Archives for November 2021

Russia running out of ‘easy’ oil

November 28, 2021 by NewsMaker Leave a Comment

“Almost 100% of our production will be hard to recover over the term of ten years,” Sorokin said, as quoted by news agency TASS.

The hard-to-recover reserves will have much higher lifting costs than conventional reserves, according to the deputy energy minister.

This is a problem for Russia, one of the world’s biggest oil producers, as it would see the quality of its reserves decline and make the extraction of oil much more expensive than it is now.

Russia needs to incentivize exploration in order to replace the hard-to-recover reserves with new, potentially lower-cost, discoveries.

In May this year, Russia’s Natural Resources Minister Alexander Kozlov said that oil reserves would last until 2080 at the current pace of annual production. Russia’s actual oil and gas reserves could even rise if it steps up exploration in hard-to-drill areas, the minister added, noting that Russia needs to develop exploration, including in hard-to-reach areas.

Will oil ever become truly worthless?

Russia’s oil and gas discoveries fell to the lowest in five years in the first half of 2021, after last year’s crisis resulted in steep cuts in capital expenditures for exploration, data and analytics company GlobalData said earlier this month.

In the first half this year, Russian companies found oil and gas at six very small fields, adding just 36 million barrels to reserves, which is equivalent to fewer than four days of Russian daily oil production, according to GlobalData’s estimates.

While Russian oil production and revenues have benefited this year from the much higher oil prices due to the OPEC+ cuts and rebounding global demand, exploration has continued to suffer from the Covid-inflicted crisis in 2020, which forced companies to slash capex for exploration drilling, Anna Belova, Oil Gas Analyst at GlobalData, said.

“To retain its place as one of the top oil and gas producing nations, Russia needs to ensure a steady pace of discoveries to replace produced reserves. Otherwise, the effects of Covid-19 and reduced investments will be felt by the Russian oil and gas sector well after the pandemic subsides,” Belova said, commenting on GlobalData’s findings.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/541415-russia-oil-reserves-decline/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Filed Under: Global Business

Wind power becoming too cheap to support itself

November 27, 2021 by NewsMaker Leave a Comment

The cost of wind power has recently dropped to levels that allow a challenge to such fossil fuels as coal and natural gas, thanks to an enormous investment boom in green energy.

“What we’ve clearly achieved is that wind power is now cheaper than anything else. But I believe we shouldn’t make it too cheap,” Siemens Gamesa’s Chief Executive Andreas Nauen said as quoted by Reuters.

Energy majors face $3.3-trillion ‘green’ nightmare

In Europe, wind and solar are reportedly significantly cheaper than coal, natural gas and nuclear power. Driven by the green transition aimed at addressing climate change, demand for wind turbines is at a record high. However, lower prices and increased competition have seen producers’ margins squeezed.

“We have probably driven it too far,” Nauen said, stressing that the sector wouldn’t be able to invest in innovations if the drive to cut the cost wind power continues at the same rate.

Rising costs stemming from the global supply crunch and high prices for such raw material as steel are also eroding the operating margins of turbine makers.

Earlier, Siemens Gamesa, one of the world’s largest suppliers of wind energy technology, as well as its major rival Vestas, warned they have been able to pass on to customers a part of these higher costs, which is likely to be reflected in higher auction prices and power purchase agreements over time.

Governments around the world have been phasing out generous wind subsidies, opting for more competitive contract tenders, and favoring project developers that submit the lowest bids.

“We need to change auction systems in the future,” the top manager said, suggesting that criteria such as local job creation should be considered instead of focusing only on price.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/541518-wind-power-costs-wipe-investments/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Filed Under: Global Business

Indian industrial giant joins battle to end world’s chip famine

November 27, 2021 by NewsMaker Leave a Comment

The industrial group, one of the country’s oldest, is in search of land for an outsourced semiconductor assembly and test (OSAT) plant, and is currently in talks with the southern states of Tamil Nadu, Karnataka and Telangana, according to unnamed sources, as quoted by Reuters.

With potential investments of up to $300 million, the factory is expected to package, assemble and test foundry-made silicon wafers, and turn them into finished semiconductor chips.

Samsung outlines plan to help US out of chip-supply shortage

“While [Tata] are very strong on the software side of things … hardware is something they want to add to their portfolio, which is very critical for long-term growth,” the source told the agency, adding that a location was likely to be finalised by December.

