Gaza offshore gas project: Agreement expected by year-end

Gaza offshore gas project: Agreement expected by year-end
A general view of Gaza’s sole power plant. (File/AFP)
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Updated 18 October 2022

Gaza offshore gas project: Agreement expected by year-end

Gaza offshore gas project: Agreement expected by year-end
  • PM says team of ministers to finalize energy venture

RAMALLAH: Palestine is preparing a final agreement with an Egyptian company to explore and extract gas from a field off the shores of the Gaza Strip.

It is expected to provide millions of dollars to the treasury of the Palestinian Authority and improve the ability of the Gaza power plant to generate electric power for residents.

Palestinian Authority Prime Minister Mohammed Shtayyieh said at the start of the weekly government session on Monday in Ramallah that the government would form a team that includes several ministers to follow up on the issue of Palestinian gas.

He said that the chairman of the Palestinian Investment Fund, Mohammed Mustafa, and his team, were negotiating with Egypt to conclude an agreement on gas, in a manner that serves Palestinian national rights and benefits.

A senior Palestinian government official who attended Monday’s Cabinet meeting in Ramallah told Arab News that the Palestinian Authority’s government ministries would facilitate the mission of the Palestinian Investment fund in the issuance of the necessary permissions.

“The gas extraction project is an important strategic scheme for us,” a senior PA government official told Arab News.

“The prime minister and the government are very interested in it because it will generate sums of money that will help the government’s treasury.”

The Palestinian Authority had commissioned energy firm British Gas to conduct gas exploration in the area back in 1999.

A year later, British Gas found Marine 1 about 30 km out to sea, and later the smaller Marine 2, but eventually withdrew from the contract.

The project was handed over to energy giant Shell in 2016 only for it to pull out two years later.

The Palestinian natural gas field Gaza Marine is located in the Palestinian coastal areas.

The field includes an estimated reserve of about 30 billion cubic meters of natural gas.

The cost of developing the Gaza Marine is estimated at $1.2 billion, said Palestinian sources.

The Palestinian Investment Fund and the Consolidated Contractors Company for Oil and Gas are global development partners for the project.

They will cooperate with leading Egyptian natural gas holding company EGAS.

“The talks between the Palestinian coalition companies and the Egyptian company are progressing greatly to reach a final agreement soon,” a senior Palestinian source related to the coalition companies told Arab News.

The Palestinian government has formed a governmental committee to follow up on the progress, said the source.

The source pointed out that there are no negotiations with Israel over this issue. Israel is the occupying power that controls the Gaza Sea, and companies in charge of exploration and extraction of gas need its approval to enter and operate their equipment in Palestinian gas fields.

The Palestinian source confirmed that the decision of the Palestinian government, which was taken in 2018, gives the coalition of Palestinian companies a 55 percent stake and gives the other company working on gas extraction 45 percent.

Palestinian economic expert Samir Hulileh told Arab News that the annual income from the Palestinian gas field — if operated — will be between $700-$800 million annually, equivalent t0 $7-8 billion within 10 years.

Hulileh added that there would be no extension of the gas pipeline to the Israeli city of Ashdod, but rather the lines would be extended to the Egyptian city of Al-Arish. The Egyptian company would then process the gas and sell it, along with Egyptian gas, to Europe.

Part of that gas will be allocated to the power plant in Gaza to increase its production capacity.

Israel recently allowed the Palestinian Authority to explore for gas off the shores of Gaza through Egyptian mediation and US pressure.

Ret. Israeli Maj. Gen. Giora Eiland, the former chief of the Israeli Security Council, said Israel should allow the Palestinians to use the gas field.

The net value of the gas field is $3-$4 billion, forming an excellent national economic asset for the Palestinians.

“Let the Palestinian Authority and Hamas have discussions and decide to share the benefits of the revenues from this gas field,” Eiland said.


Lebanon to devalue currency by 90% on Feb. 1: Central bank chief

Lebanon to devalue currency by 90% on Feb. 1: Central bank chief
Updated 31 January 2023

Lebanon to devalue currency by 90% on Feb. 1: Central bank chief

Lebanon to devalue currency by 90% on Feb. 1: Central bank chief

BEIRUT: Lebanon will adopt a new official exchange rate of 15,000 pounds per US dollar on Feb. 1, Riad Salameh, the central bank governor, said. 

