AFP

BP has agreed to buy US renewable gas producer Archaea for $4.1 billion to help the British oil giant reach net zero carbon emissions by 2050, the pair said Monday.

The London-listed energy major is flush with cash after recent surges in oil prices that have triggered calls for the cash-strapped UK government to massively enlarge a windfall tax on British energy giants.

Chief executive Bernard Looney said in a statement Monday that the acquisition of Archaea would create “a real leader in the biogas sector, and support our net zero ambition”.

Houston-based Archaea produces renewable natural gas equivalent in amount to about 6,000 barrels of oil per day.

BP will pay $3.3 billion in cash plus around $800 million in debt, while the purchase remains subject to regulatory and Archaea shareholder approvals.

The UK energy titan is attempting to pivot towards cleaner fuels to help tackle climate change.

In June, BP said it was taking a 40.5 percent stake in an Australian energy project being billed as one of the world’s largest renewable power stations.

But energy majors are often faced with charges of corporate greenwashing, especially by environmentalists.

Greenpeace UK policy director Doug Parr said Monday that with Britain’s new finance minister Jeremy Hunt U-turning on tax cuts to limit state debt, “why not consider a full and proper windfall tax on oil and gas?”.

He added: “This government has already made more U-turns than a battalion on parade — one more won’t hurt and it’s the right one.”

The government of previous UK Prime Minister Boris Johnson unveiled a windfall tax on the profits of British energy companies earlier this year but that was deemed as far too small.

Even the outgoing head of BP’s rival Shell recently indicated that governments should “probably” tax energy firms more to help protect the poorest from rocketing energy bills.

“One way or another, there needs to be government intervention… that somehow results in protecting the poorest,” Ben van Beurden told an energy conference earlier this month.

“And that probably means governments need to tax people in this room to pay for it — I think we just have to accept as a societal reality.”

So far, Prime Minister Liz Truss — a former Shell employee — has refused to extend the windfall tax.

Oil, gas and electricity prices have all surged this year after major economies reopened from pandemic lockdowns — and following the invasion of Ukraine from major energy producer Russia.

The use by Russia of Iranian drones in its war against Ukraine makes clear the weaknesses of its domestic industry and Tehran’s growing claim on the market for unmanned aircraft, experts say.

Washington believes Iran has delivered hundreds of drones, which Ukrainian officials say are now being used in strikes like those launched against cities and energy infrastructure on Monday.

– What drones has Iran delivered? –

So far two models of Iranian drone have been identified in Ukraine’s skies, built for two different purposes.

One of them, the Shahed 136, is a relatively low-cost “kamikaze drone” that can be programmed to fly automatically to a set of GPS coordinates with a payload of explosives.

“It flies quite low, striking a target that must be stationary at a range of a few hundred kilometres,” said Pierre Grasser, a researcher tied to Paris’ Sorbonne University.

One was photographed by an AFP journalist plunging into Kyiv early Monday.

The second type, the Mohajer-6, is “similar in size and functionality to the Bayraktar TB-2 drone from Turkey,” said Vikram Mittal, a professor at the US military academy in West Point.

The Turkish model’s missile strikes on Russian armour made the Bayraktar a symbol of successful Ukrainian resistance to invasion early in the war, with a propaganda song composed about them widely shared online.

Both drones belong to a type broadly referred to as MALE (Medium Altitude, Long Endurance) unmanned aircraft, like the US-made Predator used in Iraq, Afghanistan and elsewhere.

The TB-2 was also used by Azerbaijan in its 2020 war with neighbouring Armenia to retake part of the Azerbaijani region of Nagorno-Karabakh from Armenian control.

– Are Iranian drones effective? –

“Just like any armed drone or loitering munition, they’re very effective when the enemy has no way of protecting themselves or fighting back,” said Jean-Christope Noel, a researcher at the French Institute for International Relations.

Mittal said much of their initial success comes “from being a new weapon on the battlefield.”

“The Ukrainians will eventually shoot down or capture one of the drones, dissect it, and develop counter-drone systems,” he added, although that “could take months”.

For now, Kyiv’s forces could use shoulder-launched anti-aircraft missiles to attack the drones in daylight, or radar-equipped versions at night.

They could also attempt to use complex GPS jamming techniques to turn the Shahed 136 off course, as they have no backup system to reach their target without satellite guidance.

