Saudi Arabia

Saudi Forces Foil Attempted Attack on Aramco Oil Product Center

27 Apr 2017   Saudi Arabia

Remote-controlled boat laden with explosives intercepted Saudi Arabia building 400,000 barrels/day refinery in Jazan Saudi Arabia’s security forces foiled an attempt to blow up an oil product distribution center in Jazan, a province bordering Yemen in the kingdom’s southwest, according to the state-run news agency. A remote-controlled boat laden with explosives was spotted leaving a small island in Yemeni waters and later intercepted, the Saudi Press Agency said, citing an unidentified spokesman for the Ministry of Interior. Saudi security forces said they would stop any attacks by Houthi rebels, who are threatening shipping routes in the Red Sea with explosive-laden boats and mines. Saudi Arabia entered the conflict in Yemen in March 2015, leading a coalition that’s carried out intensive airstrikes and deployed a limited number of ground troops in an effort to defeat Shiite Houthi militants aligned with Iran. Since the start of the war, the Houthis have […]

Saudi Arabia Sees 7,000 Jobs Coming From Solar Program by 2020

27 Apr 2017   Saudi Arabia

Three tenders scheduled for 3.45 gigawatts of photovoltaics Aim is to cut domestic use of crude, diesel and fuel oil Saudi Arabia is hoping its solar-power program will generate 7,000 jobs and build a local manufacturing industry that can export products to the world, reducing domestic demand for its crude oil in the process. The Ministry of Energy and Natural Resources requires bidders seeking to build about 3.45 gigawatts of solar and wind plants by 2020 to spend 30 percent of the capital they invest through home-grown workers and companies, said Turki al-Shehri, head of the renewable project development office for the kingdom. “We want to create value,” Al-Shehri said in an interview at the Bloomberg New Energy Finance conference in New York on Tuesday. “We don’t just want to bring in companies that open up manufacturing facilities at a very high premium, which the consumer will end up […]

Saudi Arabia Seen Losing Market Share to Iran, Iraq on Oil Cuts

27 Apr 2017   Saudi Arabia

‘OPEC market share battle hasn’t gone away’: ENBD’s Bell China data for March show Iraq, Iran boosting crude sales Saudi Arabia, the world’s biggest crude exporter, is losing market share to Iraq and Iran as a result of OPEC’s agreement to curb supplies to bolster prices, according to the head of research at Abu Dhabi Investment Authority. “If you’re talking about winners, you can count Iran and Iraq,” Christof Ruehl said Wednesday at a conference in Dubai. The Organization of Petroleum Exporting Countries agreed to production limits for most of its members at a meeting in November and brought 11 other nations on board with the deal in December. Saudi Arabia, OPEC’s biggest producer, agreed to cut output by 486,000 barrels a day while Iraq said it would cut 210,000 barrels a day. Iran was permitted to increase output by 90,000 barrels a day, according to the OPEC accord. […]

Aramco Insiders Suggest The Company May Not Be Worth $2 Trillion

26 Apr 2017   Saudi Arabia

As Saudi Arabia’s deputy crown prince, Mohammad bin Salman Al Saud, pushes his nation’s Vision 2030 economic overhaul and crows of the $2 trillion Saudi Aramco valuation (ahead of its potential IPO), WSJ reports that officials at the state-owned oil company are applying internal value estimates of $1.3 to $1.5 trillion to the valuation, calling bin Salman’s estimate “unrealistic and mind blowing.” Since deputy crown prince, Mohammed bin Salman, announced the stock-offering plan and his $2 trillion estimate early last year. Insiders and outsiders have questioned how he arrived at that number. A team of about two dozen employees have been working since last year to try and figure how to take Aramco public while working with Western consultants to explore ways to restructure Aramco in order to maximize its value, say people familiar with the process. The team has determined several variables – what some call “ levers […]

For Aramco Insiders, Prince’s $2 Trillion IPO Valuation Doesn’t Add Up

25 Apr 2017   Saudi Arabia

Officials at Saudi Arabian Oil Co. have told their superiors there is a hitch in the plans to take the state-owned oil company public: It is likely worth at least $500 billion less than the government previously suggested. The country’s deputy crown prince, who is leading a push to overhaul the economy, has pegged the value of the company known as Saudi Aramco at $2 trillion. But officials working on the deal have struggled to come up with a scenario under which Saudi Aramco is worth more than $1.5 trillion,…

Saudi Arabia, Kuwait signal likely extension of oil supply cuts

20 Apr 2017   Kuwait, Saudi Arabia

Leading Gulf oil producers Saudi Arabia and Kuwait gave the clearest signal yet that OPEC plans to extend into the second half of the year a deal with non-OPEC producers to curb oil supplies. Consensus is growing among oil producers that their supply restraint agreement should be extended after its initial six-month term, but there is as yet no agreement, Saudi Energy Minister Khalid al-Falih said on Thursday. “There is consensus building but it’s not done yet,” he told reporters on the sidelines of a conference in the United Arab Emirates. Asked about non-OPEC producer Russia, Falih replied: “We are talking to all countries. We have not reached an agreement for sure, but the consensus is building.” Kuwait’s oil minister Essam al-Marzouq, at the same event, said he expected to […]

