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Saudis come to Calgary warning of the consequences of ditching oil

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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.

 

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Telus prioritizing ‘most important customers,’ avoiding ‘unprofitable’ offers: CFO

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Telus Corp. says it is avoiding offering “unprofitable” discounts as fierce competition in the Canadian telecommunications sector shows no sign of slowing down.

The company said Friday it had fewer net new customers during its third quarter compared with the same time last year, as it copes with increasingly “aggressive marketing and promotional pricing” that is prompting more customers to switch providers.

Telus said it added 347,000 net new customers, down around 14.5 per cent compared with last year. The figure includes 130,000 mobile phone subscribers and 34,000 internet customers, down 30,000 and 3,000, respectively, year-over-year.

The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.09 per cent in the third quarter, up from 1.03 per cent in the third quarter of 2023. That included a postpaid mobile phone churn rate of 0.90 per cent in its latest quarter.

Telus said its focus is on customer retention through its “industry-leading service and network quality, along with successful promotions and bundled offerings.”

“The customers we have are the most important customers we can get,” said chief financial officer Doug French in an interview.

“We’ve, again, just continued to focus on what matters most to our customers, from a product and customer service perspective, while not loading unprofitable customers.”

Meanwhile, Telus reported its net income attributable to common shares more than doubled during its third quarter.

The telecommunications company said it earned $280 million, up 105.9 per cent from the same three-month period in 2023. Earnings per diluted share for the quarter ended Sept. 30 was 19 cents compared with nine cents a year earlier.

It reported adjusted net income was $413 million, up 10.7 per cent year-over-year from $373 million in the same quarter last year. Operating revenue and other income for the quarter was $5.1 billion, up 1.8 per cent from the previous year.

Mobile phone average revenue per user was $58.85 in the third quarter, a decrease of $2.09 or 3.4 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.

It said customers are increasingly adopting unlimited data and Canada-U.S. plans which provide higher and more stable ARPU on a monthly basis.

“In a tough operating environment and relative to peers, we view Q3 results that were in line to slightly better than forecast as the best of the bunch,” said RBC analyst Drew McReynolds in a note.

Scotiabank analyst Maher Yaghi added that “the telecom industry in Canada remains very challenging for all players, however, Telus has been able to face these pressures” and still deliver growth.

The Big 3 telecom providers — which also include Rogers Communications Inc. and BCE Inc. — have frequently stressed that the market has grown more competitive in recent years, especially after the closing of Quebecor Inc.’s purchase of Freedom Mobile in April 2023.

Hailed as a fourth national carrier, Quebecor has invested in enhancements to Freedom’s network while offering more affordable plans as part of a set of commitments it was mandated by Ottawa to agree to.

The cost of telephone services in September was down eight per cent compared with a year earlier, according to Statistics Canada’s most recent inflation report last month.

“I think competition has been and continues to be, I’d say, quite intense in Canada, and we’ve obviously had to just manage our business the way we see fit,” said French.

Asked how long that environment could last, he said that’s out of Telus’ hands.

“What I can control, though, is how we go to market and how we lead with our products,” he said.

“I think the conditions within the market will have to adjust accordingly over time. We’ve continued to focus on digitization, continued to bring our cost structure down to compete, irrespective of the price and the current market conditions.”

Still, Canada’s telecom regulator continues to warn providers about customers facing more charges on their cellphone and internet bills.

On Tuesday, CRTC vice-president of consumer, analytics and strategy Scott Hutton called on providers to ensure they clearly inform their customers of charges such as early cancellation fees.

That followed statements from the regulator in recent weeks cautioning against rising international roaming fees and “surprise” price increases being found on their bills.

Hutton said the CRTC plans to launch public consultations in the coming weeks that will focus “on ensuring that information is clear and consistent, making it easier to compare offers and switch services or providers.”

“The CRTC is concerned with recent trends, which suggest that Canadians may not be benefiting from the full protections of our codes,” he said.

“We will continue to monitor developments and will take further action if our codes are not being followed.”

French said any initiative to boost transparency is a step in the right direction.

“I can’t say we are perfect across the board, but what I can say is we are absolutely taking it under consideration and trying to be the best at communicating with our customers,” he said.

“I think everyone looking in the mirror would say there’s room for improvement.”

This report by The Canadian Press was first published Nov. 8, 2024.

Companies in this story: (TSX:T)

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TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:TRP)

The Canadian Press. All rights reserved.

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BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

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BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

The Canadian Press. All rights reserved.

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