You’re About to Get the “Inside Scoop” on Global Energy
Energy and national security have always been tightly linked, and never more so than today. That means that my own involvement in global energy sometimes turns rather geopolitical…
And as my suddenly packed travel schedule shows, another round of that is about to happen quickly.
Early next week I’ll be flying off to Paris, to meet with a group of bankers and financiers. I’m afraid I’m not allowed to divulge any names, but suffice it to say that these people– whom I’ve advised for some time – are very influential…
And about a week later I’ll be off to Frankfurt. Now, on the agenda of both meetings are major changes taking place in global oil and natural gas. As always, I’ll be bringing you along, right here in Oil & Energy Investor.
But the parties in that second session will be quite different. You see, a new energy power is on the rise, and it’s making its presence known…
In Energy Finance, Paris is the New London
First up is my meeting in Paris, with a group of international banking and finance folks I have advised for some time.
They specialize in energy mega-moves – e.g., large project finance, the running of derivative paper to bridge sector shortfalls, paralleling commodities future contracts with the actual ownership of the underlying product, and the occasional bankrolling of a rentier government.
We have these meetings several times a year. I’m there to provide updated global analysis of markets and possible investment targets. I serve as the only outside expert to these heavy hitters.
We used to gather in London when that was still the center of the energy financing universe. However, that has begun to change in the aftermath of Brexit. London’s district in the shadow of St. Paul’s (“The City”) is not going to be the place to go much longer, as the UK is no longer the ready gateway to the continent and beyond.
Some of that action will move to Dublin. But the bulk will be coming to Paris, where the combination of banking and international energy agencies awaits.
Two of our three most recent meetings occurred in the “City of Lights.” The last was over portions of three days in October (followed by a meeting in Abu Dhabi the next month). More specifically, the location is a very famous one in Paris…
We’re Following in Henry Kissinger’s Footsteps
It’s now called “Le Bar Kléber.” Located on the ground floor of the Hotel Peninsula, it may be the most famous watering hole in recent history. Many of us simply refer to it as “Kissinger’s Bar,” because it was here that, almost 44 years ago, Henry Kissinger signed the Paris Peace Accords that ended the Vietnam War.
It was actually a salon back then. But leave it to an American Secretary of State to pick such a venue. For those who lived through the period, it has become one of those must-see “political pilgrimage” sites in Paris.
It also serves as a convenient place for contemporary discussions on a range of matters. Centrally located between the Arche de Triomphe and the Eiffel Tower, the bar is nestled in the city’s affluent 16th Arrondissement. Easy to get to for those who want to be seen in this trendy urban district.
When we’re there, we take over the private room in the far corner and go at it.
The agenda will once again give clear signals about where the big private money is likely to be moving over the next six months.
But it’s the Frankfurt meeting that may signal the largest shift in energy investment interests…
Europe is Getting Ready to Start Investing in Iran
The reason is simple. In Frankfurt, I’ll be meeting with a government-backed group of Iranians.
What I’m scheduled for is to address a summit on Iranian natural gas and LNG (liquefied natural gas). But the real interest will be in side-bar meetings to the formal sessions. In a manner reminiscent of the meetings in Davos, Switzerland each January, or the ministerial sessions of the International Energy Forum (last held at Algiers in late September) the real news takes place in these unofficial meetings at the margins.
My meetings will be with representatives of the Iranian Ministry of Petroleum and the national oil and gas companies. Some international majors will also be present, along with the first serious indication that European banks may be prepared to seriously consider moves into Iran.
Some of this has been underway already, although not in energy. There, the combination of U.S. and European sanctions have dissuaded involvement. This shows signs of coming to an end, at least from the European side.
The U.S. position, meanwhile, is now out of focus. The incoming Trump Administration has yet to indicate whether it is serious about campaign pledges to rip up the Iranian nuclear accord. That will prove to be far more difficult to achieve than their political pundits assume.
It will also mean that the initial foray into new Iranian deals will be European. There is evidence that Brussels may be moving to “a carrot rather than a stick” approach. That means the signal is coming out and French, German, and other interests will be moving in.
Now, assuming I get what I want out of the Frankfurt meetings, the next two steps will be mine…
Next Stop: Tehran
First, I will call a meeting of the “Paris Group” for late February. This one will take place in London, but because of where I will be at the time rather than anything else.
Soon after, I’ll be giving my annual two briefings to ambassadors, ministers, and assembled energy sector leaders at the Queen’s Energy Consultation held at Windsor Castle in Berkshire. The consultation is by royal charter and always occurs the first weekend in March while the royal family is in residence.
The ambassadorial briefing is traditionally held in the castle’s dungeon:
But even more important is the second step. Assuming progress is made in Frankfurt, my next meeting with the Iranians will take place during the upcoming annual Iranian Oil Summit.
That one is in Tehran.
Things are about to get very interesting…
Of course, I’ll be bringing you along every step of the way, right here in Oil & Energy Investor.