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Policymakers must offer clarity and coordination to secure net-zero

Government must play a greater role in the global energy market, either through a direct stake or as a co-investor, to support the new emerging energy system, according to a new study by PwC.

The report, Inventing tomorrow’s energy system: The road ahead for molecules and electrons, finds that the growth in renewables, estimated to account for 90% of the global energy market by 2050, and scaling up of hydrogen, will lead to a greener but substantially more complex energy market.

Electrons produced by renewables are set to power factories, heat and cool buildings, fill up batteries that will capture power and become generators and, as electrification hits the transport sector, emerge as the major fuel for cars. While hydrogen will link the electricity and gas markets, allowing for large-scale storage, powering of heavy-transport, and the massive decarbonisation of industrial power demand. Consequently, sectors such as Oil & Gas, Utilities, and Chemicals, which are currently sharply delineated, will begin to converge and form into integrated energy systems over the next decade.

This enormous shift in the global energy sector and the players within it, will require greater coordination and collaboration between government and the market to successfully work towards a greener future.

Dr. Raed Kombargi, Partner, Strategy& Middle East, said: “From South Korea to the United States and Europe, massive economic stimulus is being aimed at building more resilient and sustainable energy systems, providing a new influx of investments aimed at strengthening decarbonisation efforts. The future points towards a much greener system than the one we have today and, from generation to application, a significantly more complex one.

“The development of the new energy system is too complex to leave to the market. Governments will need to take a far more active role in shaping the future and will need to take part either directly or as co-investor.”

To meet global emissions targets, government and business must work together in new, and untested, ways to realise the full potential of renewables. Getting the energy transition right is not only critical from an environmental perspective, but also an economic one.

The report estimates that the cost of transforming the electricity networks in Europe alone will be at least USD$2 trillion over the next 30 years.

It also cites the International Renewable Energy Agency’s forecast that USD13 trillion is required to be spent on power transmission and distribution networks across the globe in the years to 2050.

Dr. Raed Kombargi, Partner, Strategy& Middle East, continued: “As we look ahead to a low carbon future, market participants will need to fundamentally rethink the market-based approach to energy markets, and investors will need to accept the presence of a more ‘visible hand’ guiding and orchestrating the energy transition.

“Innovations from Green Bonds, directly investing in critical infrastructure, to scaling ‘smart’ technologies and modernising operational standards and regulations, all offer governments around the world the opportunity to demonstrate clarity, coordination and ambition in policymaking.”

Norton Rose Fulbright advises Shell on US$926m sale

Global law firm Norton Rose Fulbright has assisted Shell’s in-house legal team with the disposal of the company’s upstream interests in the Western Desert in Egypt to Cheiron Petroleum Corporation and Cairn Energy Plc for a base price of US$646m, with additional payments of up to US$280m between 2021 and 2024, subject to oil price and exploration results.

Shell’s asset sale in Egypt includes its stake in 13 onshore concessions and its share in the Badr El-Din Petroleum Company (Bapetco). Completion is subject to government and regulatory approvals and is expected to occur in the second half of 2021.

The London-based team was led by senior associate Andrew Davies, supervised by corporate energy partner Hussain Kubba, and supported by associate Jarrett Whitehead. Partner Fiona Millington also provided ECM support.

Hussain Kubba commented: “This high-profile deal in Egypt forms part of Shell’s wider strategy to diversify its Upstream portfolio. We have recently seen a number of significant M&A transactions in the Egyptian Oil & Gas sector, and this transaction further demonstrates our deep bench of experience in terms of both the sector and jurisdiction.”

Maarten Hillen, Senior Legal Counsel at Shell, commented: “As in previous transactions, cooperation with Norton Rose Fulbright was seamless and very effective. The team knows Shell’s ways of working, with a strong focus on in-house support, and added real value to the areas that were material to this transaction.”

Baker McKenzie announces global revenues of $2.9 billion

Baker McKenzie has announced revenues for the fiscal year ended 30 June 2020 (FY20) of $2.9 billion. In terms of constant currency revenues were up 1.2% compared to the previous year. In US dollar terms, the Firm’s reporting currency, this translates into a flat year (FY19 $2.92 billion), after the effect of adverse currency movements during the year.

All of our regions recorded growth in constant currency terms – Asia Pacific up 1%, EMEA higher by 2%, Latin America rose 2% and North America increased 1%. In US dollar terms, three out of our four regions – Asia-Pacific, EMEA and North America – each experienced slight growth. Latin America revenues, however, fell by 12% in U.S. dollar terms, highlighting the weakness of currencies in that region during FY20. The first quarter of FY21 has continued that growth with revenues and profitability up in all four of our regions.

Our PPP for FY20 is down 12% year-on-year as compared with FY19, reflecting the significant investments we made in new technology, infrastructure and laterals and other talent, as well as the negative impact of FX. Over the last decade the Firm has grown by 37% in terms of revenue and 31% in terms of PPP.

We saw revenue growth in our two largest markets – the United States and the UK. Some of our markets that saw high single-digit or double-digit growth include: Thailand, Singapore, South Korea, Netherlands, Belgium, Sweden, Luxembourg, Hungary, Egypt, Kazakhstan and Morocco.

Milton Cheng, Global Chair, Baker McKenzie says, “I am proud of how our Firm has stepped up this past year to record a reasonable set of results, given the economic and logistical headwinds we have faced since January and the softening of demand we saw in the final quarter of FY20. It is a strong demonstration of our collective resilience.

“We continue to look to the future. Despite the ongoing challenges of COVID-19 and the decline in economic activity in many parts of the world, Baker McKenzie is heading into FY21 with confidence, bolstered by our client base, resilient team, and exciting investments in the future of our industry and communities. The Firm has appointed new leaders, including our first Chief Sustainability Officer, as well as announcing our innovation arm Reinvent.

“A record number of lateral hires these past 12 months combined with our continued commitment to developing home- grown talent, as well as our significant investments in technology and our new services centres ensure that we are well prepared for a new set of challenges over the next decade.

“We have also learnt how to collaborate, work and socialise together in new and innovative ways that bring out the very best of Baker McKenzie. We transitioned smoothly to working remotely, with nearly all of the teams in our offices across the world working from home for significant periods of time over the past months.”

MBH Ranked as Top 100 Global Disputes Firm by GAR 2019

Following last week’s announcement that Legal 500 ranked Matouk Bassiouny & Hennawy as a top tier law firm in all practice areas, we are honored to share with you that Global Arbitration Review’s 12th edition of GAR 100, puts MBH as a top 100 global disputes firm in 2019.

“Matouk Bassiouny lawyers manage to provide international class legal expertise with impeccable English, in an easy to understand manner […] They also have a depth of experience in local law matters and the policies and procedures that apply in Egypt. This makes them very rare in the Egyptian market […]”

We would like to sincerely thank our clients for their continued trust in Matouk Bassiouny & Hennawy and congratulate the arbitration team on their excellent work and continued success.

If you would like to get more information, please visit https://matoukbassiouny.com/