Media missives from ADIPEC 2024

With ADIPEC 2024 drawing to a close on November 7, the Oilholic capped a fascinating and engaging week out in Abu Dhabi by hosting four pivotal industry panel sessions at the event on subjects ranging from climate finance to hydrogen markets in Asia.

Yours truly also hit the airwaves to discuss the wider energy market, impact of the US elections, an incoming Donald Trump administration and the various developments at ADIPEC 2024 which attracted over 200,000 people this year. 

These included broadcasting calls with the BBC, WION, Energy Connects and more, with this blogger's week also peppered with plenty of missives via the keyboard for Forbes, and of course this blog.

All blog entries for each ADIPEC may be found here. And here are selected Forbes copies in chronological order based on soundbites and insight from the event. 

• ADNOC Boss Urges Energy Peers To Fully Embrace Power Of AI, November 4, 2024
• Donald Trump’s Presidency Will Likely Boost U.S. Oil Output In 2025, November 6, 2024
• Strait Of Hormuz: Why Iran Wont Harm Critical Oil Shipping Route, November 7, 2024
• British Energy Majors May Lean More On Oil And Gas To Boost Profits, November 8, 2024
• New U.K. Tax Rates Are Hammering North Sea Oil And Gas Drilling, November 12, 2024

That's a wrap for this year's ADIPEC. Keep reading, keep it here, keep it 'crude'! 

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© Gaurav Sharma 2024. Photo: Gaurav Sharma at ADIPEC 2024 studio in Abu Dhabi, UAE on November 4, 2024 © dmgevents /APCO Worldwide. 

ADIPEC Days I & II: All about 'Energy^AI'

The first two days of ADIPEC 2024 in Abu Dhabi have whizzed by with one theme dominating proceedings - the deployment of AI as a service. 

In whichever direction you look around the venue - ADNEC Centre - you can't miss signage flagging it. 

At the opening ceremony on Monday, ADNOC's CEO and the UAE's Minister of Industry and Advanced Technology Sultan Ahmed Al Jaber said the state-operated energy company will deploy autonomous AI for the very first time and called on his peers to embrace it too for the benefit of the wider energy industry.

ADNOC's move - dubbed Energy^AI or 'energy to the power of AI' will be in partnership with government-backed G42, AiQ and Microsoft. Here's The Oilholic's full report for Forbes on Al Jaber's remarks and ADNOC's wider plans. ADIPEC itself has allocated 40,000 square feet of exhibition space showcasing AI, quantum computing and the latest in robotics. 

Technology driven energy transition efforts were variously revisited throughout the day, just as many big oil CEOs including BP's Murray Auchincloss and Shell's Wael Sawn highlighted market and geopolitical complexities they are operationally anxious about as well as a return to the basics of traditional oil and gas exploration and production to firm up their bottomline. 

Monday also saw several ministers speak at ADIPEC including the UAE's energy Suhail Al Mazroui and India's minister for petroleum and natural gas Hardeep Singh Puri, as did OPEC Secretary General Haitham Al Ghais, fresh from the crude producers' group's decision to postpone its planned production increase by a month. Most were united in their belief that oil and gas will continue to play a role as part of a wider energy mix for decades. 

The 2024 round of ADIPEC features conference several streams new and old including - its Strategic Conference, Hydrogen Conference, Downstream Technical Conference, Decarbonisation Conference, Maritime &  Logistics Conference, Digitalisation & Technology Conference, Technical Conference, Finance & Investment Conference and Voices of Tomorrow. 

Yours truly kick-off his ADIPEC 2024 journey by hosting a panel titled: 'Climate finance: The role that of the energy and finance sectors' with panellists Lina Osman, Managing Director & Head, Sustainable Finance - Africa and MENAP at Standard Chartered, Bruce Johnson, Director, Corporate Finance and Treasury at Masdar, and Debnath Mukhopadhyay, CFO of TruAlt Bioenergy.

In a riveting session, we all discussed how the energy transition represents a trillion-dollar investment opportunity for investors and how the energy and finance sectors can work more closely together to accelerate the flow of investments in clean energy projects to match investor risk return expectations.

The Oilholic also took time out for a BBC Business Today interview with Sally Bundock to discuss the goings-on at ADIPEC, OPEC's decision to postpone its production cuts, state of the oil market and climate finance. 

We discussed current oil market permutations, impact of the US election, how a possible protectionist White House may impact crude demand in 2025 and why climate finance and investing in energy AI / technology is a major part of the discourse at this year's ADIPEC, and as a potentially politically charged COP29 approaches. 

Tuesday, Day II, brought more discussions on sector innovation to the fore, and a renewed emphasis on why the shift to low-carbon energy was imperative in a gradual march to net zero, and the critical role governments of the world can play in facilitating this. 

