IOGP Looks Forward to Working with OPEC to Ensure Global Energy Security

Oil tanks in the port of Ras Tanura in the eastern region of Saudi Arabia on the Arabian Gulf (Aramco website)
Oil tanks in the port of Ras Tanura in the eastern region of Saudi Arabia on the Arabian Gulf (Aramco website)
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IOGP Looks Forward to Working with OPEC to Ensure Global Energy Security

Oil tanks in the port of Ras Tanura in the eastern region of Saudi Arabia on the Arabian Gulf (Aramco website)
Oil tanks in the port of Ras Tanura in the eastern region of Saudi Arabia on the Arabian Gulf (Aramco website)

For three years now, energy security has been the most prevalent issue for the global economy. The world blames the high prices of oil and gas and accuses the sector of causing record-high inflation rates.

Curbing high inflation requires increasing interest rates, which drags the global economy toward recession.

Governments of oil-producing countries have long defended their vision through the Organization of the Petroleum Exporting Countries (OPEC) and its allies in OPEC+. They have warned of supply shortages and the repercussions of rapid transition towards renewable energy.

The International Association of Oil & Gas Producers (IOGP), which represents private and public energy companies around the world, had agreed with the general vision of OPEC.

IOGP Executive Director Iman Hill affirmed that members of the association are preparing to work with OPEC in all fields during the coming period and added that a lack of investment may lead to supply disruptions and price fluctuations.

“It would be good for us to have cooperation with (OPEC) for the future in general and energy security in particular. We already have common denominators, and we look forward to working together,” Hill told Asharq Al-Awsat in Cairo.

IOGP members, integrated energy companies, national oil companies, independent upstream operators, service companies, and industry associations operate around the globe, supplying over 40% of the world’s oil and gas demand.

Saudi Aramco, the UAE’s ADNOC, Iraq’s Basrah Gas Company, the Italian Eni, the UK’s BP, the US’ Exxon Mobil, and the French Total are all members of the IOGP.

Efforts spent by IOGP companies are inseparable from the constant efforts of OPEC and its allies to maintain market stability, especially during challenging periods like when the coronavirus pandemic struck the market and disrupted demand.

With demand recovering in post-pandemic days, OPEC warned that a lack of investment witnessed during the pandemic coupled with an acceleration towards energy transition had resulted in a shortage in global stocks.

Accordingly, OPEC decided to cut production by about two million bpd from October 2022 until the end of 2023 while considering any changes in the market.

“Many believe that the issue of energy security threatens the transition to renewable energy,” said Hill, adding that it shouldn’t if a holistic approach is applied.

“In the near term, our priority should be to get more energy to the market before planning our next steps,” noted the executive.

“When the market rebalances, policy makers must make decisions based on supply and demand, with carbon emissions in mind,” she emphasized.

“The focus should be on reducing emissions rather than ideological distancing from fossil fuels,” explained Hill.

“This will allow us to benefit from oil and gas resources to ensure global energy security,” she noted.

Hill added that the energy transition will remain a critical issue for the sector and industry for the foreseeable future.

“Nevertheless, the way we approach this important topic must be sustainable and sensible,” she stressed, pointing out that “focus should be on reducing emissions.”

“We must adopt a comprehensive approach through modern technology, and even adapt it to reduce emissions.”

The development of renewable energy sources remains critical to the energy transition, underscored Hill. She, however, said that it must be done in a way that allows all solutions with potential to reduce emissions to play an active role.

Hill believes that there is a great opportunity for Gulf, Middle East, and North African countries to bridge the gap in energy demand, especially amid the policy of diversifying supplies away from Russian gas and oil.

“The Middle East and North Africa region will be a dominant region in terms of production for decades to come,” stressed Hill.

“Oil and gas companies in the Middle East are exploring sustainable alternatives to current power generation methods.”

“They are diversifying their assets and increasing financing for the development of renewable technologies such as solar energy, wind energy, nuclear energy, hydropower, and bioenergy,” she added.

Hill pointed to the “Middle East Green Initiative” launched by Saudi Crown Prince Mohammed bin Salman in November 2022. The initiative constitutes the first regional alliance of its kind aimed at reducing carbon emissions in the region by more than 60%. It also seeks to provide huge economic opportunities for the region.

Planting 50 billion trees across the region, restoring 200 million hectares of degraded land are also part of the initiative.

“We look forward to increasing the number of the association’s members, who number about 90 private and public companies, by 5% annually,” Hill told Asharq Al-Awsat.

Hill revealed that discussions are underway with Egyptian companies such as the Egyptian Natural Gas Holding Company (EGAS) and Engineering for the Petroleum and Process Industries (ENPPI) to join the IOGP.



