CAIRO – 23 February 2019: Leaders and government heads of 28 European countries and 21 Arab states will be convening a two-day summit in Sharm el-Sheikh, on Sunday, to discuss joint challenges and boost mutual cooperation opportunities.

This is the first ever platform that brings together the Arab and European heads of state and government to tackle the pressing issues, atop of which terrorism, organized crime and illegal immigration.

Chairman of the Egyptian Council for Foreign Affairs (ECFA) Ambassador Munir Zahran told MENA that the upcoming summit represents a great opportunity for enhancing the Arab-European cooperation and dialogue, where they will discuss problems of mutual concern and exchange views on various regional and international issues.

Several political issues will be also raised during the summit, topped by the Palestinian cause, Zahran said, stressing the importance of maintaining the unity and territorial integrity of Syria and putting an end to the Libyan and Yemeni crises.

Egypt’s Sharm el Sheikh International Airport is on high alert in preparation for receiving the high guests and heads of Arab and European countries, who are participating in the upcoming Arab-European summit due on February 24 and 25, said the Egyptian Ministry of Civil Aviation in statement on Thursday.

First Arab-European Summit 

The summit will be co-chaired by President Abdel Fatah al-Sisi and President of the European Council Donald Tusk.

On February 18, Sisi said that “Sharm El-Sheikh conference is a key step towards more cooperation that will be followed by other steps,” adding that the instability of some Arab countries led to the illegal migration to Europe.

“Not a single illegal migration case has crossed the Mediterranean Sea from Egyptian shores since September 2016,” President Sisi announced, adding that his country held a series of bilateral talks with a number of European countries to deal with illegal migration from Africa to Europe.

“Egypt hosts millions of registered and unregistered migrants who are integrating into the Egyptian society,” Sisi continued.

According to a statement issued by the EU, leaders from both sides will seek to strengthen Arab-European ties. They will also address a wide range of issues and common challenges, such as multilateralism, trade and investment, migration, security and the situation in the region.

The meeting is expected to start on Sunday, February 24 and end with a press conference on Monday, February 25. It will take place in the International Congress Centre in Sharm El-Sheikh.

Ambassador of the European Union to Egypt Ivan Surkos told Egypt Today on Wednesday that trade, investment, immigration and security will be among the top priority issues to be discussed during the upcoming Arab-European summit. He added that the cooperation between the European Union, the Arab league, European Council and the European Commission will enhance communication between the European and Arab regions and will boost stability in both regions.

Egypt’s strategic location made the North African country the link between Africa, the Arab region and Europe through the Mediterranean Sea, according to Sisi.

The Egyptian president said Egypt’s strategic location made it the link between Africa and the Arab region, and between Europe, the Arab and African regions through the Mediterranean.

EU-Arab relations 

Ahead of the summit, the Egyptian cabinet’s media center has published several infographs detailing cooperation between European Union and the Arab League; the trade exchange volume between Arab states and EU, in addition to investments by the European Bank for Reconstruction and Development (EBRD) in Egypt and Arab countries.

The volume of trade exchange between Egypt and the European Union states rose to €28 billion in 2017, compared to €17.4 billion in 2007, the cabinet media center said on Saturday.

The infographics indicated that trade exchange between the EU and Arab countries increased 7 percent to €315.9 billion in 2017, compared to €295.5 billion in 2016.

Arab exports to the EU states rose 20 percent to register €121.6 billion in 2017, against €101.2 billion in the previous year, they showed.

The infographics pointed out to cooperation between the EU and the Arab League (AL) in combating arms smuggling via a project that aims to enhance means of monitoring conventional weapons in the Arab League’s member states at a total cost of €2.7 billion.

The two sides also work together to support efforts of the anti-Daesh international coalition, while ensuring human rights and the rule of law, they added.

Bilateral cooperation also includes efforts to activate political dialogue that targets stability at the regional level, they said.

Media coverage 

More than 750 Arab and foreign correspondents will participate along with local journalists in the Arab-European Summit set to held in Sharm el-Sheikh, Egypt Sunday.