Such kamikaze drones are “a money-saving move for Russia, because it saves valuable cruise missiles worth $1.5 million to $2.0 million” per shot, Grasser said.

But “their main shortcoming is they can only hit stationary targets,” he added.

“They don’t pose any threat to troops in the field. The arrival of these drones therefore shouldn’t change the course of the fighting.”

– Is Russia’s industry failing? –

Russia is one of the world’s largest arms producers, but has still found itself forced to turn to Iran in this case.

“The defence ministry has worked out tactical and technical requirements for drones. And unfortunately most (Russian) manufacturers can’t meet them,” Russian colonel Igor Ischchuk recently told the country’s TASS news agency.

Although no Russian manufacturer offers long-range kamikaze drones like the Shahed 136, “they are supposed to have equipment along the lines” of the TB-2 or Mohajer MALE drones, Grasser said.

“The fact they’re taking Iranian drones is an admission of industrial failure… it shows (Russian industry) can’t keep up the pace,” he added.

Western sanctions over the invasion of Ukraine have hit a Russian industry already sapped by supply chain disruption during the Covid-19 pandemic.

Russia “no longer has access to Western technological components, and their attempts to mass-produce these types of devices have been fruitless,” Noel said.

– Iranian-Turkish rivalry? –

As drones become more fundamental to fighting wars, “there is likely somewhat of a mid-tier, cheap drone arms-race between the Iranians and Turks to try to gain control of the market and expand their country’s sphere of influence,” Mittal said.

While the US and Israel host the world’s top-of-the-line manufacturers, “the Turkish drones are a step down, but they are more reliable than the Iranian drones, which don’t seem very precise,” French drone expert Marianne Renaux said.

Tehran can already count on some buyers for its product in the Middle East in Yemen, Lebanon or Iraq, Noel said.

“But American sanctions against any customers make for a hard limit on the number of candidates who might like to arm themselves with this gear,” he added.

Britain’s new finance chief Jeremy Hunt on Monday axed debt-fuelled tax cuts to further calm market turmoil, in another major government U-turn that appears to leave Liz Truss’s position as prime minister in a precarious state.

Hunt estimated that the tax changes would raise about £32 billion ($36 billion) per year, after economists estimated the government faced a £60-billion black hole in the public finances. He also warned of spending cuts.

Chancellor of the Exchequer Hunt, parachuted into the job on Friday to replace sacked Kwasi Kwarteng, said no government could control markets — but stressed his action could give certainty over the health of public finances.

“We will reverse almost all the tax measures announced… three weeks ago,” Hunt said in a televised statement, conceding last month’s budget from his predecessor had harmed the public purse.

“The most important objective for our country right now is stability,” he added in a contrite statement. 

– Tax U-turns –

Hunt scrapped plans to axe the lowest rate of income tax, and curbed the government’s flagship energy price freeze — pulling the plug in April instead of late 2024.

After April, the government will “review” its energy support package, he said.

A proposed reduction in shareholder dividend tax was also binned, along with planned tax-free shopping for tourists and a freeze on alcohol duty.

The announcement comes as Truss’ governing Conservative party tanks in the opinion polls amid Britain’s worsening cost-of-living crisis.

Truss fired her close friend Kwarteng on Friday after their recent tax-slashing budget sparked markets chaos — fuelling intense speculation over her political future one month after taking office.

“No government can control the markets but every government can give certainty about the sustainability of public finances,” Hunt added Monday.

Britain’s fourth finance minister in as many months will address lawmakers over his plans at 1430 GMT.

His action sent the British pound briefly jumping to $1.1331, while bond yields dipped.

Last month’s notorious budget sent bond yields spiking and the pound collapsing to a record dollar-low on fears of rocketing UK debt.

– ‘Difficult decisions ahead’ –

Tax reductions were the centrepiece of the ill-starred budget, but they were financed via huge borrowing.

Truss had already staged two humiliating budget U-turns, scrapping tax cuts for the richest earners and on company profits.

Following his appointment, Hunt hit the ground running Saturday with a warning of tax hikes as he dramatically reversed course on Truss’s radical programme of economic reform.

“There will be more difficult decisions I am afraid, on both tax and spending, as we deliver our commitment to get debt falling as a share of the economy over the medium term,” he said Monday.