The new rate marks a 90 percent devaluation from its current official rate. The shift from the old rate of 1,507 to 15,000 is still far off the parallel market, where the pound was changing hands at around 57,000 per dollar on Tuesday.

The change will apply to banks, Salameh said, leading to a decrease in the equity of the institutions at the center of the country’s 2019 financial implosion.

Analysts expect the shift to have less impact on the wider economy, which is increasingly dollarized and where most trades take place according to the parallel market rate.

The pound has lost some 97 percent of its value since it began to split from the 1,507 rate in 2019.

Salameh told Reuters that commercial banks in the country “will see the part of their equity that is in pound decrease once translated into dollars at 15,000 instead of 1,500.”

In order to ease the impact of this shift, banks would be given five years “to reconstitute the losses due to the devaluation,” he said.

Salameh said the change to 15,000 was a step toward unifying the country’s multiple exchange rates, in line with a draft agreement Lebanon reached with the IMF last year that set out conditions to unlock a $3 billion bailout.


Exxon smashes Western oil majors’ profits with $56bn in 2022

Exxon smashes Western oil majors’ profits with $56bn in 2022
Updated 31 January 2023

Exxon smashes Western oil majors’ profits with $56bn in 2022

Exxon smashes Western oil majors’ profits with $56bn in 2022

HOUSTON: Exxon Mobil Corp. posted a $56 billion net profit for 2022, the company said on Tuesday, taking home about $6.3 million per hour last year, and setting not only a company record but a historic high for the Western oil industry.

Oil majors are expected to break their own annual records on high prices and soaring demand, pushing their combined take to near $200 billion. The scale has renewed criticism of the oil industry and sparked calls for more countries to levy windfall profit taxes on the companies.

Exxon’s results far exceeded the then-record $45.2 billion net profit it reported in 2008, when oil hit $142 per barrel, 30 percent above last year’s average price. Deep cost cuts during the pandemic helped supercharge last year’s earnings.

“Overall earnings and cash flow were up pretty significantly year on year,” Exxon Chief Financial Officer Kathryn Mikells told Reuters. “So that came really from a combination of strong markets, strong throughput, strong production, and really good cost control.”

Exxon said it incurred a $1.3 billion hit to its fourth quarter earnings from a EU windfall tax that began in the final quarter and from asset impairments. The company is suing the EU, arguing that the levy exceeds its legal authority.

Excluding charges, profit for the full year was $59.1 billion. Production was up by about 100,000 barrels of oil and gas per day over a year ago to 3.8 million bpd. Adjusted per-share profit of $3.40 beat consensus of $3.29 per share, according to Refinitiv data. Shares were up about 1 percent at $114.70.

“It’s a headline beat,” Biraj Borkhataria from RBC Capital said in a note, despite lower chemical margins, lower-than- expected downstream gains and plans for higher maintenance works in refineries this quarter.


US crude, petroleum products demand rises in November: EIA

US crude, petroleum products demand rises in November: EIA
Updated 31 January 2023

US crude, petroleum products demand rises in November: EIA

US crude, petroleum products demand rises in November: EIA
  • Oil steadies as dollar retreats

NEW YORK/LONDON: Demand for US crude and petroleum products rose 178,000 barrels per day in November to 20.59 million bpd, the highest since August, according to the US Energy Information Administration Petroleum Supply Monthly report on Tuesday

Demand for finished motor gasoline, rose 21,000 bpd to 8.85 million bpd in November, also its highest since November, EIA said.

Monthly crude oil field production rose in November to 12.38 million bpd, down from 12.41 million bpd in October, which was a 31-month high, EIA said.

Trading

Oil prices steadied after moving close to a three-week low on Tuesday, with US wage growth data and a retreating US dollar bolstering risk sentiment ahead of the meetings of the Organization of the Petroleum Exporting Countries and major central banks.

