Politics, Geopolitics & Conflict
It’s official: Erdogan will remain president of Turkey for five more years after the results of a “free and fair” election, at least if you fail to consider that the candidate who would have had the best chance of beating him, former Istanbul Mayor Ekrem Imamoglu, was taken out of the race back in December when he was charged with “insulting public figures” and sentenced to two years in prison. Imamoglu was very popular and a key reason behind Erdogan’s continual losses in Istanbul's local elections. Instead, the opposition was forced to rally around the far-less popular and far-less energizing Kemal Kilocdaroglu, though the voting was close, regardless. For Washington, Erdogan’s win now is immediately about Sweden’s NATO membership, which the White House appears to expect will be forthcoming now that Erdogan no longer needs this for nationalist election campaigning leverage.
There is still no indication of a target date to turn the pipeline back on that transports oil from northern Iraq to Turkey, leaving some 450,000 bpd in limbo. While Iraq and the Kurdistan Regional Government (KRG) had come to an agreement that would see Kurdistan’s oil marketed by the Iraqi federal SOMO agency, with revenues placed in a bank account controlled by the Kurds, Turkey’s critical elections (Erdogan won) were apparently holding up Ankara’s decision to turn the pipeline back on.…
Politics, Geopolitics & Conflict
It’s official: Erdogan will remain president of Turkey for five more years after the results of a “free and fair” election, at least if you fail to consider that the candidate who would have had the best chance of beating him, former Istanbul Mayor Ekrem Imamoglu, was taken out of the race back in December when he was charged with “insulting public figures” and sentenced to two years in prison. Imamoglu was very popular and a key reason behind Erdogan’s continual losses in Istanbul's local elections. Instead, the opposition was forced to rally around the far-less popular and far-less energizing Kemal Kilocdaroglu, though the voting was close, regardless. For Washington, Erdogan’s win now is immediately about Sweden’s NATO membership, which the White House appears to expect will be forthcoming now that Erdogan no longer needs this for nationalist election campaigning leverage.
There is still no indication of a target date to turn the pipeline back on that transports oil from northern Iraq to Turkey, leaving some 450,000 bpd in limbo. While Iraq and the Kurdistan Regional Government (KRG) had come to an agreement that would see Kurdistan’s oil marketed by the Iraqi federal SOMO agency, with revenues placed in a bank account controlled by the Kurds, Turkey’s critical elections (Erdogan won) were apparently holding up Ankara’s decision to turn the pipeline back on. With elections now over and Erdogan voted in to continue his 20-year rule of the country, there was still no sign as of the time of writing that Turkey was preparing to restart the pipeline. In the meantime, a new spat has erupted between Baghdad and Erbil over the KRG’s share of the federal budget, which is awaiting a final draft after the KRG rules some amendments “unconstitutional”. A key sticking point is still related to SOMO’s marketing of the KRG’s oil and a reduction in the time allowed for Erbil to pay off its debts to the federal government. There is also a dispute over who has the power to authorize withdrawals from the oil revenue account.
Moscow is blaming Kyiv for three consecutive drone attacks on a town on the border with Ukraine, while Putin scrambles to get out in front of the narrative that anti-Russian infiltrators are entering these borders towns with impunity and launching operations–an issue Wagner chief Prigozhin has harshly criticized the Kremlin for. Last week, Wagner mercenaries withdrew from the flashpoint Ukrainian city of Bakhmut and handed operations over to the Russian Defense Ministry, but not without casting dispersions on the Russian army and embarrassing Putin. Prigozhin’s power play now pits him directly against another strongman who is jockeying for position like a true war profiteer – Chechen leader Ramzan Kadyrov, who has reportedly now taken control of the Bakhmut positions (seemingly proving Prigozhin’s point that the Russian army is incapable of holding these positions).
Discovery & Development
A new natural gas discovery in the Mediterranean Sea off the coast of Israel has been announced by the Israel Energy Ministry and Greek-British E&P company Energean. The natural gas field was initially discovered last year, but this week was officially declared a discovery, with an estimated 68 billion cubic meters. The discovery, Katlan, is not as significant as Israel’s earlier ground-breaking discoveries in the Levant Basin, but will still be a significant potential contributor to Israel’s gas supply.
French TotalEnergies and partners (Petrobras, QatarEnergy, Petronas) signed a production sharing contract (PSC) this week for Brazil’s 1300-sq km Agua Marinha block, the license for which was awarded in December. Agua Marinha is located in the pre-salt Campos Basin some 140 km from shore. TotalEnergies will participate in the block with a 30% interest, alongside operator Petrobras (30%), QatarEnergy (20%) and PPBL (20%).
Russian Novatek is reportedly planning to build a new LNG plant in Murmansk that is scheduled to become operational in 2029 (with initial launch in 2027) with a production capacity of 6.8 million tonnes per year with three production lines.
Deals of the Week
Western investors will be forgiven for the confusion as to why Saudi Arabia is still pumping tons of money into California-based Lucid Motors EV producer, despite all the delays and setbacks. While many funds had expected the Saudis to cut and run last year, the Lucid investment is more strategic for the Saudis, and this week it’s gearing up to add billions more in equity. Lucid has announced plans to raise some $3 billion through a stock offering, the majority of which will come from the Saudi sovereign wealth fund (PIF). That news announcement caused Lucid stock to plunge over 16% on Thursday. The cash burn here has been incredible, but that has done nothing to deter the Saudi Crown Prince, with the PIF holding shares worth some $9 billion.
Shell has acquired 12 solar projects in Spain from Isemaren, a renewables developer, with a total capacity of 1.1 gigawatts.
Also keep an eye on Abu Dhabi’s ADNOC, whose Logistics & Services company made its market debut on Thursday, with shares soaring 44.8% above listing price. ADNOC Logistics & Services raised $769 million in its IPO for 19% of shares.
