Quick action by OPEC+ stabilized oil markets during the coronavirus crisis, says IEF chief Joseph McMonigle

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In this episode of Frankly Speaking, Joseph McMonigle, secretary-general of the International Energy Forum (IEF), spoke to Arab News’ Frank Kane about the looming investment crunch in the oil industry. (AN Photo)
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International Energy Forum secretary-general Joseph McMonigle. (AN Photo)
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Updated 02 March 2021

Quick action by OPEC+ stabilized oil markets during the coronavirus crisis, says IEF chief Joseph McMonigle

  • Secretary general of the International Energy Forum was interviewed on the Arab News video show Frankly Speaking
  • McMonigle discussed rising oil prices, looming investment crunch and the fight against climate change among other big issues

DUBAI: Saudi Arabia and Russia have been commended by one of the thought leaders of the global energy industry for playing a “responsible, leadership role” via the OPEC+ alliance in stabilizing oil markets during the coronavirus pandemic.

Joseph McMonigle, secretary general of the International Energy Forum (IEF), the world’s biggest forum for energy policymakers, also spoke of the looming investment crunch in the oil industry and the crucial role that technology will play in the global battle against climate change.

He was interviewed on Frankly Speaking, the Arab News video show in which leading policymakers and business executives give their candid opinion on some of the big issues of the day.

McMonigle took over at the IEF last year after two decades’ experience in the global energy business, including a stint as adviser to the White House administration of George W. Bush.

“OPEC+ has been quite responsible in stabilizing oil markets during the pandemic, and of course like every other producer it had to adjust its demand lower, but really they took a leadership role right out of the box,” he said.


The Kingdom, alongside Russia, played a crucial role in limiting excess supply of crude onto fragile markets at the height of the crisis last year, when oil demand fell by 30 per cent and global crude prices plunged into negative territory in some markets.

“Really only due to their quick action were prices able to stabilize during the summer,” McMonigle said. “I think if we just said ‘Let’s wait and just see how market forces affect everything,’ I think it would have been a much more painful transition period.”

Nevertheless, he believes Saudi Arabia and OPEC do not want to see oil prices soaring too fast as the world recovers from the pandemic.

According to him, producers in the region and worldwide are conscious of the risks to economic growth from a “supercycle” in energy prices that some analysts have predicted.

“I don’t think that OPEC and the producers here in the region are necessarily so thrilled with supercycle type prices,” McMonigle said.

“I think they recognize, from the last time this happened, that it wasn’t good for the global economy, and I think they’ve realized now that healthy customers and a healthy global economy is the best for their industry and the best for the energy market.”

His comments came as crude oil prices hit new post-pandemic highs, with Brent crude, the global benchmark, up 20 per cent over the past month to stand at around $66 per barrel.

Some analysts have forecast the Brent will reach $75 in the summer, and could even spike to $100 as demand soars on economic recovery prospects and vaccines are rolled out across the world.

But with OPEC+ just days away from a crucial meeting to decide oil supply levels, McMonigle warned that lack of investment last year as prices plummeted could come back to bite the global industry.

“There’s not much we’re going to be able to do about demand returning faster and stronger than estimated but we can do something on the supply side, and that’s really going to take this investment that we talked about,” he said.


“If we’re in a full recovery at the end of the year from the pandemic I think you’re going to see demand be stronger and faster than forecasted, and so if you combine that with the investment crisis, I think the outlook for higher oil prices is quite good.”

The role of the IEF is to encourage dialogue and consultation between energy producers and consumers, and its work has been thrown into sharp relief by the pandemic energy crisis, as well as its effect on accelerating energy transition away from hydrocarbons.

“We have a much more diverse membership and so our agenda is expanded outside of just fossil fuels and we’re very involved in the energy transition and the role of natural gas and obviously paying very close attention to renewables,” McMonigle said.

The new emphasis on renewables — like solar, wind and nuclear energy sources — has struck a chord in Saudi Arabia, which has put in place some $10 billion worth of investment in the sector and announced plans to produce half its electricity from renewable sources by 2030.