The two-day summit will witness the attendance of country leaders and heads of governments representing 28 European countries and 21 Arab states.

A month ago, the Ministry of Foreign Affairs have started receiving demands from around 550 foreign correspondents to attend the summit, in addition to 250 reporters from different local and foreign media outlets and news agencies. Mohamed Emam, the head of the press center of the State Information Service Authority said that more than 200 journalists will be accompanying the presidential delegations from Arab and European countries participating in the summit.

According to Emam, all media personnel approved to attend to the summit will receive required press allowances upon their arrival. He further assured that facilitations guaranteed to their and their equipment entrances.

MELBOURNE (Reuters) – Australia’s Oil Search is confident its partners ExxonMobil Corp and Total SA will be ready to sign off on two big projects in 2020 that together will double liquefied natural gas (LNG) exports from Papua New Guinea.

Oil Search had first hoped the projects to fuel an expansion of Exxon Mobil’s PNG LNG plant would be approved in 2019, but talks with the government took longer than expected after an earthquake hit the country a year ago.

“It was a very tough year in Papua New Guinea for a range of reasons and it started with the earthquake,” Oil Search Chief Executive Peter Botten said.

The quake killed more than 100 people in the rugged highlands region of one of the world’s poorest countries, destroyed homes, roads and runways and knocked out gas and oil facilities.

It also stoked long-running antagonism against the PNG LNG project, as the country’s take from the development has been much lower than anticipated and the government has been slow to pay out royalties to local communities.

Some people even blamed oil and gas operations for triggering the quake.

“In that context, we were doing a lot of negotiations on major projects and those sensitivities, I think, have been really well addressed,” Botten told Reuters after the company reported its annual results.

Total’s Elk and Antelope fields, new gas from PNG LNG fields and P’nyang are set to feed gas into three new processing units at PNG LNG, roughly doubling its output to 16 million tonnes a year, at a cost of around $13 billion, according to analysts.

“I’m very confident that a 2020 final investment decision is very achievable,” Botten said.

Oil Search, which has a 29 percent stake in the PNG LNG project, posted a 13 percent rise in annual profit, boosted by higher prices for its LNG and oil, which offset a loss of output after the earthquake.

Net profit for the year ended Dec. 31 rose to $341.2 million from $302.1 million a year earlier, but fell short of analysts’ forecasts around $360.83 million, according to Refinitiv data.

Oil Search raised its full year dividend to 10.5 cents from 9.5 cents in 2017.

Oil Search’s shares fell 1.5 percent in a slightly firmer broader market.

Production is expected to return to pre-quake levels in 2019 and unit production costs are forecast to fall 15-20 percent on the back of higher production, it said.

Qatar Petroleum (QP) signed three agreements worth QR9bn ($2.47bn) with leading international companies on Monday as part of QP’s ‘Tawteen’ initiative that aims to localise the energy sector’s supply chain and expand the country’s small and medium-sized enterprise (SME) base.
QP signed the agreements on the sidelines of Tawteen’s launch ceremony, which was led by HE the Prime Minister and Interior Minister, Sheikh Abdullah bin Nasser bin Khalifa al-Thani at the Sheraton Grand Doha Resort & Convention Hotel.
Speaking at a press conference after the signing ceremony, HE the Minister of State for Energy Affairs, Saad Sherida al-Kaabi, who is also CEO of QP, said the agreements “will give an important momentum” to the programme’s objectives, which aims to add QR15bn worth of in-country economic investment value to the local economy, “which reflects investor confidence in the Qatari economy.”
QP and Baker Hughes, a GE company, signed a memorandum of understanding (MoU) designed to help create new opportunities to expand its presence Qatar, and to enhance its operations through continued investment in future technologies and services. The MoU would also help strengthen Qatar’s oil and gas supply chain and boost the skills of Qatari talent in the industry.
QP also signed an MoU with Schlumberger, which recently celebrated 70 years of presence in Qatar. The agreement will help increase Schlumberger’s footprint, which plans to expand its current operations in Zikreet, to open a new integrated base facility in Ras Laffan by the end of 2019, and to establish a Centre of Efficiency in the Free Zone to be used as a regional maintenance centre.
On the sidelines of the launch ceremony, Nakilat and McDermott signed an agreement to form a joint-venture company, providing offshore and onshore fabrication services in Qatar.
The new company will help increase productivity levels at Nakilat’s Erhama Bin Jaber Al Jalahma Shipyard and developing local construction capabilities to meet the increasing demand for the construction of offshore and onshore structures.
The project will provide a range of new services that will support the construction, maintenance, repair and refurbishment of offshore and onshore structures, and all types of vessels.
The launch of Tawteen was part of a dedicated two-day conference and exhibition held with a large participation of official bodies and entities, energy sector companies, and a wide spectrum of service providers and supporting industries.
The activities during the event, which concludes Tuesday, are designed to present a unique opportunity for private sector companies to know more about the initiative, and about the incentives it offers to guarantee effective participation in the energy sector’s supply chain and to generate high-quality job opportunities.

