HOUSTON: Take a trip across the “skybridge” from the Hilton Americas hotel to the George R. Brown Convention Center in downtown Houston, and you are in a different world. Is it Saudi Arabia? Is it ancient Rome? Is it the depths of the Permian Basin? It’s all very confusing.
The bridge — really just a third-floor walkway with views over the pleasant greenery of central Houston — links the CERAWeek by IHS Markit energy forum with its hip overspill area, the Innovation Agora.
It also contains the Lyceum Workshops interactive program; with all these classical allusions you might expect to find a crowd of toga-clad sybarites reclining in the vomitorium, plucking lyres and demanding their grapes be peeled.
But not many Texans are like that, in my experience. Those here settled instead for chicken satay and peanut sauce canapes.
The first thing that greets you is straight out of Ad Diriyah, near Riyadh — an awesome-looking racing car complete with Saudi Aramco speed flashes and tail-fins you could build a garden patio on. It is a vehicle from the Kingdom’s recent Formula E event, and would turn many heads, even in Houston’s bling-laden Avenida.
Take a stroll around and you will find another example of the Kingdom’s high-tech prowess. Wedged into a corner is another Aramco-badged vehicle — a Ford F-150 pick-up truck, fitted with the company’s revolutionary gasoline compression ignition engine, designed for more efficient and cleaner motoring. One Agoran asked: “How did they get it parked there?”
Close by is the Aramco “partner house,” a corporate space given over to strategic partners of CERAWeek, which the Saudi energy giant has been for years. Bathed in Aramco’s company colors of blue and green, you marvel at wireless sensors the size of golf balls, anti-corrosion technology, jars of Saudi sand used in hydraulic fracturing — better than US sand apparently — and new zeolites, chemical catalysts that help in the oil “cracking” process. These are all examples of the Kingdom’s cutting-edge energy technology.
But the most surreal part of the Agora experience still awaits you, in the partner house occupied by Emerson, the engineering company based in Missouri but increasingly active in Saudi Arabia. There, men in suits and hard hats take you on a simulated journey through the Permian oil production process, from extraction through pipelining to refining and power generation.
Emerson employees bounce around excitedly explaining the joy that the company’s technology and digital data systems have brought to their lives. In a boiler suit and hard hat, Mo tells how she doesn’t have to worry that pipes will get corroded any more because she can monitor them real-time from Emerson consoles; Megan enthusiastically expounds the pleasure she now gets out of managing her fleet of power stations, thanks to the same equipment.
Surely these people are all actors — nobody could be naturally that happy about the dirty work of fracking and shipping shale oil?
But Mike Train, president of Emerson Automation Solutions and certainly no thespian, explains how the company’s technology really is a game-changer in the digital transformation going on in the global energy business.
It is a big thing, too, in Saudi Arabia, where Emerson last year opened a facility in the Dhahran Techno Valley in the Eastern Province, part of the company’s growing operations in the Kingdom.
Train is looking for Saudi employees, women in particular, to beef up Emerson’s business there, and will coach newcomers in the cutting-edge processes the company pioneers. It sounds like a good offer for any young potential Saudi Agorans.
Back across the skybridge, on the escalators of Hilton Americas hotel, the memory of the Innovation Agora instantly assumed the status of fantasy. Had it all been a dream? The peanut sauce stain on my shirt was the only evidence it had been real.
CERAWeek Diary: Across the bridge, a real piece of Saudi tech in Houston fantasy land
CERAWeek Diary: Across the bridge, a real piece of Saudi tech in Houston fantasy land
- The first thing that greets you is straight out of Ad Diriyah — an awesome-looking racing car complete with Saudi Aramco speed flashes and tail-fins you could build a garden patio on
- Wedged into a corner is another Aramco-badged vehicle — a Ford F-150 pick-up truck, fitted with the company’s revolutionary gasoline compression ignition engine
EV transition targets out of reach without mining more copper than in all of history: IEF
RIYADH: The world needs to mine more than double the amount of copper ever excavated in human history if it wants to hit widespread electric vehicle targets, according to a new study.
Analysis by the International Energy Forum warns that unless the industry is rapidly expanded, there will not be enough of the metal available to ensure the 2025 EV adoption goals set by the UN’s Intergovernmental Panel on Climate Change.
