A number of converging events has led to higher energy prices and BP is bullish on India where the company plans to expand its business, chief executive Bernard Looney said.
A surge in demand owing to a faster-than-expected economic recovery in developed markets, along with the beginning of winter in Europe and drought in Brazil, contributed to higher energy costs, Mr Looney said at the Cera Week India Energy Forum on Thursday.
“What we have is the confluence of events on the back of particularly strong, strong demand in Asia on the back of [the] pandemic,” he said.
“We had very cold winter in Europe, particularly later in the year in April and May, and storage levels dropped and we had lower rainfall than normal in Brazil, which meant that hydro-system was down and LNG was pulled out of America to Latin America.”
Brazil, which relies heavily on hydropower for energy, had to burn fossil fuels to boost power generation at plants as water levels were depleted at many reservoirs because of the reduced rainfall.
“All forms of energy are being pulled hard at this moment in time," Mr Looney said. "The real question is not about how it looks today because, in general, things are being supplied today, the question is what it would look like as we head into winter months, particularly in the north. Everybody is anxious about what may happen if we have a particularly cold winter."
A number of countries are trying to increase storage levels in anticipation of a severe winter in Russia, the UK and Europe.
“What it means in the longer term is that we must invest into things like longer-term contracts, invest into natural gas, which remains a great balancer in the system, invest into storage and invest into diversification. These are the investments that are required and that are necessary,” he said.
Brent, the global benchmark for more than half of the world’s crude, was trading at $85.24 per barrel and West Texas Intermediate above $83 per barrel at 12.25pm UAE time on Thursday. Both benchmarks have rallied more than 60 per cent this year. The price of natural gas has also doubled since the start of the year to trade at $5.13 per million British thermal units on Thursday.
Analysts including top US economist Nouriel Roubini expect oil prices to touch $100 per barrel by the end of this year because of a lack of investment in the energy sector as the world focuses on transitioning to clean energy in a bid to cut emissions.
The oil major is also bullish on India and aims to expand its business in Asia's third-largest economy in partnership with multinational conglomerate Reliance Industries, according to Mr Looney.
Last year, BP and billionaire Mukesh Ambani's Reliance Industries launched new Indian fuels and a mobility joint venture called Reliance BP Mobility. The British oil company paid $1 billion for a 49 per cent stake in the joint venture with Reliance holding 51 per cent.
Operating under the Jio-BP brand, the joint venture aims to become a leading player in India's fuels and mobility markets.
“We have 1,500 sites today, which were traditionally Reliance, have now become Jio-BP sites. We are about to open our first Jio-BP truly new site near Mumbai and will grow that to 5,500 sites between now and 2025,” Mr Looney said.
BP plans to supply 15 per cent of India’s natural gas needs with new projects, he said.
“We started up two projects and we are bringing on the third by the end of next year. It is working well and performing well and represents about 15 per cent of the total natural gas market in the country,” Mr Looney, said.
India is an important market and could represent 90 per cent of the energy growth between now and 2050 in the world, he said.
“As we look at [a] cross-spectrum of the things we do, all the way from natural gas in the upstream to providing fuel to consumers in the downstream and to moving overtime to EV charging, possibly to hydrogen to the bio, all of those things, there is an offer there that very much aligns with the strategy for the country, which I think is ambitious and it’s innovative.”
India's economy is forecast to grow 9.5 per cent this year after contracting 7.3 per cent in 2020, according to the International Monetary Fund.
The five pillars of Islam
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Jonathan Gornall, Simon & Schuster
Married Malala
Malala Yousafzai is enjoying married life, her father said.
The 24-year-old married Pakistan cricket executive Asser Malik last year in a small ceremony in the UK.
Ziauddin Yousafzai told The National his daughter was ‘very happy’ with her husband.
Lexus LX700h specs
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Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
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What can you do?
Document everything immediately; including dates, times, locations and witnesses
Seek professional advice from a legal expert
You can report an incident to HR or an immediate supervisor
You can use the Ministry of Human Resources and Emiratisation’s dedicated hotline
In criminal cases, you can contact the police for additional support
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
The specs: 2018 Nissan Patrol Nismo
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Engine: 5.6-litre V8
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Fuel economy, combined: 12.7L / 100km
Infiniti QX80 specs
Engine: twin-turbocharged 3.5-liter V6
Power: 450hp
Torque: 700Nm
Price: From Dh450,000, Autograph model from Dh510,000
Available: Now
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
What is dialysis?
Dialysis is a way of cleaning your blood when your kidneys fail and can no longer do the job.
It gets rid of your body's wastes, extra salt and water, and helps to control your blood pressure. The main cause of kidney failure is diabetes and hypertension.
There are two kinds of dialysis — haemodialysis and peritoneal.
In haemodialysis, blood is pumped out of your body to an artificial kidney machine that filter your blood and returns it to your body by tubes.
In peritoneal dialysis, the inside lining of your own belly acts as a natural filter. Wastes are taken out by means of a cleansing fluid which is washed in and out of your belly in cycles.
It isn’t an option for everyone but if eligible, can be done at home by the patient or caregiver. This, as opposed to home haemodialysis, is covered by insurance in the UAE.
What is tokenisation?
Tokenisation refers to the issuance of a blockchain token, which represents a virtually tradable real, tangible asset. A tokenised asset is easily transferable, offers good liquidity, returns and is easily traded on the secondary markets.
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
Killing of Qassem Suleimani
KILLING OF QASSEM SULEIMANI
Killing of Qassem Suleimani
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How to get exposure to gold
Although you can buy gold easily on the Dubai markets, the problem with buying physical bars, coins or jewellery is that you then have storage, security and insurance issues.
A far easier option is to invest in a low-cost exchange traded fund (ETF) that invests in the precious metal instead, for example, ETFS Physical Gold (PHAU) and iShares Physical Gold (SGLN) both track physical gold. The VanEck Vectors Gold Miners ETF invests directly in mining companies.
Alternatively, BlackRock Gold & General seeks to achieve long-term capital growth primarily through an actively managed portfolio of gold mining, commodity and precious-metal related shares. Its largest portfolio holdings include gold miners Newcrest Mining, Barrick Gold Corp, Agnico Eagle Mines and the NewMont Goldcorp.
Brave investors could take on the added risk of buying individual gold mining stocks, many of which have performed wonderfully well lately.
London-listed Centamin is up more than 70 per cent in just three months, although in a sign of its volatility, it is down 5 per cent on two years ago. Trans-Siberian Gold, listed on London's alternative investment market (AIM) for small stocks, has seen its share price almost quadruple from 34p to 124p over the same period, but do not assume this kind of runaway growth can continue for long
However, buying individual equities like these is highly risky, as their share prices can crash just as quickly, which isn't what what you want from a supposedly safe haven.
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