Good News for #Egypt's #Energy Sector #MasterEnergy @Stratfor

Italian oil firm #Eni's Aug. 30 announcement that it has discovered the largest known natural gas deposit in the Mediterranean in Egyptian waters means Egypt could re-establish its energy independence with natural gas supplies, ending several challenging years for the country's energy sector.

Good News for Egypt's Energy Sector

For most of the past decade, international energy producers have been able to earn only $2.50 to $2.65 per mmbtu for the natural gas that they sold to EGAS, the Egyptian domestic natural gas company. This pales in comparison to most global natural gas prices, which at times have exceeded $15 per mmbtu. (Under the terms of the deals by which international oil companies operate in Egypt, Cairo can force them to sell at below-market rates.) Making matters worse, Cairo has struggled to pay international oil companies. By late 2013, Egypt owed energy firms an estimated $6 billion to $7 billion, prompting the firms to hold off on numerous exploration projects. Reduced investment resulted in lower Egyptian production as older fields and wells saw production declines. Between 2012 and 2014 alone, Egyptian production fell from 61 billion cubic meters to 49 bcm.

After his 2014 re-election, President Abdel Fattah al-Sisi carried out reforms in the energy sector, including reducing energy subsidies that had accounted for 25 percent of the government's budget. It allowed Cairo to begin repaying foreign oil companies, lowering its outstanding debt from more than $6 billion in late 2013 to $3.5 billion at the end of June 2015.

Read the rest of the article online on Stratfor here: https://www.stratfor.com/image/good-news-egypts-energy-sector?login=1

Interesting top line analysis from Stratfor on the balance between energy development and conservation on the heels of Obama's visit to Alaska this week.

Alaska Exemplifies the Climate Change Debate

U.S. President Barack Obama headed to Alaska today for a three-day trip to speak at a conference on climate change organized by the United States. That climate change is the main agenda item at the conference highlights the tension that Alaska — and the rest of the world — faces between the production and consumption of energy and its environmental impact.

Obama's trip to Alaska tops off a month during which his administration introduced several environmental regulations. On Aug. 3, the president unveiled a new set of regulations to fast-track reductions in carbon emissions from power plants and to give U.S. states slightly more than a year to propose their plans. Later in the month, Obama announced new plans to increase renewable energy access and energy efficiency for U.S. households.

The U.S. moves to implement programs to combat climate change are part of preparations for the 2015 U.N. Climate Change Conference, to be held Nov. 30-Dec. 11 in Paris. There, the international community intends to sign binding pacts designed to fight climate change. Ahead of the summit, countries are finalizing their pledges. The United States has set a target to reduce greenhouse gas emissions by 26-28 percent below 2005 levels by 2025. China is aiming to cut emissions per unit of gross domestic product by 60-65 percent below 2005 levels by 2030.

The Paris climate summit may bring up the most comprehensive international agreement to combat climate change since the Kyoto Protocol. The extent and success of the pact, however, will face the same constraints. Developing countries like China, India and Argentina will require more energy as they continue to develop over the next couple of decades, and their emission levels will increase in tandem. For poor or developing countries, "dirty" energy like coal remains the cheapest source of energy; more expensive sources are detrimental to their development. The conflict between core interests and requirements to reduce energy consumption and/or use more expensive renewable energy is also an issue for businesses, especially in the developed world.

Alaska is perhaps the place where these conflicting interests are most apparent. The Obama administration allowed Shell to begin drilling in the Arctic Sea this summer, and some of Alaska's most prominent politicians have been steadfast supporters of the oil and natural gas industry. Sen. Lisa Murkowski has been a vocal proponent of approving the Keystone XL pipeline, crude oil exports and more favorable terms for oil companies looking to explore the Arctic. And of course, 2008 vice presidential candidate and former Alaskan Gov. Sarah Palin became known for the slogan, "Drill, Baby, Drill."

This should come as no surprise. The oil and natural gas industry is the source of more than 80 percent of Alaska's state taxes. The Alaskan economy is built on the production and sale of natural resources, among which energy resources are the most important and valuable.

However, climate change will continue to challenge Alaska as well. The Arctic region is an important part of the Earth's climate system. Melting polar ice caps and increasing freshwater runoff would affect ocean circulation and the freshwater intake of the Arctic Ocean. Snow, vegetation and ice also play a role in reflecting light and radiation from the sun.

