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Cop 27: Impasse on fossil fuels despite last hour push

  • : Crude oil, Natural gas
  • 22/11/24

The final text from the UN Cop 27 climate summit fell short on efforts to reduce greenhouse gas (GHG) emissions, with no mention of additional curbs on fossil fuels, the largest contributors to global warming, although the issue was debated until the very last minutes of the conference.

This year's Cop was set against a backdrop of rising energy costs and concerns about energy security, with the summit designed to tackle the climate crisis — the third issue of the energy trilemma.

More than 80 countries supported phasing out unabated fossil fuels, EU executive vice-president and lead negotiator Frans Timmermans said. "Sadly, we don't see this reflected here [in the final text]", Timmermans said in his closing speech as the plenary wrapped up on 20 November.

The call for language around curbing fossil fuels did not seem to be one united effort, and the EU cautioned against including coal and gas in the same group, given how much more polluting coal is.

The inclusion of fossil fuels in the final text remained up for discussion until the final few hours of the conference — which ran over by almost two days, and was the second-longest Cop on record — delegates told Argus on the sidelines. Countries with varying degrees of ambition but supportive of phasing out fossil fuels — including Norway, Denmark, Finland, France, Germany, the UK, Colombia and several vulnerable and small island developing states — made "very strong statements", but they faced a battle even to uphold last year's Glasgow Climate Pact, ministers said. The text was "backsliding" from Glasgow's, even in the final hours of negotiations, Tuvalu's finance minister Seve Paeniu told Argus.

"Those of us who came to Egypt to keep 1.5° alive… have had to fight relentlessly to hold the line", UK lead negotiator and Cop 26 president Alok Sharma said in his closing speech on 20 November, in reference to the Paris Agreement's commitment to limit global warming to 1.5°C.

"Many parties, too many parties, are not ready to make more progress today in the fight against the climate crisis. There were too many attempts to even roll back what we agreed in Glasgow", Timmermans said on 20 November.

The final text treads very lightly on any language around fossil fuels, instead calling on parties "to transition towards low-emission energy systems, including by rapidly scaling up the deployment of clean power generation and energy efficiency measures, including accelerating efforts towards the phase down of unabated coal power and phase out of inefficient fossil fuel subsidies". This is a repeat of the Cop 26 text and represents no increase in ambition on the topic.

Tough sell

Saudia Arabia was one of several countries that pushed against the use of language targeting fossil fuels in the final text, delegates said. "The convention needs to address emissions and not the origin of the emissions", a member of the Saudi delegation, speaking on behalf of the 22 countries in the Arab League, said on 20 November.

The inclusion of broader language on fossil fuels was destined to be tricky in Egypt. The country's oil minister Tarek el-Molla said last month that natural gas will continue to play a key role in the future energy mix, calling it "the cleanest hydrocarbon fuel" at a meeting of the Gas Exporting Countries Forum.

It could be an even tougher sell in the UAE, which will host Cop 28 next year and which holds some of the largest spare reserves of the Opec+ coalition. The country's president Mohammed bin Zayed al-Nahyan, speaking at the opening of Cop 27, said that the UAE will continue to supply oil and gas "for as long as the world needs it", stressing the country's role as a responsible supplier.

The global energy crisis was a clear undercurrent at Cop, largely framed in energy security terms. The final Cop 27 text referenced the "unprecedented global energy crisis" and the "urgency to rapidly transform energy systems to be more secure, reliable, and resilient, including by accelerating clean and just transitions to renewable energy during this critical decade of action". It also said that the "increasingly complex and challenging global geopolitical situation… should not be used as a pretext for backtracking, backsliding or deprioritising climate action".

Energy security pressures

But the energy crisis weakened developed countries' hands this year, as they sought to replace Russian fossil fuel supplies. Many developing countries concentrated on this, setting out their arguments for producing oil and gas, and noting European "hypocrisy" on fossil fuel use.

Germany, seeking to cut its dependency on Russian gas, has signalled its interest in working with Senegal to develop its gas resources. Timmermans, speaking at a Cop side event on 16 November, told economic advisor to the Namibian government James Mnyupe: "I don't want to prevent you from using your fossil fuels, and especially natural gas". But for imports, the EU has been clear that additional gas infrastructure must be pre-fitted so that it can carry hydrogen.

