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  • Many hydrocarbon producers are making policy progress to fight climate change and prepare for the energy transition, despite major global macroeconomic and energy market headwinds. Elections in Australia, Brazil and Colombia saw victories by new, more climate friendly governments, while new US policy could reduce emissions. COP27 saw several new net-zero pledges and emissions reduction targets, with methane a particular focus. However, many key challenges remain, including questions about financing that will have to be addressed if countries are to meet their ambitious goals.
    Mon, Nov 28, 2022
  • The approval of prime minister Mohammed Shia al-Sudani’s cabinet brings a reprieve from recent political chaos. However, politics remains sectarian and volatile, while questions about Kurdistan and Iran’s role grow. Al-Sudani also pledged to hold early elections next year in a likely attempt to appease Sadrists, which may generate volatility itself. Al-Sudani also faces numerous chronic obstacles, including corruption, water scarcity, energy shortages and an underperforming private sector. For the energy sector, the end of Iraq’s political deadlock reduces imminent supply risks and may enable new projects to advance, depending on the new government’s policies. Addressing Iraq’s natural gas supply deficit will also be important.
    Tue, Nov 22, 2022
  • Brazil’s oil and gas sector is booming, attracting considerable investment to its abundant, competitive offshore pre-salt resources. However, the election of leftist former President Luiz Inacio Lula da Silva will shake up energy policy making with changes felt most acutely by Petrobras, which will expand its focus beyond the pre-salt. While there is still considerable uncertainty, the impact on foreign investment may be more limited. Notably, Lula will be constrained by fiscal realities and lower levels of legislative support, forcing him to pursue a more moderate track. Energy transition efforts are also likely to ramp up under Lula.
    Thu, Nov 10, 2022
  • The recent protests in Iran present serious challenges for Tehran. Critically, the demonstrations often directly challenged the government and called for an overhaul of the political system. The protests’ duration also suggests that Tehran may be divided on how to proceed, increasing the risk of prolonged instability or further escalation. Repressions in minority areas may generate longer-term challenges managing already restive regions. Tehran may also adopt a more hawkish foreign policy, including more assertive behaviors from it and its proxies. Energy sector risks are also rising due to labor strikes in refining and petrochemical facilities and the decreased likelihood of sanctions relief.
    Thu, Oct 27, 2022
  • Opec-plus’s average external break-even fell to about $72 per barrel, according to Energy Intelligence’s updated modeling. Yet, it made a 2 million b/d cut, although the market impacts will likely be lower as many producers struggle to meet existing quotas. Notably, mature producers are vulnerable due to inflationary pressures on imports, eroding some current account advantages. With Opec-plus cutting supply as prices reached the low $80/bbl range, we see this as a key factor in the group’s decision-making process. Looking ahead, we now expect the average break-even price to climb to around $82/bbl in 2023 before declining slowly but remaining elevated through 2026.
    Tue, Oct 11, 2022
  • Recent Russian escalations, including the annexation of Ukrainian territory and partial mobilization, and Ukrainian successes are driving an update of our conflict scenarios. The likelihood of further Russian escalation or some form of Ukrainian victory have risen. However, our base scenario remains continued fighting, before eventually settling into a frozen conflict. Regardless, the escalations and prolonged conflict are raising risks. The partial mobilization is unpopular, while the conflict and sanctions are weighing on Russia’s surprisingly resilient economy. Geopolitically, the moves are likely to reinforce Western sanctions resolve, while risks are spreading beyond Russia to its neighbors in Europe, Central Asia, and the Caucasus.
    Mon, Oct 3, 2022
  • The UK is at a crossroads. Inflation is surging, while its energy sector is facing major challenges driven by war-linked record high energy prices. Political risks are rising as a new sovereign, King Charles III, and a new Prime Minister, Liz Truss, take the reins. Energy policy making is in flux as the UK boosts low carbon and fossil fuel investment, while pursuing policies like price caps and windfall taxes, which undercut these goals. Geopolitically, the UK is navigating its post-Brexit future, while managing risks from China and Russia. Nonetheless, it will remain one of the world’s least risky producers and a transition leader.
    Thu, Sep 22, 2022
  • This Quarterly Risk Outlook examines the major investment, geopolitical and energy transition-related risks shaping the global oil and gas operating environment in Q3’22 and beyond. Iraq’s spiraling political crisis – including the growing likelihood of disruptions to oil and gas activities – and Kenya’s disputed elections are both highlighted as well as other key risk aboveground risk drivers. Iran nuclear talks and rising tensions in Asia are key geopolitical risk factors. Meanwhile, policy developments in the US, Brazil and Australia impact the outlook for energy transition risks and opportunities this quarter.
    Wed, Aug 31, 2022
  • The Inflation Reduction Act will have a major, positive impact on the US investment climate. Critically, it will encourage greater spending on a host of low-carbon energy technologies, helping to drive a major reduction in emissions. While there are some fiscal terms shifts, it includes key victories for the oil and gas sector, including increased incentives for carbon capture and storage (CCS) and hydrogen as well as greater federal licensing certainty. The Act reinforces the US’s already favorable aboveground risk environment and advances US President Joe Biden’s green agenda, improving the US’s standing in both our Country Risk and Transition Risk Indexes.
    Thu, Aug 25, 2022
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  • The model of working within hubs to develop CCUS opportunities may be the key to expanding CCS and CCUS across the globe and in the Mideast in particular, says Boston Consulting Group Associate Director Carl Clayton.
    Wed, Dec 7, 2022
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