(MENAFN- ProactiveInvestors) Outlook on the Global Agenda 2015
Thanks to a subscriber for this report from the World Economic Forum which will form the basis of discussions at next year’s event. Here is a section:
What we see today is a pattern of persistent multidimensional competition and the simultaneous weakening of established relationships a trend that trickles down and spills over into multiple sectors and issues. In this fluid amorphous world order we must manage both asymmetric and symmetric challenges together. The changing relationship between world powers has reduced the political energy available for tackling shared problems like climate change and global health not to mention second-order crises. Chaos has festered.
Yet in the face of potential globalization (and indeed de-globalization) rising nationalism and a deepening disbelief in multilateralism the most important lesson from 2014 is that we cannot remain passive. We need more international cooperation not less.
Regional and global intergovernmental organizations will be put to greater tests; meanwhile institutions like the World Economic Forum must continue to create a confluence of private and public actors civil society and academia to impress upon political leaders the importance of collective reflection. Far from improving conditions for its participants the current pattern of geostrategic competition threatens to harm us all.
Eoin Treacy's view
A link to the full report is posted in the Subscriber's Area.
Ballooning revenues from high commodity prices paper over a lot of cracks for energy producers; not least those with kleptocratic or despotic tendencies. Governance is Everything and with lower energy prices pressure will inevitably come to bear on those countries incapable of the reforms needed to spur continued growth in the absence of surging oil revenues.
At the recent OPEC meeting it was Venezuela that pleaded most fervently for a cut to output. Considering that nationalisation of production reduced its capacity to increase supply lower energy prices suggest an additional devaluation of the Bolivar is likely.
Email of the day on oil
Given the current intense concentration on oil I suggest that everyone reads Daniel Yergin's book "The Quest". Yergin is the most interesting long term historian of oil.
Eoin Treacy's view
Thank you for this suggestion.
Audi Plans Electric Crossover for U.S. to Challenge Tesla
This article by Christoph Rauwald for Bloomberg may be of interest to subscribers. Here is a section:
Rauwald for Bloomberg may be of interest to subscribers. Here is a section:
The new model will mark Audi’s first mainstream all- electric vehicle and is part of a push to roll out greener cars.
Next year Audi will introduce a battery-powered variant of the $115900 R8 sports car which will follow the start of deliveries of the plug-in hybrid A3 E-Tron hatchback this year.
“Our engineers are working” on an electric car that will meet U.S. regulations for a zero-emission vehicle Chief Executive Officer Rupert Stadler said to Bloomberg at a meeting in Berlin. “It’s probably going to be a crossover but development work is still ongoing.”
Tesla has emerged as a viable competitor to German auto manufacturers in the luxury-car space. The electric-vehicle maker led by billionaire Elon Musk plans to start deliveries of the Model X sport-utility vehicle in 2015. The brand had the top score in this year’s Consumer Reports owner-satisfaction survey. Audi ranked third after Porsche while Mercedes-Benz was fourth.
Audi the world’s second-largest maker of luxury vehicles expects to sell more than 1.7 million cars this year for the first time. The Volkswagen AG unit aims to surpass No. 1 BMW in sales by the end of the decade and expanding in the U.S. is a key part of that.
Eoin Treacy's view
As the self-professed first US car start-up in almost a century Tesla has a lot to be proud of. However such has been the success of its all-electric luxury sedan that it is attracting copycats which will ultimately represent competition. The success of Tesla’s gigafactory in producing cheaper battery packs will likely be integral to its success in competing with well capitalised rivals.
Bloated with Gas
Thanks to a subscriber for this contemplative report from Deutsche Bank examining the LNG sector and its potential for growth. Here is a section:
There is a positive: capex likely much reduced trading volumes enhanced
Today c15-20% of major IOC capex is on LNG developments. We think much will be deferred in 2015/beyond potentially a material $10bn plus curb on near term IOC capex. For those with trading businesses ( & BG) greater access to US volumes gives an attractive low capital source of annuity cash flow.
Other industries
For Europe by 2022 70bcm (15% of supply) could come from the US potentially cutting Russian dominance of Europe markets (to 22% from 33% now) unless significant ground is ceded on price. For European Oil & Gas E&C companies the shift in build to the US represents another nail in their coffin. Euro utility Falling spot gas helps affordability but curbs UK power margin.
Why bother writing this report
LNG matters to the IOCs: long-lived low maintenance it grows towards 20% of operating cash flows by 2020. With the downstream pressured this shift has been central to the rebuild of cash cycles at Shell Total Chevron and Exxon. Relative winner . A price disrupter and less dependent on Asia is long US gas and short European a positive given the likely trade flows.
Eoin Treacy's view
A link to the full report is posted in the Subscriber's Area.
A number of the international oil companies (IOCs) have been producing more gas than oil for a number of years which is why they report reserves on an energy parity basis. Chief among these are and . There is no doubt that the US has the gas necessary to supply a substantial portion of the global LNG market but it is questionable at what price this can be achieved and whether today’s wide arbitrage will be sustained once US gas starts to be exported.
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