According to the report, electrifying the global vehicle fleet would necessitate the opening of 55 percent more new copper mines by 2035 – and this expansion needs to be encouraged by governments.
The IEF study also warned that copper demand between 2018 and 2050 is set to be 115 percent greater than all of the metal that has ever been excavated before this point.
As a result, policy makers should consider shifting the focus from 100 percent electric vehicles to hybrid models to help stop the automotive industry dominating this resource, which is widely used across the economy.
“Under today’s policy settings for copper mining, it is highly unlikely that there will be enough additional new mines to achieve 100 percent electric vehicles by 2035, only the first small step toward decarbonization. So we need to manage this transition,” said Joseph McMonigle, secretary general of the IEF.
He added: “To make the best use of the available copper supply, governments should prioritize economy-wide electrification, which is the foundation of climate policy. Moreover, governments need to incentivize and support new copper mine projects because, without it, 100 percent adoption of EVs is not an achievable target.”
McMonigle said that the EV industry will continue to be a significant segment in the automotive market and “should continue to thrive based on consumer preference and the growing array of vehicles available, but 100 percent adoption by 2035 is unlikely.”
Hybrid electric vehicles an option to minimize copper demand
According to the report, copper plays a crucial role in electricity generation, distribution, and storage, and the adoption of EVs is one of the most effective solutions for reducing the reliance on fossil fuels.
However, unprecedented copper requirements of electric car batteries will compete with the electricity needs of countries which are in the early stages of development.
“Copper demand for EV manufacture could increase the price of copper very substantially and significantly impede the advance of less developed areas,” the report said.
The energy think tank said that manufacturing a traditional internal combustion engine vehicle requires 24 kg of copper, while an EV demands 60 kg.
On the other hand, a hybrid electric vehicle requires 29 kg of copper, which would have a negligible impact on the demand for metal.
“Policymakers might consider changing the vehicle electrification goal from 100 percent EV to 100 percent hybrid manufacture by 2035. This would allow for future output of existing and new copper mines to be used for the developing world to catch up with the developed world in electrification,” said IEF in the report.
According to the US Department of Energy, hybrid EVs are powered by an internal combustion engine and one or more electric motors, which use the power stored in batteries.
A hybrid EV cannot be plugged in to charge the battery. Instead, the battery is charged through regenerative braking and by the internal combustion engine.
Citing a report by the American Council for an Energy-Efficient Economy, IEF further pointed out that EVs and hybrids scored similarly based on their cost to human health from air pollution associated with vehicle manufacturing and disposal, the production and distribution of fuel or electricity, and vehicle tailpipe emissions.
Responsible copper mining strategy to be encouraged
The energy forum also underscored the importance of encouraging responsible copper mining strategies by governments worldwide to meet the demand for this metal.
“The baseline outlook for copper supply in the report, based on historical trends, sees supply rising by 82 percent by 2050, peaking in 2086, and then falling sharply. However, the report also cites projections based on the pipeline of copper projects, which shows a decline in supply as soon as 2026,” said IEF.
It added: “The report argues that mining should be recognized as essential, and exploration and responsible copper mine development strongly encouraged.”
The analysis highlighted that the mining industry is facing various challenges including limited land access, low discovery rates and a 23-year lead time for mines to come into production.
The energy think tank added that governments are hesitant to approve mine permits even in areas where significant copper reserves are discovered.
According to IEF, the mining industry will need to explore and mine deeper to obtain the copper the world needs, while exploration in subsurface mines will be safer and have a smaller environmental footprint.
“The message that we may not be able to mine materials fast enough to meet humanity’s desires even if there are more than enough of these materials to meet all of humanity’s needs has proven difficult to effectively deliver, yet its effective delivery and subsequent discussion is necessary to the formulation of realistic energy resource policies,” said IEF.
In April, the International Energy Agency released an additional report stating that global battery production must be scaled up to meet the climate and energy security goals set at the 2023 UN Climate Change Conference.
During the COP28 summit, nearly 200 countries agreed to triple renewable energy capacity by 2030, double the pace of energy efficiency improvements, and transition away from fossil fuels.
The IEA report also added that ensuring energy security requires greater diversity in supply chains, including extracting and processing the critical minerals used in batteries.
