COP27 delegates rubbed shoulders with energy executives ready to cut deals

Alongside the formal negotiations taking place in the halls of the sprawling COP27 climate summit in Egypt last week, a group of officials from Uganda met fossil fuel company executives to discuss potential oil exploration.

“We’ve only explored 30-40 per cent of our oil resources,” said Irene Batebe, permanent secretary at Uganda’s ministry of energy and mineral development, which has approved the east African crude oil pipeline that will turn the country into an oil producer for the first time. “We are definitely ready for business for additional exploration.”

The Ugandan delegation also had meetings with solar, wind and nuclear energy companies at the climate conference, which had been useful for “establishing contacts”, Batebe said.

The dealmaking and networking on the sidelines of the COP27 summit was notable at the Red Sea resort town of Sharm el-Sheikh, where energy industry executives rubbed shoulders with top government officials at the vast conference, held against the backdrop of higher gas prices.

Energy security was in focus as countries worked to secure gas supplies and diversify their energy mixes by adding renewables. The EU, in particular, has looked to African nations with fossil fuel reserves this year, to replace Russian gas supplies following the war on Ukraine.

This imperative, combined with record numbers of fossil fuel industry lobbyists at COP27, raised concerns among climate change experts that the industry was promoting new oil and gas ventures as false solutions to energy security and national economic challenges.

The push for gas as the “cleanest” fossil fuel was particularly evident in both official programme events and sideline discussions.

“This COP was in part a gas trade fair,” said Alden Meyer, a UN climate negotiations expert at think-tank E3G. “You had producers here cutting deals for gas exports.”

More than 45,000 people registered to attend the conference — a crowd that at times proved problematic, with people forced to wait at kiosks for an hour to buy food and drinking water running precariously short on some days.

But the private sector groups hosted invitation-only events, often held beyond the main venue in more luxurious resort hotel settings.

Among the prominent COP27 industry attendees was BP chief executive Bernard Looney, listed as a delegate for Mauritania, the west African nation where the oil major has investments and struck a green hydrogen deal announced during the summit. That followed a deal agreed by the two parties in October to explore offshore gas production.

There was also a group from the Opec Fund for International Development, a multilateral financier of projects across a range of sectors, including energy and fossil fuels. One EU energy security adviser confirmed there were “meetings going on the side on gas imports”.

During the summit, the EU’s energy commissioner Kadri Simson met her US counterpart to discuss the bloc’s plan to start purchasing gas as a group, and had dinner with the Egyptian energy minister.

Quid-pro-quo deals on EU “imports of natural gas from Africa” were under discussion, said one European diplomat in Sharm el-Sheikh. “Africa is also saying ‘help us get the renewables’. That is the dynamic you are seeing right now.” 

The Gas Exporting Countries Forum, whose Algerian secretary-general delivered a speech at COP27, said afterwards that it would “pay special attention to countries, which are newcomers to gas markets, by intensifying interaction with their governments . . . to encourage policies favouring natural gas” as part of its updated long-term strategy.

But the potential for deals at COP27 went beyond fossil fuel energy. According to the Global Wind Energy Council, interest from governments in renewables sources was far greater in Egypt than in previous years.

“We have met with government representatives from a wide range of emerging, developing and developed countries,” said Sepi Golzari-Munro, energy transition director at the council. “It’s notable this year that many more are very actively seeking us out.”

Siemens Gamesa, a major wind turbine manufacturer, said its executives had met US senators, as well as officials from countries including Morocco, Egypt, Ghana and Senegal.

COP27 also marked the launch of new industry groups such as the Global Offshore Wind Alliance, which brings together countries and companies for offshore wind deployment, and the Asia Clean Energy Coalition, a coalition of renewable energy buyers, sellers and financiers.

Green hydrogen — derived using renewable power and water — was given a fillip, its development spurred by legislation from Joe Biden’s administration that provides credits for its production.

Uganda and France’s HDF Energy, as well as the EU and Egypt, signed memorandums of understanding at the summit for green hydrogen projects.

Lorenzo Simonelli, chief executive of oilfield services company Baker Hughes, which also finalised a green hydrogen agreement at COP27, said the company had attended the conference to “explore new ways we can partner with customers, governments, and other organisations.”

Baker Hughes also “saw and supported” customers including the oil majors Saudi Aramco and TotalEnergies, he said.

With activists tracking the presence of fossil fuel lobbyists at COP27, and the EU sensitive about the numerous gas import agreements it has signed this year, European governments were keen to avoid public discussions about gas.

When the US and Germany announced a $500mn package to help Egypt deploy renewables, reduce its dependence on gas and close inefficient gas facilities, the White House said the agreement would “enhance energy security by freeing up over 2bn cubic meters of gas”.

Conscious of the growing gas-deal criticism, Germany later stressed that any “freed up” gas had not been set aside for export to meet its domestic needs.

Sharm el-Sheikh energy and carbon deals

• EIB Global and AllianzGI set up $100mn fund for renewable energy projects — finalised and announced at COP27

• Uganda and HDF Energy sign memorandum of understanding for the country’s first green hydrogen plant

• EU and Egypt sign MoU for green hydrogen development

• EU and Namibia sign MoU for ‘strategic partnership’ in green hydrogen and critical raw materials

• EU concludes a partnership agreement with Kazakhstan for collaboration on renewable hydrogen, batteries and raw materials

• BP and Mauritania sign MoU for green hydrogen development, on sidelines of COP27

• Baker Hughes and Amea Power sign agreement for green hydrogen development in Egypt, finalised at COP27

• US, Germany, Egypt announce $500mn deal at COP27 for new renewables and closure of inefficient gas plants in Egypt

• UN Development Programme helps to launch first-of-a-kind carbon credit agreement between Switzerland and Ghana at COP27

• Indonesian $20bn ‘just energy transition partnership’ announced at G20 in Bali to coincide with COP27

Climate Capital

Where climate change meets business, markets and politics. Explore the FT’s coverage here.

Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here