Andrew Smith

With a looming deadline of May 22nd, the pressure is on for BHP to raise its offer from the recently proposed US$42.7 billion. Although BHP increased the initial offer by US$2 billion, Anglo American has rejected it, claiming that it undervalues their company and places execution risk on Anglo American shareholders. In our updated report, we provide a detailed analysis on the potential combination of BHP and Anglo American, including valuations and strategic rationale. Read it here: https://okt.to/mRMGY7

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This is a good one for those in or out of the energy business. Such a pivotal issue for future energy supply.

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Thanks for having me on the show, James Cater and Jonathan Hackett and Global Partners LP! I encourage you all to listen. Not only will you learn more about me and my work, but what I think the biggest challenges and opportunities are when it comes to #transport #energy #decarbonization, what policies might be most effective (hint: #LCFS) and some good advice. Plus, where else will you hear a reference to Chevron and Dr. Suess in the same place! 😂 #energy, #energytransition, #sustainability, #climatechange

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Today Enbridge issued our 23rd Sustainability Report through which we update stakeholders on our progress against the sustainability goals we set in 2020 and the work remaining. We also outline the actions we're taking to deliver reliable, affordable energy to as many people as possible sustainably. Across the company our teams are advancing an integrated, sustainable business strategy focused on advancing the best possible solutions for a broad set of stakeholders.  2023 performance highlights include: 🌟37% reduction in GHG emissions intensity; 20% reduction in absolute GHG emissions from 2018 baseline 🌟 40% reduction in methane emissions from natural gas operations over the same period 🌟Expanded categories of Scope 3 emissions reporting and enhanced transparency 🌟 Updated analysis of Enbridge’s business under different climate-related scenarios (TCFD) 🌟 16% reduction in work-related injuries and safety incidents among employees and contractors 🌟 Advanced Indigenous reconciliation - meeting 10 of 22 goals set out in our Indigenous Reconciliation Action plan, reached $2 billion in Indigenous procurement and labor spending; committed to an additional $1 billion in cumulative Indigenous spending by 2030 🌟 Increased workforce representation of underrepresented ethnic and racial groups, U.S. veterans, women, Indigenous peoples and persons with disabilities 🌟 Exceeded Board of Directors diversity goals, with 50% representation from underrepresented racial and ethnic groups and 50% women Tomorrow is On! https://lnkd.in/eK2_b_UZ

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The world cannot decarbonise without copper. The scale of the investment required in new mine supply is well understood. But the implications for downstream processing and semi-manufacturing are often overlooked. And China dominates both these sectors.   On this month’s Horizons Live on Wednesday 28th August, our panel looks at what it would take to diversify copper supply from China – and why de-risking supply chains may be more about compromise than a complete decoupling.  Register now. https://okt.to/ilhUb1

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I am presenting this week at the APAC Conference in Singapore on “The need for continuing conventional petroleum exploration, (even in a carbon constrained world); An example from a developing nation, Papua New Guinea” The talk focusses on why developing countries such as PNG still need to develop their resource sector to not only provide national income, but also to alleviate energy poverty. Lack of investment in this sector driven by a western world view of the energy transition is damaging the development of many nations. Additionally, we all need to focus on getting the economic split correct; resource projects need to equitably share benefits. Papua New Guinea has many large resource projects that have not moved forward as a result of local concerns at how the revenues are split. Some of this is real, and some of this is a result of a lack of communication and understanding, but the bottom line is, we all need to do better to get the balance right and to improve the livelihoods of local people in developing nations. Large investments in resource projects are a good way to do this. It is also clear that resource projects also need to focus on minimising carbon footprints. The second focus of the talk is about Larus Energy and how this small exploration company with one offshore block in the Gulf of Papua, last year became the most active explorer in Papua New Guinea. Capital was raised from the private sector in PNG and in Australia and a 3D seismic vessel was contracted to acquire the 1855 km2 3D seismic survey. The data has now been processed and is of excellent quality showing a deep-water Miocene fold belt with a series of giant structures with large turbidite/contourite sand bodies and some exciting direct hydrocarbon indicators. The plan is to test this as yet undrilled part of the basin in 2025 which if successful could be a game changer for Papua New Guinea.

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"To network or not to network..." I love networking, because it broadens my horizon, keeps me up-to-date and I just like to exchange ideas with people and hear their experiences, perspectives and opinions. However, in the aftermath of the #Uniper Diversity Day on the topic of "social background" and Fatima Hussain, LL.M.'s inspiring speech, I once again asked myself to what extent networks are also "obstructionists". Networks are often not only sources of inspiration and exchange, but also of power and influence. If you have a good network, it is easier to get information, resources and opportunities that will help you privately or professionally. But not everyone has the same access to networks. For people from socially disadvantaged backgrounds or people with a migration background, for example, a firmly established, influential network of like-minded people can often become an obstacle, because it is much more difficult for them to get access or "belong". That's why it's important that we don't just use our networks for ourselves, but diversify them. This not only helps those affected, but also ourselves and our organizations, because it can contribute to: 💡 overcoming prejudices and stereotypes 📍 promoting empathy and understanding 🗝 strengthening our social responsibility by advocating for the interests of others, opening up opportunities for them and involving them ✔ and last but not least: to benefitting from diversity by learning from the different skills, ideas and solutions that people from different social groups can contribute. Therefore let us all contribute to making networks even more diverse and accessible!

