown prince’s reform program, it rings hollow against the background of jailed peaceful dissenters. The Saudis will argue that all the Western reporting and analysis is wrong—the people arrested were in communication with foreign countries and thus trying to undermine the Saudi state. It is a claim that is both tiresome—because it comes from the script every foreign ministry reads anytime their governments want to repress activists—and revealing. There is no foreign conspiracy, of course. It is the dodge of a nervous Saudi leadership, fearful that its people will discover its inability to deliver on its promises.

The Saudis and their supporters often complain that they get a bad rap in Washington. I am sympathetic to this claim. Sure, Crown Prince Mohammed bin Salman got some terrific personal press on his barnstorm through New York, Washington, Los Angeles, and Silicon Valley last spring—but news coverage of Saudi Arabia at around the same time was demonstrably negative. With good reason, of course. In November 2017, the Saudis orchestrated the brief resignation of the Lebanese prime minister—surely one of the stranger diplomatic episodes in the Middle East ever—and then there was the terrible (and ongoing) humanitarian toll of Saudi Arabia’s military intervention in Yemen. The Saudi-led blockade of Qatar, meanwhile, seems to have been a pointless exercise in showing Doha who is the big dog in the Gulf.

Yet the negative coverage ignored the middle ground; complications and shades of gray are typically saved for stories other than Saudi Arabia. The war in Yemen has been a foolish blunder, but hardly anyone mentions the brutality of the Houthis. The Qataris may be victims of Saudi, Emirati, Egyptian, and Bahraini scheming, but they are not innocent victims. The crown prince is hardly the reformer that he has proclaimed himself to be, but he does seem to enjoy genuine support at home.

Still, whatever beating the Saudis are taking over the war of words with Canada, it is entirely of Riyadh’s own making and well deserved. One is hard-pressed to truly understand what officials at the Royal Court are thinking, beyond taking a cue from the Trump administration and declaring, “We are Saudi Arabia, bitches.” The Saudis really can’t have it every which way: posturing as “reformers,” tossing activists in jail, and then taking umbrage when people dare criticize them for not actually reforming.

The crown prince decided to pick a fight with the wrong country. Not because Canada is powerful and the Saudis are dependent upon them, but rather because Ottawa has taken a stand on the straightforward principle that peaceful dissent is not a crime. In their overreaction, the Saudis have decided to flaunt their own foolishness and feebleness. Instead of railing against Ottawa, Riyadh should apologize for its rash behavior. That’s what the Canadians would do.

Turkey’s central bank yesterday acknowledged it won’t meet its 5% inflation target for three more years, disappointing investors seeking signs that monetary policy would tighten.
Although governor Murat Cetinkaya pledged to raise borrowing costs when needed, his prediction of 6.7% inflation by the end of 2020 was seen as a dovish signal by investors who gathered in Ankara for the bank’s quarterly inflation report. He expects prices to rise 13.4% through this year and 9.3% through 2019.
This was the first time the governor provided an above-target forecast for three years into the future since taking office in 2016, and it comes with the inflation rate at its highest in 15 years. For investors surprised that the bank didn’t raise borrowing costs at its last rate meeting on July 24, it’s another indication monetary policy makers will put a premium on stimulating economic activity, according to Erkin Isik, a strategist at Turk Ekonomi Bankasi AS in Istanbul. That’s an agenda demanded by President Recep Tayyip Erdogan.
“The upward revision to medium-term forecasts suggests that the bank will prioritize growth over inflation and let inflation remain high for much longer,” Isik said by e-mail as Cetinkaya spoke.
The lira fell during the governor’s speech and was trading 0.4% lower at 4.90 per dollar at 12:31pm in Istanbul.
Unlike in his previous inflation reports, Cetinkaya went out of his way to explain last week’s rate decision. This year’s 500-basis-point increase in lending costs will take time to have an impact on demand conditions, which are set to soften with a re-balancing in the economy, he said.
His base-case scenario of a “moderate” slowdown in growth after last year’s 7.4% expansion is partly based on expectations the government will lower spending. Continued expansionary fiscal policies would result in higher inflation, according to the inflation report.
Taking into account the high inflation rate and current account deficit “at a time of tightening global financial conditions, such a situation would result in a higher country risk premium and increase the pressure on foreign-exchange levels, necessitating a tighter monetary policy stance to rein in price gains,” the report read.
Erdogan has repeatedly stressed he wants interest rates to come down, taking the anomalous approach that cheaper money would help to tame inflation by stimulating growth.

