Europe faces long-term pain from energy crisis: Shell CEO

Europe faces long-term pain from energy crisis: Shell CEO
State-owned QatarEnergy earlier this year signed deals for North Field East, the first and larger phase of the two-phase North Field expansion plan, which includes six LNG trains. (File)
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Updated 23 October 2022

Europe faces long-term pain from energy crisis: Shell CEO

Europe faces long-term pain from energy crisis: Shell CEO
  • QatarEnergy names Shell partner for LNG expansion project

DOHA: Europe faces painful “industrial rationalization” due to its energy crisis that risks political trouble, the head of Shell warned Sunday, as the oil giant joined a natural gas project in Qatar.

Shell chief executive Ben van Beurden agreed to a deal for a 9.3 percent stake in Qatar Energy’s North Field South project, that will play a major role in the Gulf state’s effort to increase liquefied natural gas production by 50 percent in the next five years.

At the signing ceremony in Doha, Van Beurden said European industry face taking a major hit from the energy crisis, worsened by the Russian invasion of Ukraine.

Europe has reduced consumption “quite effectively, quite significantly” following the loss of 120 million tons of Russian gas a year, Van Beurden said, but “a lot of this reduction is achieved by switching off industry.”

Europe has desperately searched for quick alternatives to Russian gas, but Van Beurden said Europe would need large amounts of LNG for decades.

“A lot of people say, turn down the thermostat, or maybe don’t switch on the air conditioning,” he said.

“But there is also ‘why don’t we switch off the fertilizer plant that we have’ or ‘let us scale down on some petrochemicals production in general.’ And that rationalization, if it goes on long enough, becomes permanent.”

Van Beurden said there have been “some victory laps” in Europe over the way it has reduced demand, but added “some of it is actually bad news for the long term, namely economic or industrial rationalization.”

The Shell chief, who will retire at the end of the year, said industrial cuts could spark some “rejuvenation,” but also brought risks.

“To do it at this scale, this abruptness, at a time of economic challenges in general, I think will bring quite a bit of pressure on European economies, and perhaps also a lot of pressures for the political system in Europe,” he said.

British-based Shell is the second European company, after France’s TotalEnergies, to take a stake in North Field South.

Twenty-five percent of the project has been reserved for international energy giants.

Expansion across the North Field, the world’s biggest proven gas reserves, is intended to increase Qatar’s LNG production by 50 percent to about 127 million tons a year by 2027.

Shell and TotalEnergies took stakes earlier this year in the North Field East zone.

“Natural gas assumes greater importance in light of recent geopolitical turmoil,” said Qatar’s Energy Minister Saad Al-Kaabi as he welcomed the Shell deal.

EU reaches deal on higher renewable energy share by 2030

EU reaches deal on higher renewable energy share by 2030
Updated 10 sec ago

EU reaches deal on higher renewable energy share by 2030

EU reaches deal on higher renewable energy share by 2030

BRUSSELS: The EU reached a provisional deal on Thursday on higher renewable energy targets, an important pillar of the bloc's plans to fight climate change and end dependence on Russian fossil fuels. 
Negotiators of the European Parliament and the Council, representing EU members, agreed that by 2030, the 27-country EU would commit to sourcing 42.5 percent of its energy from renewable sources like wind and solar, with a potential top-up to 45 percent. 

The EU's current 2030 target is for a 32 percent renewable energy share. 

The EU got 22 percent of its energy from renewable sources in 2021, but the level varied significantly between countries. Sweden leads the 27 EU countries with its 63 percent renewable energy share, while in Luxembourg, Malta, the Netherlands and Ireland, renewable sources make up less than 13 percent of total energy use. 

A rapid shift to renewable energy is crucial if the EU is to meet its climate change goals, including a legally binding aim to cut net greenhouse gas emissions by 55 percent by 2030, from 1990 levels. 

EU countries will have to raise to 29 percent the share of renewables in energy used by the transport sector. EU industry would increase its use of renewables by 1.6 percent per year, with 42 percent of the hydrogen it uses deriving from renewable sources by 2030 and 60 percent by 2035. 

The directive added targets for buildings and sought accelerated permitting processes for renewable energy projects. 

Renewable energy targets have gained significance since Russia’s invasion of Ukraine as the EU has vowed to end its dependence on Russian fossil fuels by 2027 - and plans to do this mostly through locally produced, low-carbon energy. 

Reaching the new goals will require massive investment in wind and solar farms, scaling up production of renewable gases, and reinforcing Europe's power grids to integrate more clean energy. 

The European Commission has said additional investments of 113 billion euros ($123 billion) in renewable energy and hydrogen infrastructure will be needed by 2030, if EU countries are to end their reliance on Russian fossil fuels. 