The plant will be launched next year and is expected to employ up to 4,000 workers.

“Once Tata starts, the ecosystem will come around … So it’s very critical to find the right place from a labour standpoint,” the source said, adding that availability of skilled labour at the right cost was key to the long-term viability of the enterprise.

Earlier this year, Tata’s Chairman Natarajan Chandrasekaran had said that the company planned to invest in high-end electronics and digital businesses. The giant is already building a high-tech electronics manufacturing facility in Tamil Nadu.

Tata controls India’s top software services exporter, Tata Consultancy Services, and has interests in everything from autos to aviation, with potential clients of its OSAT business to include such companies as Intel, Advanced Micro Devices (AMD) and STMicroelectronics.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/541509-india-chip-shortage-tata-plant/?utm_source=rss&utm_medium=rss&utm_campaign=RSS
Filed Under: Global Business

Where Will We Be in 20 Years?

November 27, 2021 by NewsMaker Leave a Comment
Where will that electricity get produced? Solar power could be produced on largely unpopulated land masses and transported to population centers, an idea Elon Musk raised about China five years ago. China has “an enormous land area, much of which is hardly occupied at all,” he said, noting that most of China’s population is concentrated in coastal cities. “So you could easily power all of China with solar.”

Another trend that, like increasing energy needs, isn’t new and isn’t going away: on-demand everything. Technology has led us to expect that goods and services will be delivered at the push of a button, often within minutes. That could transform real estate, especially space in cities that is currently used for retail. As companies work toward instant deliveries, they’ll need to warehouse items closer and closer to customers. Real estate investors are already contemplating how to create mini-warehouses on every block. And the density of people in cities is likely to affect the farming and delivery of food. To get fresh produce to customers quickly, vertical farming — in indoor, controlled environments — could move from being the dream of some start-ups to a new reality.

And we’ll be older. In the United States, we’re likely to live until 82.4 years old, compared with the current life expectancy of 79.1 years, the United Nations forecasts. That’s a good thing and for health care companies and others that cater to older people. But living three extra years is going to be more expensive, which will have implications for both working and saving. According to the Urban Institute, government “projections indicate that there will be 2.1 workers per Social Security beneficiary in 2040, down from 3.7 in 1970.”

Article source: https://www.nytimes.com/2021/11/27/business/dealbook/future-society-demographics.html
Filed Under: Small Business

Xiaomi to start making Tesla rival in Beijing

November 27, 2021 by NewsMaker Leave a Comment

On Saturday, the Beijing-based corporation signed an agreement with the committee of the Beijing Economic-Technological Development Zone to land the ambitious car project in Yizhuang, a suburb southeast of the Chinese capital.

China’s Xiaomi overtakes Apple in global smartphone market

The new plant will be built in two phases with Xiaomi to create its auto unit’s headquarters, sales and research offices as well, the local government announced in a WeChat post.

In March, the company announced plans to invest up to $10 billion in a new e-vehicle enterprise over the near decade. Xiaomi completed the business registration of its EV unit in late August. The firm pledged to start the manufacturing process for its first electric cars by 2023 in order to release the EV in the market by early 2024.

Earlier this year, Xiaomi acquired an autonomous-driving-focused startup called Deepmotion and is reportedly expected to launch a subsidiary to further increase the pace of the project. Meanwhile, some 500 employees out of nearly 14,000 working in the company’s research and development (RD) wing are currently focused on the EV project, according to the recent financial report.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/541501-xiaomi-tesla-rival-beijing/?utm_source=rss&utm_medium=rss&utm_campaign=RSS
Filed Under: Global Business

Russia grants Serbia ‘incredible’ gas price

November 27, 2021 by NewsMaker Leave a Comment
The deal, which is the renewal of a previous contract, was agreed during a meeting on Thursday between Serbian President Aleksandar Vucic and Russian President Vladimir Putin in the Black Sea resort of Sochi. The existing deal, signed back in 2013, expires at the end of this year.

Hungary inks new gas supply agreement with Russia, bypassing Ukraine

“We managed to get, … for the next six months, a gas price of an incredible $270, so our price doesn’t change. We also got an increase in the amount of gas in those six months and … flexibility [in monthly supplies], about which I asked President Putin in particular,” Vucic told journalists after the meeting.

Serbia imports nearly all of its gas from Russia’s energy giant Gazprom, although its domestic output covers about 15% of its needs.