But McMonigle also emphasized the role hydrocarbons still have to play in the global energy mix and the importance of innovative technology to mitigate the effect of harmful emissions.

“I think it’s important to recognize that wind and solar energy alone can’t really help us meet our climate goals,” he said. “We really need a shift now by governments and industry to invest more in clean energy R&D, technology and innovation, with a goal to reduce greenhouse gas emissions.

At a recent meeting of the IEF with European Union energy policymakers, Prince Abdul Aziz bin Salman, the energy minister of Saudi Arabia, underlined the Kingdom’s commitment to renewable sources, and to the use of hydrogen as a fuel of the future.


“Hydrogen is a very hot and trending topic now and I think that’s because the EU has recognized intellectually that wind and solar just can’t do it alone, and we’re not going to just go off of fossil fuels. We need a replacement and so that’s why I think they’re investing so much in hydrogen, and Saudi Arabia is getting very involved in it,” McMonigle said.

Saudi Arabia has backed the framework of the Circular Carbon Economy (CCE) as a strategy to mitigate and remove the harmful emissions that cause global warming, and that framework was endorsed by G20 leaders at last year’s summit under the Saudi presidency.

McMonigle said that the key to CCE was investment in new technology. “Up until now really it’s just been the US, maybe also the UK, Norway and Australia that have invested in it, but if Saudi Arabia is going to get behind it in a big way that’s really going to advance the technology - not just on this but on the other technologies that will help us solve our climate crisis,” he said.

One crucial technology aspect is the direct capture of carbon from the air, which is a focus of significant Saudi energy research.

The effects of climate change and extreme weather conditions were recently demonstrated in the US, where the Texas electricity network was overwhelmed by severe low temperatures that also seriously affected the state’s oil industry.

Some experts have blamed the Texas policy of renewable investment for the crisis, but McMonigle disagreed.

“Certainly, renewable energy was affected, but natural gas generation was also affected as well. I think it’s a lot more complicated than just pointing out one or two fuel sources,” he said, highlighting the once-in-a-century nature of the Texas storm and the state’s unique regulatory structure as contributory factors.

Some critics of the hydrocarbon industry predict that the rise of electric vehicles (EV) will, in the long term, contribute to the decline of petrol cars and “peak” oil demand, encouraged by environmental legislation in some countries.

“There’s tremendous momentum behind EVs. Last year there were 2.3 million EVs sold globally — that's about one in every 40 cars sold was an electric vehicle or hybrid. These numbers are only going to grow and some forecasts suggest that global EV sales will make up more than 50 per cent in most vehicles segments by the year 2035,” McMonigle said.

But that does not necessarily mean the imminent end of oil as the main global energy source, he insisted.

“Fossil fuel and hydrocarbon demand is going to continue out to 2040 and maybe some of it gets affected by EVs. But you still have jet fuel, you still have diesel, you have petrochemicals that are driving a lot of the growth,” he said.

“The point here is that you know oil is going to be a dominant energy source for the foreseeable future.”


Twitter: @frankkanedubai

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Abu Dhabi’s G42 forms big data JV with Israeli defense company Rafael

Updated 19 April 2021

Abu Dhabi’s G42 forms big data JV with Israeli defense company Rafael

  • The joint venture will have a research and development site in Israel and will develop products for sectors including banking, health care and public safety

DUBAI: Abu Dhabi-based technology company Group 42 (G42) has formed a joint venture with Israel’s state-owned Rafael Advanced Defense Systems to commercialize artificial intelligence and big data technologies, the companies said on Monday.
The joint venture, called Presight.AI, will have a research and development site in Israel and will develop products for sectors including banking, health care and public safety, to be sold in Israel, the United Arab Emirates and internationally.
Israel and the UAE agreed to normalize relations in August, triggering a number of announcements from businesses stating their intention to cooperate across the two countries.
UAE Ambassador to Israel Mohamad Al-KHajja said the joint venture strengthened the relationship between Israel and the UAE and opportunities for bilateral economic growth.
G42 is an Abu Dhabi-based artificial intelligence and cloud computing company set up in 2018 which works with government and private clients. In September it became the first UAE company to open an international office in Israel.
UAE national security adviser Sheikh Tahnoon bin Zayed Al Nahyan is its chairman and a shareholder. Abu Dhabi’s sovereign fund Mubadala in November invested in G42 and last week US private-equity firm Silver Lake invested to help the company expand.
G42 rose to prominence last year as it led Phase III clinical trials of a vaccine developed by Sinopharm’s China National Biotec Group (CNBG) in the UAE and regional countries, as well as offering medical diagnostic services.
The joint venture agreement is subject to regulatory approvals by Israeli and UAE authorities.

