Welcome to this week’s On Our Radar, our summary of ten recent 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
Australia: Port of Newcastle’s Clean Energy Precinct Moving Forward
What happened: Important new steps have been taken to develop the Port of Newcastle’s Clean Energy Precinct.
Why it matters: The location is ideal for a hub to support the decarbonization of the heavy industry in NSW’s Hunter Region and its export customers.
What happens next: Foreign investors should watch out for further announcements in support of hydrogen leading up to the looming federal election.
Azerbaijan: Gas Transit and Supply Issues Coming to a Head
What happened: Ahead of COP29, Azerbaijan faces two high-stakes issues: potential involvement in a new Russia-Ukraine gas transit deal and its role in meeting Europe’s energy needs.
Why it matters: The potential expiration of both the Russia-Ukraine transit agreement and US sanctions on Nord Stream 2 by the end of the year has heightened the urgency for Europe to find stable energy alternatives.
What happens next: Putin’s potential attendance at COP29 could make discussions on Azerbaijan’s gas production and Europe’s energy strategy increasingly heated.
Brazil: IBAMA Technocrats Oppose Drilling in Amapa
What happened: IBAMA’s technocrats are lining up against offshore drilling in Amapa.
Why it matters: In response, Petrobras CEO Magda Chambriard met with state leaders, including Sen. Davi Alcolumbre, to stake out a political strategy to circumvent the licensing agency.
What happens next: Petrobras E&P Director Sylvia dos Anjos indicated the NOC will obtain a drilling license soon, implying that a political solution is in the works.
Cote d’Ivoire: Trump Presidency Will Heighten Security Challenges
What happened: Donald Trump’s return as US president will decrease military support for the Ouattara administration and the broader Sahel region.
Why it matters: Cote d’Ivoire will be more exposed to jihadist spillover and destabilization threats from neighboring states, which will become more pronounced in the lead-up to the presidential election in 2025.
What happens next: We expect continued French and Chinese support and Ouattara’s popularity will help prevent severe security ramifications.
Iraq: Higher Reconstruction Committee: Fast Track or Cutting Corners?
What happened: PM Sudani has created a formula for rapid non-public authorization of investment deals.
Why it matters: This is lowering the quality of pre-qualification and award processes, especially within the energy sector, resulting in a higher incidence of projects needing to be re-bid.
What happens next: In the mid term, awards made via the Higher Committee for Reconstruction and Investment may become more vulnerable to review and even investigation.
Malaysia: South Korea Interested in CCS, Hydrogen Collaborations
What happened: On 25 October, South Korea’s Deputy Minister for Energy Policy Lee Ho-hyeon met with Petronas gas and maritime chief Adif Zulkifi to discuss how the two sides can work together on emerging energy technologies.
Why it matters: Our sources say the South Korean government wants to become a more prominent energy partner for Malaysia beyond gas and hydrogen. The country’s ultimate goal is similar to Japan’s — to export its CO2 to Malaysia’s abundant storage sites.
What happens next: It may take the South Koreans a while to become a strong strategic player in Malaysia’s new energy sector, but if they are successful, their bottom-up approach to engaging local executives could serve as a model for foreign investors.
Mexico: Sheinbaum Loses US Election but Wins in Supreme Court
What happened: On 5 November, Mexico witnessed two pivotal events — Donald Trump’s victory in the US presidential election and the Supreme Court’s decision not to overturn critical aspects of MORENA’s judicial reform.
Why it matters: Trump 2.0 is likely to impact trade relations and tariffs, while the survival of judicial reform indicates potential regulatory shifts that could undermine investor confidence and the overall business climate.
What happens next: Investors should closely watch the appointments of the next ambassadors to each country; MORENA’s reform agenda will advance at full speed, accelerating regulatory changes that will shape the investment landscape.
Nigeria: Tinubu Not for Turning on Tax
What happened: President Tinubu pressed ahead with tax reforms despite strong resistance from northern governors and calls from the National Economic Council to slow down the passage of the new laws.
Why it matters: The resistance may slow the pace of tax changes that affect energy investors. It also demonstrates the widening gap between Tinubu’s efforts to court investors and his poor standing with Nigerians.
What happens next: The legislation may face further pressure but is likely to pass given the APC’s control of the Senate and House of Representatives. Further out, the row could catalyze northern organization against Tinubu’s second-term bid.
Turkey: Mayor Removals Push Back Kurdish Peace Process
What happened: The government replaced three pro-Kurdish mayors over alleged ties to the PKK and replaced them with trustees.
Why it matters: The move happened amid an ill-conceived peace process that the Kurds, the opposition and the security apparatus all oppose, but the administration believes it must pursue due to the threat of the PKK occupying the Hezbollah power vacuum.
What happens next: The walls are closing in on an aging President Erdogan, who may face a succession challenge from a younger politician.
Yemen: Meeting of Rivals Raises Questions Over South Yemen’s Future
What happened: A 29 October meeting between STC President Aydrus al-Zubaydi and SNC leader Ahmad al-Essi hints at rapprochement.
Why it matters: Zubaydi is trying to recruit a weakened Essi after STC elements attacked the latter’s business interests.
What happens next: It will be hard to fix the antagonistic relationship between the STC and SNC, but Essi will temporarily play ball in order to regain political relevance ahead of any Saudi-brokered peace deal.
Stakeholder Influence Tracker
Rising Influence: UAE’s Khaled Salmeen
Declining Influence: Turkey’s Mehmet Simsek
President Recep Tayyip Erdogan quickly congratulated Donald Trump for winning reelection.
In our view, Trump’s win is unwelcome news for Minister of Treasury and Finance Mehmet Simsek. Trump has teased a series of heterodox policy options, including massive tariffs, during his campaign. Any move to follow through on those suggestions will likely reduce pressure on countries like Turkey to pursue transparent and predictable economic policies.
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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