The price of $270 per 1,000 cubic meters is less than the average of $300 that Gazprom expects to set in Europe, and far less than the benchmark rate, which has soared to a record high over the past year as global demand returned after the initial impact of the coronavirus pandemic.

The price of gas futures on Netherlands’ TTF hub recorded a further growth to $1,025.5 per 1,000 cubic meters, marking a weekly surge of 4.5%.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/541494-serbia-russia-incredible-gas-deal/?utm_source=rss&utm_medium=rss&utm_campaign=RSS
Filed Under: Global Business

Russia grants Serbia “incredible” gas price

Energy majors face $3.3-trillion ‘green’ nightmare

November 27, 2021 by NewsMaker Leave a Comment
Despite the fact that this year’s oil prices are now nearly double compared to the 2020 average, the energy industry faces additional impairments in the coming years and decades, this time due to the investor pressure to slash emissions and start accounting for changes to energy demand in the transition to low-carbon sources.

READ MORE: ‘Mutant’ virus attacks global oil

All industries are under pressure to realign their accounting and financing practices to climate change-related risks, but none more so than the large companies in the energy sector the core business of which continues to be oil, gas, and coal.

The increased scrutiny and pressure on companies from investors and society, as well as uncertainties over long-term demand for fossil fuels, could leave assets currently estimated to be worth trillions of US dollars stranded in the future.

Recent studies have suggested that more than half of oil and gas reserves should remain in the ground if the world is to limit global warming to 1.5 degrees Celsius above pre-industrial levels by 2050.

Carbon prices and additional regulations to limit carbon emissions could make a greater number of fossil fuel assets – especially coal – unprofitable as governments, especially in developed nations, press for net-zero emission economies by 2050.

Businesses are waiting for details on carbon markets and carbon emission rules and, potentially, carbon taxes, before re-evaluating their assets, analysts tell The Wall Street Journal.

READ MORE: Russia Saudi Arabia respond to US oil move

“Carbon charges are likely to come, and they will transform the upstream sector, affecting both asset values and the industry’s economics,” WoodMac analysts said earlier this year.

With carbon taxes and prices, more reserves and operations of energy companies, not only in the upstream sector, could be left as “stranded assets.”

Energy Firms Face Trillions Of Stranded Assets By 2050

In its World Energy Transitions Outlook: 1.5°C Pathway report from June 2021, the International Renewable Energy Agency (IRENA) reiterated its estimates from two years ago.

“Delaying action could cause this value to rise to an alarming $6.5 trillion by 2050 – almost double. Planning in advance also supports a just transition, assisting in the reallocation and creation of jobs and services,” according to IRENA.

Last year, the biggest oil and gas firms in North America and Europe alone wrote down over $150 billion off the value of their assets, the highest since at least 2010 and representing around 10% of the companies’ combined market capitalizations, an analysis by the Wall Street Journal showed in December.

The reassessment of oil and gas assets was so widespread that even ExxonMobil – which, until last year, hadn’t really adjusted the value of its assets in many years – warned of massive write-downs of between $17 billion and $20 billion after-tax in Q4 in its gas assets in the United States, Canada, and Argentina, due to the pandemic and its effect on the industry. TotalEnergies even used “stranded assets” in qualifying Canadian oil sands projects Fort Hills and Surmont as such.

While the write-downs of 2020 were the direct result of the collapse in prices leading to the reduced value of assets, future impairments would likely be driven by climate-related risks, analysts and think tanks say.

Not all assets will pass the scrutiny to be resilient and profitable in a world that will still need oil and gas but aims to significantly limit energy-related emissions.

READ MORE: Boom Bust explores what’s next for gas market as Germany puts brakes on Russian pipeline

Long-Term Stranded Assets Risk

If the world’s 60 largest listed oil and gas companies continue with a business-as-usual approach, more than $1 trillion of such business-as-usual investment is at risk, including $480 billion in shale/tight oil projects and $240 billion in deepwater projects, financial think tank Carbon Tracker said in a report in September.

“Companies and investors must prepare for a world of lower long-term fossil fuel prices and a smaller oil and gas industry, and recognise now the risk of stranded assets that this creates,” Carbon Tracker Head of Oil, Gas and Mining and report co-author Mike Coffin said.

