Italy Chases African Gas To End Dependence On Russia

This picture shows installations at the Tunisian Sergaz company, that controls the Tunisian segment of the Trans-Mediterranean (Transmed) pipeline, through which natural gas flows from Algeria to Italy, in El-Haouaria, some 100km east of the capital Tunis, on April 14, 2022.
FETHI BELAID / AFP

 

Italian ministers headed to central Africa Wednesday in an urgent quest for new energy deals as Italy scrambles to break away from Russian gas over the Ukraine war.

Prime Minister Mario Draghi is looking to add Angola and the Congo Republic to a portfolio of suppliers to substitute Russia, which provides about 45 percent of Italian gas.

“We do not want to depend on Russian gas any longer, because economic dependence must not become political subjection,” he said in an interview with the Corriere della Sera daily published on Sunday.

“Diversification is possible and can be implemented in a relatively short amount of time — quicker than we imagined just a month ago,” he said.

Draghi was due to go himself but after testing positive for Covid-19, sent Foreign Minister Luigi Di Maio and Ecological Transition Minister Roberto Cingolani in his place.

They were due to arrive in Luanda on Wednesday evening, before heading to Brazzaville on Thursday, accompanied by Claudio Descalzi, chief executive of Italian energy giant ENI.

“This is a race against time to make sure we stock gas and oil for the next winter season,” said Francesco Galietti, head of Rome-based consultancy Policy Sonar.

In Angola, the ministers were due to meet with President Joao Lourenco — who also spoke by telephone Wednesday with Draghi — before signing a “declaration of intent” on energy cooperation, officials on both sides said.

A similar declaration will be signed in the Republic of Congo following talks with President Denis Sassou Nguesso, Italy’s foreign ministry said.

The foray follows the signing of agreements with Algeria and Egypt in recent weeks.

Algeria is currently Italy’s second-largest supplier, providing around 30 percent of its consumption.

ENI said the deal with Algeria’s Sonatrach would boost deliveries of gas through the Transmed undersea pipeline by “up to nine billion cubic meters per year” by 2023-24.

Transmed only had a spare pipeline capacity of 7.8 billion cubic metres per year in 2021 — though it has said it is ready to expand.

Italy has also been in talks with Azerbaijan over the expansion of the Trans-Adriatic Pipeline (TAP).

 ‘Fanciful’

The Egypt accord could result in up to three billion cubic meters of liquefied natural gas (LNG) bound to Europe and Italy, in particular, this year, ENI said.

Italy is looking into buying or renting two floating storage and regasification units (FSRU) to allow it to import more LNG.

Diversification will not be cheap, warn experts, who foresee extra taxes passed on to businesses and families.

Davide Tabarelli, head of energy think tank Nomisma Energia, said Rome was rightly exploiting the “excellent relationships” that ENI has built up over 69 years in Africa, where it is the sector leader in terms of production and reserves.

But the idea of replacing Russian gas “in the short term” was “fanciful”, he told AFP. “It will take at least two or three years.”

The government said it expects to get the floating regasification units into place within 18 months.

It has also talked of kick-starting stalled projects for two onshore regasification plants, which would take some four years to build.

 ‘Operation thermostat’

Italy is one of Europe’s biggest guzzlers of gas, which currently represents 42 percent of its energy consumption, and it imports 95 percent of the gas it uses.

The government hopes to reduce that by accelerating the investment in renewables and has vowed to cut red tape on wind and solar farms.

Draghi has called for a collective sacrifice, asking Italians this month: “Do we want to have peace or do we want to have the air conditioning on?”

His rallying cry was met with some grumbling in a country feeling the effects of global heating, which science shows is driven by the human burning of fossil fuels.

Undeterred, the government is readying the so-called “operation thermostat”, which could see the public sector turn down heating in schools and offices by one degree, and the equivalent for air conditioning in the summer.

The rule would apply to private households and companies too, though it would be difficult to police.

It could save some four billion metric cubes of natural gas a year — or around 14 percent of the total gas imported from Russia, according to La Stampa newspaper.

AFP

Oil Prices Sink As US Considers Tapping Reserves, Stocks Struggle

Traders work on the floor of the New York Stock Exchange on March 30, 2022, in New York City. GETTY IMAGES NORTH AMERICA / Getty Images via AFP

 

Oil prices tumbled Thursday on reports that the United States is considering tapping its reserves to combat a supply crisis sparked by the Ukraine war.

However, equities struggled to build on the week’s rally after Russia poured cold water on hopes that ceasefire talks were progressing, leaving the prospect of a protracted war in eastern Europe.