Brent prices may average between $50 and $70 a barrel until 2024, Bank of America Merrill Lynch has said in a report.
“As prices become more anchored around $60, we believe volatility implied in oil options could trend lower in the medium term. But in contrast to last year, we see growing downside risks to our price outlook on rising US shale supply and slowing consumption growth,” Bank of America Merrill Lynch noted.

Its projections assume Opec+ is prepared to lose share in the global oil market. More broadly, it expects oil as a share of the global energy pie will drop too as the petroleum consumption mix rotates away from gasoline and ends into distillates and natural gas liquids (NGLs).
While medium-term trends pose some challenges, Bank of America Merrill Lynch still sees a balanced oil supply/ demand outlook this year. Brent should average $70 in 2019, helped by “voluntary and involuntary declines” in Opec supply. It projects a 2.5mn bpd drop in Opec supply from fourth quarter (Q4, 2018) into Q4, 2019 and then assumes stable output for the group through 2024.

As global oil demand growth slows from 1.2mn bpd in 2019 to 600,000 bpd in 2024, Bank of America Merrill Lynch sees non-US, non-Opec contributions averaging 190,000 bpd per year.
Shale should fill the balancing gap as US producers rush to deliver the marginal barrel. Total average US crude oil and liquids supply is projected to grow from 15.5mn bpd in 2018 to 21.9mn bpd in 2024.

The stage has been set for a European natural gas price war that will help boost demand and enable both Russia and the U.S. to increase sales to the region.

The battle won’t brutalize earnings too much because gas supply is just so profitable in Europe, where prices are more than double the prevailing level in the U.S. And those costs probably won’t drop too far because higher carbon allowances and other climate measures are finally making the fuel’s traditional competitor, coal, less attractive.

After last week successfully diluting planned European Union gas-market legislation to include loopholes for a controversial pipeline from Russia, Germany this week promised to build at least two terminals that open its market to seaborne imports, including from the U.S. The direct competition between the world’s biggest gas producers should help stymie prices to some extent, even as Europe needs to boost imports to meet ambitious climate goals.

“If you factor in the need for Russia to utilize the pipeline and how it will compete with U.S. LNG and other pipeline exporters such as Norway, then it could set the stage for a price war in Europe in the not-so-distant future,” said Nick Campbell, a director at industry consultant Inspired Energy Plc in England.

Gas prices in Europe are still prevailing at high levels even after falling since September. The cost is usually even higher in Asia, although oversupply there has crimped the premium that region usually offers to draw in cargoes of the fuel in its liquid form.

Representatives of EU governments and the European Parliament on Tuesday approved a revision to gas-market legislation to spur competition. While it included loopholes for the Nord Stream 2 pipeline to bring the fuel directly from Russia, bypassing Ukraine’s transport network, it was designed to play suppliers against each other.

