Colombia reassures oil producers after Davos vow

: Crude oil
23/01/23

Colombia's energy minister downplayed the chances of cancelling existing oil exploration and production contracts after reaffirming the country's commitment to not award new ones at the World Economic Forum in Davos, Switzerland.

"We have not talked about ending contracts for the exploration and production of oil and gas," energy minister Irene Velez said on social media yesterday. "But Colombia is heading towards the transition to produce cleaner energy."

Velez on 20 January in Davos had insisted that the country will no longer award any new E&P contracts for natural gas or oil as part of a shift in policy after President Gustavo Petro took office in August.

"This is of course very controversial at the national level," she said. "But for us it is a clear signal of our commitment to fight climate change."

The administration is banking on tourism and development cleaner energy to fill the gap in revenues that this would cause.

Petro and Velez have reiterated often that Colombia will not grant new oil, natural gas or coal contracts as part of their plan to transition to renewable energy. But finance minister Jose Antonio Ocampo said two months ago that the government could reconsider its position. The ministries of finance, mines and energy, state-controlled oil company Ecopetrol and the ANH are weighing the issue.

Yesterday, public credit director Jose Roberto Acosta denied that Colombia will stop signing new oil and gas contracts.

The government has made several contradictory statements on the issue. In August Velez stressed the importance of ensuring energy security at a meeting with natural gas industry leaders, appearing to pull back from earlier comments signaling the country may turn to gas imports from neighboring Venezuela if it were unable to meet domestic demand.

Colombia emits an average 237mn t/yr of total GHG emissions, or just 0.46pc of the global total, partly thanks to extensive hydroelectric generation.

Colombia will need to add 250mn bl/yr of oil reserves to stave off a rapid decline in oil production, former hydrocarbon's director Julio Cesar Vera said. The country produces about 757,00 b/d.

By Diana Delgado

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24/11/12

Cop: Negotiators positive on remaining Article 6 talks

Baku, 12 November (Argus) — Negotiators have a "positive attitude" towards outstanding talks on Article 6 of the Paris Agreement taking place at the UN Cop 29 climate conference in Baku, Azerbaijan, bolstered by the finalisation of crediting mechanism standards yesterday. The adoption of two key Article 6.4 standards on Monday night kicks off remaining talks on a very positive note, Switzerland's lead negotiator on international carbon markets under Article 6, Simon Fellermeyer, said. The approval has set the mood for remaining negotiations, lead Article 6 negotiator for New Zealand Jacqui Ruesga added. Article 6 of the Paris accord aims to help set rules on global carbon trade. Negotiators have already seen a more constructive attitude to discussions since the failed talks at Cop 28 in Dubai last December, Ruesga said. This was spurred on by disappointment at the lack of outcome last year, and supported by a number of informal meetings organised in the lead-up to June's Bonn climate conference, as well as increasing direction from heads of delegation on the subject. Divergence persists on some issues, but negotiators still have this positive attitude, Ruesga said. Different sides have also begun communicating the reasons behind their positions more clearly, Article 6 negotiator for Colombia Adriana Gutierrez added, which she hopes will help bring a result this year. Outstanding questions include how to deal with reporting inconsistencies and credit authorisations. Countries also still disagree on the question of whether Article 6.2's international registry should be capable of holding internationally transferable mitigation outcome (Itmo) units, or simply provide an accounting function. But talks on this point are progressing along the lines of deciding which potential functions of the registry could be integrated or dropped in the view of opposing sides, Ruesga said. The first ever Itmo transfer, which took place between Switzerland and Thailand earlier this year , would have been much easier through such a registry, Fellermeyer said. Gutierrez expects most remaining topics to be concluded ahead of Cop 30 in Belem, Brazil, next year. But some smaller, more technical elements are "bound to stick through" to the next summit, Ruesga said. There is not much appetite to reopen most elements for discussion next year, Fellermeyer said, meaning it could be that they are either concluded in Baku or left in a state of "constructive ambiguity". Agreement in Baku on the remaining Article 6 elements is important to give confidence to potential participants, Fellermeyer said, having encountered parties who declined to cooperate through the mechanism owing to a lack of visibility on the rules. By Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: UK sets ambitious 2035 climate target

24/11/12

Cop: UK sets ambitious 2035 climate target

London, 12 November (Argus) — The UK government has set a target to cut all greenhouse gas (GHG) emissions by at least 81pc by 2035, from a 1990 baseline, the country's prime minister Keir Starmer said today at the UN Cop 29 climate summit in Baku, Azerbaijan. The target, which will form the basis of the UK's next national climate plan, is in line with recent recommendations from the independent advisory Climate Change Committee . Energy minister Ed Miliband sought the committee's guidance shortly after the Labour government was elected in July. Starmer urged all countries to come forward with new national climate plans — known as nationally determined contributions (NDCs) — at Cop 29. Details of the UK's new NDC are not yet clear, but Starmer said his government is "fully committed" to its pledge of zero-emissions power by 2030. He also repeated his promise for a "government that trod lightly on people's lives". "The UK is stepping up as a climate frontrunner at a time when such leadership is critically needed, co-founder of think-tank E3G Nick Mabey said. "We hope to see detailed implementation plans — ideally with sectoral commitments and a supporting investment roadmap — to lend credibility to its submission." The energy transition "is a huge opportunity", Starmer said, pointing to global appetite for renewables investment. And he noted the "advantage of being a first mover". The country's Labour government, elected in July, has diverged substantially from the previous administration on climate issues. The UK government today announced a "clean industry bonus" — a provisional £27mn ($34.6mn) per GW of offshore wind, to incentivise offshore wind developers to invest in industrial areas, many of which are rooted in the oil and gas industry. This will boost "green jobs" and support sustainable industry, the government said. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: Carbon credit standards key step, work continues