The conflict has already sent shockwaves through the world economy, with growth forecasts this year being lowered across the board. On Thursday, the European development bank EBRD said gross domestic product in Russia and Ukraine would contract 10 percent and 20 percent respectively this year.

READ ALSO: 10-Hour Blackouts, Hospitals Stop Surgery As Sri Lanka Crisis Worsens

WTI tumbled more than five percent at one point while Brent dropped more than four percent as reports said President Joe Biden was looking at releasing a million barrels a day for several months — totalling up to 180 million — as he tries to temper a surge in the market to more than $100.

Concerns about demand in China owing to a lockdown in Shanghai were adding to downward pressure.

The White House this month put an embargo on oil from Russia as part of a series of wide-ranging sanctions against the country for its invasion.

However, that sent prices soaring further and put added upward pressure on world inflation, which was already at multi-decade highs.

Officials said the president would make a statement Thursday on plans to cut energy costs “and lower gas prices at the pump for American families”.

Warren Patterson, at ING Groep NV, said: “Suggestions that we could see up to 180 million barrels released over several months is significant and would help to ease some of the tightness in the market.”

It would be the biggest ever release by the United States, he said.

The news comes as the International Energy Agency urges other countries to further tap their reserves.

A coordinated release earlier this year, before the war, did little to temper a rally in prices, which were being boosted by the global economic reopening and expectations for a pick-up in demand.

OPEC and other major producers including Russia are preparing for their monthly meeting later in the day where they are expected to refrain from lifting output by more than previously planned, despite the growing energy crisis.

While the drop in oil prices will be welcomed on trading floors, Asian equity markets fell after three days of healthy gains and following comments from Russian officials playing down progress in talks with Ukraine over the ceasefire.

Adding to selling pressure was data showing signs of a further slowdown in China’s manufacturing sector caused by Covid lockdowns around the country.

Tokyo, Hong Kong, Shanghai, Sydney, Mumbai, Singapore, Taipei and Bangkok retreated, though Seoul, Manila, Wellington and Jakarta edged higher.

London, Paris and Frankfurt were up in early trade.

Traders on Wednesday jumped on news that Moscow had pledged after negotiations in Istanbul to “radically” reduce its attacks.

Both sides initially said the gathering Tuesday had been productive but on Wednesday Kremlin spokesman Dmitry Peskov said: “We cannot state that there was anything too promising.”

Turkey said Thursday the foreign ministers of Ukraine and Russia could meet within two weeks.

Investors are awaiting the release Friday of US jobs data for an idea about the impact of soaring inflation and the war on the world’s top economy.

The reading could also be of particular importance regarding the Federal Reserve’s plans for monetary policy as it pivots to a more aggressive approach in a bid to staunch the surge in prices, which many fear will hammer growth.

AFP

Bitcoin To The Rescue: Cryptocurrencies’ Role In Ukraine 

Cryptocurrencies have taken on an unprecedented role in the war in Ukraine, helping the government raise millions of dollars to fund its fight against the Russian invasion.

Why has Ukraine turned to cryptocurrencies, and how is the nascent crypto industry changing its reputation and having an impact amid the clouds of war?

 

– How much crypto has been raised? –

At the outset of the conflict, Ukrainian officials posted addresses for two crypto wallets on their Twitter account, giving donors a direct and clear address to which to send contributions.

The wallets attracted more than $10.2 million (9.2 million euros) just four days after the start of the invasion.

Since then, more than $100 million worth of crypto has been raised, with the “Crypto Fund for Ukraine” run by Michael Chobanian -– the founder of the Ukrainian crypto exchange Kuna -– accounting for 60 percent of all donations.

“We are still collecting crypto. It is being spent on aid like daily rations and bullet-proof vests and helmets,” the 37-year-old Ukrainian told AFP.

Initially, two funds were set up, one for humanitarian purposes and the other to support the Ukrainian military.

However, after the violence escalated across Ukraine, the funds were merged and focused fully on supporting the military, said Chobanian.

He said that the majority of crypto donations came in the form of Bitcoin, Ethereum, and the stablecoin Tether –- a coin pegged one-to-one to the dollar.

 

– What are the benefits of donating in crypto? –

Aid packages sent to Ukraine in fiat money from the United States and the European Union dwarf cryptocurrency donations, but the latter allow individuals to get involved.

US crypto charity, “The Giving Block”, told AFP that cryptocurrency donations have the potential to attract “younger donors” who are looking to support various causes.

Another reason crypto donations are of value to Ukraine is because they are less influenced by geopolitical or macroeconomic factors. Chobanian points to the depreciation in the value of the Ukrainian hryvnia as a result of inflation.