Higher oil prices and increased output helped BP Plc (NYSE: BP) quadruple its second-quarter profit from a year earlier as the oil major finally shakes off the after-effects of 2010’s Deepwater Horizon spill and the last oil market slump.

Second-quarter results have been a mixed bag for the world’s top oil companies. Total SA (NYSE: TOT) beat forecasts and boosted production targets while Royal Dutch Shell Plc (NYSE: RDS.A) launched a $25 billion share buyback program despite profits falling short of expectations.

U.S. majors Exxon Mobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: CVX) disappointed Wall Street.

BP confirmed it would increase its quarterly dividend for the first time in nearly four years, offering 10.25 cents a share, an increase of 2.5%. The company bought back shares to the tune of $200 million in the first half.

In a further sign of recovery, BP last week agreed to buy U.S. shale oil and gas assets from global miner BHP Billiton for $10.5 billion.

The deal, BP’s first major acquisition in 20 years, marked a watershed for the company in the United States as it looks to leave behind the $65 billion fallout from the deadly explosion of its Deepwater Horizon rig in the U.S. Gulf of Mexico.

Benchmark Brent crude futures, currently over $74 per barrel, rose about 16% in the first half of 2018 and are up about 60% since June last year.

BP’s output in the first six months of the year was 3.662 million barrels of oil equivalent per day (MMboe/d), including production at Russia’s Rosneft, of which it owns just under a fifth, from 3.544 MMboe/d a year earlier. That helped underlying replacement cost profit, BP’s definition of net income, rise to $2.8 billion, exceeding forecasts of $2.7 billion, according to a company-provided survey of analysts.

The company earned $0.7 billion a year earlier and $2.6 billion in the first quarter. BP’s shares were up about 1.2%, hitting a two-week high in early trading.

BP has paid around $2.4 billion of expected 2018 costs of just over $3 billion related to Deepwater Horizon, and plans to split the outstanding payments equally between the third and fourth quarters, CFO Brian Gilvary said.

Meanwhile, the company has tightened its investment budget for this year to about $15 billion from previously up to $16 billion and increased its divestment guidance to over $3 billion from $2 billion to $3 billion.

Gearing, the ratio between debt and BP’s market value, declined to 27.8% at the end of the quarter from 28.1% at the end of March. Net debt was $39.3 billion at the end of June compared with $40 billion at the end of March.

“With gearing nudging down sequentially, dividends raised, and execution on track, 1Q and 2Q are the start of a new positive trend for BP,” Bernstein analyst Oswald Clint said.