Exclusive: China gathers state-led consortium for Aramco IPO – sources

20 Apr 2017   China, Saudi Arabia

China is creating a consortium, including state-owned oil giants and banks and its sovereign wealth fund, that will act as a cornerstone investor in the initial public offering of Saudi Aramco, people with knowledge of the discussions told Reuters. Saudi Aramco, a key exporter to China along with Russia’s Rosneft ( ROSN.MM ), is due to list next year, with a potential $100 billion equity sale that is expected to be the world’s largest to date. The planned Chinese investment makes it more likely that the national energy giant would seek a listing in Asia, with Hong Kong currently the frontrunner among bourses in the region, the same people said. Reuters reported earlier this month that Saudi Aramco’s board would meet in Shanghai in May, its first meeting in […]

Saudi Minister Wants OPEC Oil-Production Deal Extended, Perhaps for Less Than 6 Months

20 Apr 2017   OPEC, Saudi Arabia

An extension to an agreement by members of the Organization of the Petroleum Exporting Countries and producers outside the group to cut crude-oil production is most likely needed, but perhaps not for as long as another six months, Saudi Arabia’s energy minister Khalid al-Falih said Thursday. A preliminary agreement has been reached, though not all OPEC ministers have signed on, Mr. Falih said at an energy-sector event. …

Reeling From Low Oil Prices, Saudis Look To Freeze Megaprojects

18 Apr 2017   Prices, Saudi Arabia

Saudi Arabia will start reviewing a number of multi-billion-dollar infrastructure and development project—remnants from a better past when crude oil prices were in three-digit territory. Some of these, according to government sources, will be shelved and others will be restructured. The review is part of urgent reforms prompted by the oil price rout from 2014, which saw Saudi Arabia plunge into a budget deficit for the first time in its history. As part of efforts to reform the oil-reliant economy, last year Deputy Crown Prince Mohammed bin Salman removed from their positions the Kingdom’s long-serving oil and finance ministers, Ali al-Naimi and Ibrahim al-Assaf. At the time, the Finance Minister defended these same megaprojects that will now be scrutinized by the Bureau of Capital and Operational Spending Rationalization, saying that when the investment decisions were made, the economic outlook was very different from where it was in 2016. At […]

Saudis Target 30 Solar, Wind Projects in $50 Billion Pledge

18 Apr 2017   Saudi Arabia, Solar, Wind

World’s biggest exporter of crude seeks to wean itself off oil Government to tender for 400 megawatts of wind in 4th quarter Saudi Arabia will develop 30 solar and wind projects over the next 10 years as part of the kingdom’s $50 billion program to boost power generation and cut its oil consumption. The world’s biggest exporter of crude oil will produce 10 percent of its power from renewables by 2023, Energy Minister Khalid Al-Falih said Monday at a conference in Riyadh. It also plans to generate an unspecified amount of electricity from nuclear plants. The country is currently seeking bids to build 700 megawatts of wind and solar power capacity in a first round of tenders. It plans a second tender round for rights to build 400 megawatts more of wind power and an additional 620 megawatts of solar plants, Turki Al Shehri, head of the ministry’s renewable […]

Saudi’s Falih says too soon to discuss extending oil output pact: Arabiya TV

18 Apr 2017   Saudi Arabia

The level of compliance among OPEC and non-OPEC oil producers with a global deal to cut output is very good, above 100 percent, but it is premature to talk about extending the deal, Saudi Energy Minister Khalid al-Falih said on Monday.Speaking to Al-Arabiya television on the sidelines of a renewable energy investment conference, Falih said he saw a consensus within OPEC on stabilizing the oil market, and that producers would do whatever was necessary to achieve that goal, whether it took six months or more.But he insisted it was too early to discuss whether extending the six-month production deal beyond June would be necessary. Producers will look at the expected condition of the market over the next two years, and will be cautious when making their decision on any extension, Falih told Arabiya.

Saudi Wealth Fund to Get Airports in Step Toward Privatization

18 Apr 2017   Saudi Arabia

Operators will become companies before handover to state fund Government seeking to sell assets amid depressed crude prices Saudi Arabia will transfer airports to its sovereign wealth fund by mid-2018, as part of a nationwide privatization drive spurred by low oil prices. Airports will be turned into companies before being handed over to the Public Investment Fund , to help improve accountability, Faisal Al-Sugair, chairman of Saudi Civil Aviation Holding Co., said in a phone interview. The transfer will also boost oversight as the General Authority of Civil Authority will no longer be both an operator and regulator, he said. The kingdom aims to win investment in airports as its seeks to revive an aviation industry that’s been dwarfed by competitors in nearby Dubai and Qatar. It’s also looking at privatizing seaports as depressed crude prices weigh on state spending plans. The wealth fund will take over Saudi Civil […]

Oil market rebalancing, demand expected to rise: Aramco CEO

The oil market is rebalancing in the short term, and demand will continue to grow in the long term, Saudi Aramco Chief Executive Amin Nasser said at the Columbia University Energy Summit on Friday. In the short term, the oil market has a surplus, but Nasser said that supplies are falling behind what will be required in coming years. “The future market situation will be increasingly on firmer grounds, though volatility could continue until the rebalancing takes firmer hold and inventory withdrawals assume a more consistent trend,” he said. In both 2018 and 2019, Aramco expects demand to continue to grow, and Nasser said he expects the growth will continue into the years ahead. “I believe that peak demand is […]