The deal must be approved by the EU Parliament and EU countries to become law, normally a formality.

Oil Updates — Crude steady; PetroChina’s net profit surges 62% to record high

Oil Updates — Crude steady; PetroChina’s net profit surges 62% to record high
Updated 19 min 56 sec ago

Oil Updates — Crude steady; PetroChina’s net profit surges 62% to record high

Oil Updates — Crude steady; PetroChina’s net profit surges 62% to record high

RIYADH: Oil was steady on Thursday as a surprise drop in US crude stockpiles offset a smaller-than-expected cut to Russian supplies, while investors closely watched developments on Iraqi Kurdistan oil exports.

Brent crude futures were up 20 cents, or 0.26 percent, to $78.48 a barrel at 10.50 a.m. Saudi time, while West Texas Intermediate crude rose 34 cents, or 0.47 percent, to $73.31 a barrel.

Producers have shut in or reduced output at several oilfields in the semi-autonomous Kurdistan region of northern Iraq following a halt to the northern export pipeline, with more outages on the horizon, company statements showed.

Shell names Tony Nunan as its first chief of staff

Shell Plc said on Thursday that Tony Nunan will undertake the newly created senior role of the chief of staff and corporate relations, while Cecile Wake would take over from Nunan as Chair of Shell Australia.

The chief of staff, the first in Shell’s 115-year-old history, is the biggest change made by CEO Wael Sawan to the top management since he took the helm on Jan. 1, with a promise to boost the oil major’s performance.

Under the new role, Nunan will report to Sawan and be based in London, the company said, adding that Wake would replace Nunan, effective May 22.

PetroChina’s 2022 net profit surges 62 percent to record high

PetroChina’s net profit jumped 62.1 percent to a record high last year as stronger energy prices more than offset weak demand for fuel and chemicals, China’s largest oil and gas producer said on Wednesday.

PetroChina’s net profit amounted to 149.38 billion yuan ($21.69 billion) last year, while revenue rose 24 percent to 3,239 billion yuan, the firm said in a filing to the Hong Kong Stock Exchange.

The state energy giant produced 2.1 percent more crude oil last year at 906.2 million barrels, and natural gas output rose 5.8 percent to 4,675 billion cubic feet.

Refinery crude throughput, however, dipped 1 percent last year to 1,213 million barrels, or 3.32 million barrels per day, as Chinese consumption of gasoline and aviation fuel took a hard hit from Beijing’s COVID-19 control measures.

PetroChina recorded a 6.5 percent drop in domestic sales of gasoline, diesel and kerosene combined.

“For 2023, the global economy is expected to continue to recover but at a slower pace and there are still many unstable and uncertain factors,” PetroChina said.

(With input from Reuters) 

Saudi Arabia to sign International Coffee Agreement

Saudi Arabia to sign International Coffee Agreement
Updated 29 March 2023

Saudi Arabia to sign International Coffee Agreement

Saudi Arabia to sign International Coffee Agreement

RIYADH: The Saudi Cabinet on Wednesday approved the Kingdom’s accession to the International Coffee Agreement, the Saudi Press Agency reported.

It is an international commodity agreement between coffee producing and consuming countries. It was first signed in 1962 to maintain exporting countries’ quotas and keep coffee prices high and stable in the market, mainly using export quotas to steer the price.

Another objective of the agreement is to explore ways to improve conditions in an over $300 billion-a-year industry that provides a livelihood for millions of people from farmers to baristas across the world.

According to a report by global business analysts Euromonitor International in January 2022, coffee consumption in Saudi Arabia grew by 4 percent per year between 2016 and 2021 and is forecast to increase by a further 5 percent annually up to 2026, reaching an expected consumption of 28,700 tons each year.

In a bid to boost the Kingdom’s coffee production, the Public Investment Fund launched the Saudi Coffee Co. It aims to ramp up production by more than 700 percent within five years.

The firm currently produces 300 tons of coffee a year, but is aiming to hit 2,500 tons.



AI could replace 300m jobs globally: Goldman Sachs 

AI could replace 300m jobs globally: Goldman Sachs 
Updated 29 March 2023

AI could replace 300m jobs globally: Goldman Sachs 

AI could replace 300m jobs globally: Goldman Sachs 

RIYADH: Artificial Intelligence could take the place of 300 million full-time jobs around the world, investment bank Goldman Sachs has predicted in a new report.

Administrative and legal sectors will be at the highest risk, with 46 percent of administrative jobs and 44 percent of legal jobs risking replacement by AI, according to the institution.  

Physically intensive jobs face low risk, with construction facing a 6 percent threat, whereas maintenance is at 4 percent threat.  

However, the roll out of AI could boost labor productivity, and push global growth up by 7 percent year-on-year over a 10-year period, according to Goldman Sachs.  

