Iran: Chinese investment in railway and renewable energy projects

First Vice President of Iran on Thursday discussed the strengthening Tehran-Beijing ties with Premier of the People’s Republic of China Li Qiang in Bishkek, Kyrgyzstan. The meeting was held on the sidelines of the 22nd session of the Council of Heads of Government of the Shanghai Cooperation Organization (SCO). Iran officially became a full member of the SCO in April 2023.

Mohammad Mokhber said the relations between Iran and China rooted in history and culture and said Iran has extensive capacities and capabilities that can be put to use in the two countries’ ties. 

Mokhber announced that Iran sees the development of ties with China as extremely important. “The development of Makran and Chabahar coasts, the construction of 15,000 megawatts of renewable power plants, mining development, Tehran-Mashhad and Tehran-Isfahan high-speed train projects, and transit cooperation in the west and east are all on Iran's agenda, and we welcome China's participation and investment in these areas,” the official noted. 

The vice president also emphasized the full implementation of the 25-year cooperation agreement between Iran and China. The deal signed in 2021 includes economic, military and security cooperation.

Mokhber also took the time to thank Beijing for its stance on Israel’s brutal attacks on Gaza which have so far resulted in the death of more than 7,000 civilians. 

“The bitter events in Gaza and Palestine hurt the heart of every noble, free, and conscientious person, and unfortunately, in the current chaotic situation and war crimes being committed by the Zionist regime in Gaza, most of the casualties are among civilians, women, and children”. 

The Chinese premier, for his part, described Iran as one of the major and influential countries in the West Asian region. “Iran's full presence and membership in Shanghai and BRICS will strengthen these organizations and be very useful for regional and global peace and stability,” he said. 

“The relations between the two countries have always had a growing trend since the establishment of political relations fifty years ago, and this year important agreements have been concluded between Tehran and Beijing with two meetings between the presidents of the two countries,” Li said, adding that Beijing regards Tehran as an important partner and seeks to further enhance ties with the West Asian country. 

 

Saudi Aramco CEO will not attend Houston energy conference

The chief executive of Saudi Arabian state oil company Aramco will not attend an energy conference organized by S&P Global next week, the event's updated schedule showed.

Amin Nasser, head of the world's largest oil company, had been listed as delivering a keynote address at CERAWeek, the largest gathering of high-profile oil executives and energy ministers.

Nasser was one of the few high-level Saudi officials on this year's schedule and has been a regular presence at past CERAWeek conferences.

The agenda for this year's event is dominated by major oil company executives and US government officials, with fewer Middle East executives and officials.

A record 7,000 people have signed up for the week-long event, which includes discussions of fossil fuels, clean energy and advanced energy storage.

Recent clashes over supply and demand between the Organization of the Petroleum Exporting Countries, Europe (OPEC) and the US have led to some visible vacancies. Unlike in past years, the event's agenda has no oil ministers from Iraq, Kuwait, the United Arab Emirates or Russia.

Top energy executives and officials from around the world will descend on Houston as the political fallout from Russia's invasion of Ukraine a year ago continues to distort global oil supply lines and put long-term energy security front of mind for governments.

Oil company chiefs and ministers will make their case for investment in all forms of energy - fossil fuels and renewables - to meet rising demand and at the same time accelerate the move toward the low-carbon industry of the future.

The war in Ukraine sparked a rally in crude oil and fuel prices that led to record industry profits, prompting the US government and others to accuse Big Oil of profiteering and for Britain and some other governments to impose windfall taxes on energy companies.

Big Oil executives and US government officials will likely trade blows publicly again as they did at last year’s event. While the US and many Western governments continue to call on oil firms to pump more, executives at top oil firms say they have a duty to their shareholders to maximize returns for staying invested in an industry which faces an uncertain long-term future.

"We will get a sense of how companies' strategies have been changed by the events of the last year," said Dan Yergin, the Pulitzer Prize-winning author and vice chairman of conference organizer S&P Global, in an interview.

BP's Looney will share the stage with Hertz car-rental CEO Stephen Scherr, whose firm has become an energy transition champion with plans to buy tens of thousands of electric vehicles from General Motors, Polestar and Tesla.

"The industry is on board with the energy transition, ESG and decarbonization, but there is a recognition that we are going to need hydrocarbons from an energy reliability and security standpoint," Pat Jelinek, EY Americas oil and gas leader, said of the return to prominence of Big Oil executives.

