Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Expect to keep hearing an awful lot less about ESG and DEI — and an awful lot more about cost-cutting, sales growth and profit margins. https://www.bloomberg.com/opinion/articles/2024-01-29/personal-wealth-esg-and-dei-were-always-luxury-goods?srnd=premium-europe
Https://seekingalpha.com/article/4665055-q1-starts-with-a-bang-as-oil-inventories-draw
And another Houthi bang this evening : https://www.bloomberg.com/news/articles/2024-01-26/merchant-ship-reportedly-suffers-fire-after-being-hit-near-yemen
Https://www.bloomberg.com/news/articles/2024-01-23/edf-s-uk-hinkley-nuclear-costs-balloon-as-plant-delayed-again
Perhaps not a bad idea to pay attention to what Norway does : https://www.reuters.com/business/energy/norway-gas-output-hits-record-oil-beats-forecast-2024-01-23/
“If you want to have cheap energy, you need to be gas fired. That’s the cheapest way, the most secure way if you calculate the whole thing, from the beginning to the end.
“I believe people need to become reasonable about the energy transition.
“The matter of renewables being volatile - if there is a windless night, it could get complicated if you don’t have storage. So you need to think: what is my energy agenda? How much do I want to have on renewables? How do we deal with the fact that sometimes availability and demand don’t match?
“So you say, okay, maybe we do baseload nuclear. Then maybe gas fired or even hydrogen-fired gas turbines for peaks [in demand].”
But he added: “Where does the hydrogen come from? That story of green hydrogen is another fairytale. If you believe in the next five years, in industry it’s a feasible option - it’s not.”
Mr Kaeser seemed faintly exasperated by the state of the industry.
“There’s just now, every week, every month, another debate about something. Do you bring nuclear back, or that or this? And this is what causes friction,” he sighed. “Uncertainty is great, but I have enough uncertainty already.”
Inflation has also led to the cancellation of many offshore wind projects. 15 gigawatts’ worth of projects were cancelled or postponed last year in the UK and US alone, which would have provided enough electricity to power 12m homes.
As well as inflation, Mr Kaeser, who took over as chairman in 2021, argued that the problems are also down to foot-dragging by developers and governments.
“One of the shortcomings of the wind industry in the last five years is that there were a lot of announcements, a lot of plans,” he explained. “But they took four, five or six years sometimes to go from the order to execution.
“Now, if you have five years in between, you have a massive risk of inflation, which has hit us really, really hard. Not just Siemens Energy, but also others. “We need to have a long-term energy plan, that this is what we’re going to do in the next three years, five years.”
Mr Kaeser, 66, also criticised a “bigger is better” mentality in the industry that has seen turbine heights more than double in the past 20 years. For example, General Electric’s Haliade-Xs stand at 853 feet each - two and a half times as tall as Big Ben - compared to a typical turbine height of around 300 feet at the turn of the century.
A dash to build bigger and bigger turbines has in some cases proved counterproductive, Mr Kaeser said, by forcing manufacturers to spend large sums of money upfront with too little time to recoup their investments.
“Industry was in quite a rat race. It was 3 gigawatts and then somebody would come out with 3.5 and then someone else 4 and on and on. They hadn’t even tested the old one yet but announced a new one.”
At the same time, flip-flopping on projects or delays caused by slow planning processes have left manufacturers without the certainty they need to invest in even bigger factories, let alone research and development that could bring costs down.
He said: “It’s up and down and up and down, and promise here and promise there and then, ‘Oh, well, renewables are too expensive’. Well, the cost of energy doesn’t go down on renewables if you don’t innovate.
“And if you’re making all the losses, why should you innovate? So you have a sort of a Catch 22, which you can only break if you have a long term energy agenda.” Ultimately, money talks. If countries and developers are not prepared to put their money where their mouths are, they should rethink their plans for net zero altogether, he suggested.
“I think [the net zero targets] are realistic, but they come at a cost,” Mr Kaeser said. “You need to stick by the facts at some point, even though facts sometimes may not be liked.”
He added that energy supplies are governed by a triangle of “reliability, affordability and sustainability”, but “sustainability and affordability may conflict”.