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For more than a century bp has been investing in the UK and the bp UK 2023 Economic Impact Report published today shows we continue to ‘back Britain’ delivering economic benefits across the country. Oxford Economics estimates in 2023 bp: ·      contributed £17.1 billion gross value add to UK GDP ·      spent £5.3 billion with UK suppliers ·      supported 81,000 direct and indirect jobs – that’s 1 in every 410 UK jobs These are numbers we can be really proud of. But for me the real pride is seeing how working with bp has helped UK supply chain companies flourish - growing their workforce, developing new technologies and expanding internationally. And how we have helped communities – donating more than £16 million last year to charities helping the most vulnerable through the cost-of-living crisis, and investing in projects that aim to enhance education, employability and biodiversity. The report underlines that we can deliver for the economy and for communities, while transitioning from an international oil company to an integrated energy company. These economic benefits were generated by our established North Sea oil and gas business, our UK-wide retail and EV charging network, and by progressing plans for potential projects in offshore wind, hydrogen and carbon capture and storage. I’d like to thank all our staff, suppliers and community partners who feature in this year’s report for their work with bp. Read more here bp.com/uk/eir  

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Interesting developments

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Great insight from my colleague David Brown on the importance of the US election result for the energy transition. A pivotal moment for the US #energytransition lies ahead. The results of the election could see investment in the energy and natural resources sectors play out in very different ways. Read this month’s #WMHorizons insight as we set out a delayed transition scenario for the US: https://okt.to/ugFfbL

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In a recent peer-reviewed article, Professor Robert Howarth of Cornell University concluded that "Overall, the greenhouse gas footprint for LNG as a fuel source is 33% greater than for coal when analyzed using GWP20, (160 g CO2-eqivalent/MJ vs 120 g CO2-eqivalent/MJ). Even considered on the time frame of 100 years after emission (GWP100), which severely understates the climatic damage of methane, the LNG footprint equals or exceeds that of coal". https://lnkd.in/dPBhbCZt Ireland currently takes roughly 20% of its natural gas supply from the Corrib gas field, and 80% from the UK Gas grid. In 2022 (the most recent year published) the UK gas supply was 27% from LNG, the majority of that from US LNG. No doubt the level of LNG in UK gas supply is even higher now. So Ireland already uses more imported LNG than domestic gas supply (27% 0f 80% is 21.6%) in its energy mix. Independent scientific research carried out by consultants Sustain:able shows that the average carbon intensity of imported LNG from the UK to Ireland was 78 kgCO2/boe. The same study showed that a new Corrib-like find would have an average carbon intensity of less than 4 kgCO2/boe, i.e. around 5% of that of imported LNG. Perhaps the most useful thing the Goverment could do with its €13 billion windfall would be to explore for new, low emissions domestic gas near Corrib? It would be a lot more sensible that continuing to rely on importing highly carbon intensive LNG from the UK, as we currently do.

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Now that the dust has settled following today’s OPEC+ meeting, a few thoughts. As expected, the group extended the 2.2 Mb/d of voluntary cuts that had been slated to expire June 30th. But the group also published a plan to (very gradually) ease those cuts each month from October to September 2025 – IF market conditions permit. Part of that easing is the gradual removal of the unilateral Saudi cut of 1 Mb/d (the famous “lollipop” from Saudi Minister Prince Abdulaziz bin Salman), returning the Kingdom’s burden to something more proportional to its production share. Additionally, the UAE, which has significantly increased its production capacity in recent years, won another increase in its base production level. This won’t increase the 3Q production target, but will begin to be reflected in a bigger share of the gradual easing planned for 4Q and beyond. Next, Prince Abdulaziz offered a rhetorical change in describing the group’s risk management approach. His mantra has long been that the group would be “proactive”. I've noted before, in practice this meant "proactive" regarding downside risks. 🙂 Today he outlined just such an asymmetric risk mgmt approach: “We will maintain our precautious and preemptive approach.” That is, preemptive in managing against potential downside risks and precautionary in waiting to see bullish indicators before easing production restraint. Finally, the group extended other cuts throughout 2025 (a combination of “collective” and voluntary cuts of nearly 3.7 Mb/d, which had been in effect through end-2024). Some of these cuts have been in effect since 2022: "Temporary" cuts are becoming uncomfortably long-lived! The longer these cuts remain in place, the greater the risks – both for compliance within the group AND for OPEC+ frustration with losing market share to other producers. Learn more about the Baker Institute Center for Energy Studies (CES) and related fields of work here: https://lnkd.in/ed9sH3Cn