Of course, the event saw divergent views on whether this should be achieved via taxation, subsidies or be left to the free markets. Or perhaps a combination of all three. Technology occupied centrestage here too, with several industry participants outlining the various ways in which AI, advanced analytics, quantum computing and IIoT can make a difference in helping the energy sector as well as the wider global industrial complex discover a low - to - ultimately zero carbon future. 

For his part, the Oilholic hosted his second panel of ADIPEC 2024 titled 'Standardised sustainability reporting: building energy transition trust to boost investment' first thing on Day II with panellists Karim Arslan, Executive Director, Green & Sustainable Finance Originator, Green & Sustainable Hub, Natixis Corporate and Investment Banking, Semih Ozkan, Executive Director, EMEA Energy, Power, Renewables, Metals & Mining, J.P. Morgan and Don Dimitrievich, Senior Managing Director and Portfolio Manager for Energy Infrastructure Credit, Nuveen.

We discussed the critical subject of how standardised sustainability reporting could provide the key to boosting investment into the energy transition through higher levels of investor insight and confidence. And here's to more insightful dialogues over the days to follow. That's all for now folks. There's plenty more to come from ADIPEC 2024. So keep reading, keep it here, keep it 'crude'! 

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© Gaurav Sharma 2024. Photo I: Energy AI signage at ADNEC, Abu Dhabi - the venue of ADIPEC 2024. Photo II: AI display at ADNOC exhibition booth at ADIPEC 2024. Photo III: Gaurav Sharma host a panel on climate finance at ADIPEC 2024 on 04.11.24. (Courtesy: dmgevents) Photo IV: Gaurav Sharma on BBC World Business Today on 04.11.24 at 9:50 GST. (Courtesy: BBC) 

Risk weighting oil in the current climate

The last few weeks have been relentless in terms of geopolitical developments and their impact on the oil market - albeit a somewhat oversupplied one with plenty of barrels to more than meet global demand. 

From the lows of September last seen in December 2021, the Brent front-month contract has ended the current trading week posting its highest weekly rise in almost two years. The reason is a bit more complicated than yet another escalation of tensions in the Middle East.

On Tuesday, Iran hit Israel with a barrage of ballistic missiles in response to its "aggressive acts," including the killing of Hezbollah leader Hassan Nasrallah in Lebanon.

With speculation rife about Israel's impending response to Iran, Brent futures stemmed their decline towards $70 per barrels and started inching up towards $80. The inching quickly turned climbing on Thursday after US President Joe Biden decided to make an "off the cuff" remark about discussing with Israel if it could go after Iran's oil facilities. 

Four key ones spring to the Oilholic's mind as yours truly noted in an article for Forbes. These sites may well have a target on their back but any potential Israeli action does not need to be spelt out by a sitting US President 4 weeks from a presidential election. 

Cue a 5.5% spike in Brent futures on Thursday, followed by another 2% today, bringing prices closer to $80. That prices are still below the $85 level seen at the start of the third quarter last year, as well as earlier this year, is down to the fact there is plenty of crude in the market at a time of uncertain demand. 

So the question is where do we go from here? In that respect, things are pretty much as they were at the start of the week when the Oilholic was interviewed by Reuters, i.e., risk weighting for front-month oil futures is currently contingent upon what Israel might do next and if there is a direct confrontation with Iran.

It is now (almost) guaranteed that such a confrontation is now not a question if but when, as yours truly said on subsequent back-to-back BBC News interviews following Iran's attack on Israel on Tuesday and Biden's astounding intervention on Thursday. 

Now, if its a case of simple mathematics, Iran's 1.7 million barrels per day (bpd) in oil exports, mainly to China, can be taken care off by the rest of the market should they be knocked offline by Israel. Because as things stand, the crude market will likely end this year and start the next with a surplus.

However, should the conflict broaden to engulf the Gulf and hit exports from Saudi Arabia, UAE, Bahrain and Qatar, as well as hold-ups in the Strait of Hormuz, we would almost certainly be looking at an upward lurch to $100 Brent prices. Where this goes is anybody's guess and all eyes are now on Israel. Well that's all for now folks! Keep reading, keep it here, keep it 'crude'! 

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© Gaurav Sharma 2024. Photo I: Oil pump jack building block model at the AVEVA World 2023 Conference, Moscone Center, San Francisco, US. © Gaurav Sharma. Photo II: Gaurav Sharma on BBC News on October 3, 2024 © BBC. 