Scrutiny was directed in particular towards the EU — which has of late ramped up coal-fired power generation as it swerves from Russian gas imports — and ministers saw off criticism. The bloc is on track to reduce emissions by 57pc by 2030, from 1990 levels, Timmermans reiterated during Cop. The EU repeatedly said that the only way to bolster energy security and boost energy access in Africa was through renewables.

"Low-emission" fuels

But even the mention of enhancing a clean energy mix through renewable energy proved difficult to push through, which led to the last-minute addition of "low-emission" energy.

The elasticity of the language potentially keeps the door open for significant amounts of technology — nuclear, biomass, biofuels, carbon capture and storage (CCS), and even gas. The language is even pliable enough to keep the use of carbon offsets on the table — an option that factors heavily in corporate decarbonisation plans. UN secretary-general Antonio Guterres has cautioned against the lack of "rigour" in voluntary carbon market credits, while biomass and biofuels often attract concerns over indirect land use change and deforestation, and CCS remains an emerging technology.


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24/07/26

Eni confident on 2024 output, but Libya project slips

Eni confident on 2024 output, but Libya project slips

London, 26 July (Argus) — Executives at Italy's Eni are confident it will achieve the upper end of its 1.69mn-1.71mn production guidance for this year, but start-up of a key Libyan project is set to slip from 2026 into 2027. In a presentation of second-quarter earnings today, A&E Structure was one of two Libyan projects on a list of Eni's upcoming start-ups through to 2028 that will deliver some 740,000 b/d of oil equivalent (boe/d) of net production to the company. A&E Structure is a 160,000 boe/d gas development that will include some 40,000 b/d of liquids production, mainly condensate. A&E Structure is central to Libya's ability to sustain gas exports to Italy, which have dropped in recent years on a combination of rising domestic consumption and falling production. Supplies through the 775mn ft³/d Greenstream pipeline hit their lowest since the 2011 revolution in 2023, averaging 250mn ft³/d. The slide has continued since, with year-to-date volumes of around 160mn ft³/d on track for a record low. Eni's other upcoming Libyan project — the Bouri Gas Utilisation Project development that aims to capture 85mn ft³/d of gas at the 25,000 b/d offshore Bouri oil field — had already been pushed back from 2025 to 2026. For 2024 Eni expects to be "at the upper boundary of its guidance", according to chief operating officer of Natural Resources Guido Brusco. The company had a strong first half, during which output was 1.73mn boe/d — 5pc up on the year — thanks to good performance at assets in Ivory Coast, Indonesia, Congo (Brazzaville) and Libya. Brusco said Eni is in the process of starting up its 30,000 boe/d Cassiopea gas project in Italy, with first production expected next month, and the 45,000 b/d second phase of the Baleine oil project in Ivory Coast is expected to start by the end of this year. At Baleine, Brusco confirmed the two vessels to be used at phase two "will be in country in September and, building on the experience of phase one, we expect a couple of months of final integrated commissioning" before first oil. Eni also said today it would raise its dividend for 2024 by 6pc over 2023 to €1/share, and confirmed share repurchases this year of €1.6bn. It said there is potential for an additional buyback of up to €500mn, which is being evaluated this quarter. Eni's debt gearing is scheduled to fall below 20pc by the end of the year. Chief financial officer Francesco Gattei said these accelerated share buybacks would be possible if divestment deals are confirmed. By Jon Mainwaring and Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Australia’s Ichthys LNG to restart liquefaction train