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Does oil and gas exploration still have a role to play in the energy transition? This month’s #WMHorizons report is a deep dive into the role of selective, high-impact exploration in the energy transition – and the potential for low-cost, lower-emission barrels to create value and cut carbon by displacing disadvantaged alternatives.   Read the full insight here: https://okt.to/fBCxsL

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I’m excited to share a new journal article co-authored with my RMI colleague TJ Conway and led by Resources for the Future’s Brian Prest and Harrison Fell from NCSU. The article, published in Elsevier #EnergyEconomics, explores the greenhouse gas emissions benefits of early oil well retirement as a supply-side emissions intervention for the #FossilFuel industry. COP29 Azerbaijan is being held later this fall in one of the oldest oil producing places on Earth. In 1900, 50% of the worlds oil was produced here! Thus, focusing emissions reduction on old, climate-intensive oil and gas assets is a high priority for global climate action. Here are my key takeaways: 👉Supply-side interventions that retire highly emitting fossil fuel assets have received increased attention from policymakers and private actors alike 👉Market leakage — even if reduced supply from one source is partially offset by increased production from other sources — it still makes sense to retire the most emissions intensive assets to reduce GHGs 👉Climate benefits — emissions reductions associated with early retirement are about 40–50% of each barrel's life-cycle emissions. Let’s retire the dirtiest #OilandGas assets now! Use my free link to access the article: https://lnkd.in/dJEi_Syq ⭐️Climate TRACE ⭐️Watson Institute for International and Public Affairs For background information on global oil and gas emissions intensity estimates see: https://ociplus.rmi.org

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Is the transition to a more circular economy stuck in a loop? In this month’s #WMHorizons report, we look at barriers to progress – not least challenging economics – and draw on case studies from electronics, plastics and biofuels to see what can be learned from those leading the charge. https://okt.to/3A5diX

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Are you facing the daunting task of transitioning large-scale assets? Learn how our experienced consultant helped bp successfully divest its Bruce, Keith, and Rhum assets to Serica Energy plc. The divestment was definitely large-scale: 3 bridge linked platforms were sold, 110 staff were transferred, and the asset value was $400m. The transition was completed within the planned timescale of 11 months. Want to learn more about how Matrixx Solutions can help you navigate your next M&A transition? Contact us at [email protected] to discuss your unique challenges. #M&A #TransitionManagement #BusinessTransformation #CaseStudy #Businessconsultancy https://lnkd.in/eYyT4JH8

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Hustings - engage to be engaged? Ok. We are a small trade association, but I want us to be confident with our voice and to proactively engage politicans in regards to decommissioning and its role in decarbonisation and the energy transition. As such, we are slowly increasing our engagement work, otherwise known as lobbying. With a UK election on at present my ears are particularly focussed on debate regarding energy. I, like many others in the energy sector, find the absence of sound, pragmatic energy policy somewhat frustrating. Climate, economy and energy are intertwined and the impacts of policy decisions in this space relate to investment, employment, environmental protection and resource use. It’s hugely complicated. And so, good on Aberdeen & Grampian Chamber of Commerce for organising a hustings today with local candidates in Aberdeen City and Aberdeenshire. It’s not appropriate to offer a view on who is right and who is wrong (especially as I don’t believe any one party truly understands the complexities within this topic) but I will say that being engaged is really important. Only by asking questions or listening to the policies being offered can we hope to influence policy and outcome. In other words. Please remember to vote, it’s important to be part of the process.

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Thank you Alix Steel, for leading a discussion with myself and Jeff Gustavson about the energy transition and BloombergNEF for convening a group of people passionate about how business, finance and policy communities can work together faster and more efficiently to meet decarbonisation goals.   As we move away from talking about ‘why’ we need an energy transition to ‘how’ we’re enabling it, there are three key takeaways from this summit that I’d like to share with you:   1. The current energy system is large, integrated and built over many years. We need to ensure we maintain the benefits we rely on today, while developing lower-carbon solutions for the future – and the emerging low carbon energy system needs to be designed with scale in mind. 2. New technologies in fuels and supply chains can accelerate progress, and over time lower the carbon intensity of the products we use. Ambitious and innovative collaborations hold the key to unlocking the solutions at scale that we need. 3. Decarbonising planes, ships and large trucks requires government action to support the supply of low carbon solutions and to stimulate emerging demand. Watch our conversation here: https://lnkd.in/gVTyc7cK   My team and I at Shell Low Carbon Solutions will focus where our expertise lies: in fuels, energy markets and where we see strong policy incentives.   #BNEFSummit #EnergyTransition #AcceleratetoZero  

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