Saudi Aramco chief warns of looming oil shortage

The head of Saudi Arabia’s state energy giant has warned of a looming oil shortage as a $1tn drop in investments into future production takes effect.  Amin Nasser, chief executive of Saudi Aramco, the world’s largest oil producing company, said on Friday that 20m barrels a day in future production capacity was required to meet demand growth and offset natural field declines in the coming years. “That is a lot of production capacity, and the investments we now see coming back — which are mostly smaller and shorter term — are not going to be enough to get us there,” he said at the Columbia University Energy Summit in New York.  Mr Nasser said that the oil market was getting closer to rebalancing supply and demand, but the short-term market still points to a surplus as US drilling rig levels rise and growth in shale output returns.  Even so, he said it was not enough to meet supplies required in the coming years, which were “falling behind substantially”. About $1tn in oil and gas investments had been deferred and cancelled since the oil downturn began in 2014.

Saudi Arabia, Iraq, Kuwait Aim for $60 a Barrel Oil Price

Some of OPEC’s biggest oil producers, including Saudi Arabia, are now targeting $60 a barrel as the level where they want to push crude prices, OPEC officials said, signaling they will support additional production cuts next month. Saudi Arabia, Iraq and Kuwait believe $60 a barrel will lift their economies and allow for more energy-industry investment, the officials said, without jumpstarting too much American shale output, which…

Saudi Arabia Said Likely to Support OPEC Extending Output Cuts

12 Apr 2017   OPEC, Saudi Arabia

Riyadh hasn’t taken a final decision on the production curbs OPEC will meet in Vienna late next month to discuss its policy Saudi Arabia is likely to support extending OPEC output cuts into the second half of 2017 in an effort to boost oil prices, according to a person familiar with the kingdom’s internal discussions. The Organization of Petroleum Exporting Countries is scheduled to gather in Vienna on May 25 to discuss whether to roll over for another six months the 1.2 million barrels a day in production cuts it implemented in January. Several OPEC countries, including Kuwait, have expressed public support for an extension. While Riyadh is likely to support extending the curbs to end a three-year oil glut, the kingdom hasn’t taken a final decision yet, the person said, asking not to be identified because the conversations aren’t public. Saudi Arabia, the world’s largest oil exporter, will […]

Saudi Arabia Said to Cut Oil Output to Lowest Since January

12 Apr 2017   Saudi Arabia

Kingdom said to pump 9.9 million barrels a day in March Production increased in February to refill storage tanks Saudi Arabia pared its oil production last month to the lowest since January, staying below the output level it pledged to maintain as part of a global deal to reduce crude supplies, according to a person with knowledge of the data. The biggest producer in OPEC cut output by 111,000 barrels a day last month to 9.9 million a day, according to the person, who asked not to be identified because the information isn’t public. Production had increased in February to 10.011 million barrels a day as the country replenished its own storage tanks. Saudi Arabia and Russia are leading the agreement by the Organization of Petroleum Exporting Countries and other producers to curtail oil supplies and end a three-year surplus. Under the accord reached in December, Saudi Arabia pledged […]

Saudis to Seek Bids for 700-Megawatt Wind and Solar Projects

11 Apr 2017   Saudi Arabia

Energy Ministry qualifies 51 companies to bid for power plants First Solar, renewables unit of EDF among qualified companies Saudi Arabia will begin seeking bids next week from renewable-energy companies to build wind and solar plants with a combined capacity of 700 megawatts as part of the kingdom’s $50 billion program to boost power generation and cut its oil consumption. Energy Minister Khalid Al Falih will announce a request for proposals for the projects, the next phase in the country’s bidding process, at a conference next week in Riyadh, the ministry said Monday in an emailed statement. The ministry qualified 27 companies to bid for a 300-megawatt solar plant and 24 firms for a 400-megawatt wind farm. The project is part of a plan to transform the Saudi economy by weaning it off oil and creating new industries. Other Middle Eastern countries including the United Arab Emirates, Jordan and […]

Exclusive – Saudis, oil majors discuss gas investments ahead of giant IPO

11 Apr 2017   Saudi Arabia

Saudi Arabia and international oil companies have discussed gas venture opportunities inside the kingdom and abroad as part of the top crude-exporting country’s drive to diversify investments before the listing of national energy giant Saudi Aramco. Saudi officials explored investment opportunities with firms including BP ( BP.L ) and Chevron ( CVX.N ) to help develop its gas reserves, the world’s sixth largest, at a time of booming energy demand at home, four industry sources told Reuters. Aramco has also looked into investing in gas ventures abroad, including with Italy’s Eni ( ENI.MI ), the sources said. The development revives memories of talks between Aramco and global majors at the end of the 1990s and early 2000s, known as the Saudi gas initiative. Most of those talks collapsed as the parties disagreed over returns on investment. This time, Aramco is gearing up for a share listing next year, aiming […]