Turkey bans crypto assets over illegal transaction fears

Updated 19 April 2021

Turkey bans crypto assets over illegal transaction fears

  • The much-criticized move against the digital currency will come into effect on April 30

ANKARA: Turkey’s Central Bank has banned the use of crypto assets in payments as part of the country’s efforts to regulate cryptocurrencies, which have gained huge popularity in recent months.

The government has been closely monitoring cryptocurrencies for some time, alleging that extremists might use them to fund illegal activities or facilitate money laundering.

“Their use in payments may cause irreparable damages for the parties to the transactions, and include elements that may undermine the confidence in methods and instruments used currently in payments,” the bank said.

The new regulation will come into effect by April 30, but the legislation’s announcement lowered the value of Bitcoin by more than 4 percent on Friday.

Besides forbidding crypto  payments for buying goods and services, the regulation also bans transferring money to cryptocurrency platforms via fintech systems. But many investors in Turkey view Bitcoin and other cryptocurrencies as a shelter against inflation, with the lira facing a significant devaluation against foreign currencies due to the country’s financial volatility.

The lira has lost about half of its value since the 2018 currency crisis.

Increasing inflation rates, which reached a six-month high last month of 16 percent, as well as official unemployment rates hitting 13.4 percent are making people turn to cryptocurrency to gain money and compensate their losses with stable assets.

The booming business of cryptocurrencies has replaced Turks’ rush for gold and real estate as a hedge against the struggling lira and rising interest rates. This new digital money is mostly used by the country’s tech savvy younger population, which is seeking to protect its livelihood against Turkey’s recent economic troubles.


• Turkey bans crypto payments for buying goods and services.

• The regulation also forbids transferring money to cryptocurrency platforms via fintech systems.

• Many investors in Turkey view Bitcoin and other cryptocurrencies as a shelter against inflation.

The government’s crypto asset ban drew anger from domestic investors. About 100,000 tweets were sent from Turkey-based social media accounts in one day criticizing the legislation.

The country’s main opposition Peoples’ Republican Party (CHP) also criticized the government’s midnight move against cryptocurrency use. 

“Rather than issuing a midnight legislation, you should have decided on such sensitive issues after consulting all relevant parties,” CHP leader Kemal Kilicdaroglu said.

Regulation in the field of cryptocurrencies was not a new debate for Turkey, where the government expected to achieve some political goals from blockchain technology, according to Dr. Mehmet Bedii Kaya, an expert of IT law at Istanbul Bilgi University.

The government, in line with its 11th Development Plan, was set to implement a digital central bank based on blockchain technologies.

“On the other hand, there is a significant number of Turkish citizens who use cryptocurrencies for short and long-term gains,” Kaya told Arab News. “I think that this latest regulation has been prepared with a quick reflex, without considering the potential financial losses it might generate with the wave of resulting misinformation.”

Kaya said that payment institutions were already under the close supervision of the Central Bank. “These fintech institutions, which are active in the cryptocurrency market, are very innovative and dynamic. Therefore the Turkish state considered this dynamism as a risk and source of complexity. However, these key players shouldn’t have been disqualified.”

After Tesla CEO Elon Musk announced it was now possible to buy Tesla vehicles in the US with Bitcoin, an Istanbul-based luxury car distributor called Royal Motors began accepting payments in cryptocurrencies last week.