The plan will “remove some of the risk” contained in prices because of the prospect of interruptions of supplies via Ukraine, with which Russia is in a territorial dispute, Campbell said.

Russia and the U.S. are vying to supply Europe with cleaner-burning fuel as governments from Berlin to Madrid grapple with coal phaseouts. Vladimir Putin is seeking to buttress one of his nation’s biggest sources of foreign cash while Donald Trump wants to win the U.S. a bigger share of a consumption boom.

Nord Stream 2, a planned 1,200-kilometer (746-mile) undersea pipeline, has sparked controversy. Eastern European countries wary of Russia gained U.S. support in opposing the project, whose chief political champion in Europe has been German Chancellor Angela Merkel. The region’s biggest economy is simultaneously seeking to phase out nuclear power, leaving a further gap for gas to fill.

The critics of Nord Stream 2 also picked up backing from the European Commission, the EU’s executive arm, which said the bloc needs to become less dependent on Russian gas and which proposed the revised pipeline legislation in late 2017.

Ending Ambiguity

The measures are meant to end ambiguity over gas-import infrastructure by making them explicitly cover all pipelines to and from the EU. While the draft law builds on EU rules that prevent gas providers from controlling the transmission business and that require third-party access to pipelines, the French-German compromise being included in the final version of the new legislation creates loopholes for Nord Stream 2.

The French-German plan denies the regulatory authority in Denmark a decisive say over the project and puts that power primarily in the hands of German regulators, who could then seek and gain an exemption from the EU market-opening requirements as long as it didn’t hurt competition or supply.

Dutch gas prices for next winter are 24 percent above forward levels of a year ago, despite losing a fifth of their value since September on mainly benign temperatures and below-capacity demand. That suggests there’s room for a further move down.

There’s a glut of LNG after multibillion-dollar investments in global production and Europe has already been receiving record amounts of super-chilled fuel. That should help damp prices and make it easier for Germany and the rest of Europe to source gas to meet environmental pledges.
Still, the drop might be limited by that rally in EU carbon allowance prices, which increases demand for gas. A trade deal between China and the U.S. could further stoke interest in gas as China seeks to deal with coal pollution, Inspired’s Campbell said.

Stiffer Competition

“With Nord Stream 2 and two LNG import terminals, Germany can easily exit from coal and nuclear power while pleasing both Trump and Putin,” said Laurent Segalen, a partner at Megawatt-X in London, who advises on financing wind and solar projects. “Putin will have to price its gas to stay competitive below U.S. LNG.”

Europe’s gas suppliers should brace for stiffer competition between LNG and pipeline shippers, as domestic production wanes, BP Plc said Thursday in its 2019 outlook report.

“Europe’s existing infrastructure means it has the capacity to increase substantially its imports of either LNG or pipeline gas,” the oil company said. A more globally integrated gas market may “ease” concerns about Russia, it said.

Indeed, any pain for Russia might be fleeting, according to analysis published Thursday by Macquarie Group Ltd. analyst David Hewitt.

The biggest supplier’s market share in Europe will drop to about 30 percent this year from 33 percent in 2018. That reflects extra LNG supplies being produced around the world, he said. But its share will rebound to 32 percent by 2021 as the LNG market tightens.

Europe will act as the global gas market’s “balancing point” to some extent, Hewitt said.

The congressman behind a bill that would allow the U.S. to sue OPEC for manipulating oil prices expects President Donald Trump to back the effort once it clears Congress.

“My sense is that the administration is waiting to determine whether we can actually get it through both houses of Congress before they spend any capital on it,” U.S. Representative Steve Chabot, an Ohio Republican, said in an interview on Friday. “I am cautiously optimistic we will be able to get it through both houses and get it to the president’s desk.”

The “No Oil Producing and Exporting Cartels Act” quickly cleared its first hurdle when it was approved by the House Judiciary Committee earlier this month, but a floor vote hasn’t been scheduled yet. The proposed law would subject the Organization of Petroleum Exporting Countries to possible antitrust action by the Justice Department through an amendment of the Sherman Antitrust Act of 1890, the law used more than a century ago to break up the oil empire of John Rockefeller.