24/07/26
24/07/26

Australia’s Ichthys LNG to restart liquefaction train

Singapore, 26 July (Argus) — The second liquefaction train at Australia's 9.3mn t/yr Ichthys LNG export terminal plans to resume partial operations today, after going off line unexpectedly during 18-19 July, according to traders. The export facility is operated by Japanese upstream firm Inpex. Repairs at the affected train could take up to a month before it returns to full production, although the train is expected to restart by this weekend, according to market participants. Attempts to restart train two could take place by 26 July. Some delays to deliveries from the facility are expected, although there are also unconfirmed reports that up to two cargoes may have already been cancelled at the time of writing. The overall impact on the market is likely to be limited for now, with continuing weak spot demand from northeast Asian importers. Some term buyers previously requested for their deliveries to be deferred, traders said, although it is unclear just how many requests for deferment were received. But other participants have pointed out that the winter restocking season could soon start and any further impediments to train two's restart could lift prices. Recent temperatures in Japan have been higher than expected, with at least a 70pc probability of above-normal temperatures over the vast majority of the country until 23 August, according to the latest forecast issued by the Japan Meteorological Agency on 25 July. At least one Japanese utility may be considering spot purchases for August, owing to higher-than-expected power consumption because of warmer temperatures. But at least two other Japanese firms could be looking to sell a September and an October cargo each, traders said, which could indicate that the spot market is still sufficiently well-supplied to cope with additional demand from Japanese utilities. The 174,000m³ Grace Freesia departed from Ichthys on 25 July after loading an LNG cargo, according to ship tracking data from Kpler. The export terminal sold a spot cargo for loading over 2-6 June at around high-$9s/mn Btu through a tender that closed on 10 May, but further details are unclear. The US' 17.3mn t/yr Freeport export terminal also faced issues restarting since it was first taken off line on 7 July as a precautionary measure against Hurricane Beryl. The terminal loaded its first cargo on 21 July . All three trains are likely to be back on line as of 26 July, although production at the facility should still be closely monitored, traders said. By Naomi Ong Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Australia’s Empire Energy signs deal to sell gas to NT


24/07/26
24/07/26

Australia’s Empire Energy signs deal to sell gas to NT

Adelaide, 26 July (Argus) — Australian independent Empire Energy has signed an agreement to supply the Northern Territory (NT) with gas from its Carpentaria project in the onshore Beetaloo subbasin. Empire will supply NT with up to 25 TJ/d (668,000 m³/d) of gas over 10 years, starting from mid-2025. This equates to an estimated total supply of 75PJ (2bn m3) of gas. The deal includes scope for an additional 10 TJ/d for up to 10 years if production level at the Carpentaria plant exceeds 100 TJ/d. The firm bought domestic utility AGL Energy's dormant 42 TJ/d Rosalind Park gas plant late last yearwith plans to reassemble the facility on site at Carpentaria, subject to a final investment decision on the project. Gas will be delivered to the NT government-owned Power and Water (PWC) via the McArthur River gas pipeline on an ex-field take-or-pay basis, Empire said on 26 July. PWC in April signed an agreement to buy 8.6PJ of gas from Australian independent Central Petroleum , to supply gas-fired power generation and private-sector customers. Low production at Italian energy firm Eni's Blacktip field, offshore the NT, has led PWC to court new supply while providing a new outlet for prospective producers operating within Beetaloo. The largest Beetaloo acreage holder, Tamboran Resources, has revealed ambitious plans for a 6.6mn t/yr LNG plant to be located near Darwin Harbour's two existing LNG projects, using the basin's shale gas resources as feedstock. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Yemen warring factions reach UN-mediated financial deal