However, each of those processes is long term. The Arctic polar ice cap's average extent may be melting over time, but its impact will be gradual — decades, perhaps generations long — which means the issue will not suddenly become more urgent for companies and voters. It is unlikely that an event will occur that can be clearly or immediately connected to climate change and that will cause politicians or companies to suddenly enact radical measures that go against their core interests. Drastic oil, natural gas and energy regulations have been passed, but typically only in response to a disaster like the 1989 Exxon Valdez oil spill in Alaska or the 2010 Deepwater Horizon oil spill in the Gulf of Mexico. Developing countries have even more constraints than their developed counterparts in introducing proactive measures.

The world's industrial development has one crucial input: energy. That is unlikely to change anytime soon. Moreover, during the last century, energy supplies have become one of the world's most important resources in geopolitics because of their indispensable role in industry. Most alternative energy sources remain more expensive — quite significantly, in some cases — than their traditional hydrocarbon-based sources, making the economic pain of switching enormous. This will not always be the case: Breakthroughs are occurring already in alternative energy sources and energy storage that could cause them to reach cost equivalence with other sources in the not too distant future. Once that happens, a comprehensive plan of action to fight climate change will become more appealing.

For now, though, the consequences of overhauling a country's energy demand are enormous and politically charged. Obama is using his Alaska visit to promote his climate change action plan, but Alaska is caught between immense benefits from energy production and some of the most serious consequences of energy use.



Read the article online at Stratfor here: https://www.stratfor.com/geopolitical-diary/alaska-exemplifies-climate-change-debate

Share

-- The MasterFeeds

Monday was murderous for miners @Mineweb #MiningStocks

Picking through the wreckage

HALIFAX – To set the scene briefly: Monday was murderous for miners. A rout in Asia and renewed bearishness regarding China’s slowing economy served as a double whammy, especially in bulks and base metals. Spot copper flirted with $2.20/lb and there were eye-popping sell-offs in the world’s biggest miners on all the world’s major exchanges. The sell-off spared no major category: diversified, base metal miner, gold miner – all were slaughtered. Indeed, it didn’t matter what the metal price did on the day.

Taking a look at the 100 worst performances of miners (excluding microcaps) on the NSYE, LSE, TSX and ASX on Monday confirms the view. The top ten of the losers on Monday were a broad slice of the mining sector. Glencore – a diversified miner – was down 13%, putting in the worst performance among the largest miners. Gabriel Resources – a gold developer sitting on the controversial Rosia Montana project in Romania – was down 15%. First Quantum Minerals, the copper miner, had a 13% loss. A slew of gold and silver miners were among the worst losers: McEwen Mining (down 14%), GoGold (14%), Kinross Gold (13%), Centerra Gold down (12%) and Coeur d’Alene Mines (11%).

And this “100 worst” list was not top heavy. The median loser on it – just to give a sense of the distribution here – was down 7.8%. The average was down 8%. The range was -4.3% to -16.4% encompassing all the big names like BHP, Rio, Cameco, Barrick, Goldcorp. So yes, it was a very bad day.

Interesting too, as the sell-off was agnostic. It punished pretty well any kind of miner regardless of what they mined, where they mined, or who they primarily sold their products too. (Fertilizer miners were notably absent.) The sellers were not interested in the fact that the miners have had an awful few years and now trade at, in many cases, near or at historic lows.

The conspicuous presence of the gold miners was perhaps most notable. For on the day, gold held steady, more or less, and this after a string of gains that has brought at least a smidgen of optimism back to the sector. But the gold companies withered along with the rest anyway. Indeed, they posted among the worst performances – strange, perhaps, given that the sell-off in miners was ostensibly due, in part, to an emerging bearishness on China and largely, a slowdown, in its need for mostly industrial metals like copper. Hence copper flirting with $2.20/lb from closer to $2.30/lb within the day, building on a multi-year decline.

In this respect – for the gold companies – you can reasonably wonder if a rebound is inevitable, at least in the short term. Otherwise put, was there really a good reason to hit down the likes of Barrick or Goldcorp 9% (and you could likely insert any number of other gold mining names here)? If not quite right on the day, Kerry Smith, over at Haywood Securities, was thinking that way. In an email to Mineweb he wrote, “Initially the reaction by everyone is just sell everything, especially when you get the Dow down 1 000 points. But after a bit, the smarter ones look at the metal price (up) and start to buy gold stocks. I expect gold shares generally will be up today.” The rebound was largely absent Monday – so maybe Tuesday?

