The Eurasian Economic Forum in Verona is one of the leading networking platforms for businesses and politics linking Europe and Eurasia. On October 24-25, the event was held by the Italian “Cognoscere Eurasia” initiative for the 12th time, as usual gathering more than 400 leaders from all over Eurasia in the city’s beautiful old town. Creon Capital chairman Dr. Fares Kilzie attended a panel discussion on the role of natural gas in helping Europe’s energy security and climate change goals, alongside with Gazprom Deputy Chairman Elena Burmistrova and Leonid Mikhelson, Chairman of the Management Board of Novatek.
Prior to the debate, Igor Sechin, President and CEO of Russia’s leading oil producer Rosneft, had set the tonality for the day. He turned out to be very confident that oil and gas will remain key sources for energy production throughout the upcoming decades, hydrocarbons will still account for more than 50 percent of the energy mix in 2030 despite the growth of renewables. For this time period, he forecasts a 20 percent growth of oil demand due to the increasing consumption in Asia, first and foremost in India. But Sechin underlined: “We at Rosneft show that oil production is possible in a socially and environmentally responsible way.”
The Creon Energy Fund is committed to gas-related projects, which are a cleaner alternative to Diesel and gasoline. However, improving the entire energy sector’s ecological responsibility maintains an objective for the fund managers of Creon Capital, as chairman Dr. Fares Kilzie stated. “We consider investments in green technologies as being commercially viable and reasonable. Therefore, we aim at co-investing with companies of the energy-sector in projects to slow down climate change.” As one example he named the Fund’s attempts to develop a market for small-scale LNG and CNG, which ensures that vessels and trucks can be fueled with cleaner gas instead of Diesel and heavy oil.
This seems to be in line with the “bullish” expectations of Novatek’s Leonid Mikhelson. Russia’s leading exporter of liquefied natural gas recently corrected its capacity plans for 2030 upwards: Instead of 57 million tons, the company now plans to produce and export 70 million tons annually, up from 19 million tons this year. Similarly, also Gazprom’s leader Elena Burmistrova presented the audience ambitious plans to improve the gas giant’s position on the LNG market, including small-scale infrastructure projects on the domestic hydrogen market.
Both Mikhelson and Burmistrova made clear that natural gas will play inevitably a major role in reducing the climate impact of the energy sector. Creon chairman Fares Kilzie, however, put more emphasis on renewable energy, which is deployed increasingly even in hydrocarbon-based countries such as Kazakhstan and Russia. The Fund joint-venture ISS Global Solutions these days completes one of the largest transportation projects for windmills going from China and Germany to Kazakhstan.
Kilzie finally pointed out that even hydrocarbon producers have to think day-by-day how to become “greener”: “As we are running a private equity fund in Luxembourg, we know perfectly how banks and regulators increasingly pay attention to environmental and social responsibility of companies and their projects. We recognize rapidly growing demand for ‘green bonds’, but emitters have to fulfill strict preconditions in terms of environmental responsibility”. For the Eurasian energy companies this would means, that they must become “best-in-class” in terms of environmental protection.
Like it or not, coal will remain an important resource for generating energy and heat over the coming decades. Countries such as China, Russia, Kazakhstan and even the EU member state Poland are increasing their coal production. It is therefore even more important to minimize environmental and health risks associated with coal. This is the mission of CoalTech Limited.
Clean Invest Africa Plc (NEX:CIA) and fund management company Creon Capital are pleased to announce the launch of CoalTech S.a.r.l. The joint company aims to expand towards Russia and CIS markets with innovation by CoalTech Limited. Recently acquired by the clean technology and renewable energy investment company CIA, CoalTech has developed an innovative agglomeration solution that converts coal fines waste deposits into combustible coal pellets via a proprietary technology.
CoalTech innovative solutions are required in Russia and CIS countries, which account for roughly two thirds of the coal production in Eurasia, excluding China. Creon Capital invests in the joint project with its clean-tech focused Creon Energy Fund (Sicav-SIF), aiming to develop multiple projects and scale up production in these markets. The Fund’s initiator Creon Energy (Moscow) will be responsible for the project implementation regionally, while adding value through its vast network in the region’s energy sector.