Donald Trump is the first US president to think that the US-led world order is undermining US interests.
Though the current order obviously benefits the United States, Trump is convinced that it benefits China even more.
Fearing China’s ascendance as another pole of global power, Trump has launched a project of creative destruction to destroy the old order and establish a new one that is more favourable for the US.
Trump wants to pursue this objective by engaging with countries bilaterally, thereby always negotiating from a position of strength.
He has shown particular disdain for traditional US allies, whom he accuses of free riding, while also standing in the way of his demolition derby.
Likewise, Trump cannot stand multilateral organisations that strengthen smaller and weaker countries vis-à-vis the US.
Given his “America First” strategy, Trump has spent his presidency undermining institutions such as the World Trade Organisation, and abandoning multilateral agreements such as the Trans-Pacific Partnership (TPP), the Iran nuclear deal, and the Paris climate accord.
And because Trump has been able to pick new fights so fast, other countries have struggled to keep up, let alone form effective alliances against him.
In recent weeks, Trump has set his sights squarely on the European Union.
As Ivan Krastev of the Institute for Human Sciences recently observed, the EU now faces the possibility of becoming “the guardian of a status quo that has ceased to exist.” As a committed Atlanticist and multilateralist, it pains me to admit that he is right.
The time has come for Europe to redefine its interests, and to develop a new strategy for defending them.
First and foremost, Europeans will have to start thinking for themselves, rather than deferring to the US foreign-policy establishment.
The EU clearly has an interest in preserving the rules-based order that Trump hopes to tear down, and its interests with respect to the Middle East – particularly Turkey – and even Russia have increasingly diverged from those of the US.
Europeans should of course try to work with the US whenever possible; but not if it means subordinating their own interests.
Europeans must also start investing in military and economic autonomy – not to break away from the US, but to hedge against America’s abandonment of its commitments.
Fortunately, there is already a healthy debate in European capitals about increasing national defence spending to 2% of GDP; and both the EU Permanent Structured Co-operation framework (PESCO) and French President Emmanuel Macron’s new European Intervention Initiative (EI2) represent steps in the right direction.
The question now is whether France’s Force de Frappe (military and nuclear strike force) can be extended to provide a credible deterrent for the rest of the EU.
On the economic front, Europe is facing a dilemma as it weighs its values against its business interests.
Former Belgian foreign minister Mark Eyskens once described Europe as “an economic giant, a political dwarf, and a military worm.” But Europe is now in danger of becoming an economic dwarf, too.
The fact that the US can threaten secondary sanctions on European companies for doing business with Iran is deeply worrying.
Though the EU is standing up for international law, it remains captive to the tyranny of the dollar system.
Looking ahead, the EU needs to gain more leverage for dealing with other great powers such as China and the US.
If Trump wants to make the transatlantic relationship more transactional, then the EU needs to be ready to trade across different policy areas to make deals.
Consider the US Department of Defence’s recent request that the United Kingdom send more troops in Afghanistan.
If the EU were taking a muscular approach, it would deny any reinforcements until the US drops its threats of secondary sanctions on European companies.
Moreover, Europe needs to develop a strategy for political outreach to others.
The G7 is supposed to be the cockpit of the West, but at its recent summit in Quebec, it seemed to be short-circuiting.
So shocking was Trump’s behaviour that some senior European officials now wonder if US allies should form an independent middle-power alliance, lest they be crushed between the rocks of a rising China and a declining America.
In an increasingly deal-based world, a new G6 might offer a defence of the rules-based system.
Still, one wonders if the EU is capable of putting up a united front.
With the bloc splintering into distinct political tribes, it is becoming easier for other powers to pursue a divide-and-conquer strategy.
This has long been Russia’s strategy, and it is now being adopted by China and the US, too.
For example, in 2016, southern and eastern EU member-states that rely on Chinese investment managed to water down a joint EU statement on China’s territorial encroachments in the South China Sea.
Similarly, Trump routinely reaches out to eastern and southern EU member-states in order to sow divisions within the bloc.
For example, US Department of State officials reportedly made it clear to Romania that the US would not press it on rule-of-law violations if it breaks ranks with the EU and moves its embassy in Israel to Jerusalem.
With US-EU relations already fraught, the Trump administration will be all the more tempted to engage in such tactics.
It is unclear how the EU should respond.
It could impose heavier costs on countries that break ranks on foreign policy, or it could invest more in security so that even countries on the periphery feel as though they have something to lose by undermining EU cohesion.
Alternatively, the EU itself could strike a deal with member states, whereby it would go easy on internal political matters in exchange for foreign-policy co-operation.
Whatever is decided, the EU urgently needs to chart a new course.
Rather than being perpetually surprised and outraged by Trump’s affronts, Europeans must develop their own foreign policy with which to confront his behaviour. – Project Syndicate

* Mark Leonard is Director of the European Council on Foreign Relations.

