Underinvestment in the hydrocarbons sector amid green transition efforts and changing government regulations could lead to higher oil prices and growing energy scarcity, according to a report by the International Energy Forum and IHS Markit.
The total investment in the upstream sector of the oil and gas sector fell 23 per cent below the pre-coronavirus levels to $341 billion in 2021 while oil demand continued to rise globally, the report said.
The upstream sector is related to the exploration and production of hydrocarbons or oil and gas.
The energy crisis in Europe and Asia this winter is a preview of what can be expected in the coming years, said Joseph McMonigle, secretary general of the forum.
“Two years in a row of large and abrupt underinvestment in oil and gas development is a recipe for higher prices and volatility later this decade,” he said.
Oil prices rose more than 40 per cent this year as global economies continued to recover from the coronavirus pandemic.
Brent, the global benchmark for two thirds of oil, was trading at $75.26 a barrel at 9.08am UAE time on Wednesday while US crude gauge West Texas Intermediate was at $71.81 a barrel.
The price of natural gas also jumped by more than 40 per cent since the start of the year to $3.79 per million British thermal units on Wednesday.
“More frequent boom-bust cycles will harm consumers and producers recovering from Covid, set back UN climate and sustainable development goals and threaten global security,” said Mr McMonigle.
The report also highlighted a number of factors that are hindering investment in the energy sector.
These include record price volatility, changing government regulations, divergent long-term demand scenarios and non-standardised environmental, social, governance criteria “that are driving up investment hurdles and hiking the cost of capital for long-cycle projects”, the report said.
Two years in a row of large and abrupt underinvestment in oil and gas development is a recipe for higher prices and volatility later this decade
Joseph McMonigle,
International Energy Forum secretary general
Pressure on governments and industry for a green recovery is further constraining the availability of capital to invest in the oil and gas sector.
“While the energy transition proceeds, underinvesting in oil and gas before renewables and other low-carbon technologies are ready to scale up to meet energy demand could create recurrent energy crises of the kind we saw in Asia and Europe over the last few months, resulting in elevated prices and adverse economic consequences,” said Daniel Yergin, vice chairman of IHS Markit and author of The New Map: Energy, Climate and the Clash of Nations.
The global oil and gas industry requires more than $600bn of investment annually until 2030 to keep pace with the rising demand, Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and managing director and group chief executive of Adnoc, recently told the Abu Dhabi International Petroleum Exhibition and Conference.
Echoing his views, Suhail Al Mazrouei, UAE Minister of Energy and Infrastructure, also said a lack of investment in securing future energy supplies could extend the cycle of higher oil prices.
"If we are not investing enough, I am afraid, we could see highs like we have seen in coal and in gas due to lack of investments," Mr Al Mazrouei said at the time.
He credited the Opec+ bloc of oil exporters, of which the UAE is a part, for helping to stabilise oil prices.
Last week, JP Morgan, the largest lender in the US, also highlighted the problem and said underinvestment in the oil and gas sector over the past 18 months, caused by the pandemic, has hit the output capacity of many producer countries and their ability to respond to recovering oil demand.
It predicted that Brent will "overshoot" to $125 a barrel next year and $150 in 2023 due to the scenario.
“Oil and gas upstream investment will need to increase and be sustained at near pre-Covid levels of $525bn through 2030 to ensure market balance despite slowing demand growth,” the report by the IEF and IHS Markit said.
Meanwhile, the next two years are critical for sanctioning and allocating capital towards new projects to ensure adequate oil and gas supply comes online within the next five to six years, the report said.
The fear of a mismatch between demand and future supply could start to materialise in this time frame, the report said.
"Operators will continue to favour projects with access to existing infrastructure as these require less capital, have shorter payback periods and are more insulated from long-term demand risks," it said.
Oil demand growth is expected to be robust across Asian countries that are not part of the Organisation for Economic Co-operation and Development, as well as Africa and the Middle East in the coming years. This underscores the importance of higher investment to boost production, the report said.
A steady stream of investment is also needed to offset declines in existing oil and gasfields.
“Without additional drilling, we estimate that non-Opec production would decline by 9 million barrels per day by 2025 and 20 million bpd by 2030,” it said.
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Avengers 3: Infinity War: an American superhero film released in 2018 and based on the Marvel Comics story.
Sholay: a 1975 Indian action-adventure film. It follows the adventures of two criminals hired by police to catch a vagabond. The film was panned on release but is now considered a classic.
Lucifer: is a 2019 Malayalam-language action film. It dives into the gritty world of Kerala’s politics and has become one of the highest-grossing Malayalam films of all time.
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The cost of Covid testing around the world
Egypt
Dh514 for citizens; Dh865 for tourists
Information can be found through VFS Global.
Jordan
Dh212
Centres include the Speciality Hospital, which now offers drive-through testing.
Cambodia
Dh478
Travel tests are managed by the Ministry of Health and National Institute of Public Health.
Zanzibar
AED 295
Zanzibar Public Health Emergency Operations Centre, located within the Lumumba Secondary School compound.
Abu Dhabi
Dh85
Abu Dhabi’s Seha has test centres throughout the UAE.
UK
From Dh400
Heathrow Airport now offers drive through and clinic-based testing, starting from Dh400 and up to Dh500 for the PCR test.