North Highland to invest ‘millions of dollars’ in Saudi workforce development
RIYADH: US-based consulting firm North Highland, which recently relocated its headquarters to Riyadh, plans to invest “millions of dollars” in Saudi Arabia to bolster workforce capabilities in line with Vision 2030.
During an interview with Arab News, CEO Alex Bombeck emphasized the company’s focus on supporting the Kingdom’s economic growth and infrastructure, while also highlighting the importance of building a core team of Saudi nationals.
Speaking on the sidelines of the GREAT Futures conference in Riyadh, Bombeck said: “I would say we’re going to be able to bring experience and expertise from folks around the world to Saudi Arabia, but we have to focus on building a national team here in Riyadh.”
He revealed that the company has already hired employees here, and “we are bringing in more as quickly as we can.”
Bombeck added: “Our ambitions here are great, and we’re going to be investing millions of dollars.”
The CEO also emphasized the importance of digital upskilling, particularly among younger workers, who often bring “fresh perspectives and innovative ideas.”
This includes investing in their skills, which will not only “benefit the workforce but also align with the broader goals of Saudi Arabia’s Vision 2030.”
“They’re not as constrained in their thinking, so I think not only can they bring digital thinking to us, but we can also help upskill them in certain technologies and platforms to help grow the workforce because the most important thing for us is one to bring value to the Kingdom,” Bombeck said.
He continued: “We’ve got to ensure that particularly the young portions of the workforce are bringing the differentiated thinking that they can offer and that when we think about stuff like generative AI, we’re actually seeing that some of our younger consultants are bringing fresher, more innovative ideas.”
During the two-day event, the management consulting firm held discussions with Saudi Commerce Minister Majid Al-Qasabi, Investment Minister Khalid Al-Falih, and top executives from projects such as NEOM and Red Sea Global.
“Our focus is to take these super ambitious and high growth economic plans and to be able to actually see the value created from them,” Bombeck said.
He added: “In doing that, one of the things that we always focus on is how can we drive progress by being agile and continuously working in partnership with whether it be the Saudi government or in the private sector, to be learning as we go.”
The CEO concluded by emphasizing that Saudi Arabia “needs to be the best at getting better.”
Saudi influence expands as 8 new firms join MSCI’s Global and Small Cap Indexes
RIYADH: Eight new Saudi companies have joined MSCI’s global and small capital indexes, highlighting the Kingdom’s growing influence on the international investment landscape.
According to an official document, the financial solution provider has included SAL Saudi Logistics Services Co. in the MSCI Global Standard Index.
MSCI has also added seven stocks to the Small Cap Index, including Al-Babtain Power & Telecommunication, Etihad Atheeb Telecom, and the Mediterranean and Gulf Insurance and Reinsurance Group.
Additional inclusions comprised Middle Mast Pharmaceutical Industries Co., known as Avalon Pharma, Saudi Advanced Industries Co., Saudi Paper Manufacturing Co., and Walaa Cooperative Insurance Co.
Conversely, MSCI has removed six companies from the Small Cap Index: Amlak International for Real Estate Development & Finance Co., known as Amlak, Fawaz Abdulaziz Al Hokair & Co., known as Cenomi Retail, Methanol Chemicals Co., and Riyad REIT.
Additionally, Saudi Co. for Hardware and Saudi Arabian Refineries Co. have also been excluded.
As a result, the number of Saudi companies listed on the Small Cap Index now stands at 80, while the Global Standard Index includes 41 companies. MSCI stated that these changes will be implemented at market close on May 31.
The Saudi companies included in the MSCI Global Standard Index reflect the diverse and robust economic landscape of the Kingdom, with the oil giant Aramco leading the list.
The banking sector is represented by Al-Rajhi Bank, Riyad Bank, and Alinma Bank. It also includes Bank AlJazira, Bank AlBilad, and Saudi French Bank, as well as National Commercial Bank, SABB, and Saudi Investment Bank.
Industrial and petrochemical giants such as SABIC, Advanced Petrochemical, and Saudi Basic Industries Corp., as well as SABIC Agri-Nutrients, Kayan, Yansab, and Ma’aden, feature prominently in the global index, underscoring the Kingdom’s leadership in these fields. Telecommunications and technology are highlighted by stc and solutions by stc.