An extra advantage of donating in cryptocurrencies is the speed of the transfers. Bank wires may take up to 24 hours to be validated between two countries. However, cryptocurrency transfers typically take less time.

 

– What are the drawbacks? –

Despite the success of crypto in aiding the Ukrainian war effort, it has not always been a smooth ride.

In the early days of the conflict, the deputy minister for digital transformation wanted to issue Ukraine’s own crypto as a symbolic gesture for Kyiv’s cause, but the project was eventually cancelled.

To make matters worse, people seized the opportunity to mint and market fake versions of the planned government-issued crypto.

“There was a lack of communication” within the government, said Chobanian, who now works closely with the ministry.

“It was the first day of the war,” he recalls.

Moreover, cryptocurrencies have become a staple part of Ukraine’s shadow economy –- used as a medium of exchange in online crime, tax avoidance and capital flight.

According to data analytics firm Chainalysis, transactions from Eastern Europe to other regions are particularly high, and the company suggests that “capital flight could account” for some of the crypto movement in the area.

 

– What are the consequences? –

Despite the risks associated with crypto, Chobanian is confident that it will become a core part of the Ukrainian economy.

“When we win the war, we will rebuild Ukraine using blockchain technology. All of us were helped by crypto,” he said.

While Chobanian’s aspirations may be very ambitious, they are based on real developments.

On Wednesday, President Volodymyr Zelensky passed a law that would provide a legislative framework for crypto platforms and users to operate within the country.

Caroline Malcolm, head of international public policy and research at Chainalysis, told AFP that the conflict in Ukraine “is forcing governments to develop their understanding of cryptocurrencies and their regulation”.

She believes that such discussions can be beneficial to the crypto industry, leading to “proportionate and effective regulatory policies”.

As of last week, US President Joe Biden signed an executive order seeking further clarification and guidance on crypto regulation — showing Washington’s willingness to contend with an ever-growing and new asset class.

AFP

World Must Not forget Afghanistan Because Of Ukraine War – UN

In this file photo taken on February 25, 2021 the United Nations logo is seen inside the United Nations in New York City. Angela Weiss / AFP
In this file photo taken on February 25, 2021 the United Nations logo is seen inside the United Nations in New York City. Angela Weiss / AFP

 

The Russian invasion of Ukraine must not make the world forget Afghanistan, the UN refugee chief said on Tuesday, warning that ignoring its humanitarian needs could be “very risky”.

UNHCR chief Filippo Grandi, who is on four day visit to Afghanistan, said the international community must continue to engage with Afghanistan’s Taliban authorities as the country desperately needed humanitarian assistance.

“The whole attention of the world at the moment is focussed on Ukraine,” Grandi, the UN High Commissioner for Refugees, told AFP at a UN compound in the Afghan capital.

“But my message coming here is, don’t forget the other situations, where attention and resources are needed and Afghanistan is one of them.

“The risks of distraction are very high, very high … Humanitarian assistance has to flow no matter how many other crises compete with Afghanistan around the world.”

The Taliban seized power on August 15 amid a hasty withdrawal of US-led foreign forces, and since then the country’s humanitarian crisis has deepened.

The United Nations and other global aid agencies have said that more than half of Afghanistan’s 38 million people are facing hunger this winter.

In January, the UN made its biggest-ever single-country aid appeal, calling for $5 billion to avert a humanitarian catastrophe.

But Grandi said that the war in Ukraine has already started to make it difficult to raise funds for Afghanistan.

UNHCR itself had made an appeal of $340 million for Afghanistan for 2022 but so far has managed to raise about $100 million, he said.

“So, we need to push because the needs are the same now as they were in September” just after the Taliban takeover, he added.

“Generous response has to continue” for Afghanistan, a country that has up to six million of its citizens living as refugees abroad.

Grandi, who acknowledged that the security situation across the country had improved since the Taliban came to power, said that aid related discussions with the Islamists have been increasingly “frank and open”.

If the Taliban continue to make progress on issues like women’s rights then steady international aid will also continue to come to Afghanistan, he said.

Global donors led by Washington have insisted that any foreign aid will depend on the Taliban’s policy when it comes to women’s rights to education and work.

Since coming to power the Taliban have imposed several restrictions on women, but have said that secondary schools for girls would reopen soon.

“We will see in few days when schools reopen, then the international community will take note,” Grandi said.

“When 25 years ago this country fell off the radar screen, it ended very badly … we can not go down the same road. I hope that common sense will prevail,” he said, referring to a brutal civil war that erupted in the 1990s after the withdrawal of then Soviet forces.

AFP