24/07/25
24/07/25

Yemen warring factions reach UN-mediated financial deal

Dubai, 25 July (Argus) — The UAE today welcomed a UN-mediated agreement between Yemen's warring factions that could allay economic woes in the impoverished country. The UAE's ministry of foreign affairs hailed the 23 July announcement of an agreement between the internationally recognised Yemen presidential leadership council (PLC) and the Houthi militant group "with respect to airlines and the banking sector." The UAE, alongside Saudi Arabia, support the PLC. The agreement stipulates "cancelling all the recent decisions and procedures against banks by both sides and refraining in the future from any similar decisions or procedures," and calls for the resumption of Yemenia Airways' flights between Sana'a and Jordan at three a day and operating flights to Cairo and India "daily or as needed." The deal was reached two days after Israeli jets bombed the Houthi-controlled Red Sea port of Hodeidah. The internationally-recognised central bank in Aden in April ordered financial institutions to move their main operations from Houthi-held territory within 60 days or face sanctions. That deadline ran out in June, leading to a ban on dealing with six banks whose headquarters remained in Houthi-held Sana'a. The Houthis retaliated by taking similar measures against banks in PLC-held areas and seized four Yemenia Airways planes at Sana'a airport. The PLC said it hoped the Houthis would also meet a commitment to resume crude exports. Yemen's crude production collapsed soon after the start of the country's civil war, from around 170,000 b/d in 2011-13 to 50,000-60,000 b/d in 2022, according to the BP Statistical Review of World Energy. Data from analytics firm Kpler suggests Yemen has not exported any crude since October 2022. Threats yield results The Iran-backed Houthis earlier in July threatened to attack vital infrastructure such as airports and ports in Saudi Arabia, holding Riyadh responsible for decisions taken by Aden's central bank. The Houthis struck central Tel Aviv on 19 July, inviting an Israeli retaliation that took out a power station that supplies the Red Sea coastal city of Hodeidah and its port and fuel tanks, which are controlled by the Houthis. A breakthrough in the UN-mediated talks between the PLC and the Houthis resulted in the agreement on 22 July, a possible sign that Riyadh might have compromised to avoid a Houthi escalation. The Houthis have been attacking commercial ships in and around the Red Sea since November last year, six weeks after the breakout of the Israel-Hamas war, in what they say is an act of solidarity with Palestinians in Gaza. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Refining, LNG segments take Total’s profit lower in 2Q


24/07/25
24/07/25

Refining, LNG segments take Total’s profit lower in 2Q

London, 25 July (Argus) — TotalEnergies said today that a worsening performance at its downstream Refining & Chemicals business and its Integrated LNG segment led to a 7pc year-on-year decline in profit in the second quarter. Profit of $3.79bn was down from $5.72bn for the January-March quarter and from $4.09bn in the second quarter of 2023. When adjusted for inventory effects and special items, profit was $4.67bn — slightly lower than analysts had been expecting and 6pc down on the immediately preceding quarter. The biggest hit to profits was at the Refining & Chemicals segment, which reported an adjusted operating profit of $639mn for the April-June period, a 36pc fall on the year. Earlier in July, TotalEnergies had flagged lower refining margins in Europe and the Middle East, with its European Refining Margin Marker down by 37pc to $44.9/t compared with the first quarter. This margin decline was partially compensated for by an increase in its refineries' utilisation rate: to 84pc in April-June from 79pc in the first quarter. The company's Integrated LNG business saw a 13pc year on year decline in its adjusted operating profit, to $1.15bn. TotalEnergies cited lower LNG prices and sales, and said its gas trading operation "did not fully benefit in markets characterised by lower volatility than during the first half of 2023." A bright spot was the Exploration & Production business, where adjusted operating profit rose by 14pc on the year to $2.67bn. This was mainly driven by higher oil prices, which were partially offset by lower gas realisations and production. The company's second-quarter production averaged 2.44mn b/d of oil equivalent (boe/d), down by 1pc from 2.46mn boe/d reported for the January-March period and from the 2.47mn boe/d average in the second quarter of 2023. TotalEnergies attributed the quarter-on-quarter decline to a greater level of planned maintenance, particularly in the North Sea. But it said its underlying production — excluding the Canadian oil sands assets it sold last year — was up by 3pc on the year. This was largely thanks to the start up and ramp up of projects including Mero 2 offshore Brazil, Block 10 in Oman, Tommeliten Alpha and Eldfisk North in Norway, Akpo West in Nigeria and Absheron in Azerbaijan. TotalEnergies said production also benefited from its entry into the producing fields Ratawi, in Iraq, and Dorado in the US. The company expects production in a 2.4mn-2.45mn boe/d range in the third quarter, when its Anchor project in the US Gulf of Mexico is expected to start up. The company increased profit at its Integrated Power segment, which contains its renewables and gas-fired power operations. Adjusted operating profit rose by 12pc year-on-year to $502mn and net power production rose by 10pc to 9.1TWh. TotalEnergies' cash flow from operations, excluding working capital, was $7.78bn in April-June — an 8pc fall from a year earlier. The company has maintained its second interim dividend for 2024 at €0.79/share and plans to buy back up to $2bn of its shares in the third quarter, in line with its repurchases in previous quarters. By Jon Mainwaring Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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