Deal to Export Oil from Kurdish Region to Continue with No Issues, Kurdish Rudaw Reports

A staff at an oilfield holds the flag of Kurdistan. (X)
A staff at an oilfield holds the flag of Kurdistan. (X)
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Deal to Export Oil from Kurdish Region to Continue with No Issues, Kurdish Rudaw Reports

A staff at an oilfield holds the flag of Kurdistan. (X)
A staff at an oilfield holds the flag of Kurdistan. (X)

Kurdistan broadcaster Rudaw quoted the ​vice president of Iraq's state oil company SOMO as saying ‌on Saturday that ‌the ‌oil ⁠export ​deal ‌between Baghdad and Erbil is set to be renewed with ⁠out issues, Reuters reported.

In September, ‌Iraq restarted ‍the ‍export of ‍oil from its Kurdish region to Türkiye after ​an interruption of more ⁠than two years following a deal between Baghdad and the Kurdish regional government.


Musk Wins Appeal that Restores 2018 Tesla Pay Deal Now Worth about $139 Billion

FILE PHOTO: Elon Musk attends the Breakthrough Prize awards in Los Angeles, California, U.S., April 13, 2024. REUTERS/Mario Anzuoni/File Photo
FILE PHOTO: Elon Musk attends the Breakthrough Prize awards in Los Angeles, California, U.S., April 13, 2024. REUTERS/Mario Anzuoni/File Photo
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Musk Wins Appeal that Restores 2018 Tesla Pay Deal Now Worth about $139 Billion

FILE PHOTO: Elon Musk attends the Breakthrough Prize awards in Los Angeles, California, U.S., April 13, 2024. REUTERS/Mario Anzuoni/File Photo
FILE PHOTO: Elon Musk attends the Breakthrough Prize awards in Los Angeles, California, U.S., April 13, 2024. REUTERS/Mario Anzuoni/File Photo

Elon Musk's 2018 pay package from Tesla, once worth $56 billion, was restored by the Delaware ​Supreme Court on Friday, nearly two years after a lower court struck down the compensation deal as "unfathomable." The ruling overturns a decision that had prompted a furious backlash from Musk and damaged Delaware's business-friendly reputation. It assures Musk greater control over the company, which he has said is his main concern, even after shareholders recently approved a new pay package that could be worth $878 billion if Tesla meets certain targets, Reuters reported.

The Supreme Court said a 2024 ruling that rescinded the pay package had been improper and inequitable to Musk. The remedy of total rescission "leaves Musk uncompensated for his time and efforts over a period of six years," the 49-page ruling issued on Friday stated.

The 2018 pay package is now worth about $139 billion based on the price of Tesla's stock at the close of trading on Friday. "For ‌Elon, this is ‌a win because he gets control faster," said Gene Munster, managing partner at Tesla ‌investor ⁠Deepwater ​Asset Management.

If Musk ‌exercises all the stock options from the 2018 package, his stake in Tesla would grow from about 12.4% to 18.1% of an expanded share base. The company is issuing shares tied to his new pay package, although he must earn them by hitting performance goals.

Tesla shares were up less than 1% in after-hours trading following the ruling.

Tesla did not immediately respond to a request for comment. Musk posted on X that he was "vindicated." Lawyers who challenged the pay package said in a statement that they were considering their next steps and were "proud to have participated in the historic verdict below, calling to account the Tesla board and its largest stockholder for their breaches of fiduciary duty." The pay package was by ⁠far the largest ever until Tesla shareholders approved the new pay plan in November. If Tesla’s appeal had failed, it could have triggered a $26 billion hit to profit over two ‌years to account for the replacement stock-compensation package it had promised Musk – at ‍today’s much higher stock price.

The 2018 pay deal provided Musk options ‍to acquire about 304 million Tesla shares at a deeply discounted price if the company hit various milestones, which it did. ‍The options represent around 9% of Tesla's outstanding stock. Musk never collected his stock options because soon after shareholders approved the 2018 compensation, the board was sued by Richard Tornetta, an investor with nine Tesla shares.

UNFRIENDLY TO BUSINESS?

In 2024, after a five-day trial, Delaware Judge Kathaleen McCormick concluded that Tesla's directors were conflicted and key facts were hidden from shareholders when they voted to approve the plan. She ordered that the 2018 plan be rescinded.

Musk ​accused Delaware judges of being activists who are hostile to tech founders and he urged businesses to follow Tesla and reincorporate elsewhere. Dropbox, Roblox, Trade Desk and Coinbase were among the handful of large companies that moved ⁠their legal homes to Nevada or Texas. However, Delaware remains by far the most popular legal home for U.S. public companies.