Indeed, the same argument might be deployed for other metals where the storyline of the day – China’s market meltdown, China’s slowing industrial economy – doesn’t have an obvious direct or heavily bearish effect. Uranium comes to mind. The top 100 losing miners on Monday included many a uranium name, from developer to miner. Yet it’s hard to argue that any news recently from China negates a growth story, ultimately, of reactors and demand for uranium oxide to, the hope is, tip the balance in favour of the miners. Cameco, the top uranium miner, was down 5%; Paladin, another miner, was down 8%; and NexGen, a leading junior, was down 9%, for some examples.

It will be tempting to take this view more broadly of course and include the big guns like BHP, Rio, Teck, and so on, the many other names among the withering base and bulk miners on Monday. If there is a rebound it may be longer in the coming, however. You wonder, with the fall of base metals still in process and some of the negative views growing on China, if the market will be less willing to flock back to them.

Sure – it seems to me – there’s been over zealous selling of names that otherwise might jump back for strong cash flows. That as always will be hard to ignore. Ray Goldie noted over the phone that surely the market went too far among the base metal miners Monday. Indeed, he noted that recently China imports of copper and other metals ticked up (June over July), suggesting healthy or at least not falling copper demand. Still, back over at Haywood, Smith advised staying out of the way of base metal miners. Was there overreaction on the market? Smith answers, “Nope – copper going to $2/lb I think… so stocks still a bit expensive.”