Crypto trading volumes hit $27 billion between early February to March 24, according to data analyzed by Reuters, while trading gained momentum especially after the Central Bank governor was dismissed by presidential decree and further weakened the lira.

Last week, the Turkish government asked crypto trading platforms to provide it with user information.

France’s Alstom on track to expand presence in Saudi Arabia

Updated 19 April 2021

France’s Alstom on track to expand presence in Saudi Arabia

  • The French technology provider has been part of several other key projects in the Kingdom

RIYADH: French transport technology provider Alstom, which is working on the Riyadh Metro project, is targeting expansion in Saudi Arabia.

Andrew DeLeone, who is president of Africa, the Middle East and Central Asia at Alstom, said the company was a  long-standing partner of Saudi Arabia.

“We have been active for decades and played an integral role in the Kingdom’s energy sector,” he told Arab News. “We installed the first gas turbine in the Kingdom in 1951. We are one of the largest technology players in the Riyadh Metro program, which is one of the largest public transport systems in the world. We are supplying solutions and the Riyadh Metro’s lines 3, 4, 5 and 6 have been built by Alstom and its civil partners, as part of the FAST consortium, and the system is set to provide comprehensive, citywide, mass-transit coverage.”

The Al-Eqtisadiah newspaper reported in January that the Riyadh Metro would be launched in the third quarter of this year. 

When fully operational, it will comprise six lines with a total length of 176 km, and 85 stations. Once launched, Alstom will continue to provide services for the metro. 

“We will be continuing in Riyadh for many years as part of the O&M (operations and maintenance) for these four lines and (as a) major presence in the metro system,” DeLeone added.

Alstom has supplied 69 trains for the Riyadh Metro and an Urbalis signaling system. 

It has also implemented HESOP (harmonic energy saver) technology in the project. HESOP recovers the electrical energy generated by trains during braking which, in addition to reducing operational costs, will cut about 3 million kilos of carbon emissions and decrease power consumption by 6.6 million kilowatts a year.

Alstom also has a number of other projects in its current Saudi portfolio.


• Alstom installed the first gas turbine in the Kingdom in 1951.

• It is one of the largest technology players in the Riyadh Metro program.

• Alstom has supplied the key components for the high-speed trains that connect Makkah and Madinah.

“We will also deliver the transit solutions for the King Abdullah Financial District when the project resumes and completes. We have supplied the key components for the high-speed trains that connect Makkah and Madinah. We will also be delivering the people mover system in the Kingdom, which is now operating in Jeddah airport.”

DeLeone said that Saudi Arabia was already making inroads into driverless technology solutions. 

“We already see it in Jeddah airport as our people mover system is driverless. Our monorail system is also driverless. Riyadh Metro system is also a driverless transportation system. Driverless transport is here in the Kingdom and will be an essential part of the Riyadh Metro system.” 

Andrew DeLeone

With Saudi Arabia committing to developing an additional 10,000 km of rail and metro by 2030, and a key factor in this commitment being its ambition to lead the way in reducing transport emissions, relieving traffic congestion, and improving residents’ health and quality of life, DeLeone was confident Alstom could win even more projects in the Kingdom and wider region.

“Alstom has secured a five-year service contract extension for automated people mover systems at Dubai Airports and to provide comprehensive O&M services. We had a similar contract in Jeddah airport and (an) extended service contract. Despite the pandemic, our technology and services have seen growth. We will supply tram orders for the city of Casablanca.”

Last week, at a webinar organized by the Future Investment Initiative, the governor of Saudi Arabia’s Public Investment Fund (PIF) Yasir Al-Rumayyan said that environmental, social, and governance (ESG) programs made solid business sense in the Kingdom and worldwide. 

Alstom was already making progress on developing sustainable and greener modes of transport.

“Today is a big day for Alstom, with our first order of hydrogen trains in France, which is really a historic step in our leadership around CO2-free sustainable urban mobility. The dual mode electric-hydrogen train will mark a historic step in rail transport’s reduction in CO2 emissions, and in the development of a hydrogen ecosystem,” DeLeone said.