The technology used for upcoming projects is unique: With the help of patented binders, coal fine waste is being dried and processed into pellets, which show the same calorific values, composition and other characteristics as the coal of the respective mine itself.
CoalTech CEO Filippo Fantechi explains: “Our technology produces a valuable product made out of polluting and toxic waste. Tested successfully initially in South Africa, we are now ready to upscale globally. Russia and the CIS countries are attractive markets from an environmental and health perspective, as well as having an enormous industrial legacy. People in the region suffer from poor water and air quality, as residues of coal production and processing are often released into the environment. Drinking water is often contaminated by coal fine leaching. In winter times, carbon particles from coal fines in the air sometimes create what is known as ‘black snow’. These coal fines could relatively easily be cleaned-up and processed into combustible pellets with CoalTech’s green technology. We look forward to working with Creon to maximize this commercial clean–up opportunity”.
Dr. Fares Kilzie, Chairman and CEO of the Fund managing company Creon Capital, is confident that the new technology will be demanded in the region: “People in Russia and other former soviet countries care increasingly about how companies treat the environment, especially when phenomena such as ‘black snow’ highlight the problem of pollution. Companies have to take this into account, the industry and government authorities are seeking solutions, and the CoalTech green technology provides a commercially attractive solution whilst enabling the industry to effectively improve its environmental and social impacts.”
Creon Capital chairman Dr. Fares Kilzie and Shaikh Mohamed Abdulla Al Khalifa, main shareholder of Clean Invest Africa, signed the shareholder agreement in Forte dei Marmi (Italy). CoalTech S.a.r.l. has been established in Luxembourg, further updates shall be provided as the Russia and CIS opportunities develop.
UPDATE: CoalTech S.à.r.l. has been incorporated on October 4th, 2019.
Creon Capital S.a.r.l. manages the Luxembourg-based Creon Energy Fund (S.C.A. Sicav-SIF). The regulated Alternative Investment Fund (AIF) concentrates investments up to 100 Mio. Euro (targeted) on green technologies, logistics projects, value-adding midstream and downstream energy projects. The unlimited opportunity fund cooperates with partners such as the Investment Corporation of Dubai (ICD) and is focused on emerging markets and uprising new business segments in Eurasia and the Middle East. The Fund’s initiator and general partner is the Moscow-based independent consulting and management company Creon Energy, which brings add value on projects in Russia and CIS countries by using its vast network and market expertise in the region.
CoalTech Limited is registered in the UK and its parent company, Clean Invest Africa Plc is listed in London NEX Exchange (NEX:CIA). CoalTech has developed a revolutionary and innovative agglomeration solution that converts coal waste into combustible coal pellets via a proprietary technology using a specially formulated organic binder and a customized production process. CoalTech has developed its proprietary technology over almost a decade, has an operational producing and testing plant in Witbank, Province of Mpumalanga, South Africa. This plant started commercial operations in November 2018. The plant is expected to operate at full capacity soon, generating revenues on target margins based on a net monthly volume of 5,000 tons.
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Currently, one may find merely few topics in European-Russian relations on which a constructive discussion is still possible. Environmental protection is one of these topics. While Russia just like Germany sticks to the Paris Agreement on Climate Change, the country’s oil and gas producers are striving to become cleaner and greener along their value chains: instead of flaring the associated gas in oil production they process it, areas contaminated with oil are being recultivated. Risk management and accident prevention systems are being implemented. German and European companies provide the necessary technologies and solutions.
In order to awaken the potential of the cooperation and to expand the cooperation, the 2nd summit “Ecological Responsibility in Russia’s Energy Sector” took place on December 5th in Berlin Marriott Hotel. The Moscow-based CREON Group and the group-owned fund management company Creon Capital (Luxembourg) hosted the event. CREON finances “green” projects in the oil and gas industry and accompanies them in execution. The German Eastern Business Association (OAOEV) and the German-Russian Chamber of Commerce supported the event, which attracted around 100 participants.