The healthcare sector includes Bupa Arabia for Cooperative Insurance Co., Dr Sulaiman Al Habib Medical Services Group Co., and Al-Mouwasat, as well as Dallah Healthcare, and Al-Nahdi Medical Co.
Retail and consumer goods are represented by Jarir Marketing Co., Almarai Co., and Savola Group, while the energy sector features Saudi Electricity Co., ACWA Power, and Power and Water Utility Co. for Jubail and Yanbu.
Additional key players include Saudi Research and Media Group, known as SRMG, Tadawul Group, and Luberef. The list also features the Co. for Cooperative Insurance, ADES Holding Co., and SAL Saudi Logistics Services Co., illustrating the wide-ranging and dynamic nature of Saudi Arabia’s corporate environment.
The Saudi companies in the MSCI Small Cap Index also represent diverse sectors, including Saudi Cement, Ataa Educational Co., Al-Rajhi Takaful, eXtra, and Arriyadh Development Co., known as Tameer.
MSCI stands as a premier provider of essential decision support tools and services for the worldwide investment community, according to its website.
GCC bank’s profitability to remain strong in 2024 due to delay in US Fed’s rate cut
RIYADH: A delay in interest rate cuts by the US Federal Reserve will see Gulf Cooperation Council banks’ profitability remain strong in 2024, according to S&P Global Ratings.
This comes as most GCC central banks typically mirror the Fed’s rate movements to preserve their currency pegs.
In a statement, the US credit rating agency revealed that it also expects asset quality to remain robust despite the prolonged high interest rates, thanks to supportive economies, contained leverage, and a high level of precautionary reserves.
“We anticipate a slight deterioration in profitability in 2025, as the Fed could start cutting rates in December 2024, and most GCC central banks are likely to follow suit to preserve their currency pegs,” the statement said.
“However, we believe that several factors will mitigate the overall effect,” it added.
Moreover, S&P disclosed that every 100-basis point drop in rates cuts an average of around 9 percent off the region’s banks’ bottom lines.
This is based on the GCC banks’ December 2023 disclosures and assumes a fixed balance sheet and a parallel shift in the yield curve.
Pakistan shares hit fresh record on rate cut hopes, IMF talks
- Pakistan last month completed a short-term, $3 billion IMF program, seeking fresh, longer-term bailout
- IMF mission is in Pakistan to discuss financial year 2025 budget, policies, reforms under potential new program
Pakistan’s benchmark share index touched a lifetime high on Wednesday, breaching the key level of 75,000, on hopes that easing inflation could pave the way for interest rate cuts as early as June.
Still attractive stock valuations, expectations of more foreign inflows, and the start of talks with the IMF on a new loan program added to the bullish sentiment.
The index was trading at 75,013 points at 0531 GMT, up 0.7 percent, after hitting an intraday high of 75,115. It has surged 80 percent over the past year, and it is up 16.1 percent year-to-date after an IMF rescue last summer helped the government avert a debt default.
On Monday, the index closed at a record of 73,822, up 1 percent.
Mohammed Sohail, CEO of Topline Securities, said Wednesday’s gains were fueled by foreign fund buying.
On Tuesday, the MSCI index added a Pakistani bank, National Bank of Pakistan, to the MSCI frontier market index. Its shares rose 1.6 percent on Wednesday, outperforming the benchmark index.
“We estimate Pakistan’s weight will also increase, thereby having the potential to attract more passive foreign funds,” said Sohail.
The market is picking up steam due to an anticipated decline in inflation to 13.5 percent for May and expectations of a monetary easing cycle starting in June, said Shahid Habib, CEO of Arif Habib Limited.
Investors were also optimism about discussions on a new International Monetary Fund financing program and the economic roadmap ahead, Habib said.
Pakistan last month completed a short-term, $3 billion IMF program, but the government of Prime Minister Shehbaz Sharif has stressed the need for a fresh, longer-term program.
An IMF mission is in Pakistan to discuss the financial year 2025 budget, policies, and reforms under a potential new program.
Wall Street bank Citi expects Pakistan to reach a four-year agreement with the IMF worth up to $8 billion by end-July, and recommends going long on the country’s 2027 international bond.