24/11/12

Cop: Carbon credit standards key step, work continues

Baku, 12 November (Argus) — The adoption of new standards for creating carbon credits under the Paris Agreement on the first day of the UN Cop 29 climate summit yesterday is a key step, but work continues on Article 6. Cop parties agreed yesterday on standards that will cover credits for greenhouse gas (GHG) emissions removals under Article 6.4 of the Paris accord. The new standards set requirements for developing and assessing projects and establish rules covering carbon removal projects. Article 6 of the Paris accord aims to help set rules on global carbon trade. Cop 29 lead negotiator Yalchin Rafiyev said the decision is a critical step towards concluding Article 6 negotiations. "This will be a game-changing tool to direct resources to the developing world and help us save up to $250bn/yr when implementing our climate plans," Rafiyev reiterated. "[The] centralised UN mechanism for markets looks at the projects that are not financially feasible currently and how it can help in providing some stream of revenue," chair for the supervisory body Maria al-Jishi said. UN climate body UNFCCC chief Simon Stiell said that yesterday's breakthrough was a good start but pointed out that this was "the product of over 10 years of work within the process" and that more work remains to be done. Cop parties must reach a deal on other aspects of implementing 6.4 and 6.2, which together govern how countries can use carbon credits to meet their GHG emissions-reduction pledges, known as nationally determined contributions (NDCs). Remaining issues include the nature of credit registries, the guidance for inclusion of removals and a solution for dealing with reporting inconsistencies and credit authorisations. Overlapping articles 6.4 and 6.2 elements are still under discussion and will require a decision at Cop 29, including on how governments and host parties choose to interact with 6.4 on credit authorisation and how national credit registries can interact with the 6.4 registry, al-Jishi said. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: Azerbaijan president criticises ‘petrostate’ label

24/11/12

Cop: Azerbaijan president criticises ‘petrostate’ label

Edinburgh, 12 November (Argus) — Azeri president Ilham Aliyev remonstrated a room packed with world leaders at the UN Cop 29 summit in Baku about calling his country a "petrostate", given its small share of global oil and gas production. He said that it was "not fair" to label Azerbaijan a "petrostate", adding that it might have been "acceptable" when the country produced more than half of global oil output in the 19th century. He said the country accounts for 0.7pc of global oil production and 0.9pc of global gas production today. He also said that Azerbaijan's share of global greenhouse gas emissions is only 0.1pc. Azerbaijan's oil output reached 480,000 b/d in October. "Right after Azerbaijan was elected as a host country of Cop 29 we became a target of co-ordinated, well-orchestrated campaign of slander and blackmail," he said. The Azeri president reiterated that oil and gas is a "gift of god" and that countries rich in natural resources should not be blamed for bringing them to the markets as they are needed. He pointed out again that eight of the 10 countries that are supplied with Azeri gas are in Europe and that the EU asked Azerbaijan to double its gas supply to the bloc by 2027. Natural gas output in Azerbaijan reached a new high of 132mn m³/d in 2023, and the country aims to increase it further. Upping exports to the EU to 20bn m³/yr by 2027, from the current 12bn m³/yr, has been a key government commitment since 2022, when Europe was desperate for alternative gas suppliers. The UAE, Azerbaijan and Brazil — the Cop presidencies Troika — face scrutiny for pushing for increased global climate ambitions, but at the same time seemingly avoiding the question of fossil fuels in relation to their own new climate targets. The Troika countries look at fossil fuels through the lens of their own national circumstances — with their economies being heavily reliant on them. Azerbaijan's increasing gas exports spurred an economic boom, with GDP increasing tenfold over 2003-13. "As a president of Cop 29, I will be a strong advocate for the green transition, but at the same time we must be realistic," he said. He listed green projects in Azerbaijan, either in the pipeline or already operating, including an agreement to be signed at Cop 29 with BP to build a 240MW solar power station. By Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Opec trims oil demand growth forecasts again

24/11/12

Opec trims oil demand growth forecasts again

London, 12 November (Argus) — Opec has cut its global oil demand growth forecasts for 2024 and 2025 for a fourth month in a row, citing China as the main reason. In its Monthly Oil Market Report (MOMR) today the producer group revised down its 2024 demand growth projection by 110,000 b/d to 1.82mn b/d. It cut its demand growth forecast for China to 450,000 b/d in 2024, from 580,000 b/d in last month's MOMR. Opec's global oil demand growth forecast for 2024 is now 430,000 b/d lower than the 2.25mn b/d it had long projected until it made its first downward revision for 2024 in August. But its demand forecasts are still much higher than many others. The IEA's latest oil demand projection for 2024 is 860,000 b/d, while the EIA's 920,000 b/d. For 2025, Opec downgraded its demand growth forecast by 100,000 b/d to 1.54mn b/d, again mainly due to China. This is 310,000 b/d lower than its long-held 1.85mn b/d growth projection for next year, which it also first downgraded in August. On the supply side, the group kept its non-Opec+ liquids growth estimate for 2024 and 2025 unchanged at 1.23mn b/d and 1.11mn b/d, respectively. Opec+ crude production — including Mexico — increased by 215,000 b/d to 40.34mn b/d in October, according to an average of secondary sources that includes Argus . This is about 2.36mn b/d below Opec's projected call on Opec+ crude for this year, which is 42.7mn b/d. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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