Congressional support for the bill intensified last fall as crude prices neared a four-year high on the back of production limits set by OPEC, and Trump publicly blamed OPEC for high pump prices in the U.S. While the producer group hasn’t set prices since the 1980s, its members periodically agree to boost or cut their production to keep the oil market in balance.

A 2007 version of the so-called “NOPEC” bill passed the House and Senate by large margins, only to face a White House veto. Other attempts to approve the legislation have met similar fates. The difference this time is that Trump has consistently bashed the oil cartel on Twitter for keeping prices artificially high.

“This year, we seem to have a sympathetic White House,” Chabot said. “I hope the president will listen to the right people and be with us.”

Prices have fallen from last year’s but that hasn’t shaken Chabot’s resolve.

“These things are temporary and can change in the blink of an eye,” he said. “Prices in general seem to go up very quickly whereas they go down very slowly.”

Passage doesn’t necessarily mean that any lawsuits are actually brought against the cartel, Chabot said. But the threat may be enough to “keep OPEC nations more in check so they’re reasonable and not manipulating the world market.”

Companion legislation targeting OPEC has also been introduced in the Senate.

LAUNCESTON, Australia (Reuters) – Asia’s oil refiners are increasingly finding themselves trapped between the rock of OPEC’s production cuts and the hard place of U.S. President Donald Trump’s sanctions against Iran and Venezuela.

While the region, which accounts for about half of the world’s refining capacity, is still able to source oil, it’s becoming harder to get hold of the grades of crude that many Asian refiners prefer.

This is because the output restrictions agreed by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, which include Russia, have resulted in mainly heavy and medium sour crude grades being cut.

Add to this the sanctions imposed by the United States on Venezuela, which produces heavy sour crude, and on Iran, another producer of mainly heavy and medium sour grades, and Asia’s refiners are facing operational challenges.

Many of the region’s refineries are new and are optimized to process heavy and sour crudes.

They were designed this way to take advantage of the historical discount these grades were priced at relative to light, sweet crudes, such as global benchmarks Brent and West Texas Intermediate (WTI), and oil from West African producers such as Nigeria and Angola.

The recent developments in the crude oil market have all but eliminated the discount enjoyed by heavy crudes, and in some cases, physical cargoes of some heavy grades have traded at premiums to light crudes.

The Brent-Dubai exchange for swaps, which charts the premium of Brent over the Middle Eastern benchmark Dubai, narrowed to 36 cents per barrel on Tuesday, the weakest in almost nine years.

Looking at specific grades of crude shows that a grade such as Iraq’s Basra Heavy has been increasing in price relative to a light crude such as Nigeria’s Bonny Light.

Basra Heavy, as assessed by Argus Media, was at $60.17 a barrel on Tuesday, while Bonny Light was at $64.38.

This represents a premium of $4.21 a barrel for the light crude, but this is down from a gap of $6.18 as recently as early October last year, and $7.26 at the start of 2018.

ASIA’S HEAVY DISTRESS

The flows of crude oil to Asia also help illustrate the dilemma facing the region’s refiners.

Asia imported about 669,000 barrels per day (bpd) of Venezuelan crude in January, according to vessel-tracking and port data compiled by Refinitiv, with eight of the 13 cargoes going to China, four to India and one to Malaysia.

Given the six- to eight-week sailing time between the Latin American country and destinations in Asia, it’s likely that the pinch of U.S. sanctions will only be felt in April, given that all February cargoes and most of March’s are already en route.

But Asia is facing the loss of almost 700,000 bpd of heavy crude from Venezuela by April, coincidentally the same month that Trump’s waivers on Iranian crude exports are due to expire.

The U.S. administration reimposed sanctions against the Islamic Republic’s oil exports in November in a bid to ramp up pressure against Tehran’s nuclear program, but extended waivers to eight major buyers of Iranian crude, most of them in Asia.