Oil Heads Higher As Iran And Saudi Arabia Draw On Reserves

7 Apr 2017   Iran, Saudi Arabia

Oil is ticking higher today, as speculators continue to bet on the prospect of the market tightening. As Nonfarm payrolls beckon tomorrow, hark, here are five things to consider in oil markets today. 1) While total global floating storage is ticking lower, it is still holding above 100 million barrels. Two areas where we are seeing it gradually drawn down is off Singapore / Malaysia, and in the Persian Gulf. After being over 30 million barrels as recently as October, Iranian floating storage has been siphoned to supplement exports – underscoring the Persian Gulf state’s struggles to boost domestic production. This week we have seen Iranian barrels drop to 5 million barrels, while barrels offshore of United Arab Emirates have halved in the last week, dropping to just under 10 million barrels. (Click to enlarge) 2) We have seen a distinct change in appetite from China, as March deliveries […]

Saudi Arabia Vs. Russia: The Next Oil Price War

International oil markets could be heading towards a new war, as leading OPEC and non-OPEC producers are vying for increased stakes. The unexpected cooperation between OPEC and non-OPEC countries, instigated by the full support of Saudi Arabia (OPEC) and Russia (non-OPEC) has brought some stabilization to the crude markets for almost half a year. The expected crude oil price crisis has been averted, it seems, leaving enough room when looking at the fundamentals to a bull market in the coming months. As long as Saudi Arabia, Russia and some other major producers (UAE, Kuwait), are supporting a production cut extension, financials will be seeing some light at the end of the tunnel. The effects of the 2nd shale oil revolution, as some have stated, have been mostly mitigated by a reasonably high compliance of OPEC and non-OPEC members to the agreed upon cuts, while geopolitical and security issues have […]

An Oil Giant Is Still Burning Through Its Cash Pile

6 Apr 2017   Saudi Arabia

The depletion of Saudi Arabia’s currency reserves shows no sign of abating It was meant to be a given that a rebound in oil prices would slow the depletion of Saudi Arabia’s foreign-currency reserves. That hasn’t happened yet, and economists are wondering why. Net foreign assets held by the Saudi central bank have fallen by an average $6.5 billion a month over the past year, and now stand at just over $500 billion – having peaked at $737 billion in 2014 when oil prices were above $100 a barrel. The drop in January and February was $11.8 billion and $9.8 billion respectively, the latest data show. “The burn rate is a cause of concern because it shows no sign of abating,” said Mohamed Abu Basha, a Cairo-based economist at EFG-Hermes. “It can’t be explained by government spending alone. They haven’t sold domestic bonds, so that could be a reason, […]

Gulf’s $24 Billion Bond Bonanza Meets Cash Need in Cheap Oil Era

Middle East international bond sales are off to the strongest ever start to a year as borrower demand for funds outstrips the firepower of local banks in an era of depressed oil prices. Hard-currency bond issuance from the six-nation Gulf Cooperation Council, which accounts for the bulk of the region’s capital markets and includes Saudi Arabia, its largest economy, more than quadrupled in the first quarter from a year earlier, according to Bloomberg data. In contrast, syndicated lending, traditionally the preferred source of capital for GCC borrowers, is having its worst year since 2010, declining 73 percent in the first three months of the year. “It is mainly the sovereigns that have issued this year and they are very conscious about not sapping liquidity in the local banking system so that access to credit to the small and medium sized companies is not hindered,” said Anita Yadav, head of […]

Aramco Hires JPMorgan, Morgan Stanley, HSBC for IPO Roles

31 Mar 2017   Saudi Arabia

Saudi Arabian Oil Co. has appointed JPMorgan Chase & Co., Morgan Stanley and HSBC Holdings Plc for key roles on its initial public offering, according to people familiar with the matter, as it moves ahead with its plans for what could be the world’s biggest share sale. The global banks will act as advisers on the listing, the people said, asking not to be named because the discussions are private. A representative for Aramco, as the company is known, said it doesn’t comment on rumors or speculation. Representatives for JPMorgan and Morgan Stanley declined to comment. HSBC didn’t immediately respond to a request. The appointments were reported earlier by Reuters. The banks will join Moelis & Co., Evercore Partners Inc. and Michael Klein, the former Citigroup Inc. investment banker, which have already won roles, people familiar with the matter said previously. Saudi Arabia is aiming to sell as much […]

Saudi Arabia likely to cut May crude prices to Asia on weak demand

31 Mar 2017   Saudi Arabia

Top oil exporter Saudi Arabia may cut prices for most of the crude grades it sells to Asia in May to track weak demand in the region, trade sources said on Friday. The producer could cut the official selling price (OSP) for flagship Arab Light crude by 10-40 cents a barrel in May from a month ago, a Reuters survey of four refiners in Asia showed. “I’m seeing price reductions across the board,” one of the survey respondents said. Crude supplies in Asia remained abundant despite production cuts by the Organization of the Petroleum Exporting Countries and other suppliers as several Asian refiners are shut for seasonal maintenance. The Middle East supply cuts and increasing U.S. shale output have made it economical for traders to send huge volumes of oil from west to east, reducing buyers’ appetite for spot Middle East crude. “The spot market is weak. Almost every […]

Saudi Arabia Will Not Break The OPEC Deal

29 Mar 2017   OPEC, Saudi Arabia

The OPEC deal is turning out to be a failure, but has it led the Saudi’s to abandon the deal? Have they cheated on their numbers? These were the questions that arose on March 14, when reports came in that Saudi Arabia had increased production by 263,000 barrels per day in February over January. The OPEC “Monthly Oil Market Report” publishes two separate figures. One, the production data directly provided by the member nations. Second, the data collated from six independent secondary sources, mainly consisting of statistical agencies and specialist oil industry publishers. Both figures have been fairly consistent in the case of Saudi Arabia, with an average gap of 72,000 barrels a day in 2016, with the maximum gap being 102,000 barrels a day. However, in January of this year, there was a gap of 117,000 barrels a day, when the secondary sources data exceeded the government figures […]

