Welcome to the new-look On Our Radar. We’ve changed the newsletter up so now it includes a summary of ten of the week’s developments that will have a significant impact on energy markets, and, crucially, exactly why they are relevant to energy 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.
Country Insights Roundup
Argentina: Milei Turns to China to Save Hydroelectric Dams
What happened: After saying on the campaign trail that he would not do business with “Communist” China, President Milei is now pivoting toward Beijing.
Why it matters: Milei needs to save two major hydroelectric dams that state-owned Chinese firms are building in Patagonia to expand Argentina’s power generation by at least 5%.
What happens next: The president will culminate his foreign policy shift by visiting China in the next months while his administration works on the details to restart construction of the dams, which was frozen soon after he took office.
Greece: Mitsotakis Faces Internal Revolt Over Energy
What happened: Energy has become the latest hot topic for disgruntled MPs from the ruling party questioning the direction of the Mitsotakis administration.
Why it matters: Low-level grumblings accompanying New Democracy’s slide in approval ratings and the rise of the right are creating a distraction for the government, increasing political risk.
What happens next: The upcoming presidential nomination could have a domino effect on the Energy Ministry.
Indonesia: Prabowo’s Maritime Balancing Act with China
What happened: Less than a week into his presidency, Prabowo Subianto passed a major test with flying colors by ordering the maritime security forces to expel Chinese coast guard shops from waters off North Natuna in a disputed part of the South China Sea. On 21 October, the Chinese vessels reportedly disrupted survey operations conducted by Pertamina, claiming the area was under Beijing’s jurisdiction.
Why it matters: This is not the first time that China has sent its coast guard to challenge Indonesia’s oil and gas activities in North Natuna. It is also not unusual for Indonesia to flex its military muscles more quickly than other South China Sea claimants. However, what is different this time is how the government publicized the incident and its response by posting photos and videos on social media. This suggests that Prabowo will take a harder line on enforcing Indonesian maritime sovereignty.
What happens next: We believe the government’s strong response will allow exploration to proceed more smoothly, boosting investor confidence. However, there is a latent risk coming from tensions with China that could trigger disruptions. For instance, Chinese coast guard vessels interfering with drilling operations would increase security costs.
Malaysia: Despite Radio Silence, a Petronas-Petros Deal Is Imminent
What happened: On 18 October, Prime Minister Anwar Ibrahim announced his long-awaited federal budget, including decarbonization goodies like future tax incentives for CCUS projects.
Why it matters: Despite the lack of details on the incentives, our sources are already upbeat about the sector’s prospects. They see the PM’s commitment to setting a regulatory framework as a sure sign that his administration is serious about turning Malaysia into a CCUS regional hub.
What happens next: We also see the inclusion of CCUS among Malaysia’s more established strategic sectors, such as electronics, as a vote of confidence from the very top and a hint at more financial benefits coming up. Anwar hinted at this in his speech.
Namibia: Some Parties Demand Renegotiation of Natural Resource Deals
What happened: Echoing a now-familiar message on the campaign trail, the United Democratic Front (UDF) called to renegotiate all mining agreements in Namibia. Speaking at a rally in Swakopmund, UDF President Hendrik Gaobaeb emphasized the party’s commitment to ensuring that the nation’s natural resources benefit its citizens directly. Gaobaeb said Namibia has sufficient resources to meet its people’s needs.
Why it matters: The UDF joins the Popular Democratic Movement, the Landless People’s Movement and Affirmative Repositioning. The latter three opposition parties also want the government to own a minimum 50% stake in all natural resource projects.
What happens next: Swapo remains cautious. In its electoral manifesto, the ruling party pledged to increase local content and participation in the natural resource sector but without setting specific targets. Swapo also aims to expand processing efforts to boost job creation.
Nigeria: Tinubu Finally Reshuffles Cabinet
What happened: After months of speculation, President Bola Ahmed Tinubu reshuffled his cabinet. The changes were mostly limited to second-tier players and smaller ministries.