“The combination of significant labor cost savings, new job creation, and a productivity boost for non-displaced workers raises the possibility of a labor productivity boom like those that followed the emergence of earlier general-purpose technologies like the electric motor and personal computer,” stated the bank in a note titled The Potentially Large Effects of Artificial Intelligence on Economic Growth.

Despite the probable job losses that will occur due to AI, economists noted that technological advances which initially replace workers will create employment growth in the long term.  

“Although the impact of AI on the labor market is likely to be significant, most jobs and industries are only partially exposed to automation and are thus more likely to be complemented rather than substituted by AI,” the economists added. 

The report hypothesizes that around two-thirds of jobs in the US alone are exposed to automation by AI, with almost 50 percent of that work being replaceable.   

In the US, around 7 percent of jobs could be substituted by AI, 63 percent could be complemented by it, and 30 percent unaffected.

Closing Bell: Saudi stocks extended gains mirroring rise in global peers

Closing Bell: Saudi stocks extended gains mirroring rise in global peers
Updated 29 March 2023

Closing Bell: Saudi stocks extended gains mirroring rise in global peers

Closing Bell: Saudi stocks extended gains mirroring rise in global peers

RIYADH: Like most major Gulf markets, Saudi stocks extended gains on Wednesday mirroring a rise in global peers after sentiment was lifted by receding fears of a global banking crisis and rising oil prices.

Saudi Arabia's benchmark stock index edged up 0.3 percent supported by gains in most sectors, led by healthcare and financials. Dr Sulaiman Al-Habib Medical Services added 2.3 percent and Al-Rajhi Bank rose 0.4 percent.

The parallel market, Nomu, also went up by 68.96 points or 0.35 percent to close at 19,603.35, while the MSCI Tadawul 30 Index went down by 0.22 percent to 1,420.05.

The total trading turnover of the benchmark index was SR5.7 billion ($1.52 billion).

The top gainer was Arabian Pipes Co., whose share prices went up by 10 percent to SR45.65 followed by Al Kathiri Holding Co. and Al Hassan Ghazi Ibrahim Shaker Co., whose share prices rose 9.95 percent and 6.24 percent respectively.

Thimar Development Holding Co. was the worst performer. The company’s share prices dropped by 6.67 percent to SR41.30.

On the announcements front, Alhasoob Co. reported a drop in its profit by 44.31 percent to SR6.65 million in 2022, from SR11.94 million in 2021. In a statement given to Tadawul, the company attributed the decrease in profits to a fall in exports amid weak demand. The company’s share prices remained unchanged on Wednesday at SR218.

Meanwhile, Jazan Energy and Development Co., reported a surge in net profit by 44 percent in 2022 to SR16.5 million, compared to SR11.5 million in the year-ago period. The company’s profit was driven by SR31 million gains realized from the sale of a land plot in the Khabt Al-Falaq, Jazan.

As the profits of the company surged, the share prices of Jazan Energy and Development Co. went up 0.59 percent to SR13.68.

Saudi Fisheries Co. also announced its financial reports. It widened its 2022 net loss to SR68.79 million, compared to SR 34.12 million in the year-earlier period. As the losses deepened, the firm’s share prices dropped 1.65 percent to SR26.75.

Seera Group Holding, in 2022, narrowed its net loss to SR46 million, from a loss of SR373 million in 2021. Despite narrowing the losses, the company’s share prices fell by 3.02 percent to SR21.80.

Another firm that narrowed its net loss was Knowledge Economic City. The company trimmed its 2022 net loss to SR 19.38 million, from SAR 22.08 million a year earlier. The firm’s share prices, on Wednesday, rose 0.82 percent to SR14.7.

Naseej International Trading Co. also narrowed its losses to SR1.37 million in 2022, from SR85.51 million in 2021. Driven by better performance in 2021, the firm’s share prices rose by 0.46 percent to SR43.8.

Gulf Coperation Council markets

Dubai’s main share index was up 0.7 percent, on its second positive day in a row, supported by financial and real estate stocks. Emirates NBD Bank, Dubai’s largest lender, gained 0.8 percent, and blue-chip developer Emaar Properties inched up 0.5 percent.

In Abu Dhabi, the benchmark index rose 0.3 percent, boosted by a 1.2 percent climb in the UAE’s largest lender First Abu Dhabi Bank, and a 0.7 percent lift in Abu Dhabi Ports.

The benchmark stock index in Qatar advanced 0.5 percent on its second day of gains on a boost from financial and industrial stocks. Shariah-compliant lender Masraf Al Rayan continued its surge for a third day to open nearly up 6 percent, while chemical makers Industries Qatar jumped more than 3 percent.