According to a recent study of researchers from the University College London (UCL), nearly 60% of both oil and fossil methane gas and almost 90% of coal must remain in the ground by 2050 in order to keep global warming below 1.5 degrees Celsius. The findings, published in Nature in September, are based on a 50% probability of limiting warming to 1.5 degrees Celsius this century. This would mean that reaching this target would require an even more rapid decline in production and more fossil fuels left in the ground, UCL researchers say.

Still, the world will need oil and gas for decades to come. Yet, the pressure to account for climate-related risk to assets could bring about billions of asset impairments in the energy industry every year and leave trillions-worth of fossil fuel assets stranded.

“Just a few years ago, few within the oil and gas industry would even countenance ideas of climate risk, peak demand, stranded assets, liquidation business models and so on. Today, companies are building strategies around these ideas,” Luke Parker, vice president, corporate analysis, at Wood Mackenzie said last year, commenting on the massive write-downs at Shell and BP.

“Demand might still grow from here, and many companies are still chasing a share of that growth. But make no mistake, the corporate landscape is changing, and the majors are changing with it.”

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/541409-oil-gas-industry-stranded-assets/?utm_source=rss&utm_medium=rss&utm_campaign=RSS
Filed Under: Global Business

Energy majors facing $3.3 trillion ‘green’ nightmare

November 27, 2021 by NewsMaker Leave a Comment
Despite the fact that this year’s oil prices are now nearly double compared to the 2020 average, the energy industry faces additional impairments in the coming years and decades, this time due to the investor pressure to slash emissions and start accounting for changes to energy demand in the transition to low-carbon sources.

READ MORE: ‘Mutant’ virus attacks global oil

All industries are under pressure to realign their accounting and financing practices to climate change-related risks, but none more so than the large companies in the energy sector whose core business continues to be oil, gas, and coal.

The increased scrutiny and pressure on companies from investors and society, as well as uncertainties over long-term demand for fossil fuels, could leave assets, currently estimated to be worth trillions of US dollars, stranded in the future.

Recent studies have suggested that more than half of oil and gas reserves should remain in the ground if the world is to limit global warming to 1.5 degrees Celsius above pre-industrial levels by 2050.

Carbon prices and additional regulations to limit carbon emissions could make a greater number of fossil fuel assets – especially coal – unprofitable as governments, especially in developed nations, press for net-zero emission economies by 2050.

Businesses are waiting for details on carbon markets and carbon emission rules and, potentially, carbon taxes, before re-evaluating their assets, analysts tell The Wall Street Journal.

READ MORE: Russia Saudi Arabia respond to US oil move

“Carbon charges are likely to come, and they will transform the upstream sector, affecting both asset values and the industry’s economics,” WoodMac analysts said earlier this year.

With carbon taxes and prices, more reserves and operations of energy companies, not only in the upstream sector, could be left as “stranded assets.”

Energy Firms Face Trillions Of Stranded Assets By 2050

In its World Energy Transitions Outlook: 1.5°C Pathway report from June 2021, the International Renewable Energy Agency (IRENA) reiterated its estimates from two years ago.

“Delaying action could cause this value to rise to an alarming $6.5 trillion by 2050 – almost double. Planning in advance also supports a just transition, assisting in the reallocation and creation of jobs and services,” according to IRENA.

Last year, the biggest oil and gas firms in North America and Europe alone wrote down over $150 billion off the value of their assets, the highest since at least 2010 and representing around 10% of the companies’ combined market capitalizations, an analysis by The Wall Street Journal showed in December. The reassessment of oil and gas assets was so widespread that even ExxonMobil – which until last year hadn’t really adjusted the value of its assets in many years – warned of massive write-downs of between $17 billion and $20 billion after-tax in Q4 in its gas assets in the United States, Canada, and Argentina, due to the pandemic and its effect on the industry. TotalEnergies even used “stranded assets” in qualifying Canadian oil sands projects Fort Hills and Surmont as such.

While the write-downs last year were the direct result of the collapse in prices leading to the reduced value of assets, future impairments would likely be driven by climate-related risks, analysts and think tanks say.

Not all assets will pass the scrutiny to be resilient and profitable in a world that will still need oil and gas but aims to significantly limit energy-related emissions.

READ MORE: Boom Bust explores what’s next for gas market as Germany puts brakes on Russian pipeline

Long-Term Stranded Assets Risk

If the world’s 60 largest listed oil and gas companies continue with a business-as-usual approach, more than $1 trillion of such business-as-usual investment is at risk, including $480 billion in shale/tight oil projects and $240 billion in deepwater projects, financial think tank Carbon Tracker said in a report in September.