OAOEV Chairman Michael Harms confirmed that ecology is an issue where Germans and Russians are d’accord. The move to more environmental protection offers opportunities for German companies to sell their equipment. CREON Chairman Fares Kilzie emphasizes that “even in Russia the transformation towards a green economy” has started. “In the 21st century, sustainability in projects in the Russian oil and gas sector will be a crucial factor.” For Creon Capital and its fund, this opens a “new vector for innovative investment” wherefore CREON is looking for partners and know-how in Europe, says Kilzie. “We host this conference in Berlin by purpose, as concepts and solutions for a greener future have culminated here along with the ‘Energiewende’, Germany’s turnaround in energy policy a decade ago.”
To document progress in Russia and also further cooperation this potential, CREON invented the independent transparency rating of oil and gas companies on environmental responsibility five years ago. The results have been presented together with WWF Russia. Ulrich Benterbusch, who oversees the German ‘Energiewende’ at the Ministry of Economic Affairs and Energy (BMWi), described the survey as “very important” and welcomed the establishment of the instrument. At the same time, he sees potential for a greener transport infrastructure: “Natural gas mobility could be an integral part of the energy transition in the transport sector in Germany.” LNG, as an alternative fuel especially for ships and heavy commercial vehicles, is cost-effective and environmentally friendly in the long term, especially as though the admixture of biomethane the CO2-free mobility would become a possibility.
At a panel discussion, Russia’s ex-Minister of Environment Sergej Donskoy, DEA Manager Michael Zettlitzer, Tatyana Minayewa of Wetlands International and Elena Kompasenko (Zarubeshneft) deepened the topic of “ecological responsibility” – and agreed on a conclusion, drown by Donskoy: Of course, there is still room for even more environmental protection in Russia, but it’s going in the right direction. “We are not wizards, but we are learning,” Donskoy said. But every initiative is important.
CREON is a Moscow-based group of independent consulting and management companies, which has developed a comprehensive expertise in the chemical, energy and commodity processing industries in about 20 years. Luxembourg-based Creon Capital manages a private equity fund that invests in projects in the energy and chemicals sectors, including green technologies and building LNG infrastructure in Europe.
Contact: Florian Willershausen, Director BD/M/C, firstname.lastname@example.org, Tel. +49-151-16244591
The Worldwide Fund for Nature (WWF) and CREON Group have announced results of the fifth Environmental Transparency Rating of Oil & Gas Companies operating in Russia. The announcement ceremony took place at the Analytical Center of the Government of the Russian Federation in Moscow on the 30th of November.
The Rating project has been implemented with support from the United Nations Environment Program and with participation of the Ministry of Natural Resources and Environment of Russia and the Ministry of Energy of Russia. Just as in previous years, the rating process has been executed by National Rating Agency, while the Luxembourg-based fund management company Creon Capital participated as a partner in the project.
The results of the rating in 2018 both affirmed yesteryear leaders’ standings and revealed new prominent up-and-coming participants. As in the previous year Sakhalin Energy (Sakhalin-2), a joint venture of Gazprom, Shell, Mitsui and Mitsubishi, ranked first, followed by Zarubezhneft. The latter company appears in the top 3 for the first time. Exxon NL achieved the third rank.
For the first time, special diplomas were awarded to winners in each of three Rating categories: Surgutneftegaz and Zarubezhneft shared the first rank in terms of ‘Environmental Management’; Caspian Pipeline Consortium (CPC) scored the best result in ‘Environmental Impact’; and LUKoil convinced the rating agency regarding their ‘Information Disclosure’.
The high importance of the study was underlined by Denis Khramov, the Minister of Natural Resources and Environment of the Russian Federation: “The public initiatives of the Worldwide Fund for Nature such as the Transparency Rating of Environmental Responsibility of Oil & Gas Companies operating in Russia represent an important input in improving ecological policies in the industry, and are also increasing the public availability of environmentally significant information”.