In January, Alstom merged with Canada’s Bombardier Transportation. 

Reuters reported the deal to be worth around €5.5 billion ($6.7 billion) and the combined conglomerate will have €15.7 billion in revenues with an order book of €71.1 billion. It will also employ around 75,000 staff in 70 countries.

The Kingdom and the wider region was a significant area for the new combined entity, with over 1,500 people delivering major projects in Riyadh, Dubai, and Qatar, according to DeLeone.

“A large percentage of our workers are in Saudi Arabia, delivering the programs, and we look forward to growth. It’s a place where we (can) grow our business, so we are going to grow our employee presence, supplier presence and grow the local impact.”

Saudi unemployment rate drops in Q4 2020

Updated 19 April 2021

Saudi unemployment rate drops in Q4 2020

  • Unemployment among young people decreased from 34.2 percent in Q3 2020 to 28 percent in Q4

JEDDAH: The unemployment rate in Saudi Arabia decreased to 12.6 percent in the fourth quarter (Q4) of 2020, down from 14.9 percent the previous quarter, according to the latest data from the General Authority for Statistics (GaStat).

According to a report by Riyadh-based investment management advisory Jadwa Investment, the decrease in joblessness was due to more women and young people joining the Saudi labor force at the end of 2020.

“The recovery in the labor market has proceeded quicker than we anticipated (with Saudi unemployment at 12.6 percent at the end of 2020, versus our forecast of 14 percent). At the same time, however, the swift recovery reinforces our view that Saudi unemployment will decline to 12.1 percent by the end of 2021,” the Jadwa report said.

Unemployment among young people decreased from 34.2 percent in Q3 2020 to 28 percent in Q4. Among men it declined from 7.9 percent to 7.1, while for women it was down from 30.1 percent to 24.4 percent, across the same period. 

According to GaStat’s numbers, 200,000 new private sector expatriate work visas were issued in Q4, compared to 46,000 in Q3. The sharp increase was largely due to a big increase in female expat visas, which increased by 181,000 in Q4 compared to just 4,000 in Q3.

Across the various sectors, public administration and accommodation and food services recorded the largest increase in employment among Saudi nationals and expat workers.

“That said, with the ongoing roll-out of vaccines in the Kingdom, we are expecting a more vigorous economic recovery in the second half of 2021, which, along with ongoing localization efforts (such as the recent
Ministry of Human Resources and Social Development decision to raise the level of Saudization in shopping malls, supermarkets, restaurants and coffee shops), will help create more employment opportunities for citizens,” Jadwa said in its report.


PIF’s Noon launches Ramadan drive to help poor families

Updated 19 April 2021

PIF’s Noon launches Ramadan drive to help poor families

  • The project runs until May 12

RIYADH: Noon, an online platform backed by Saudi Arabia’s Public Investment Fund (PIF) and Dubai businessman Mohamed Alabbar, have teamed up with a charity to let online shoppers donate food to needy families during Ramadan.

Noon Daily, which is Noon.com’s grocery website, will partner with Bunyan Women’s Charitable Association for the initiative. 

The project runs until May 12.

Kaushik Mukherjee, senior vice president of customer experience and seller operations at Noon, said: “We’re proud to work with Bunyan to help our customers and team more easily contribute to people in need. Noon Daily will pack and ship Ramadan donation bundles purchased by customers and our own employees to Bunyan throughout the holy month. Thousands of families and frontline workers across the country will benefit from the food parcels distributed by the charity, and we couldn’t be happier to provide a service that helps bridge the donation process between customers and the community.”

Bunyan Women’s Charitable Association was established in 2011 with the aim of improving the physical and social conditions of poor families by assisting them through significant charity initiatives.

Noon was launched in the UAE and Saudi Arabia in Dec. 2017, and in Egypt in Feb. 2019. 

With an initial investment of $1 billion and working from headquarters in Riyadh, Noon said in 2016 that it aimed to expand online sales in the region from 2 percent of the total retail market ($3 billion) to 15 percent ($70 billion) within a decade.