Media missives from Gastech 2024

With Gastech 2024 drawing to a close on September 20, the Oilholic capped a fascinating and engaging week in Houston by hosting two pivotal industry fireside chats with H.E. Hardeep Singh Puri, Minister of Petroleum & Natural Gas, India and Chris Ashton, CEO of Worley.

And it was wonderful moderating multiple panel sessions on subjects ranging from harnessing the potential of natural gas for powering AI to solutions for the decarbonization of the global transport complex and climatetech finance.

Yours truly also hit the airwaves to discuss the energy market and developments at the conference. The final broadcasting call before departing was with the BBC, with this blogger's week out in Houston peppered with plenty of other missives via the keyboard for Forbes, and of course via this blog.

All blog entries for each Gastech may be found here. And here are selected Forbes copies in chronological order based on soundbites and insight from the event. 

• Energy Bosses Demand Clear And Consistent U.S. Policies On Natural Gas, September 18, 2024.
• India’s Energy Source Shifting Agility Will Define Its Transition, Says Oil Minister, September 20, 2024.
• UK’s Cleantech And Green Energy Focused ‘Wealth Fund’ Is Anything But, September 24, 2024.

And that's a wrap for Gastech. Keep reading, keep it here, keep it 'crude'! 

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To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2024. Photo: Gaurav Sharma on BBC News on September 18, 2024 © BBC. 

Oil heading to $90, renewables in Japan & more

It's been a hectic few weeks in the energy markets over the course of which oil prices have acquired a bit of buoyancy. Its something they briefly lost last month following the OPEC+ meeting. Brent crude futures currently sit just a few dollars south of $90 per barrel level, having dropped below $80 in early June. 

While global crude demand permutations haven't materially altered, there is renewed optimism over lower interest rates in key markets. That and higher demand projections in Asian markets, especially India, appear to be supporting prices. This sets the stall for relatively higher crude prices as we enter the first month of the second half of the year. 

All things staying even, the Oilholic would argue there is now a near-term case for $90 Brent crude prices. However, defending price upticks beyond the level would prove tricky, given the fact that crude supplies, especially those of light sweet non-OPEC crude, remain on a solid footing.  

Away from the oil market, yours truly was interviewed by the BBC on Japan's and wider East Asia's renewable energy landscape. The Oilholic spoke about a call by the country's private sector to triple its renewables capacity by 2035. 

This kerfuffle over Japan's future energy mix has been going on since the Fukushima tragedy in 2011, and has been further complicated by readily available and competitively priced LNG. 

Japan continues to trail the G7 in terms of renewables. However, while still using coal as a power generation source, Japan is not expanding usage in the same way as India and China are. Overall, a renewables capacity target in excess of 360GW by 2035 looks very ambitious. However, never discount Japanese ingenuity for getting things done! 

Elsewhere, here is one of the Oilholic's missives from late June on why the world needs to nurture sustainable entrepreneurship for Forbes (click here), and another one on why green hydrogen's fate in a net zero economy hinges on upscaling for Energy Connects (click here).

Finally, on the eve of the UK's general election, here are this blogger's thoughts on how the outcome will impact the country's energy industry. Regardless of whoever wins, looks like UK Energy Inc may be stuck between a rock and hard place! That's all for the moment folks. More musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

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© Gaurav Sharma 2024. Photo: Gaurav Sharma on BBC World © BBC, June 25, 2024. 

OPEC+ G20 = 'Crude' potpourri + V-shaped recovery

There have been umpteen developments over the last fortnight in the crude saga of oil producers scrambling to curtail production in light of the unprecedented drop in demand triggered by the coronavirus or Covid-19 outbreak.

That oil prices would have fallen regardless was a given, but the current desperate market situation was largely of Saudi Arabia and Russia's own making following the collapse of OPEC+ on March 6. 

Marking a reversal, frantic talks over the Easter weekend saw Moscow and Riyadh underpin a 9.7 million barrels per day (bpd) production cut, with feverish diplomacy by U.S. President Donald Trump and the promise of 1.5 million bpd in cuts by G20 oil producers serving as an accompaniment. Overall, the crude potpourri smelt better than it actually was. 

For the expected near-term oil demand decline is likely to be two to three times the production cut level. The deal itself doesn't look rock solid. As the Oilholic discussed with Mary-Ann Russon of the BBC, around 2.5 million bpd of cuts have been promised by Russia, an OPEC+ participant with a very poor record of compliance with the OPEC+ framework. 

The Saudis meanwhile would be cutting 2.5 million bpd from an inflated level of 11 million bpd. Prior to OPEC+'s December meeting, their production stood at 9.744 million bpd, which means in actual fact their compromise is closer to 1.25 million bpd on average. 