Tesla's board had warned that Musk, the world's richest person who also leads the SpaceX rocket venture and artificial intelligence startup xAI, could leave the electric car company if he did not get the pay he wanted and an increase in his voting power. The Delaware Supreme Court may have been reluctant to annul Musk's pay package because shareholders had overwhelmingly voted in favor of it, said Brian Dunn, director of the Institute for Compensation Studies at Cornell University’s School of Industrial and Labor Relations. "I think that there's some belief that maybe the courts shouldn't get between the shareholders and the decisions that they make," said Dunn. Shareholders approved the new pay package in November and Tesla has taken steps to reduce the risk that a shareholder could tie up the 2025 package in the courts.

The Austin-based company is now incorporated in Texas, which allows Tesla to require that any investor or group of investors must own 3% of the company stock before suing for an alleged corporate law violation. A ‌stake of that size would be worth around $30 billion and Musk is the only individual with that much stock.


Maersk Tests Red Sea Route as Gaza Ceasefire Offers Hope

Containers are seen on the Maersk Triple-E giant container ship Majestic Maersk, one of the world's largest container ships, next to cranes at the APM Terminals in the port of Algeciras, Spain, January 20, 2023. REUTERS/Jon Nazca/File Photo P
Containers are seen on the Maersk Triple-E giant container ship Majestic Maersk, one of the world's largest container ships, next to cranes at the APM Terminals in the port of Algeciras, Spain, January 20, 2023. REUTERS/Jon Nazca/File Photo P
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Maersk Tests Red Sea Route as Gaza Ceasefire Offers Hope

Containers are seen on the Maersk Triple-E giant container ship Majestic Maersk, one of the world's largest container ships, next to cranes at the APM Terminals in the port of Algeciras, Spain, January 20, 2023. REUTERS/Jon Nazca/File Photo P
Containers are seen on the Maersk Triple-E giant container ship Majestic Maersk, one of the world's largest container ships, next to cranes at the APM Terminals in the port of Algeciras, Spain, January 20, 2023. REUTERS/Jon Nazca/File Photo P

Danish shipping company Maersk said that one of its vessels had successfully navigated the Red Sea and Bab el-Mandeb Strait for the first time in nearly two years, as shipping companies weigh returning to the critical Asia-Europe trade corridor.

The company stated that while it had no firm plans to fully reopen the route, it would take a "stepwise approach towards gradually resuming navigation" via the Suez Canal and the Red Sea. Maersk declined to further elaborate on its plans, according to Reuters.

Maersk ‌and rivals, ‌including Germany's Hapag-Lloyd , rerouted vessels around Africa's Cape ‌of ⁠Good ​Hope from December ‌2023 after Houthis attacked ships in the Red Sea in what they said was a show of solidarity with Palestinians in Gaza.

The Suez Canal is the fastest route linking Europe and Asia and until the attacks had accounted for about 10% of global seaborne trade, according to Clarksons Research.

CMA HAS MADE LIMITED PASSAGES THROUGH THE SUEZ CANAL

French shipping firm CMA CGM has already made limited passages through the Suez Canal when ⁠security conditions allowed, with other operators similarly exploring resumption plans. "Most carriers appear to be adopting a wait-and-see approach, monitoring ‌developments, and any meaningful reopening would likely unfold gradually," said ‍Nikos Tagoulis, analyst at Intermodal Group.

The potential ‍return of Maersk to the Suez Canal could ripple through the shipping sector, ‍where freight rates have risen because the alternative route added weeks to transit times between Asia and Europe. A recent ceasefire in the Gaza conflict has renewed hope of normalizing Red Sea traffic, though analysts note the fragility of the truce. "By the end of 2026, we estimate ​things will start to look like they were before the Houthis attack started," said Simon Heaney, a container industry analyst at Drewry Shipping Consultants. "The ⁠risk level has reduced, so they're prepared to test the waters. But the Houthis aren't particularly reliable." Maersk confirmed that one of its smaller vessels, Maersk Sebarok, had completed the first test transit through the Red Sea on Thursday and Friday, while stressing that no additional sailings were currently planned.

"Whilst this is a significant step forward, it does not mean that we are at a point where we are considering a wider East-West network change back to the trans-Suez corridor," it said.

Niels Rasmussen, chief shipping analyst at ship-owner association BIMCO, projected that broader resumption of Suez Canal transits could result in a 10% drop in ship demand.

"The possibility of a return to Suez Canal routings looms large over ‌the market outlook," he said in a note published on Thursday.