As hundreds of oil and gas executives and government representatives descend on Calgary for the World Petroleum Congress, a delegation from Saudi Arabia is warning of the consequences of ditching oil and preaching the need for a more realistic energy transition and more investment in oil and gas.
The country has the largest delegation at the conference of any country or company, led by Energy Minister Abdulaziz bin Salman Al Saud, who told the crowd of delegates that the sector can’t solely focus on climate change.
“If we really want to be faithful to the idea that we will be transitioning, we have to also make sure that transitioning happens whereby you end up attending to energy security, ensuring that energy is still affordable, and does not act as an impediment to economic prosperity and growth,” he said while onstage.
“And if you don’t do all of the above, I’m sorry, but I don’t think you could attend to climate change issues.”
Net zero?
The pitch by the Saudi delegation runs somewhat counter to the net-zero theme of this year’s World Petroleum Congress, though it’s shared by many in attendance. Alberta Premier Danielle Smith made similar comments this week, along with the head of ExxonMobil, one of the world’s largest publicly traded international oil and gas companies.
But outside the walls of the World Petroleum Congress there’s pushback to this narrative. A recent, bombshell op-ed from the International Energy Agency (IEA) suggests peak demand for fossil fuels will happen within the next decade and that, while timelines vary, oil, gas and coal are all on their way out.
The two perspectives exemplify the fundamental debate that surrounds the oil and gas industry, as some governments and environmental groups pressure companies to move faster on climate change — especially given their record profits — while executives and some politicians caution the road to net-zero is a slow, windy path without a clear road map.
Amin Nasser, CEO of Saudi Aramco, speaks on stage at the World Petroleum Congress in Calgary. (Kyle Bakx/CBC)
Just days before the World Petroleum Congress kicked off, the IEA warned how the world’s appetite for oil and other fossil fuels may peak before the end of this decade.
It’s the first time the global energy watchdog has predicted peak fossil fuels will arrive so soon.
Fatih Birol, the IEA’s head, wrote in the Financial Times last week that the projections would show that “the world is on the cusp of a historic turning point.”
“Peaks for the three fossil fuels are a welcome sight, showing that the shift to cleaner and more secure energy systems is speeding up and that efforts to avoid the worst effects of climate change are making headway,” he wrote.
Still, Birol warned the IEA’s forecast downturn is nowhere near steep enough to put the world on a path to limiting temperature rises to 1.5 C above pre-industrialized levels, which is considered important to avoiding a climate catastrophe.
ExxonMobil CEO Darren Woods participates in a conference panel discussion as part of the World Petroleum Congress in Calgary. (Kyle Bakx/CBC)
But speaking to conference delegates Monday, the president and CEO of Saudi Arabia’s state-owned oil and gas company pushed back against the idea that the world is anywhere close to peak fossil fuel demand.
“The reality on the ground is that despite concerted effort to move to alternatives, global coal consumption is at record levels … with demand still robust,” said Amin Nasser, the company’s president and CEO, while accepting an industry leadership award at the conference.
Oil consumption also remains strong, he said, while natural gas has become an increasingly important “bridge fuel.” He said renewables still only account for a relatively small share of global energy consumption and new solutions like green hydrogen are currently pricey.
‘The world wobbles’
While alternatives like hydrogen, wind and solar are important, Nasser said, he warned that phasing out conventional fuels too quickly could put global energy and security at risk.
“As the recent energy crisis has shown, compounded by the conflict in Ukraine, the world wobbles if these realities are ignored or wished away, and the public anger we have already seen could ultimately derail climate ambition and action themselves,” he said.
Delegates from Saudi Arabia chat in front of an image of the Canadian Rockies at the World Petroleum Congress in Calgary Monday. (The Canadian Press)
On-stage at the conference, Darren Woods, chair and CEO of ExxonMobil, made a similar point.
“There seems to be somewhat wishful thinking that we’re gonna flip a switch and we’ll go from where we’re at today to where we’ll be tomorrow,” he said. “If we don’t maintain some level of investment in the industry, you end up running short of supply, which leads to high prices and some of the effects that Amin referenced.”
The IEA, for its part, agrees that demand for fossil fuels will still see peaks and valleys in the years to come, and that demand will vary country by country. Still, it predicts the era of “relentless growth” for the fossil fuel sector is coming to an end.
Different perspectives on oilpatch
The IEA’s projection and industry comments at the conference in Calgary show the different points of view that exist about the future of the oilpatch, said John England, global energy and chemicals leader, with Deloitte Global.
Oil and gas producers are taking different strategies to try to meet the world’s growing demand for oil, while also trying to cut emissions.
“We can’t stop investing in hydrocarbons. We still need to invest in those, but while we’re investing in these newer energies. And so I think it’s just trying to find the balance,” he said in an interview with CBC News.
Smith tours the Saudi Arabia pavilion at the World Petroleum Congress in Calgary Monday. (The Canadian Press)
North American oil prices surged Monday to more than $90 US per barrel, a nine-month high.
Those prices give the industry the financial strength to make investments to reduce emissions and invest in low-carbon sources of energy. However, the sector has faced criticism from environmental groups for not using enough of its profits to make meaningful investments to drive down greenhouse gases.
Environmentalists unimpressed
2023 was Canada’s worst wildfire season on record, while record temperatures were reached this summer around the globe.
Environmental groups have protested outside the gathering.
“Now that the evidence is clearer than ever that demand for fossils will peak this decade, major oil producers will do anything to delay that transition,” said Julia Levin, associate director of national climate at Environmental Defence Canada.
Saudi oil delegation at World Petroleum Congress says we’re nowhere near peak fossil fuel
The pitch by the Saudi delegation runs somewhat counter to the net-zero theme of this year’s World Petroleum Congress, though it’s shared by many in attendance, like Alberta Premier Danielle Smith. CBC reporter Kyle Bakx explains.
The science is clear about what needs to be done, Natural Resources Minister Jonathan Wilkinson said during a speech at the conference, urging the industry to prioritize climate change.
“As a global community we need to achieve net-zero emissions by 2050 and we need to make meaningful progress by 2030. We cannot get to net-zero by 2050 if we begin our journey in 2040.”
The World Petroleum Congress is led by WPC Energy, which is an organization of nearly 65 member countries from around the world, including both Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries.
The event, which has not been held in Canada since 2000, is expected to draw in 15,000 visitors from more than 100 countries this week.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