Refinitiv data show that buyers have taken advantage of the waivers, with Iran’s exports rising to a three-month high of 950,000 bpd in January, of which 700,000 bpd headed east.

In theory, these exports should drop to zero when the waivers expire in early May, barring a further extension by the Trump administration, or less likely, some kind of agreement between the United States and Iran.

In the lead up to the November granting of waivers by the United States, oil prices had jumped to a four-year high as the market anticipated the loss of Iranian barrels.

However, the granting of the waivers contributed to a sharp reversal in crude prices, with Brent dropping to a 14-month low by late November.

In turn, this spurred OPEC and its allies to impose new output restrictions at a meeting in early December, with these cuts to take effect from January.

Given that much of the heavy lifting of the output restrictions will fall on OPEC’s top producer Saudi Arabia, and fellow Middle East producers Kuwait and the United Arab Emirates, it’s likely that the barrels lost will be heavy, or medium-heavy crudes.

With the actual loss of Venezuelan and some Middle Eastern crude, and the potential loss of Iranian barrels, the dilemma for Asian refiners becomes more acute.

Do they bid ever-increasing amounts for what heavy oil remains in the market, do they lower run rates, or do they try and switch to using more light crude?

None of these options are appealing, and all of them are likely to result in higher costs for refined products, particularly the middle distillates such as diesel and jet fuel that are produced in greater quantities from heavy crudes.

The European Union pushed ahead yesterday with an agreement that will allow Russia to continue to build a new gas pipeline to Europe, despite US warnings it posed a security risk.
The EU’s revised gas directive aims to establish common gas market rules for pipelines entering the bloc from a third country, with all the focus on Russia’s Nord Stream 2 project which will pipe gas to Germany.
In November 2017, the European Commission proposed amending the existing legislation in what was seen as a bid to put curbs on Nord Stream 2 launched by the Russian giant Gazprom.
Negotiators for the European Parliament and EU countries struck a provisional political agreement on Tuesday night on the rules that recognise Germany’s lead role in the pipeline while putting it under EU oversight.
The Nord Stream 2 pipeline will double the capacity to ship gas from Russia to Germany via the waters of Finland, Sweden and Denmark.
But the pipeline has faced opposition from many countries in eastern and central Europe, the United States and particularly Ukraine because it risks increasing Europe’s dependence on Russian natural gas.
Combined with the planned TurkStream pipeline across the Black Sea, Nord Stream 2 would mean Russia could bypass Ukraine in providing gas to Europe, robbing Moscow’s new foe of transit fees and a major strategic asset. The new regulations require all pipelines on European land and sea to meet with EU law, with exceptions only accorded under the strict supervision of Brussels.
Member states will have oversight of the project, but in light of concerns from eastern member countries, the European Commission, the 28-nation EU’s executive arm, will have the final say. The commission will also have the power to authorise a member state to open negotiations with a non-EU country in future deals.
“The new rules ensure that EU law will be applied to pipelines bringing gas to Europe and that everyone interested in selling gas to Europe must respect European energy law,” EU energy commissioner Miguel Arias Canete said yesterday. US Secretary of State Mike Pompeo said on Tuesday that the United States would do everything in its power to stop the gas pipeline to Europe as he joined Poland in warning of risks.
Pompeo said the pipeline from Russia, which began construction last year, “funnels money” to Russia in a way that ultimately hurts Europe.
The pipeline project got a new lease on life last week after France, which had demanded EU oversight, struck a compromise with Germany.
Rebecca Harms, who heads the Greens in the European Parliament, said: “With this accord, all the problems with Russia’s gas policy and all the problems on the gas market in eastern Europe are not settled.”
But Harms said: “But we have made a lot of progress.
We have ensured that Gazprom will have to play by European rules from now on.”
Her French colleague Michele Rivasi nevertheless worried the exemptions introduced by the member states “may reduce the impact of the legislation.”
The legislation must still be formally adopted by the European Parliament and the member countries.