Saudi Aramco to Price Islamic Bond in $10 Billion Debt Push

29 Mar 2017   Saudi Arabia

Saudi Arabian Oil Co. set final pricing for its debut Islamic bond as the company presses ahead with plans to raise $10 billion in debt, according to a person with knowledge of the matter. Aramco, as the world’s largest oil producer is known, is selling debt with a seven year tenure in a private placement at 25 basis points over the country’s interbank offered rate, the person said, asking not to be identified as the information is private. The company is seeking to raise about $2 billion in its debut sale of Islamic bonds under a 37.5 billion-riyal ($10 billion) sukuk program, people with knowledge of the matter said this month. The oil giant is selling debt ahead of an initial public offering in 2018 as the country’s finance ministry plans to cut taxation on the company, potentially raising its valuation to more than $1 trillion, according to estimates […]

Saudi Aramco’s Valuation Could Top $1 Trillion After Tax Cut

29 Mar 2017   Saudi Arabia

Saudi Aramco could have a market value of more than $1 trillion in an initial public offering after the government slashed the oil producer’s tax burden to attract investors, analysts at Sanford C. Bernstein & Co. and Rystad Energy AS said. The tax cut will increase Aramco’s after-tax income by 300 percent, allowing for higher cash returns to shareholders and giving the company, known officially as Saudi Arabian Oil Co. , a potential market value of $1 trillion to $1.5 trillion, Bernstein analysts said in a report. Rystad Energy increased its valuation of Aramco by 250 percent to $1.4 trillion, assuming a long-term oil price of $75 a barrel. The Saudi government announced Monday that it’s reducing Aramco’s tax rate to 50 percent from 85 percent, as it prepares to offer investors as much as 5 percent of the world’s biggest oil exporter in what could be a record […]

Here’s how much it costs both Saudi Arabia and the US to produce oil

When crude oil prices crashed into the $20 range early last year, it had most oil-producing nations quaking in their boots. That’s because few countries can make much — if any — money at that price point. I say most because there are a handful of producers that were still able to make a tidy profit at that price point. Leading the way was Saudi Arabia. According to data from energy industry consultant Rystad Energy, on average it cost Saudi Arabia less than $9 to produce a barrel of oil last year. That’s the cheapest in the world, though fellow OPEC countries Iran and Iraq can produce for around $10 per barrel as well, which is well below rival nations: The Motley Fool Here’s a look at why Saudi oil is so cheap, and what one emerging rival is doing to catch up. Drilling down into what makes Saudi […]

Saudi Aramco Tax Slashed to Prepare Oil Producer for Giant IPO – Bloomberg

28 Mar 2017   Saudi Arabia

Saudi Arabia slashed the tax rate paid by state oil producer Saudi Aramco, a key milestone in preparing the company for what may be the world’s biggest initial public offering. “The new tax rate will bring Saudi Aramco in line with international benchmarks,” Nasser said. The new rate is effective retroactively from Jan. 1.  Deputy Crown Prince Mohammed bin Salman’s $2 trillion valuation, based on Aramco’s right to exploit the kingdom’s giant oil reserves, would see the sale raise $100 billion and dwarf Alibaba Group Holding Ltd. as the largest IPO in history. But others have said that valuation could be ambitious given uncertainty about oil prices, the future of fossil fuels and political risks in the Middle East.  The tax cut will increase Aramco’s net income by 300 percent, potentially valuing the company at $1 trillion to $1.5 trillion, Sanford C. Bernstein & Co said in a March 28 report. Its per-barrel profit is expected to be in line with oil majors such as Exxon Mobil Corp., it said.

View full article at www.bloomberg.com

Saudi Arabia sweetens huge Aramco IPO with tax cut

28 Mar 2017   Saudi Arabia

Saudi Arabia’s government has cut the income tax paid by national oil giant Saudi Aramco to smooth the company’s initial public offer of shares next year, which is expected to be the world’s largest equity sale. A royal decree on Monday, retroactive to Jan. 1, set a tax rate of 50 percent for the firm. Previously, Aramco had paid 85 percent tax, plus a 20 percent royalty levied at a different stage; the decree did not mention the royalty.  The step appeared likely to reduce Aramco’s tax burden by as much as tens of billions of dollars, which could make the firm much more attractive to private investors. Saudi authorities had been considering such a change for months, sources told Reuters.  “The royal order is a milestone in setting the stage for the world’s biggest IPO. I am sure there will be more such moves to follow in coming weeks and months,” an oil industry executive said.  “It shows the Saudi government is serious about the IPO of Saudi Aramco, and this is a very strong message to those who doubted that the government will follow through on taking Aramco public.”  The government aims to sell up to 5 percent of Aramco, listing the shares in Riyadh and at least one foreign exchange, to raise cash for investment in new industries, as the kingdom seeks to diversify its economy beyond oil exports in an era of cheap crude.

