Pioneer’s Scott Sheffield takes the rap for US-Opec co-operation

Oil prices fell sharply last week, with Brent crude shedding more than $4 a barrel on Wednesday and dropping again on Friday to $82.96 a barrel, after closing the previous week at $89.50. US crude inventories rose significantly, confounding expectations of a reduction. Adnoc announced its production capacity had increased to 4.85 million barrels per day, up from 4.65 million bpd at the end of last year, and well on the way to its five million bpd target by 2027.

The US has long been frustrated with Opec’s influence over the oil market. Now the Federal Trade Commission has gone after Scott Sheffield, former chief executive of Pioneer. ExxonMobil’s acquisition of Pioneer for $60 billion has been approved but the FTC has banned Mr Sheffield from sitting on ExxonMobil’s board. It referred to communications he had with Opec officials regarding the possibility of Texas oil producers cutting production.

It is unlikely that Mr Sheffield’s efforts affected the notoriously independent-minded Texan oil barons or Opec countries, which consult their national interests. The one time such co-operation was mooted came during the Covid-19 pandemic, in April 2020, when former US president Donald Trump encouraged Russia and Saudi Arabia to cut production.

Henry Cuellar, a US Democratic congressman, has been charged with accepting bribes from Azerbaijan’s state oil company Socar in return for influencing US foreign policy in Azerbaijan’s favour.

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Aramco dividend steady despite profit drop

Oil company Saudi Aramco reported a 14.4 per cent drop in first-quarter profit to $27.3 billion, not surprisingly, as production fell in line with Opec cuts, even as oil prices rose somewhat. Lower refining and petrochemical margins also contributed to weaker earnings. Free cash flow after capital expenditure came in at $22.8 billion, above expectations as capital spending of $10.8 billion was below the anticipated annualised $48 billion to $58 billion.

The deferral of the planned expansion of oil production capacity to 13 million barrels per day will save on capital expenditure, but Aramco still has major expenditures in unconventional gas, and in its planned petrochemical and refining expansion in China. The company maintained its planned $31 billion dividend and expects to pay out $124.3 billion this year.

Adnoc Gas reported improved results: Its first-quarter adjusted earnings were up 21 per cent to $1.18 billion as it sold more gas in the UAE.

Sharjah has new gas reserves – the Hadiba Field, discovered by the emirate’s national oil company to the north of Al Sajaa industrial area. In 2020, it found the Mahani Field, in partnership with Italian oil company Eni, adding to three older fields. The find will be welcome to the emirate, helping to feed its power generation, as the Sharjah National Oil Company also explores solar, carbon capture and green hydrogen projects.

Emirates Global Aluminium has acquired Leichtmetall, a German aluminium recycling company, as it seeks to build up a greener side to its business. Abu Dhabi wants to work on electric vehicle manufacturing through a partnership between the Department of Economic Development and Emirates Global Industries-Alfahim Group. This will create a plant to build electric buses and lorries and will develop electricity storage and charging.

French billionaire Vincent Bollore is considering building an electric car battery factory in eastern France, as Europe tries to reduce dependence on China for crucial new automotive components.

Dana Gas is set to resume production at the important Khor Mor gasfield in the Kurdistan region of Iraq, after four people were killed when an explosive drone struck the complex about two weeks ago. The company on Wednesday said the drone attack may delay the completion of the $600 million Khor Mor gas expansion project, also called KM250.

Iraqis are complaining after fuel prices were increased by the government by up to 30 per cent. Fuel subsidies contribute to the budget deficit and require imports of petrol, although new refineries are under construction. Now, 95 octane petrol in Iraq is sold for $0.65 a litre, compared with $0.88 in the UAE.

Offshore wind farms in Bahrain

The Middle East could be set for its first significant offshore wind farms after Masdar signed an agreement with Bahrain’s state company Bapco Energies to explore wind power in the country, with a capacity of up to two gigawatts, including nearshore and offshore wind farms. Bahrain’s limited land area makes offshore renewable energy a good option.

Palm oil is a versatile and vital ingredient in cooking oil, cosmetics and biofuels, but its cultivation in South-East Asia is environmentally damaging. New cultivation measures and a certification of sustainability could improve this.

Rising temperatures in developing countries with limited access to air conditioning threaten health and livelihoods. Heat-reflective paint, being promoted in the Indian state of Gujarat, can lower indoor temperatures by 5°C.

UAE nights heating up faster than day

The first meeting of the climate “loss and damage” fund established at Cop28 has concluded in Abu Dhabi. It was welcomed by the Cop28 presidency as a “historic milestone” needed to help “people in vulnerable communities recover from the impacts of climate change”.

Temperatures in the UAE are increasing more at night than during the day because of climate change, as found by researchers at Khalifa University. This is because of more low-lying cloud cover, exacerbated by dust from desertification. Despite the human and financial toll of wildfires and other extreme weather, probably set to become worse with climate change, California continues to flourish.

Londoners are being told to prepare for the “new reality” of temperatures regularly above 30°C due to global warming. The mystery of a large hole in Antarctica's sea ice in 2017 may have been solved and may show a change in how the region’s waters behave.