Africa to be badly affected: Petrostates must prepare for $9 trillion revenue shock: report – My Comments
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S.Africa: Animal sex: Black man arrested, goat dies
The Goats were screaming! Villagers at Ga-Ratisi in the Northern Province holding an all-night vigil arrested a naked man early on Sunday morning, who is believed to have committed bestiality with a goat which later died.
[I am not fully sure whether the demand for oil will drop the way they predict. I think that world affairs might become weird and that these predictions might not happen. But if they happen, even partly, it can be bad for Black Africa. As it is, Black Africa has peaked and the only path now is downhill. I believe we've seen the peak of Black power in Africa. Jan]
Oil and gas revenues in the world’s 40 major petrostates could plunge by $9 trillion — or 46% — over the next two decades as commodity prices fall in the energy transition, according to a report published today by the Carbon Tracker Initiative (CTI) think tank.
The report’s findings came just weeks after a former West Africa analyst at the US Central Intelligence Agency (CIA) expressed grave concerns about the future of fossil fuel producers, such as Nigeria, that are not facing the transition head-on.
UK-based non-profit CTI called on governments of oil and gas producer nations to establish “decisive and forward-looking policies” to diversify their economies, with the help of the international community, to mitigate the adverse consequences of this revenue shortfall.
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“There is a fundamental shift under way as the global economy begins to decarbonise; populations that are heavily reliant on fossil-fuel production face lower government revenues and job losses as the pace and inevitability of the energy transition increases," the report said.
African nations particularly vulnerable
The 54-page report, Beyond Petrostates, further estimated that the cumulative total revenue loss for all hydrocarbon producing countries by 2040 could hit $13 trillion, or 51%.
CTI identified 19 nations — mainly in Africa — with a combined population of 400 million as being highly vulnerable to the predicted plunge in hydrocarbon revenues.
In these nations, “declining fossil fuel revenues could see total government income fall by at least 20%, leading to cuts in public services and job losses", the report warned.
CTI highlighted that half of this highly vulnerable population live in Nigeria, where a 70% drop in oil revenues would cut total government income by a third, adding that fellow Opec member Angola, home to 33 million people, could lose over 40% of government income.
‘The time to act is now’
Mike Coffin, senior analyst at CTI and a former BP geologist, said: “It’s in the interests of all nations to minimise global temperature rise and this means rapidly reducing our use of fossil fuels.
"But many countries are heavily reliant on oil revenues — the time to act on rebalancing their economies is now. Waiting for demand to fall will be leaving it far too late.”
CTI’s head of climate, energy and industry, Andrew Grant, added: “Government oil revenues will shift dramatically as the market shakes out during the energy transition.
“Understanding the scale of the challenge and which nations are most vulnerable will help policymakers focus their efforts (while) cushioning the landing for hundreds of millions will deliver better outcomes for both climate and human development.”
Stranded assets risk
The report’s authors call on petrostates to act now “by cutting public spending, raising new taxes and restructuring their economies”, warning that continuing to invest in upstream projects risks creating stranded assets and wasting capital that would be “better spent on developing sustainable new industries".
To minimise losses, CTI argues for an orderly winddown of hydrocarbon production with supplies falling in line with demand.
“If (petrostates) go it alone and seek to monetise their existing reserves while they can, oversupply is likely to destroy value for all, with falling prices quickly outweighing the benefit of increased production.”
Many petrostates are adopting measures to help bridge the expected hole in their finances, said CTI, highlighting several Middle Eastern countries that have introduced value-added taxes and how Nigeria, Angola and Iran have reduced subsidies.
Nevertheless, the think tank pointed out that “the scale of the challenge is huge and the pace of transition (is) accelerating".
Middle East producers best placed
The report’s findings echo the views of other energy market commentators.
Helima Croft, a former CIA analyst but now managing director of RBC Capital Markets, said last month that Persian Gulf nations are “best placed for an energy transition” because they are diversifying their economies and because “they have the greenest, cheapest barrels they will have the biggest share of a shrinking (oil and gas demand) pot".
However, she said some countries “are really going to struggle” because they are not preparing for the transition, while others are readying the groundwork set to become major electro-states, or electricity exporters.
Concern for ‘the left behinds’
“What happens to those countries who don’t prepare for the transition? What security issues are posed by petrostates that are insolvent and unable to pay their military and for public services?
"I deeply worry about the ‘left behinds’ in an energy transition,” she said during an Atlantic Council event.
CTI said the international community can help the most vulnerable countries by, for example, supporting the development of new technologies, offering technical assistance for regulatory and tax reform, and providing capital.
The report notes it is in the international community’s interest to help petrostates successfully navigate the energy transition because it will make it easier to meet global climate targets, and also avoid instability and social unrest.
It estimates that Angola, Azerbaijan, Bahrain, Timor-Leste, Equatorial Guinea, Oman and South Sudan are the countries that could lose at least 40% of total government revenues.
Nigeria, Algeria, Saudi Arabia, Kuwait, Libya, Gabon and Iraq are among 12 nations that see revenues drop by 20% to 40%, while Iran, Mexico, Russia and Sudan are among 10 countries that could lose 10% to 20% of revenues.
Norway and Malaysia are less vulnerable, but they could still lose 5% to 10% of government revenues, states the report.
Low production costs will ensure the Middle East and North Africa are some of the least affected regions, although revenues are still forecast to decline by 40%.
CTI also identified six emerging petrostates — Uganda, Ghana, Senegal, Mozambique, Mauritania and Guyana — whose revenues could fall far short of expectations, calculating that Uganda’s expected revenues “fail to materialise entirely".
The report’s estimates are based on limiting the global temperature rise to 1.65 degrees Celsius — the International Energy Agency’s (IEA) ‘sustainable development scenario’ — and a long term Brent oil price of $40 per barrel, compared to the IEA’s ‘stated policies scenario’ and an oil price of $60.
What Jews say: Why ALL Whites must DIE! The INTENSE Jewish HATRED of the White Race
Here are various quotes from Jews showing their intense hatred of Whites everywhere. Take special note of Jewish academics like Susan Sontag and Professor Ignatiev and what they say about our race. There are lots of quotes from many famous Jews about the need to destroy the European people.