“Recently we have witnessed increasing support and attention to our rating from relevant government bodies such as the Ministry of Natural Resources and Environment of Russia and the Ministry of Energy of Russia, which confirms the importance of ratings in the system of public administration of environmental risks and impacts”, said Alexey Knizhnikov, Oil & Gas Program Leader, WWF Russia. “At the same time, it should be noted that two of four Russian state oil and gas companies, namely NK Rosneft and Zarubezhneft, have been increasingly involved in the rating’s development compared to previous years. Their representatives have always been participating in methodology development and progress review meetings”.
Pavel Sorokin, Deputy Minister of Energy of the Russian Federation, also addressed his support to the rating’s initiators: “Improving social and environmental responsibility of companies in the oil and gas sector in Russia is becoming an increasingly pivotal task in the field of public administration and in achieving better competitiveness of Russian business. The non-government initiative to conduct the rating has proven its effectiveness within the five years since the project started. The dialogue between oil and gas companies and the society on environmental safety issues should be actively pursued with this project”.
Head of CREON Group und Chairman of Creon Capital, Fares Kilzie, underlined in his speech: “CREON Group in general, and Creon Capital in particular, fully support and promote the idea of “responsible investments”, which promotes the rapidly improving investment climate in Russia. As an investment fund we identify outstanding business opportunities, when Russian oil and gas companies improve their ecological footprint. We are ready to contribute in financing sound projects such as advanced APG processing and LNG as an alternative energy source to replace traditional sources fuels such as Diesel and heavy oil. In this context, I would like to mention NOVATEK as a successful endeavor, that grow to the largest Russian LNG producer. This company pioneers with the implementation of large-scale LNG, which may change the whole industry’s structure.
The “Environmental Transparency Rating of Oil and Gas Companies” operating in Russia is an independent project, invented by the Fund’s initiator Creon Energy in 2014. More than 30 Russian and international enterprises are being rated annually regarding their environmental policy. The rating is conducted independently by the Russian Rating Agency, according to a sophisticated methodology developed by the Worldwide Fund for Nature (WWF) Russia. In 2018, Creon and WWF also started to rate oil and gas companies in Kazakhstan, a global rating will be conducted soon.
For a long time the mostly state-owned oil and gas companies in Russia were closed shops. Reports on environmental sustainability – missing. Manuals how to deal with hazardous situations – out of date. Recultivation projects for oil spills – what for?
In the past couple of years the situation has changed tremendously: Even large state enterprises such as Rosneft started to report on environmental responsibility in detail. Lukoil installed solar-based power generation on their oil production plants. And the gas associated with the process of oil refining has increasingly been processed or transferred to pipeline systems instead of being burnt.
The rating aims to accompany this process towards more environmental responsibility. The disclosure of information has significantly increased within the five years the rating has been conducted. Companies’ ecologists discuss the ratings results and best-practice examples. The product’s presentation annually turns out to be a gathering of specialists working for competing companies in Russia. But all of them try hard to get the oil and gas production “greener”. In 2018 the rating’s results have been presented in the Analytical Center of the Russian government, representatives of several ministries attended the event.
The methodology behind the rating of oil and gas companies in terms of environmental transparency and responsibility has been developed in 2014 and reviewed since then on an annual basis. Every year all Russian oil and gas companies are invited to participate in a round table discussion with WWF specialists to discuss the details and propose changes. Large companies such as Rosneft and Lukoil contribute to this discussion constructively just as much as smaller producers such as Salym Petroleum.
According to the metholodology the rating agency assesses the oil and gas companies along the value chain from hydrocarbon production, processing to transportation. The amount and quality of disclosed information is crucial for their placement in the rating, but also the way how comapnies deal with accidents, whether they inform about it or deploy a harzard prevention and risk management system. Also the producers measures to process associated petroleum gas (APG) during the refinery process matter, some still burn APG instead of using it.
As much as some may be surprised in the West: ecology and Russia – this combination is no longer a contradiction today. Not only since the Year of the Environment took place in 2017, the world’s largest country moves slowly but visibly in the right direction in terms of environmental issues: The burning of associated gas in the oil production is decreasing, landfills have been closed, recycling is being promoted by the state actively. Above all Russian oil and gas companies have to offer something, which could boost the EU-countries leap towards a cleaner economy structure: Liquefied Natural Gas (LNG) as a fuel for decentral regions and the transportation sector.