A little about CVRL
Founded in 1985 by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, the Central Veterinary Research Laboratory (CVRL) is a government diagnostic centre that provides testing and research facilities to the UAE and neighbouring countries.
One of its main goals is to provide permanent treatment solutions for veterinary related diseases.
The taxidermy centre was established 12 years ago and is headed by Dr Ulrich Wernery.
Museum of the Future in numbers
- 78 metres is the height of the museum
- 30,000 square metres is its total area
- 17,000 square metres is the length of the stainless steel facade
- 14 kilometres is the length of LED lights used on the facade
- 1,024 individual pieces make up the exterior
- 7 floors in all, with one for administrative offices
- 2,400 diagonally intersecting steel members frame the torus shape
- 100 species of trees and plants dot the gardens
- Dh145 is the price of a ticket
The specs: 2018 Nissan Patrol Nismo
Price: base / as tested: Dh382,000
Engine: 5.6-litre V8
Gearbox: Seven-speed automatic
Power: 428hp @ 5,800rpm
Torque: 560Nm @ 3,600rpm
Fuel economy, combined: 12.7L / 100km
How to come clean about financial infidelity
- Be honest and transparent: It is always better to own up than be found out. Tell your partner everything they want to know. Show remorse. Inform them of the extent of the situation so they know what they are dealing with.
- Work on yourself: Be honest with yourself and your partner and figure out why you did it. Don’t be ashamed to ask for professional help.
- Give it time: Like any breach of trust, it requires time to rebuild. So be consistent, communicate often and be patient with your partner and yourself.
- Discuss your financial situation regularly: Ensure your spouse is involved in financial matters and decisions. Your ability to consistently follow through with what you say you are going to do when it comes to money can make all the difference in your partner’s willingness to trust you again.
- Work on a plan to resolve the problem together: If there is a lot of debt, for example, create a budget and financial plan together and ensure your partner is fully informed, involved and supported.
Carol Glynn, founder of Conscious Finance Coaching
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Schedule for Asia Cup
Sept 15: Bangladesh v Sri Lanka (Dubai)
Sept 16: Pakistan v Qualifier (Dubai)
Sept 17: Sri Lanka v Afghanistan (Abu Dhabi)
Sept 18: India v Qualifier (Dubai)
Sept 19: India v Pakistan (Dubai)
Sept 20: Bangladesh v Afghanistan (Abu Dhabi) Super Four
Sept 21: Group A Winner v Group B Runner-up (Dubai)
Sept 21: Group B Winner v Group A Runner-up (Abu Dhabi)
Sept 23: Group A Winner v Group A Runner-up (Dubai)
Sept 23: Group B Winner v Group B Runner-up (Abu Dhabi)
Sept 25: Group A Winner v Group B Winner (Dubai)
Sept 26: Group A Runner-up v Group B Runner-up (Abu Dhabi)
Sept 28: Final (Dubai)
Muslim Council of Elders condemns terrorism on religious sites
The Muslim Council of Elders has strongly condemned the criminal attacks on religious sites in Britain.
It firmly rejected “acts of terrorism, which constitute a flagrant violation of the sanctity of houses of worship”.
“Attacking places of worship is a form of terrorism and extremism that threatens peace and stability within societies,” it said.
The council also warned against the rise of hate speech, racism, extremism and Islamophobia. It urged the international community to join efforts to promote tolerance and peaceful coexistence.
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
The biog
Name: Salem Alkarbi
Age: 32
Favourite Al Wasl player: Alexandre Oliveira
First started supporting Al Wasl: 7
Biggest rival: Al Nasr
The specs: 2019 Jeep Wrangler
Price, base: Dh132,000
Engine: 3.6-litre V6
Gearbox: Eight-speed automatic
Power: 285hp @ 6,400rpm
Torque: 347Nm @ 4,100rpm
Fuel economy, combined: 9.6L to 10.3L / 100km
Explainer: Tanween Design Programme
Non-profit arts studio Tashkeel launched this annual initiative with the intention of supporting budding designers in the UAE. This year, three talents were chosen from hundreds of applicants to be a part of the sixth creative development programme. These are architect Abdulla Al Mulla, interior designer Lana El Samman and graphic designer Yara Habib.
The trio have been guided by experts from the industry over the course of nine months, as they developed their own products that merge their unique styles with traditional elements of Emirati design. This includes laboratory sessions, experimental and collaborative practice, investigation of new business models and evaluation.
It is led by British contemporary design project specialist Helen Voce and mentor Kevin Badni, and offers participants access to experts from across the world, including the likes of UK designer Gareth Neal and multidisciplinary designer and entrepreneur, Sheikh Salem Al Qassimi.
The final pieces are being revealed in a worldwide limited-edition release on the first day of Downtown Designs at Dubai Design Week 2019. Tashkeel will be at stand E31 at the exhibition.
Lisa Ball-Lechgar, deputy director of Tashkeel, said: “The diversity and calibre of the applicants this year … is reflective of the dynamic change that the UAE art and design industry is witnessing, with young creators resolute in making their bold design ideas a reality.”
Silent Hill f
Publisher: Konami
Platforms: PlayStation 5, Xbox Series X/S, PC
Rating: 4.5/5
The biog
Family: He is the youngest of five brothers, of whom two are dentists.
Celebrities he worked on: Fabio Canavaro, Lojain Omran, RedOne, Saber Al Rabai.
Where he works: Liberty Dental Clinic
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