March Brent crude futures were down 58 cents, or 0.68 percent, at $84.32 a barrel by 1512 GMT. The March contract expires on Tuesday and the more heavily traded April contract rose by 24 cents, or 0.28 percent, to $84.74.

US West Texas Intermediate crude futures were up 22 cents, or 0.28 percent, at $78.12.

Brent and WTI earlier touched their lowest prices in almost three weeks on the prospect of further interest rate increases and abundant flows of Russian crude.

But prices steadied after the US dollar pared early gains, with the resulting improvement in risk sentiment also boosting equity markets, said UBS analyst Giovanni Staunovo.


Green energy investment tops $1tn, matches fossil fuels

Green energy investment tops $1tn, matches fossil fuels
Updated 31 January 2023

Green energy investment tops $1tn, matches fossil fuels

Green energy investment tops $1tn, matches fossil fuels

PARIS: Investment in cleaner energy is on the verge of overtaking spending on fossil fuels for the first time ever after exceeding $1 trillion last year, a report on Tuesday said.

Despite the milestone, spending on energy transition technology must immediately triple to meet the target of net-zero emissions by 2050 to combat climate change, according to research group BloombergNEF.

Investment in sectors such as renewables, nuclear, zero-emission vehicles or recycling projects totaled $1.1 trillion last year, matching spending on fossil fuels, the report found.

This is up 31 percent on the previous year, and marks the first time the investment total has been measured in trillions.

The increase was driven by the energy crisis that followed Russia’s invasion of Ukraine, the report said.

“Investment in clean energy technologies is on the brink of overtaking fossil fuel investments, and won’t look back,” said Albert Cheung, head of global analysis at BloombergNEF.

China was by far the largest investor in energy transition, with the US a distant second.

Nearly half of the total global investment was in China, particularly in steel recycling and the renewable energy and electric vehicles sectors.

Germany has retained its place in third position, largely due to a sizable EV market.

But a drop in offshore wind deals saw investment in Britain fall by nearly a fifth, the report found.

Globally, renewable energy was the biggest sector for investment at $495 billion, followed by electrified transport projects.

With the exception of nuclear power, the researchers said all other sectors saw record levels of investment.

The growth in energy transition technology also comes as many countries saw an increase in fossil fuel investment in a bid to shore up energy security.

The war in Ukraine caused disruption to the global power supply as Russia, a major producer of fossil fuels, cut gas supplies to EU countries and was hit by sweeping sanctions over the invasion.

A separate report by Ember, an energy think tank, said on Tuesday that wind and solar energy generated 22 percent of EU electricity, surpassing gas (20 percent) for the first time.

Hydro and nuclear power still represented the biggest share of electricity generation in the 27-nation bloc, accounting for 32 percent.


Future Hospitality Investment Summit returns to Riyadh after sold-out 2022 event

Future Hospitality Investment Summit returns to Riyadh after sold-out 2022 event
Updated 31 January 2023

Future Hospitality Investment Summit returns to Riyadh after sold-out 2022 event

Future Hospitality Investment Summit returns to Riyadh after sold-out 2022 event

RIYADH: Registration is now open for the Future Hospitality Investment Summit, set to be held in Riyadh from May 7 to 9.

The summit, taking place in the Al Faisaliah Hotel, will have the theme ‘Invest in Change’ and focus on the importance of sustainability, innovation, start-ups and human capital development,

“Following our sold-out edition of FHIS in Riyadh last year, we are very excited to be back in the Kingdom this year with our host sponsors Al Faisaliah Hotel and Al Khozama and our many other partners for the event,” said Jonathan Worsley, chairman of the event’s organizer The Bench.

The summit is the sixth industry conference organized by The Bench in Saudi Arabia, with the 2022 event attracting more than 500 attendees from over 20 nations, featuring 110 speakers and 46 sponsors and partners. 

“The convergence of thought leaders and industry experts will result in reshaping the industry through revolutionary ideas, groundbreaking innovation and avant-garde practices and I can’t wait to see Saudi Arabia’s brightest minds and leaders in our industry come together to invest in change,” added Worsley.

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