	Company	Ticker	Change (Aug. 24)
1	Aureus Mining Inc	AUE.TO	-16.4%
2	Gabriel Resources, Ltd.	GBU.TO	-14.6%
3	Mcewen Mining Inc	MUX.TO	-13.9%
4	Gogold Resources Inc.	GGD.TO	-13.6%
5	Glencore Xstrata Plc	GLEN.L	-13.0%
6	First Quantum Minerals Ltd.	FQM.L	-12.7%
7	Kinross Gold Corporation	KGC	-12.6%
8	Centerra Gold Inc.	CG.TO	-11.9%
9	Peabody Energy Corp.	BTU	-11.8%
10	Coeur d`Alene Mines Corp.	CDE	-10.8%
11	ST Barbara Ltd.	SBM.AX	-10.8%
12	Yanzhou Coal Mining Co. Ltd.	YZC	-10.6%
13	IAMGOLD Corp.	IMG.TO	-10.5%
14	Yamana Gold, Inc.	YRI.TO	-10.3%
15	Denison Mines Corp.	DNN	-10.2%
16	Dominion Diamond Corporation	DDC	-10.1%
17	Gold Fields Ltd.	GFI	-10.1%
18	Endeavour Silver Corp.	EDR.TO	-10.0%
19	Anglo American plc	AAL.L	-9.9%
20	Compania de Minas Buenaventura SA	BVN	-9.8%
21	Endeavour Mining Corporation	EDV.TO	-9.7%
22	Sibanye Gold Limited American D	SBGL	-9.6%
23	New Gold, Inc.	NGD	-9.5%
24	Freeport-McMoRan Copper & Gold Inc.	FCX	-9.4%
25	Fortuna Silver Mines Inc.	FVI.TO	-9.3%
26	Hecla Mining Co.	HL	-9.3%
27	Whitehaven Coal Limited	WHC.AX	-9.3%
28	BHP Billiton plc	BLT.L	-9.2%
29	Nexgen Energy Ltd	NXE.V	-9.2%
30	Torex Gold Resources Inc	TXG.TO	-9.2%
31	Barrick Gold Corporation	ABX.TO	-9.0%
32	Harmony Gold Mining Co. Ltd.	HMY	-9.0%
33	Lundin Mining Corporation	LUN.TO	-9.0%
34	Timmins Gold Corp	TMM.TO	-9.0%
35	Kazakhmys PLC	KAZ.L	-8.9%
36	Tahoe Resources Inc.	THO.TO	-8.8%
37	Goldcorp Inc.	GG	-8.7%
38	Capstone Mining Corp.	CS.TO	-8.6%
39	Syrah Resources Limited	SYR.AX	-8.5%
40	TNG Limited	TNG.AX	-8.5%
41	Metals X Limited	MLX.AX	-8.3%
42	Pan American Silver Corp.	PAA.TO	-8.1%
43	Silver Wheaton Corp.	SLW.TO	-8.1%
44	China Gold International Resources Corp Ltd	CGG.TO	-8.0%
45	Eldorado Gold Corp.	ELD.TO	-8.0%
46	HudBay Minerals, Inc.	HBM.TO	-8.0%
47	Nautilus Minerals Inc.	NUS.TO	-7.9%
48	Paladin Energy Ltd	PDN.AX	-7.9%
49	Perseus Mining Limited	PRU.AX	-7.9%
50	Primero Mining Corp.	PPP	-7.9%
51	Alamos Gold Inc.	AGI.TO	-7.7%
52	B2Gold Corp.	BTO.TO	-7.7%
53	First Majestic Silver Corp.	FR.TO	-7.7%
54	Independence Group NL	IGO.AX	-7.6%
55	Teck Resources Limited	TCK-B.TO	-7.5%
56	NovaGold Resources Inc.	NG.TO	-7.4%
57	PH&N US Multi-Style All-Cap Equity Sr C	P.TO	-7.4%
58	Sirius Resources NL	SIR.AX	-7.4%
59	Royal Gold, Inc.	RGL.TO	-7.3%
60	Energy Fuels Inc.	EFR.TO	-7.2%
61	Ivanhoe Mines Ltd	IVN.TO	-7.1%
62	Asanko Gold Inc.	AKG.TO	-7.0%
63	OceanaGold Corporation	OGC.TO	-7.0%
64	Resolute Mining Limited	RSG.AX	-7.0%
65	Newmont Mining Corp.	NEM	-6.9%
66	Rio Tinto PLC	RIO.L	-6.9%
67	Romarco Minerals Inc.	R.TO	-6.9%
68	CONSOL Energy Inc.	CNX	-6.8%
69	Imperial Metals Corp.	III.TO	-6.8%
70	Suncoke Energy Partners L.P.	SXCP	-6.8%
71	Western Areas NL	WSA.AX	-6.8%
72	Gem Diamonds Limited	GEMD.L	-6.3%
73	SEMAFO Inc.	SMF.TO	-6.2%
74	Silver Standard Resources Inc.	SSO.TO	-6.2%
75	Hochschild Mining PLC	HOC.L	-6.1%
76	Mineral Resources Ltd	MIN.AX	-6.0%
77	OZ Minerals Limited	OZL.AX	-6.0%
78	Katanga Mining Ltd.	KAT.TO	-5.9%
79	Petropavlovsk PLC	POG.L	-5.9%
80	Asanko Gold Inc	AKG	-5.8%
81	Dundee Precious Metals Inc.	DPM.TO	-5.7%
82	Aquarius Platinum Limited	AQP.AX	-5.6%
83	Natural Resource Partners LP	NRP	-5.6%
84	Richmont Mines Inc.	RIC.TO	-5.6%
85	Fresnillo PLC	FRES.L	-5.5%
86	Altius Minerals Corp.	ALS.TO	-5.4%
87	Cameco Corp.	CCO.TO	-5.4%
88	Seabridge Gold, Inc.	SEA.TO	-5.4%
89	Antofagasta PLC	ANTO.L	-5.3%
90	Gold Road Resources Limited	GOR.AX	-5.3%
91	Franco-Nevada Corporation	FNV.TO	-5.2%
92	Iluka Resources Ltd.	ILU.AX	-5.2%
93	Lake Shore Gold Corp.	LSG.TO	-5.2%
94	New Hope Corporation Limited	NHC.AX	-5.2%
95	Rubicon Minerals Corporation	RMX.TO	-5.1%
96	Agnico-Eagle Mines Ltd.	AEM.TO	-5.0%
97	Pretium Resources Inc.	PVG.TO	-4.6%
98	Centamin PLC	CEE.TO	-4.6%
99	Alacer Gold Corp	ASR.TO	-4.3%
100	Turquoise Hill Resources Ltd.	TRQ.TO	-4.3%

Read the article online here: http://www.mineweb.com/news/base-metals-and-minerals/picking-through-the-wreckage/