China’s Sinopec Says Saudi Aramco Invited It to Be Investor

28 Mar 2017   China, Saudi Arabia

China Petroleum & Chemical Corp. said it was invited to invest in Saudi Arabian Oil Co. as part of what could be the world’s biggest-ever initial public offering. Talks are ongoing between the companies known as Sinopec and Saudi Aramco, Wang Yupu, chairman of the Chinese refiner, said on Monday. During a visit to China this month, Aramco’s chief executive officer Amin Nasser told officials he hoped the company could invest in the listing, Wang said. Saudi Arabia is preparing for the flotation by deepening relationships with its biggest buyers and locking in future demand for its oil. Saudi King Salman bin Abdulaziz led a delegation to Asia this month that saw the Middle East explorer pledge at least $13 billion worth of investments in refining projects. “We talked with them on the plan, and generally speaking we had a very good conversation,” Wang said of the offer from […]

Russia, Saudis Move at a Different Pace as Oil Cuts Scrutinized

24 Mar 2017   OPEC, Russia, Saudi Arabia

Russia and Saudi Arabia head to this weekend’s OPEC committee meeting as the tortoise and hare of a global deal to cut oil supply, with Moscow sticking to a slow and steady pace despite Riyadh’s cajoling. OPEC’s de-facto leader Saudi Arabia publicly prodded the Kremlin to speed up and implement its full 300,000 barrel-a-day production cut by the end of this month, but Energy Minister Alexander Novak reiterated it won’t reach the target before April — four months into the agreement. While this pace has offset the impact of deeper-than-expected cuts by other OPEC members, the need to show unity means Russia is unlikely to get called out for its inertia, said Daniela Corsini, a Milan-based analyst at Intesa Sanpaolo SpA. “Confidence in the OPEC/non-OPEC deal is the most important tool to protect crude prices,” Corsini said by email. “Saudi Arabia will not openly criticize poor Russian compliance as […]

Saudi exports to U.S. to fall by 300,000 barrels per day in March

24 Mar 2017   Saudi Arabia

Shaybah oilfield complex is seen at night in the Rub’ al-Khali desert, Saudi Arabia, November 14, 2007. Saudi Arabia’s crude exports to the United States in March will fall by around 300,000 barrels per day from February, in line with OPEC’s agreement to reduce supply, a Saudi energy ministry official said on Thursday. The United States imported about 1.3 million bpd from OPEC’s top exporter in February, according to U.S. Energy Information Administration data. “Exports may fluctuate week on week, but on average in March exports will be down,” the official said, responding to a Reuters request to comment on the EIA data. Saudi exports are then expected to remain around March’s level for the next few months, the official said. The official noted that export data showed higher Saudi oil exports in January and February but these shipments were the result of cargo loaded in November and December. […]

Saudi pledges stable oil supply as market confused by data

24 Mar 2017   Saudi Arabia

Output or exports? OPEC members have argued for decades over which of the two they should monitor to gauge compliance with oil-output cuts. This month, Saudi Arabia has thrown a third metric – supply – into the debate. The move saw oil prices declining, with confused traders fearing Riyadh would pump more crude, thus complicating OPEC’s efforts to reduce a global glut and prop up the market. But sources in Riyadh argue that those worries are overblown. They say that while Saudi production could fluctuate slightly from month to month, supply will remain stable at around 10 million barrels per day (bpd), fully in line with the Saudi OPEC quota. “What we are watching closely is the supply. Saudi Arabia will not supply the market more than 10 million bpd,” a Saudi-based […]

Saudi Aramco inks term crude supply with China’s CNOOC for Huizhou refining project

24 Mar 2017   China, Saudi Arabia

Saudi Aramco has signed a one-year crude supply contract with China National Offshore Oil Corp. for its upcoming Phase 2 Huizhou refining project, as Saudi Arabia steps up efforts to secure its share in its largest market, where its top supplier status was recently threatened. Under the contract that was signed earlier this year, the Saudi national oil company will supply one VLCC per month of Arab Medium crude oil to CNOOC for a year, starting from the second half of 2017, sources close to the two companies said Wednesday. CNOOC expects to start up the 200,000 b/d Phase 2 project in Huizhou, southern China, in May 2017. CNOOC may also consider raising the lifting volume of Saudi crude once the Phase 2 project is running, one source said. The initial volume translates to a total supply of 22 million-26 million barrels over 12 months, considering each VLCC can […]

Saudi Arabia may insist on Iran oil output cuts to continue OPEC deal: sources

23 Mar 2017   Iran, OPEC, Saudi Arabia

Geopolitical rivals Saudi Arabia and Iran may be headed for another OPEC showdown, as the producer group enters negotiations over extending oil production cuts in force since January.  Saudi Arabia may demand that Iran, which is allowed a slight rise in output under the deal, commit to an output reduction as a condition of continuing the cuts, people familiar with the kingdom’s thinking told S&P Global Platts.  The provision is among several that Saudi Arabia, tired of seeing its market share eroded as it bears most of the burden of OPEC’s agreed cuts, is likely to come to the table with, sources say. These include stipulations on members who have exceeded their quotas and exempt members nearing full production capacity, notably Nigeria.

