Welcome to this week’s On Our Radar, our summary of developments from the past week that will have a significant impact on emerging markets, and, crucially, exactly why they are relevant to foreign investors.
These summaries are taken from excerpts of our Country Insights and Horizon Engage Interactive services – if you would like to receive our full reporting and analysis from our team of regional experts and former ambassadors on any of these developments, please click here for more information.
This week’s banner image is of Mexican President Claudia Sheinbaum (reproduced under the Mexico City Open Government License), who has temporarily halted US tariffs (more details below).
Country Insights Roundup
Australia: Lower House to Pass Hydrogen Production Tax Credits Bill
What happened: After striking a deal with the Greens on the incentive, the Albanese administration is set to pass legislation to provide production tax credits for hydrogen production and critical minerals processing.
Why it matters: In the last parliamentary sitting week of 2024, the government passed an impressive 45 bills, some of which were key planks of the $14bn Future Made in Australia plan. However, in a surprising decision, the Made in Australia (Production Tax Credits and Other Measures) Bill did not make the cut.
What happens next: We expect the bill to be signed into law soon by the Governor General. However, the administrative details of the scheme will need to be developed and finalized. We recommend investors maintain oversight and provide input into the final design process. With an election also looming, the makeup of the next parliament will likely impact the future of this new law.
Azerbaijan: SOCAR’s Expansion Into Israeli Gas Market Will Have Regional Impact
What happened: SOCAR acquired a 10% stake in Israel’s Tamar gas field for $520mn, marking its first major gas extraction investment outside Azerbaijan and expanding its EastMed pipeline presence.
Why it matters: Although the deal boosts Azerbaijan’s energy influence, strengthens ties with Israel and the US and turns SOCAR into a potential Israeli gas supplier to Europe, it risks straining relations with Turkey over its Israel embargo.
What happens next: By expanding its global energy footprint, SOCAR will have to leverage Tamar for East Med exports and navigate tensions with Turkey while balancing ties with the US, Israel and Muslim-majority nations.
Greece: Athens’s Mixed Messages on Gas and Renewables Are Not So Mixed
What happened: The Mitsotakis administration has become increasingly outspoken in questioning the EU’s aggressive gas phase-out targets and decarbonization agenda.
Why it matters: New Democracy and its sister parties in the EU are taking a more critical view of the Green Deal, which will likely creep into the bloc’s newly minted Competitiveness Compass.
What happens next: Mitsotakis’s green rhetoric has long cohabited with pro-gas policies; the latter are more likely to find fertile ground in the new unfolding Brussels doctrine.
Libya: Damning UN Report Highlights Problems Within Oil Sector
What happened: The latest UN Panel of Experts report on Libya continues to make waves, including in the oil sector.
Why it matters: The GNU has demanded answers from the NOC and other entities following the report’s observations, including that armed groups had “infiltrated” the NOC.
What happens next: Though acting NOC Chairman Masoud Suleiman has vowed to increase transparency in the sector, the revelations in the UN report are unlikely to lead to much change.
Malaysia: Government to Announce Federal CCS Bill in March
What happened: On 5 February, Economy Minister Rafizi Ramli said that he plans to table the federal CCS bill in Parliament in early March. Rafizi’s department had planned to unveil the planned legislation in November 2024 but faced delays in securing the necessary approvals from the cabinet and the Attorney General’s Chambers (AGC).
Why it matters: The CCS bill will pave the way for Malaysia to begin capturing, transporting, utilizing and storing CO2, further invigorating an industry that has been increasingly active in recent weeks. At the end of January, Petronas opened FEED tenders in the Northern and Southern clusters of Peninsular Malaysia.
What happens next: A key signpost to watch is how the CCS bill will recognize state governments’ rights to carbon storage sites. Even if Rafizi gets the green light from the cabinet and the AGC, the main will be MPs from Sarawak, which has the most parliamentary seats among all Malaysian states.
Mexico: Sheinbaum’s US Playbook
What happened: President Sheinbaum temporarily halted US tariffs, but maintaining this diplomatic momentum — particularly in countering the proposed 25% tariff on steel and aluminum imports — will hinge on key figures in her administration and security cooperation with the US.
Why it matters: Trade remains Sheinbaum’s most significant vulnerability: Any tariffs could trigger economic instability. Strategic private-sector partnerships and experienced negotiators are crucial for safeguarding Mexico’s interests.
What happens next: Security Minister Omar Garcia Harfuch’s efficacy in delivering swift and measurable results will be a key factor to watch. However, balancing cooperation with the US while addressing internal security challenges amid fiscal constraints will be a critical test.
Nigeria: Atiku, El-Rufai Plan 2027 Challenge to Tinubu’s Second Term
What happened: Key opposition figures met to discuss how they will challenge President Bola Ahmed Tinubu’s second-term bid.
Why it matters: Even with the poll two years away, Nigeria’s top politicians — both in the opposition and in the governing APC — are busy playing electoral chess.
What happens next: We expect high-profile Tinubu detractors, including former Kaduna State Gov Nasir el-Rufai, to lead an opposition effort with a possible merger of the PDP and Labor Party. With Tinubu busy undermining their plans, we see a hard road ahead.
South Africa: US Relations Deteriorate as Government Rebuffs Trump’s Executive Order
What happened: On 7 February, US President Donald Trump signed an executive order that says the US will end aid to South Africa and promote the resettlement of “Afrikaner refugees” if the South African government continues certain expropriation, transformation and foreign policy positions.
Why it matters: Trump’s executive order reflects a significant deterioration in relations between the two countries, which will ultimately undermine trade and investment ties.
What happens next: While we do not expect any immediate impact on investors, the South African government is unlikely to simply reverse these policies. Relations will likely deteriorate further, which could result in sanctions and other economic consequences.
Turkey: SOCAR Turkey Bets on New Petrochemical Master Plan
What happened: SOCAR Turkey will produce sustainable aviation fuel in Aliagaas part of a broader strategy to combine petrochemicals with sustainability.
Why it matters: The move positions Azerbaijan’s NOC and Turkey as frontrunners in the emerging green petrochemical market.
What happens next: SOCAR’s plans will help Turkey become a bigger player in the global green petrochemical market.
United States: DOGE is Hacking Away at Business Stability
What happened: Elon Musk’s DOGE team has torn its way through the federal government, effectively shutting down USAID.
Why it matters: Killing an agency created by legislation is illegal; a judge has already ordered USAID employees back to work.
What happens next: Since the executive branch moves faster than the judiciary, Musk may start to undermine many of the US government’s core promises before countermeasures can occur.
Stakeholder Influence Tracker: ALNAFT President Mourad Beldjehem
ALNAFT President Mourad Beldjehem confirmed in a local press interview that the upstream licensing agency has extended the deadline for its ongoing oil and gas bid round from mid-April to mid-June.
Beldjehem cited strong demand among IECs – many of which have still not had the opportunity to access the data room – as a reason for the delay. ALNAFT has also extended the deadline for data room access by one month.
The ALNAFT boss noted that 36 large and mid-sized IECs have paid fees and are in various stages of preparing bids.
In our view, Beldjehem’s announcement carries an aspect of theater, intended to feed enthusiasm for the bid round. But it also augurs well for him. Beldjehem is under pressure to ensure the success of Algeria’s first licensing round in a decade and appears to be on track.
Find Out More
These summaries are taken from excerpts of our Country Insights and Horizon Engage Interactive products – if you would like to receive our full reporting and analysis from our team of regional experts and former ambassadors on any of these developments, please click here for more information.
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