“If you want to have cheap energy, you need to be gas fired. That’s the cheapest way, the most secure way if you calculate the who
Interview: Joe Kaeser says ‘a lot of big mouths but little action’ pushing wind turbine makers into the red
The German boss of Britain’s biggest wind turbine maker has warned energy bills will have to keep rising to pay for the green transition as he attacked “fairytale” thinking about net zero. Joe Kaeser, chairman of Siemens Energy, suggested higher energy bills were inevitable as turbine makers grapple with huge losses, forcing them to pass on costs to their customers. The company is the owner of the UK’s biggest wind turbine manufacturing site, in Hull, and employs thousands of British workers.
Mr Kaeser said manufacturers had become locked in a harmful “rat race” to build ever-bigger turbines and claimed developers and governments were in denial about the costs this entailed.
He also warned that inflation is battering industry balance sheets and warned of separate growing problems with faults and breakdowns in the sector. Mr Kaeser told The Telegraph: “Every transformation comes at a cost and every transformation is painful. And that’s something which the energy industry and the public sector - governments - don’t really want to hear.
“I believe that for a while [customers] need to accept higher pricing.
“And then there might be innovation – about the weight of the blades, other efficiency methods, technology – so the cost can then go down again. “But the point is, if there is no profit pool in an industry, why should that industry innovate?”
His comments come after the UK Government bowed to industry pressure in November and increased the power prices offered in future renewable energy auctions, after a competition in the summer received no bids from offshore wind developers.
The earlier auction flop triggered serious doubts that the UK would be able to meet its target of 50 gigawatts of offshore wind capacity by 2030.
Speaking at the World Economic Forum in Davos, Switzerland, Mr Kaeser criticised what he described as “a lot of big mouths but little action” that had gone on for years in the wind industry.
Governments and developers are failing to follow through on their own green transition promises quickly enough, he said, while many are reluctant to admit the full costs of their plans to reach net zero carbon emissions by 2050.
Wind turbine manufacturers have faced surging prices for materials such as concrete and steel as well as labour and specialist ships used to move large components such as blades and towers.
These rising costs were not factored into many contracts with wind farm developers, pushing turbine makers into the red as a result. Some, including Siemens Energy, have also had to set aside large sums to fix faulty equipment.
After crashing to a €4.6bn (£3.9bn) annual loss last year - blamed mainly on Siemens Gamesa, its offshore wind unit - bosses at the company had to go cap in hand to the German government for support. Gamesa announced 6,000 job cuts in November.
The German boss of Britain’s biggest wind turbine maker has warned energy bills will have to keep rising to pay for the green transition as he attacked “fairytale” thinking about net zero.
Joe Kaeser, chairman of Siemens Energy, suggested higher energy bills were inevitable as turbine makers grapple with huge losses, forcing them to pass on costs to their customers.
https://www.telegraph.co.uk/business/2024/01/21/energy-bills-must-rise-pay-for-net-zero-siemens/
Under the scheme, which is awaiting a final investment decision, the company would receive liquified carbon dioxide from tanker ships at the terminal before pumping it through existing pipelines into depleted oil fields.
Enquest is also looking at potential green hydrogen or green ammonia production facilities, powered by nearby offshore wind farms in Shetland.
Green hydrogen has been touted as a potential replacement for natural gas while green ammonia could replace chemicals used to produce fertilisers or be made into fuel for container ships.
Mr Bseisu said final approval for the scheme would depend on the UK successfully striking agreements with other countries to allow CO2 shipments.
The company has already secured carbon storage licences from the North Sea Transition Authority.
Labour’s plan to ban new oil and gas drilling is “economically senseless” and threatens to bring forward rig shutdowns by a decade, a major North Sea operator has warned.
Amjad Bseisu, chief executive of Enquest, said blocking new drilling licences would put jobs and investment at risk, while bringing forward shutdown costs for the taxpayer.
The company operates oil and gas platforms as well as the Sullom Voe terminal, where huge quantities of oil from the West of Shetland basin are processed.
Labour has vowed to block all new oil and gas developments if it comes to power, investing in renewable energy instead.