Saudi Arabia Rating Cut by Fitch on Worsening Public Finances

23 Mar 2017   Saudi Arabia

Saudi Arabia’s credit worthiness was cut one level by Fitch Ratings, which said low oil prices were worsening public and external finances. Fitch reduced Saudi Arabia’s rating to A+, the fifth-highest investment grade, and changed the outlook to stable from negative, the agency said in a statement on Wednesday. The downgrade “reflects the continued deterioration of public and external balance sheets, the significantly wider than expected fiscal deficit in 2016 and continued doubts about the extent to which the government’s ambitious reform program can be implemented,” Fitch said. The downgrade by Fitch “was anticipated,” the Finance Ministry said in an emailed statement. Saudi Arabia’s economic fundamentals are strong, it said. Fitch’s cut puts its Saudi rating on par with Moody’s Investors Service. Both classify the kingdom two levels above S&P Global Ratings. Saudi Arabia, where more than 60 percent of government revenue last year came from oil, reported a […]

A New Start For Egypt And Saudi Arabia’s Weathered Relationship

23 Mar 2017   Egypt, Saudi Arabia

Saudi oil shipments to Egypt have resumed after several months of political crisis between Cairo and Riyadh. Egyptian oil ministry sources stated on 19 March that the first two oil shipments from Saudi giant Aramco have been delivered. No reactions were given by Saudi Aramco or officials until now. Egypt expects to receive two other deliveries on March 26-27. Analysts have been watching the crisis between Saudi Arabia and Egypt, as both Arab leaders were in a brawl based on differences on regional politics, the position of Syria’s president Assad and the role of Russia in the region. In April 2016, Saudi Arabia agreed to finance Egyptian imports of refined products from Aramco for five years in a $23 billion deal. In October 2016, Aramco suspended oil deliveries to Egypt after Cairo supported a Russian backed UN Security Council resolution on Syria. Saudi Arabia is a staunch supporter of […]

Saudis Bet Big On Houston As Drilling Activity Picks Up

A Saudi logistics company has just opened a Houston office to seize the opportunity to ship increased volumes of oilfield and plant construction equipment to the Port of Houston as the Texas and U.S. drilling activity is gaining momentum. Bahri Logistics – which had opened its U.S. headquarters in Baltimore back in 1992 – is now opening an office in Houston to take advantage of expected higher demand for oilfield equipment, called breakbulk cargo in the shipping industry: these are large items that need to be loaded and shipped individually rather than in containers. Bahri, or the National Shipping Company of Saudi Arabia, is 22 percent owned by the Public Investment Fund of the Saudi Government, 20 percent by Saudi Aramco Development Company, and the remainder is held as public shares by Saudi nationals. Its 2016 revenues by segment showed that oil shipping accounted for 72 percent of revenues; […]

Saudi Arabia’s Oil Supremacy Falters

22 Mar 2017   Saudi Arabia

Saudi Arabia is losing its grip on big oil markets it once dominated amid a deep production cut that has reshaped global petroleum trade routes and benefited rivals like Iran, Russia and the U.S. As it pursues a steep production cut aimed at putting a floor under oil prices, the world’s biggest crude exporter is conceding ground to American shale producers and hastening a retreat from the U.S., people familiar with current Saudi…

Beijing, Saudi Arabia agree to more oil cooperation, exports to China

20 Mar 2017   China, Saudi Arabia

China and Saudi Arabia will increase their cooperation in the oil sector, including in Saudi oil exports to China, the two countries said in a joint communique issued on Saturday at the end of Saudi Arabian King Salman’s visit to Beijing. The world’s largest oil exporter has been looking to cement ties with the world’s second-largest economy. After losing market share to Russia last year, Saudi Arabia has sought to boost oil sales to China, the world’s second-largest oil market, by working mostly with China’s top three state oil firms. “Both countries are willing to raise their level of cooperation in the oil sector, including supplying Saudi oil to the continuously growing Chinese market,” the two said in […]

Saudi king’s Asia tour trumpets Aramco’s moves downstream

20 Mar 2017   Saudi Arabia

Saudi King Salman’s lavish tour of Asia, arriving in each country on a golden escalator with 400 tons of luggage, had a hardnosed marketing mission – to cement the kingdom’s place as leading oil supplier to the world’s biggest consumer region. The string of deals inked on his three-week tour to Malaysia, Indonesia, Japan and China also point to a fresh strategy, one to increase Saudi leverage over refined product and petrochemical markets, known as the downstream sector. “Our strategy is about growth in the downstream,” said Amin Nasser, chief executive officer of state oil company Aramco, told Reuters on Sunday. “The growth in that sector is very important, and anything integrated between refining, petrochemical, with marketing and distribution, is of interest to us.” Saudi Arabia’s […]

Saudi ‘Mission Impossible’ Makes Longer OPEC Oil Cuts Inevitable

18 Mar 2017   Saudi Arabia

Saudi Arabia has set a near-impossible target to end the current round of OPEC oil-production cuts, indicating that a policy rollover into the second half of the year is a near certainty. OPEC, which pumps about 40 percent of the world’s oil, and several non-OPEC countries including Russia agreed in December to reduce production for six months in an effort to bring supply and demand into balance. At the time, the producers said they could extend the deal for an extra six months. In an interview with Bloomberg Television on Thursday, Saudi Energy Minister Khalid Al-Falih said that OPEC would extend the cuts after they expire in June if oil stockpiles were “still above the five-year average.” Because oil stocks are so far above that level, the target will probably still be out of reach when the Organization of Petroleum Exporting Countries gathers in Vienna on May 25. “It […]

