Americas: Trinidad and Tobago looking to restart idle LNG train in 2027 to boost output, exports
Sectors: oil and gas
Key Risks: business risk
In Trinidad and Tobago, on 8 June reports emerged indicating that the government plans to restart an idled liquefied natural gas (LNG) train – that was forced to shut down in late 2020 due to insufficient supply – belonging to joint venture (JV) Atlantic LNG, by Q1 2027. The JV is formed by state-owned National Gas Company, Shell, BP and Chinese Investment Corporation. The restart depends on a restructuring deal that would allow the JV to buy gas from producers who are not plant co-owners. Previously, only BP and Shell could provide gas to the plant. The country currently produces around 2.7bln cubic feet of gas per day but it has the capacity to process 4.2bln cubic feet per day into LNG, petrochemicals and power. The restructuring deal is expected to be completed by the end of Q3.
Asia Pacific: Proliferation of arms fuels kidnap for ransom cases in Papua New Guinea
Sectors: all; oil and gas
Key Risks: kidnapping; gang violence
In Papua New Guinea, on 12 June reports emerged that 17 kidnapped schoolgirls were released and later treated at oil and gas firm Santos’ Ridge Camp after a total ransom of PGK3,300 (US$920) and nine pigs was paid following negotiations with the captors. The schoolgirls were reportedly kidnapped by a group of 40 armed men near Walagu village, along the borders of the Hela and Southern Highlands provinces, on 7 June. A total ransom of PGK40,000 (US$11,200) and 10 pigs was initially demanded from their families. Authorities suspected the involvement of the same armed group that kidnapped a New Zealand archaeologist and his research team from the nearby Fogoma’iu village on 20 February. The group’s repeated success is likely to embolden them and inspire other criminals to conduct similar undertakings, further heightening kidnap and ransom risks in the area.
Eurasia: Profound impacts of Kakhovka dam breach expected in Ukraine
Sectors: all; agriculture, energy
Key risks: war on land
In Ukraine, the 6 June Kakhovka dam breach in Kherson Oblast is expected to have severe consequences. Thousands of people have been affected by flooding on both banks of the Dnieper River. Evacuations on the south bank – controlled by Russian forces – have reportedly been insufficient. There are concerns that hundreds of civilians have been killed by the flooding. Evacuation efforts on the north bank – controlled by Ukraine – have been hindered by Russian shelling, which killed at least three civilians on 11 June. The breach will have severe impacts on access to fresh water for hundreds of thousands of civilians. It will also affect agriculture and local ecosystems. The breach is also a dangerous precedent for further such incidents, with reports emerging on 11 June that Russian forces had breached another – albeit much smaller – dam in Donetsk Oblast to prevent Ukrainian advances.
Europe: Brussels sues Warsaw over Russian influence law
Key Risks: political stability; legal disputes
In Brussels, on 7 June the European Commission announced that it was taking legal action against Warsaw over the creation of a special body probing Russian influence on domestic politics. Critics of the proposed body worry that it could be used to target political opponents – including former prime minister Donald Tusk – ahead of parliamentary elections scheduled for November 2023. Parliament passed legislation to create the body on 27 June. President Andrzej Duda signed the law on 29 May but on 2 June announced that he was proposing amendments and that he had sent them to Parliament. However, Parliament has yet to review them. The bill sparked public backlash and contributed to the turnout of hundreds of thousands of protesters led by the opposition at a 4 June rally in Warsaw. Tensions between Warsaw and Brussels will remain high. Further anti-government protests cannot be ruled out.
MENA: Israel to recognise Moroccan sovereignty over Western Sahara
Key Risks: internal conflict; regional stability
On 8 June Knesset Speaker Amir Ohana announced that Israel was set to recognise Morocco’s sovereignty over Western Sahara as part of the growing Israeli-Moroccan relations. While Rabat considers Western Sahara part of its territory, the Algerian-backed Sahrawi Polisario Front continues to claim independence. The region is officially listed as a non-decolonised territory by the UN. The US recognised Moroccan sovereignty over the territory in 2020 under former president Donald Trump, supposedly in exchange for Rabat joining the Abraham Accords normalising relations with Tel Aviv. International recognition of this territorial claim remains of the utmost priority for Morocco’s government. Full Israeli recognition is expected to be followed by an upgrade in diplomatic relations, elevating both countries’ diplomatic missions from liaison offices to embassies. The move will likely exacerbate tensions between Rabat and Algiers.
Sub-Saharan Africa: Nigeria’s Central Bank Governor arrested
Key Risks: economic, policy uncertainty
In Nigeria, on 9 June the Department of State Services (DSS) announced the arrest of the Central Bank of Nigeria (CBN) Governor Godwin Emefiele several hours after President Bola Tinubu suspended him with immediate effect. The DSS stated that Emefiele was being investigated for his alleged role in a multi-billion-dollar public lending programme. The Governor’s suspension likely stems from ongoing tension between Emefiele and Tinubu, with the latter being critical of the CBN and calling for an end to Abuja’s multiple-currency regime and a reduction in interest rates. The permanent removal of Emefiele as governor will require a vote by the Senate. If Emefiele is removed from office, the next CBN governor will likely adopt an array of economic policy changes, including a devaluation of the naira.