Top shale executives also will get less of the limelight. US shale also battled with the Biden administration over oil drilling restrictions and a lower investment in new output. Shale has become less of a factor in global markets, and tensions between OPEC and shale are less intense than they used to be.

Executives from shale bigs Hess Corp, EQT Corp and Pioneer Natural Resources last year dined with the late OPEC Secretary General Mohammad Barkindo. He received a gift bottle of "Genuine Barnett Shale," the oilfield that launched the shale revolution.

US shale also has been overshadowed by Big Oil as the companies grapple with slower gains and tight-fisted investors. Total US oil production is forecast to rise modestly this year - less than 600,000 bpd – as compared to a jump of about 2 million-bpd in 2018.

“US exploration and production companies have moderated growth," said Andy Hendricks, CEO of US driller Patterson-UTI, and leaving OPEC in charge of oil prices.

"There's never been such a focus on innovation of technologies across the energy industries," said S&P's Yergin.

Some 225 start-ups will participate, a 60% increase from a last year, many of which got a shot in the arm from Biden's Inflation Reduction Act, which provides tax credits and incentives for low-carbon and clean energy technology.

US Energy Secretary Jennifer Granholm and White House clean energy advisor John Podesta will lay out implementation of the Inflation Reduction Act, said S&P Global's Yergin.

"The amount of renewables that we're going to have to build over the next decade is enormous, and I don't think everybody has really digested the scope of that," said Andres Gluski, CEO of energy and utility giant AES Corp.

 

 

 

 

bp and Oman enter strategic partnership

bp and the Ministry of Energy and Minerals in Oman have signed a Strategic Framework Agreement (SFA) and a Renewables Data Collection Agreement which will support the potential development of a multiple gigawatt, world-class renewable energy and green hydrogen development in Oman, by 2030. 

As part of the agreement, bp will capture and evaluate solar and wind data from 8,000km2 of land – an area more than five times the size of Greater London. The evaluation will then support the Government of Oman in approving the future developments of renewable energy hubs at suitable locations within this area to take advantage of these resources. The renewable energy resources could also supply renewable power for the development of green hydrogen, targeting both domestic and global export markets.

This partnership represents a significant evolution of bp’s business in Oman and is aligned with bp’s strategy, which includes rapidly growing our developed renewable generating capacity and to take early positions in hydrogen. 

bp Chief Executive Bernard Looney said, “Today’s agreement represents what bp is able to offer as an integrated energy company. These projects will build on our gas business, and bring wind, solar and green hydrogen together in a distinctive and integrated way supporting Oman’s low carbon energy goals. 

“And we’re not just investing in energy. We are investing in Oman to create and develop infrastructure, support local supply chains and cultivate the skills and talent needed to usher in this next generation of energy leaders.  We look forward to working closely with the Omani government to take this forward.”

His Excellency Dr Mohammed Al Rumhy, Minister of Energy & Minerals of the Sultanate of Oman, said, “This is a proud moment for Oman and a significant step towards delivering our 2040 Vision. In partnership with bp, we will progress the development of new, world-class solar and wind resources – generating renewable power for the grid and powering the manufacture of green hydrogen to supply domestic demand and to export to global customers. Over the past 50 years, we’ve advanced our hydrocarbon production. Today’s agreement signals the next step in our energy journey – unlocking the potential for Oman as a low-carbon energy hub”.

The UK’s Minister for Investment Lord Gerry Grimstone added, “Following the signing last week of the UK-Oman Sovereign Investment Partnership, this investment by bp into Oman’s renewable energy sector is a shining example of our countries’ joint ambition to facilitate strategic and commercial bilateral investment. The project demonstrates our shared vision for future prosperity through clean growth, further strengthening the partnership between the United Kingdom and the Sultanate of Oman”.

Under the SFA, bp and Oman will also consider ways to collaborate in a number of areas, including a renewables strategy, regulation, the establishment of a renewable energy hub and the development and reskilling of the local workforce.

Oman has a strong track record in the oil and gas industry, which it has grown over recent years. Today’s announcement, which is subject to final agreement of commercial terms, is an important step towards the country’s 2040 Vision and an opportunity to become a leading low-carbon energy hub. And it would further support the Oman government’s goals of diversifying the economy and bolstering investment. 

bp is committed to growing its business and building on its 15-year history in Oman, where it operates Block 61, which produces a third of the country’s gas demand. In 2020, bp’s Oman business spent US$610 million with Omani-registered companies – 90% of its total spending. And in 2021, bp joined Oman’s national hydrogen alliance, Hy-Fly, to promote the hydrogen industry in Oman, and established a net zero taskforce to help develop a ‘roadmap’ for bp in Oman.