“Companies and investors must prepare for a world of lower long-term fossil fuel prices and a smaller oil and gas industry, and recognise now the risk of stranded assets that this creates,” Mike Coffin, Carbon Tracker Head of Oil, Gas and Mining and report co-author, said.

According to a recent study of researchers from the University College London, nearly 60% of both oil and fossil methane gas and almost 90% of coal must remain in the ground by 2050 in order to keep global warming below 1.5 degrees Celsius. The findings, published in Nature in September, are based on a 50-percent probability of limiting warming to 1.5 degrees Celsius this century. This would mean that reaching this target would require an even more rapid decline in production and more fossil fuels left in the ground, UCL researchers say.

Still, the world will need oil and gas for decades to come. Yet, the pressure to account for climate-related risk to assets could bring about billions of asset impairments in the energy industry every year and leave trillions worth of fossil fuel assets stranded.

“Just a few years ago, few within the oil and gas industry would even countenance ideas of climate risk, peak demand, stranded assets, liquidation business models and so on. Today, companies are building strategies around these ideas,” Luke Parker, vice president, corporate analysis, at Wood Mackenzie said last year, commenting on the massive write-downs at Shell and BP.

“Demand might still grow from here, and many companies are still chasing a share of that growth. But make no mistake, the corporate landscape is changing, and the majors are changing with it.”

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/541409-oil-gas-industry-stranded-assets/?utm_source=rss&utm_medium=rss&utm_campaign=RSS
Filed Under: Global Business

The Holiday Shopping Season Is Here, but Is It Back?

November 26, 2021 by NewsMaker Leave a Comment
Stephen Arnold, president of the International Brotherhood of Real Bearded Santas, a trade group with more than 1,800 members, appeared at only a single tree lighting event last year. It was a frightening time, he said, particularly for a group of elderly men who are often overweight and have diabetes.

But this season, Mr. Arnold said that all five of his tree lighting ceremonies are back, including a splashy event that he loves at Graceland, Elvis Presley’s estate in Mr. Arnold’s hometown, Memphis. He plans to participate in more than 200 appearances, on par with his prepandemic schedule in 2019. At times, he may perform from inside a life-size snow globe like last year, and a sizable chunk of his events will be held virtually, but it’s a world apart from 2020.

“I think almost all of our Santas intend to work a great deal more than they did last year, and a much higher percentage, probably 65 to 70 percent of us, will return to what we consider some kind of normal schedule,” Mr. Arnold, 71, said. “I’m trying to be prepared for a season of relatively close contact.”

This week, Saks Fifth Avenue unveiled its holiday window display and 10-story-tall light show at its New York flagship store. The retailer, which took a pause from its annual tradition of shutting down Fifth Avenue for a musical performance last year, returned to it this year with a performance by the Young People’s Chorus of New York City and an appearance from Michelle Obama. About 22 Nordstrom stores will have “immersive” photo booths.

At the flagship Bloomingdale’s on 59th Street, the store is offering fewer events than the 400-plus it held in 2019, but many more than 2020, when its limited activities were held outdoors. There will be more food and drink for shoppers this season, including Champagne and cups of espresso, though they are being handled more carefully than in years past. The store hosted a performance by Bebe Rexha when it unveiled its holiday windows this month, but kept it to roughly 15 minutes and carefully managed capacity and spacing.

“If you would have talked to me in 2019, we would have had elaborate spreads with caterers coming in and passed hors d’oeuvres and Champagne flowing,” said Frank Berman, Bloomingdale’s chief marketing officer. Now, the food is more likely to be prepackaged, and events like cooking demonstrations have been smaller.

Article source: https://www.nytimes.com/2021/11/26/business/holiday-shopping-stores.html
Filed Under: Economy News

Archives for November 2021

Russia running out of ‘easy’ oil

Wind power becoming too cheap to support itself

Indian industrial giant joins battle to end world’s chip famine

Where Will We Be in 20 Years?

Xiaomi to start making Tesla rival in Beijing

Russia grants Serbia ‘incredible’ gas price

Russia grants Serbia “incredible” gas price

Energy majors face $3.3-trillion ‘green’ nightmare

Energy majors facing $3.3 trillion ‘green’ nightmare

The Holiday Shopping Season Is Here, but Is It Back?

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