Mr Bseisu warned that if a ban on new licences is introduced, Enquest’s two large Magnus and Kraken platforms would become less economic and be put at risk of early closure.
In that scenario, Magnus would have to be decommissioned 10 years early in the mid-2020s. The date for Kraken, which is currently scheduled to shut down at some point between the late 2030s to the early 2040s, would likely move forward by five years.
That would hit the Treasury with extra costs earlier than expected, as oil companies receive big tax breaks for decommissioning.
Speaking to The Telegraph, Mr Bseisu said: “If the Government [under Labour] said there’s no new field licences, it would be economically senseless.
“It will exacerbate the decline of the industry and actually exacerbate the costs to the taxpayer, because we will have to decommission everything sooner rather than later. “You drill a well and the well declines. Without drilling another well to extract further production, decline rates will be exacerbated. “And once you get to a certain level in a field, it becomes uneconomic and you have to go to decommissioning. I would assume, in many cases at least, a decade acceleration in field life.” Mr Bseisu added: “We will still need oil and gas. And [if we ban new drilling], we will just end up importing more and destroying jobs in the UK, having a higher carbon footprint and a larger trade deficit.
“It should be evolution, not revolution – it’s called a transition.”
Labour has insisted that there are enough existing North Sea licences to ensure production continues and argued that granting more conflicts with Britain’s agreements to tackle climate change.
On Sunday a party spokesman said: “Labour is proud of our close working relationship with the oil and gas industry.
“Shadow energy secretary Ed Miliband and Labour leader Keir Starmer visited Aberdeen in November 2023 for discussions that were praised by leading industry figures. “Unlike the Conservatives, whose own Energy Bill has been criticised by the industry and led to one of their MPs resigning, Labour has an industry-backed plan to deliver energy security for our country.”
As part of the UK’s target to reach net zero, Enquest is separately working on plans to use the Sullom Voe facility for sequestering carbon emissions under the ocean.
1) Don't fall into the trap of confusing the performance of the business with the performance of the stock.
2)Buffett said it right in that you should value a company based on its cash flow in relation to the share price.
It is not only us, yesterday evening WTI and Brent were on the rise, Dow, S&P 500 and Nasdaq were on the rise, but oil stocks went down. One of my Canadian names, which undoubtedly has one of the highest FCF-yields in North America, made a new year low. Mind games.
When others can read the signs, can't they?
https://www.reuters.com/business/energy/norway-increases-number-new-oil-gas-drilling-permits-including-arctic-2024-01-16/
https://www.reuters.com/business/energy/market-be-short-oil-2025-onwards-occidental-ceo-davos-2024-01-16/
Https://www.barrons.com/articles/energy-stocks-could-rally-58201447?refsec=energy&mod=topics_energy
Energy Prices Are Falling, and the Stocks Are Out of Favor. That’s the Good News.
Energy stocks are out of favor. Fund managers had less exposure to energy stocks heading into 2024 than at any time since December 2020, according to the latest Bank of America Global Fund Managers Survey. With energy prices slipping, investors went from 4% more exposure to energy stocks than their benchmarks in November to 11% less exposure in December—the largest month-to-month decline since January 2016. They had 23% more exposure to tech than their benchmarks.
Then it got worse. This past Monday, Saudi Arabia cut its selling price for oil, sending Brent crude, the international benchmark, down 3.9%, to $75.73 a barrel. Natural gas prices fell, too, dropping 4.4%.
Still, it isn’t always bad for stocks when they’re out of favor. Investors who bought energy stocks in December 2020, the last time they were this out of favor, did very well. Roth MKM analyst Leo Mariani wrote that fund managers are “overly bearish” because they are convinced that oil demand is falling fast. Mariani expects demand to pick up, and for Brent crude to average $85 a barrel in 2024. “We would not advocate being underweight energy at this point in time,” he wrote.
PS I am 100% sure Stevo is NOT Itsaponzi, Therapist and Krak! Ponzi did not have 1% of Stevo's knowledge.
Https://archive.md/nK4CT
https://www.bloomberg.com/news/articles/2024-01-11/oil-tanker-embroiled-in-us-iran-tensions-is-boarded-off-oman?srnd=premium-europe