Crude oil price caught between Covid and green energy options

Prospects for global oil products markets this year are in flux, with major uncertainties surrounding the pace of vaccination program, rationalization in refining and the adoption of alternative fuels. Most forecasts for products demand and prices have been steadily revised upwards as vaccination programs have got underway and this has created positive market sentiment.

Argus' global head of oil products Stephen Jones told the forum held recently. Any actual demand recovery will depend on how quickly governments lift lockdown measures. One major unknown is how well the vaccines will deal with new variants of Covid-19.

In Europe, major oil products margins to the North Sea crude benchmark coalesced around $5/barrel by the end of January, according to Argus' European oil products editor Elliot Radley. This came in between a third and a half of their five-year averages.

A recovery toward pre-pandemic margin levels could be stimulated by lifting of lockdown measures and by major cuts to European production. Low margins have forced Europe's refiners to begin a phase of rationalization, and almost one million barrel per day of crude distillation capacity is either mothballed, shut down permanently or marked for various conversions to renewable-fuel processing.

European utilization has increased marginally since the second half of 2020, but remains close to 30-year lows, said Radley, with many refineries either offline or operating close to technical minimum rates. This reflects an oversupplied market, and oil product inventories are close to 30-year highs.

The third major uncertainty surrounding is how quickly environmental policies are adopted internationally, said Argus' head of European business development Josefine Ahlstrom. Argus Consulting — a division of Argus Media that provides forecasts and analyses separate and independent of Argus' news and price-assessment business — expects electric vehicles will make up 20% of the European vehicle fleet by 2030 and 50% by 2040. This could reduce gasoline demand by a third by 2030 as compared to 2019 levels.

Diesel demand is likely to be safer because commercial vehicles, which are more likely to retain internal combustion engines, make up a greater share of demand.

The EU's Renewable Energy Directive (RED) II calls for 14% of transport energy to be renewable by 2030, although this target could be increased as member states aim to meet ambitious greenhouse gas (GHG) emission targets. In the United States, the recent change of presidency could signal a revival of political momentum behind environmental legislation.

Overall, oil products demand is likely to fall slightly, and the share of renewables to increase rapidly.

Need for further consolidating Pakistan-Brazil diplomatic and trade relations

Brazil can be rightly termed an emerging economic power in the world – 6th by GDP after US, China, Japan, Germany and France. Brazil has been expanding its presence in international financial and commodities markets and is one of a group of four emerging economies called the BRIC countries.

The relations between Pakistan-Brazil are friendly and face zero issues. Brazil considers Pakistan an important country, and wants to promote relations in areas of trade, agriculture, defense, tourism and education. Brazil has been granting scholarships to Pakistani students and this number has been increasing over the years.

Brazil is keen in boosting bilateral trade ties with Pakistan as both countries have great potential to enhance trade in diverse fields. Pakistan produces a number of products which are in high demand in Brazil. Pakistani exporters should make efforts to enhance their exports to Brazil.

It is worth noting that number of Pakistani products go to Europe and then sold to other countries, including Brazil at high prices. Pakistan has opportunity to focus on promoting direct exports to achieve better results.

Although, Brazil was among the 5 largest world producers in 2013, its textile industry is very little integrated into world trade.

Brazil has great expertise in producing renewable energy. The country has been producing around 65% of its energy from water and using ethanol along with bio-fuels instead of costly petroleum products.

Pakistan has enormous potential for hydropower generation while it is also one of the largest sugar producers in the world. Brazil could cooperate with Pakistan in energy production from renewable sources including hydro and ethanol sources.

Keeping in view that the China-Pakistan Economic Corridor (CPEC) project will open trade doors for Pakistan with other countries, Brazil can find new markets in Pakistan and adjoining countries.

Pakistani handicrafts, carpets, fresh dry fruit, sporting equipment and other products enjoy reputation in international markets and can also find buyers in Brazil.

It is on record that Brazil is keen in investing in Pakistan. Brazilian government understands the need of international investment in Pakistan, particularly Baluchistan.

In the mining sector, Brazil stands out distinguished in the extraction of iron ore (second largest world exporter), copper, gold, bauxite (one of the 5 largest producers in the world), manganese (one of the 5 largest producers in the world), tin (one of the largest producers in the world), niobium (concentrates 98% of reserves known to the world) and nickel.