So the EU leapt into action and passed a ridiculous "law to forbid [European] companies from complying with US sanctions", very much at the behest of the French". They also tried to establish a bypass mechansim to facilitate inernational payments using a "non-transparent SPV" device - which, I predicted at the time, wouldn't work.
And, it doesn't. In fact, none of it works. Total has thrown in the towel. SWIFT has thrown in the towel.
Like almost all other EU states, France has so far received no exemptions for doing business with Iran. Leading French companies, including Peugeot parent PSA and oil group Total, have already announced plans to curb their Iran activities. [FT]So much for the EU's much vaunted foreign-policy strength and expertise, to say nothing of its *understanding of markets* (=0).
"Almost all ..." Anyhow, in the middle of all this is the UK with a very specific problem. The Iranians hold a major stake in a substantial North Sea asset-base which represents 5% of our gas production, much needed in winter.** The main operator involved is BP (and funnily enough, Total is also involved.) As mentioned before, I can tell you that no bugger in the mainstream energy industry (we are excepting the outright pirates) will step over the US sanctions line: which meant that gas production from the relevant fields (Rhum, Keith and Bruce) was set to be shut down - unless something could be negotiated.
Fortunately, BP is experienced in the ways of the world and, with a little help from HMG, has calmly negotiated a waiver from the US authorities. The gas still flows.
UK - 1, EU - 0. These things can be done. There are people who know the score (the first half of this podcast is worth listening to). If only the right people had taken May in hand back in 2016.
ND
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** stand by for some scary days for energy supply if Jan-Feb-March 2019 turn out cold, whether or not this gas is flowing.
A fascinating inside view, I have faith in our ability to prosper.
ReplyDeleteI once had a girlfriend who was an executive in Total Oil. Sexy as hell. A really posh accent which she used to speak dirty to me in.
ReplyDeleteI used to get her to read soup can ingredients while we were making love. I remember fondly one night involving a nice broth.
I think a gas shortage may be a ploy to kill off the Brexit vote.
EK, you are a strange man.
ReplyDeleteIt's not just BP that can do this. Even piddling little UK engineering companies can do it.
ReplyDeleteAll you have to do it understand the Trump is limited to 4/8 years and price your discounted LoC accordingly.
No matter the nutter, the market always finds a way.
Thud : Leave EK alone. He's the
ReplyDeleteThe nub of the story is of course, where there is a will there's a way.
Which highlights the clusterf@@@k that are the faux Brexit "negotiations"
@dm
ReplyDelete... clever one around here?
... nice one arund here?
... mutts nuts?
other?
@ND Whats with the winter weather/fuel warning? That is so unlike you I might need to take it seriously. How cold for how long is the real question I 'spose.
ReplyDelete@ Timbo: Dutch gas production has really fallen (Groningen earthquakes) and Russia has taken up all the slack. They are already at max. LNG imports will come, but only at a price. China is (trying to) switch to gas, away from coal which is literally killing their people. LNG imports will be in direct competition with them.
ReplyDeleteAlso I see the Belgians have closed their nukes.
ReplyDeleteEK,
ReplyDeletebefore, during, and after the brexit vote there has been no shortage of gas.
I wish we could use it to heat my house, generally speaking it is of no utility - bringing neither warmth, light, or any uplift.
@ND. Thanks. I assume we can expect prices to rise yet again then. :(
ReplyDeleteSo it may be back to the 70s then and I should maybe lay in stocks of candles, jumpers and blankets plus a good torch and a pile of books in case the telly is off.
ReplyDelete"China is (trying to) switch to gas, away from coal which is literally killing their people."
ReplyDeleteReally, Nick?
"China coal power building boom sparks climate warning"
https://www.bbc.co.uk/news/science-environment-45640706
I did say 'trying' !
ReplyDeleteBoth coal use and gas imports have been rising this year in China. Some predict an economic blip for them soon, which might help (help us, that is) on the gas front, in more ways than one
but in overall economic terms we might all catch a cold! Back to square one...
Me and Thud have been mates a long while.
ReplyDeleteEk...indeed we have.
ReplyDelete