“All departments will need to redouble their efforts to find savings, and some areas of spending will need to be cut.”

Hunt already warned that he was not taking anything off the table” amid speculation of painful cutbacks on critical areas like defence, hospitals and schools.

Hunt met over the weekend with the governor of the Bank of England, Andrew Bailey, and the head of the Debt Management Office to discuss his plans.

In the wake of the earlier turmoil, the BoE launched emergency buying of UK government bonds — a policy that ended Friday.

The furore over the budget has reportedly sparked a plot to oust the prime minister.

UK media reported that senior Conservative members of parliament were plotting to unseat Truss, aghast at the party’s performance since she replaced scandal-hit Boris Johnson on September 6.

Party grandee and former leader William Hague said Truss’ premiership was “hanging by a thread” after Kwarteng was unceremoniously fired.

The World Health Organization is sourcing rapid response financing directly from companies to help tackle international crises, through the foundation it set up to bridge the shortfall from member states.

The WHO Foundation — set up in May 2020 as the UN health agency scrambled for resources to fight the Covid-19 pandemic — was created to marshal new resources from business and philanthropists.

The foundation, which went live in January 2021, aims to “mobilise more support for the WHO, from the public, from businesses, from philanthropists,” its chief executive Anil Soni told AFP. 

“No organisation, no sector can solve the challenges that the world is facing alone,” the 46-year-old American said.

The WHO has a two-year budget of $5.8 billion but its financial independence has steadily declined. 

Its 194 member states provide barely 16 percent of the organisation’s financing through membership fees.

The rest comes from voluntary contributions, of which 88 percent are “specified”, meaning the money goes to projects earmarked by the donors.

And with national budgets tightening around the world, governments “are having to make tough decisions about where they give their money”, said Soni.

“That’s why we should do more with the private sector.”

– ‘Matchmaker’ –

The foundation says it exists because the WHO lacks sufficient resources to fulfil its mandate.

The list of health crises currently being combated by the WHO includes Covid-19, the cholera outbreak in Haiti, the war in Ukraine, the devastating floods in Pakistan, monkeypox and attempts to get aid into Ethiopia’s besieged Tigray region.

The foundation has raised $30 million since the start of 2021 — money which has mainly been focused on supporting the WHO’s emergency response to Covid-19 and the war in Ukraine.

“Part of our job is to be a matchmaker, is to make sure that we can facilitate dialogue and share information,” said Soni.

“So the WHO sees the benefit of working with the private sector, and the private sector sees the power of the WHO.”

The foundation has around 40 staff compared to more than 8,600 for the WHO, which is also based in Geneva.

– Innovation investments –

Soni admits that some — including within the WHO — fear the risk of private companies holding too much sway over the organisation, which makes decisions on the usage and approval of drugs, vaccines and treatments.

He insisted mechanisms were in place to prevent any company from influencing such decisions.

“But to close the door to all of the private sector — that doesn’t work,” he said.

On September 19, the WHO Foundation announced that it had partnered with venture capital firm OurCrowd to launch a $200 million investment fund focused on breakthrough health technologies.

OurCrowd will raise the money and a share of the profits will go to the WHO.

In addition, the companies in which the fund has invested will have to commit to ensuring fair access to their new technologies — one of the WHO’s chief gripes during the pandemic response, as poorer nations went to the back of the queue for Covid vaccines and treatments.

– Flexible friends –

On September 22, the foundation announced the launch of the Health Emergencies Alliance partnership — a vehicle for companies and philanthropists who want to support the WHO in tackling health emergencies on a regular basis.

The partnership, which is in its infancy, hopes to get financing to the front line swiftly and effectively.

The French laboratory pharmaceutical giant Sanofi was the first to sign up, said Soni, with discussions ongoing with other companies.

Those who join the programme will pay a set amount to the foundation each year, without the donation being earmarked for a particular situation, allowing the WHO to respond to emergencies flexibly.

And when a health emergency suddenly springs up, these companies will, within 24 hours, have the possibility of raising additional resources for the response, from their clients, employees and the company itself, capitalising while the emotion on breaking disasters is still strong.

The alliance should see companies being able to respond even more quickly to emergencies while offering greater funding flexibility to the WHO, Soni explained.