Ecology and Russia – this combination also becomes relevant for companies. Therefore, CREON Group invites to the second Berlin Conference this year. Businessmen and experts from both Russia and Germany will discuss how environmental responsibility can be shaped and improved further. Which solutions can German companies provide for Russian partners who want to tackle the topic? And conversely, can Russian companies contribute to a “greener Europe” by delivering Liquefied Natural Gas (LNG)? These discussions will be supported by the German Eastern Business Association (OAOEV) and the German-Russian Chamber of Commerce (AHK).
During the conference we will present the results of our environmental responsibility rating in Russia’s oil and gas industry. For the fifth time, WWF Russia and CREON conduct the independent rating of major oil and gas companies regarding their efforts and transparency in terms of environmental responsibility: Who renatures oil-contaminated areas? Who is flaring on associated gas, who is not? How transparent are corporations in reporting on ecological issues? In the meantime, the rating has been established as a credible, objective and recognized tool to push the oil and gas companies towards on a more sustainable course. The initiative to conduct Global rating of the 32 biggest world oil and gas companies will be also presented in Berlin.
The aim of the conference is to promote ecological responsibility as a common topic for Germans and Russians. Therefore, we are pleased to welcome high-ranking politicians from both countries, who find common interests in the field of ecology beyond the well-known political dispute topics. Above all, however, entrepreneurs from East and West should be brought together: In Europe’s East, a market is now growing with its awareness of the problem, for which Germany particularly could supply “green” technologies. CREON has set itself the goal of connecting these networks.
Venue and Timing
Wednesday, December 05th 2018
Time: 13.00 – 19.00
Hotel Marriott, Berlin (Potsdamer Platz), Inge-Beisheim-Platz 1, 10785 Berlin
CREON Group published this year’s results of the “Rational Approach” – the rating of Environmental Responsibility of Russian oil and gas companies. As in the year before Sakhalin Energy turned out to be the assessments winner. Exxon Mobil follows on the second and Surgutneftegaz on the third rank. The rankings winners received their awards during a ceremony in Hotel Kempinski Balchug in Moscow.
As an instrument to evaluate and influence the oil and gas companies in terms of their environmental responsibility, the rating is unique for Russia. Four years back, Creon Group started together with the World Wildlife Fund (WWF) to measure the “Rational Approach”: How do companies deal with flare gas? Which measures are taken to revitalize soil after oil leaks? Do they report accidents? Is there a coherent strategy how to increase corporate responsibility?
These are mere some criteria of a sophisticated methodology, which forms a guideline for the rating. The study itself is being conducted independently by experts of Russia’s National Rating Agency. In the past four years it turned out that Russian oil and gas companies pay increasingly attention to the topic of environmental responsibility. Meanwhile, the WWF is keen to deploy its experience to other sectors as project director Alexey Knizhnikov underlined: “The rating provides objective information about the environmental responsibility of companies. We have already applied our experience to a similar rating of mining and metallurgical companies, next year we plan to calculate the rating of electricity generating companies. ”
Creon’s rating has been transformed to a well-established instrument, that gained public attention and recognition both on the federal and on the international level. On December 6th the results of this year’s rating will be presented in Berlin. Together with the long-time partner WWF Russia the environmental responsibility rating of Kazakhstan’s oil and gas companies was launched, the results of which will be announced in Astana in February 2018. Creon Group’s Chairman Dr. Fares Kilzie points out: “Creon group will continue to implement the ‘Common Sense’ program not only in Russia, we would like to consolidate the image of the Russian oil and gas business in the eyes of the global community.”
The half-day conference on December 6. will be held in Berlin’s Marriott Hotel Potsdamer Platz. Please contact as if you would like to participate in the conference, which will be translated in English, Russian and German. Further information and the program can be downloaded via this LINK.
In case of questions please contact:
Director Business Development,
Marketing and Communications
Creon Capital S.à.r.l.
T (GER) +49 151 162 44 591 (WhatsApp)
T (RUS) +7 968 783 84 12
T (LUX) +352 621 235 126