Beijing, Saudi Arabia agree to more oil cooperation, exports to China

18 Mar 2017   China, Saudi Arabia

China and Saudi Arabia will increase their cooperation in the oil sector, including in Saudi oil exports to China, the two countries said in a joint communique issued on Saturday at the end of Saudi Arabian King Salman’s visit to Beijing. The world’s largest oil exporter has been looking to cement ties with the world’s second-largest economy. After losing market share to Russia last year, Saudi Arabia has sought to boost oil sales to China, the world’s second-largest oil market, by working mostly with China’s top three state oil firms. “Both countries are willing to raise their level of cooperation in the oil sector, including supplying Saudi oil to the continuously growing Chinese market,” the two said in […]

Saudi Arabia Says Oil-Supply Cuts May Be Extended If Needed

17 Mar 2017   Saudi Arabia

OPEC and its allies may prolong production cuts after they expire in June if the world’s crude inventories remain excessive, Saudi Arabia ’s Energy Minister said. The curbs will be sustained if stockpiles are “still above the five-year average, if the markets are still not confident in the outlook, if we don’t see companies and investors feel good about the health of the global oil industry,” Khalid Al-Falih said in a Bloomberg television interview in Washington. “We want to signal to them that we’re going to do what it takes to bring the industry back to a healthy situation.” The Organization of Petroleum Exporting Countries will meet on May 25 to decide whether to continue its production cuts, aimed at ending a slump that battered the economies of energy exporters around the world. The strategy is moving global markets in the “right direction” and fundamentals have improved considerably, Al-Falih […]

China, Saudi Arabia Ink $65-Billion Worth Of Preliminary Deals

17 Mar 2017   China, Saudi Arabia

China and Saudi Arabia have signed preliminary deals that could be worth as much as $65 billion if finalized, Xinhua reports . The news came on the first day of a four-day visit by Saudi King Salman to China. China’s Deputy Foreign Minister Zhang Ming said that President Xi Jinping and King Salman inked a total 14 cooperation agreements, including a memorandum of understanding on 35 projects for “production capacity and investment cooperation”. Among the industries that the agreements cover are oil production, petrochemicals, and even space. China is a crucial market for Saudi oil, and the king’s visit is widely seen as an attempt to secure future exports, preferably under long-term contracts, which is the standard approach of the Kingdom toward crude oil exports. Outside oil exports, Saudi Arabia is also looking for opportunities to expand its refining and chemical production markets, Reuters notes , as part of […]

Saudi Arabia Tries To Reassure Markets After Oil Price Plunge

16 Mar 2017   Saudi Arabia

Saudi Arabia’s Oil Minister Khalid al-Falih has tried to reassure markets of The Kingdom’s commitment to the rebalancing of crude oil’s fundamentals, after benchmarks yesterday slid down on an announcement that Saudi Arabia had increase production in February to 10.01 million bpd . The Kingdom, al-Falih said,”is committed and determined to stabilize the global oil market by working closely with all other participating OPEC and non-OPEC producers.” Al-Falih then went on to explain that the self-reported level of production does not necessarily reflect the actual amount supplied to the market. It was Saudi Arabia’s self-reported figure for February that pressured prices, with WTI diving to $47.72 in midday trading, and Brent touching the psychologically significant $50 barrier, at $50.78 a barrel. Secondary sources, which OPEC uses to calculate each member’s monthly production, pegged the Saudi output at 9.797 million barrels daily. The 10.01 million bpd are still below Saudi […]

China, Saudi Arabia eye $65 billion in deals as king visits

16 Mar 2017   Saudi Arabia

Saudi Arabia’s King Salman oversaw the signing of deals worth potentially $65 billion as he began a visit to Beijing on Thursday, as the world’s largest oil producer looks to cement ties with the world’s second-largest economy. The octogenarian monarch, who has overseen the launch of an ambitious economic reform plan since his accession two years ago, is on a month-long Asian tour. The visits to countries that are some of world’s fastest growing importers of Saudi oil aim to promote investment opportunities in the kingdom, including the sale of a stake in its giant state firm Saudi Aramco. Saudi Arabia has sought to boost oil sales to China, the world’s second-largest oil market, after losing market share […]

Nasdaq CEO says tech partnership can help win $100 billion Saudi Aramco IPO

16 Mar 2017   Saudi Arabia

A view of the exterior of the Nasdaq market site in the Manhattan borough of New York City, U.S., October 24, 2016. REUTERS/Shannon Stapleton Nasdaq Inc is touting its technology credentials in its effort to win the listing of Saudi Aramco’s upcoming initial public offering, the exchange operator’s chief executive said in an interview. Financial centers around the globe, including New York, London and Tokyo, have been making a special effort to win the oil giant’s $100 billion listing, which is expected to be the largest IPO ever. Nasdaq is already the technology provider to Saudi Arabia’s exchange, and will use that relationship to promote the idea of a dual listing in Riyadh and another global market, Nasdaq CEO Adena Friedman said. Nasdaq is based in New York, where its exchange operates, but offers technology services to other global exchanges. “Every exchange in the world right now is competing […]