Yet for all of this, if oil demand is dire, any supply cut is only likely to have a very limited impact. We are flying, consuming and driving less (despite 99c/gallon prices in some US states) - so if we aren't going out that much, it won't matter one bit what OPEC+ does or doesn't. 

The deal is supposed to run from May to July and it won't avert short-term pain. It's come too late to rescue April, and it's too little for May and June. Hopes are pinned on a V-shaped recovery in oil prices come the middle of July. But how steep that 'V' might be is the question, and in the Oilholic's opinion it'll be steeper than where we are. 

As for The Donald, here is this blogger's take in a discussion with Marco Werman on PRI / BBC joint radio production The World. Phenomenal diplomacy it was by the President but more hot air was generated than tangible results. 

Additionally, the Oilholic also discussed various other market permutations, facets and shenanigans plus direction of oil and gas stocks, fuel prices, and several other energy topics with a host of industry colleagues including Richard Hunter of Interactive Investor, Freya Cole of BBC, Juliet Mann of CGTN, Victoria Scholar of IG Markets, Auskar Surbakti of TRT World, Sean Evers of Gulf Intelligence, Garima Gayatri of Energy Dias and scribbled half a dozen Forbes missives in what can only be described as the most manic of all manic fortnights for the oil market.

Final thoughts - WTI still looks like it'll hit mid-to-late-teens and continue to lurk below $20 per barrel  till early summer because dire demands means dire prices! That's about it for the moment folks! Stay safe, keep reading, keep it 'crude'!

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© Gaurav Sharma 2020. Photo I: Oilfield in Oman © Shell. Photo II: Gaurav Sharma on the BBC, TRT World and CGTN broadcasts © Broadcasters as mentioned, April 2020. 

Why drone attacks on Saudi Aramco haven’t sparked sustained oil price spike

The Oilholic returned from researching enhanced oil recovery in rural Pennsylvania on Friday (September 13), only to wake up to a tumultuous weekend, and week, for the oil market in that order. For in the small hours of Saturday morning, multiple drone and alleged missile attacks, claimed by Houthi rebels, hit Saudi Aramco’s crude processing facilities in Abqaiq and the Khurais oilfield. 

The attack took out 5.7 million barrels per day (bpd) of Saudi production capacity. Going by the last Platts survey, the Kingdom pumped 9.77 million bpd in August, implying the attack created a 58% drop in production at the very least when measured against last month's production levels.

The situation remains unpredictable, and as yours truly told the BBC – were it not for US production serving as a buffer, current oil pricing scenario and modelling would be very different.

The Americans remain the world's largest oil producer pumping in excess of 12 million bpd, and the country’s production could rise to 13.4 million bpd at some point in 2020. That is what has largely kept the market sane. Predictably, Brent futures shot up 20% to $71 per barrel at the Asian open on Monday but the uptick did not last. As the week’s trading came to a close on Friday (September 20), a look at benchmark prices - ironing out the week’s volatility - says it all. Brent closed at $64.28 per barrel, up $4.06 or 6.84% while the WTI closed at $58.09 per barrel, up $3.24 or 5.9% on the week.

The said movement is hardly the stuff of bullish dreams; even if the week belonged to the longs, short-sellers did not take as big a hammering as some feared. And consumers need not be overly concerned for now at least. As the Oilholic said on ITN/Channel 5 News, the physical crude market’s response and its domino effect on fuel prices depend not on the here and now, but on where from here? Lot depends on the Saudi and US response to the attack that both parties near instantaneously blamed on Iran which backs the Houthi rebels.

If the Saudis, in concert with the Americans, hit sites in Iran, then that could lead to a wider conflict in the Persian Gulf and some very real turmoil associated with it; not just knee-jerk price reactions of the sort we saw in the immediate aftermath of the revolt.

It is here that the market could see a sustained geopolitical risk driven uptick in oil prices for $10 to $15 per barrel. Plausibly, you will see prices at the pump rising given that retailers pass an oil price rise near instantaneously but are pretty slow in cutting them in the event of a price drop. And of course governments who in many cases take two-thirds of the price we pay per litre at the pump, might have some serious thinking to do as well.

For now an eerie calm prevails, with the market soaking in verbal salvos between Riyadh, Washington and Tehran. Logical conclusion is that an attack of this magnitude cannot go unanswered or Saudi Crown Prince Mohammed bin Salman, the power hungry favourite son of Saudi King Salman, would look weak. Finally, here are the Oilholic’s thoughts in detail on Forbes summing up the turbulent trading week. That’s all for the moment folks! Keep reading, keep it 'crude'! 

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© Gaurav Sharma 2019. Photo 1: Gaurav Sharma on BBC News at Six on September 15, 2019 © BBC, Photo 2: Gaurav Sharma on 5 News on September 16, 2019 © ITN