One of Britain’s biggest consulting and accountancy firms has been negotiating
to land a major contract to help streamline and modernise Saudi Arabia’s
military, the Guardian can reveal.
PricewaterhouseCoopers (PwC) confirmed it had tendered for the project,
which will be part of a wholesale transformation of the kingdom’s defence
ministry designed to better equip and support its frontline forces.
PwC declined to comment further about the talks. It said there was an “ongoing
tender process with a number of participants pitching for work”.
The negotiations, for a deal that could be worth millions to the company, have
drawn criticism from campaign groups. Campaigners have condemned the
country’s involvement in the conflict in Yemen, claiming its airstrikes have
killed civilians and amount to war crimes.

Peter Frankental, Amnesty International UK’s economic affairs programme
director, urged PwC to explain what due diligence it had undertaken before
pitching for the work.
“Like any company, international accountancy firms should ensure that they
avoid contributing to human rights violations in their operations, or being
directly linked to them by their business relationships.
“We’d like to know what due diligence the company has done. The United
Nations guiding principles on business and human rights make it clear that a
company may be viewed as complicit if they are seen to benefit from abuses
committed by another party.”
The Saudi ministry of defence is run by Prince Mohammed bin Salman bin
Abdulaziz Al Saud. The 32-year-old, known as MbS, is said to be the world’s
youngest defence minister and is also the kingdom’s deputy prime minister.

Described by critics as an inexperienced firebrand, he has been the architect of
the kingdom’s intervention in Yemen, in which it has backed the exiled
government over Iranian-supported Houthi rebels.

This year the UN said the conflict had led to more than 22 million Yemenis –
up to 80% of the population – requiring humanitarian aid.
Jamie McGoldrick, the UN’s humanitarian coordinator in Yemen, has
described it as “an absurd and futile war” and condemned the “mounting
civilian casualties caused by escalated and indiscriminate attacks throughout
Yemen”.
PwC already has a presence in Saudi Arabia, but it is the company’s UK
operation that is behind the defence project.
PwC has launched a “call for resources” – asking specialists and consultants in
London whether they would be interested in moving to Riyadh to start the
work – because, it has said, it is “currently finalising the deal”.
The company told staff that the Saudi ministry of defence was undergoing an
“ambitious transformation to modernise its armed forces at a size and scale
rarely seen before … [this] is at its most critical phase and they need support to
undertake this level of change.”
If it wins the contract, PwC is likely to be tasked with transforming several
support areas within the defence ministry. The first phase of the work is likely
to focus on how to reshape recruitment, resourcing, performance management
and strategic workforce planning, and how to manage and communicate
change.

The Guardian asked PwC what due diligence it had undertaken and how it
would answer concerns about working with the Saudi military. The company
declined to respond.
The Saudi embassy in London was asked about the scale and scope of the
project but also declined to comment.
Frankental urged PwC to think again. “As any accountancy firm involved in
work for the Saudi ministry of defence must know, the Royal Saudi air force
has an appalling record in Yemen, with the Saudi-led military coalition having
indiscriminately bombed Yemeni homes, hospitals, funeral halls, schools and
factories. Thousands of Yemeni civilians have been killed and injured.”
Anna Macdonald, director of the Control Arms Secretariat, a global coalition
working for international arms control, said the UK “should be focusing on
trying to stop this terrible conflict, not assisting the Saudi government.”
She added: “British companies should be very cautious indeed in what they are
supporting. Yemen is the world’s worst humanitarian crisis and getting worse
by the day.

“The UK government and UK companies are fuelling this in continuing to
supply bombs and military equipment to Saudi Arabia and its coalition
partners. Ordinary Yemenis need access to water, to humanitarian aid and,
most pressingly of all, for the incessant bombing of their schools, hospitals,
markets and funerals to stop.”

Saudi Arabia has defended its military operations in Yemen. This year the
foreign minister, Adel al-Jubeir, said the critics were wrong. “They criticise us
for a war in Yemen that we did not want, that was imposed on us,” he told the
BBC. “They criticise us for a war in Yemen that is a just war, that is supported
by international law.”
Judeir blamed the Houthi rebels for blocking aid and contributing to the
humanitarian crisis.
A spokesman for the Department for Business, Energy and Industrial Strategy
said firms had to operate by UK and international law, and there was no
restriction on accountancy services in Saudi Arabia.