Why it matters: Tweaks at the Ministry of Finance and the scrapping of the Ministry of Niger Delta Development have implications for IECs in Nigeria, offering a new engagement target and possibly slowing the implementation of CSR initiatives.
What happens next: The reshuffle shows Tinubu is trying to build capital in regions where he is weak. These political machinations, where background trumps credentials, mean the changes are unlikely to result in improved performance from a cabinet that badly needs technocratic expertise.
South Africa: Mantashe’s Karoo Survey Plans Will Revive Environmental Pushback
What happened: Minister of Mineral and Petroleum Resources Gwede Mantashe published a notice requesting comments on a planned geological survey in the Karoo Basin.
Why it matters: Previous challenges against onshore projects in the Karoo have succeeded, except around the Mpumalanga coalfields; similar lawsuits will delay the environmental impact assessment (EIA) for Mantashe’s survey.
What happens next: Investors can expect similar issues to be raised against the financing of offshore projects, increasing banks’ reputational risk and making it harder to access finance for these projects.
South Korea: Chungju Unveils Ammonia-Based Clean Hydrogen Production Complex
What happened: South Korea’s first ammonia-based hydrogen production plant was recently inaugurated in the southern city of Chungju. The $18mn Mega-Polis Industrial Complex, funded by a coalition of government, local and private investments, will turn ammonia, traditionally used in fertilizers, into hydrogen fuel. Once development and validation are completed, this facility will become the world’s first commercial-scale model capable of refueling up to 100 hydrogen passenger vehicles daily.
Why it matters: This project is pivotal in South Korea’s quest for carbon neutrality. Ammonia is advantageous for hydrogen storage and transport due to its high hydrogen content and ability to liquefy at room temperature.
What happens next: The Chungbuk Free Regulatory Zone, established in 2021, offers promising entry points into South Korea’s green hydrogen market. The Ministry of SMEs and Startups, along with the local governments of Chungbuk and Chungju, will continue to develop safety standards and a modular production model that is adaptable for export markets.
Turkey: Gulen’s Death Diminishes Threat to Government, but Crackdown Continues
What happened: The Gulen movement announced the death of their founder, Fetullah Gulen.
Why it matters: Gulen’s death will likely be a turning point for the group, given his cult-like significance and the absence of a charismatic successor.
What happens next: Given the Gulenists’ staying power in the West, particularly in the US, we do not expect the government to ease its crackdown.
Uruguay: Orsi to Face Delgado in Presidential Runoff
What happened: The opposition leftist Frente Amplio (FA) coalition won the first round of Uruguay’s presidential elections with about 44% of the vote. The incumbent Partido Nacional (PN) came in second place with nearly 27%.
Why it matters: While the FA is the clear frontrunner, victory is not assured. The PN and the Partido Colorado (PC), its partner in the ruling Multicolor Coalition, garnered almost as many votes as the opposition, and both sides will be almost level in Congress.
What happens next: FA presidential candidate Yamandu Orsi and PN hopeful Alvaro Delgado will face off in the 24 November runoff.
Stakeholder Influence Tracker
Rising Influence: Nigeria’s Ezenwo Nyesom Wike
Federal Capital Territory Minister Ezenwo Nyesom Wike appears to have seized the upper hand over his political adversary, Rivers State Governor Sim Fubara. This follows a decision by a court in Abuja to block federal funds for the state, one of Nigeria’s biggest oil producers. The Federal High Court barred Yemi Cardoso’s Central Bank of Nigeria (CBN) from releasing funds to Rivers. The ruling rested on the failure of Fubara’s government to have the state’s spending plans approved by a validly constituted House of Assembly.
Declining Influence: Argentina’s Hugo Moyano
Teamster chief Hugo Moyano along with his son Pablo Moyano and other transport worker union leaders called a snap national strike on 30 October. They are protesting the Javier Milei administration’s economic program including a proposal to privatize Aerolineas Argentinas. In our view, they are unlikely to secure their demands. The MIlei administration believes they are a good target and will almost certainly push back. Moyano is not very popular, especially compared to Milei’s solid standing in the opinion polls.
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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