Saudi Arabia

Saudi Arabia debating shape of Aramco ahead of IPO: sources

18 Feb 2017   Saudi Arabia

An oil tank is seen at the Saudi Aramco headquarters during a media tour at Damam city November 11, 2007. Saudi Arabia is considering two options for the shape of Saudi Aramco when it sells shares in the national oil giant next year: a global industrial conglomerate, and a specialized international oil company, industry and banking sources said. The listing of Aramco, expected to be the world’s biggest initial public offer and raise tens of billions of dollars, is a centerpiece of the government’s ambitious plan – known as Vision 2030 – to diversify the economy beyond oil. When the plan was publicly released in June last year, it pledged to “transform Aramco from an oil-producing company into a global industrial conglomerate”. But now Saudi officials and their advisers are debating whether to make Aramco “a Korean chaebol”, as one source said, referring to sprawling South Korean conglomerates, or […]

Gulf States to maintain defense spending despite oil price slump

Gulf Arab states are poised to continue to spend billions of dollars on defense despite low oil prices causing severe budget deficits forcing Gulf States to introduce austerity measures and cut spending. Saudi Arabia’s total defense budget is forecast at $82 billion in 2016, steadily rising to $87 billion in 2020 while that of UAE is put at $15.1 billion in 2016 reaching $17.0 billion in 2020, according to Teal Group, a U.S-based defense analysis firm which has also forecast increased spending by Kuwait, Qatar, Oman and Bahrain. “Defense spending is linked to national security and threat perception, not resource prices,” said Richard Aboulafia, vice president of Teal Group. Oil prices more than halved in 2016 from their peaks in 2014. “Even if low oil prices might complicate the timing of defense deals, it really has little to do with the total medium- and long-term volume of sales,” he […]

Hurdles Mount for Saudi Aramco’s IPO

17 Feb 2017   Saudi Arabia

Complications restructuring Saudi Arabia’s state-owned oil company and disentangling its finances from those of the government are slowing the march toward what is expected to be the biggest initial public offering in history. The hotly anticipated listing of a minority stake in Saudi Arabian Oil Co., the kingdom’s corporate crown jewel, is now unlikely to happen until late 2018 at the earliest, and if foreign advisers have their way, won’t happen until 2019, according to more than a half-dozen people involved in the process. The country’s deputy crown prince first said early last year that the initial public offering would happen in 2017 or 2018. More recently, Saudi officials have said 2018 will be the year.

View full article at www.wsj.com

How Saudis Cut Oil Output Without Really Cutting

17 Feb 2017   Saudi Arabia

Saudi Arabia has led the way among major energy exporters in cutting oil production. At the same time, the kingdom is adding to global supply in a surprising way.  The deal to cut oil output has been a success, at least for its first month, largely because there was little cheating and because Saudi Arabia cut production by 500,000 barrels a day.  Don’t ignore the other side of the ledger, though: the Saudis, huge consumers of energy themselves, are economizing. That could allow them to export more.

Asian refiners receive full Saudi crude allocations for March

17 Feb 2017   Saudi Arabia

Saudi Aramco’s major crude oil buyers in Northeast Asia and Southeast Asia are receiving full term allocations for Saudi crude oil loading in March, according to traders contacted by S&P Global Platts this week. March allocations for Chinese buyers were met and traders at China’s top trading companies said they were not aware of any requirements that were not met. Traders at several Japanese end-users also said their March requirements were met and were not aware of cuts to any company in the country. The same was said by the biggest crude oil importers in South Korea and Taiwan. Article continues below… Oilgram News brings you fast-breaking global petroleum and gas news on and including: Industry players, upstream and downstream markets, refineries, midstream transportation and financial reports Supply and demand trends, government actions, exploration and technology Daily futures summary Weekly API statistics, and much more Traders at oil companies […]

Saudis Lose South Korean Market Share To Iran

South Korea doubled its imports of Iranian crude in January this year from the same time last year, when Iran returned on the international oil market and started exporting growing amounts of oil in a bid to regain market share lost to the Western sanctions. According to preliminary South Korean customs data reported by Reuters , the Asian country, which is also the world’s fifth-largest crude importer, last month imported 1.79 million tons of crude from Iran, which is equal to 424,143 bpd, compared to 859,223 tons in January 2016, when sanctions on Iran were lifted. This development takes market share away from Iran’s key rival, Saudi Arabia. South Korea’s imports of crude oil from Iran’s regional rival Saudi Arabia dropped by 17.3 percent in January compared to December 2016, to 785,084 bpd, as the Saudis are complying with the OPEC supply-deal cut. South Korea’s total crude oil imports […]

Can Saudi Arabia Carry OPEC Through Spring?

16 Feb 2017   OPEC, Saudi Arabia

Faced with budget strains amid low oil prices, Saudi Arabia ditched its pump-at-will policy and brought together the diverse group of OPEC nations to agree to production cuts late last year. Now the cartel’s de facto leader and largest producer is going the extra mile in reducing output, at least in January. The Saudis pledged the biggest cut in the November 30 deal , and last month went beyond the required amount to ensure a high rate of compliance. Initial estimates by the International Energy Agency (IEA) and OPEC itself show that the cartel’s early compliance to cuts is very high: more than 90 percent. The unexpectedly high rate is almost solely courtesy of Saudi Arabia. Bloomberg estimates — based on IEA and OPEC figures — show that just three out of 10 OPEC members that had promised cuts managed to reduce their output to target production levels in […]

OPEC reports big Saudi oil cut, boosting compliance with deal

14 Feb 2017   Saudi Arabia

Top OPEC oil producer Saudi Arabia made a large cut in its crude output in January to support prices and lessen a glut, helping boost compliance with the group’s supply-reduction deal to a record high of more than 90 percent. The Organization of the Petroleum Exporting Countries is curbing its output by about 1.2 million barrels per day (bpd) from Jan. 1. Russia and 10 other non-OPEC producers agreed to cut half as much. Supply from the 11 OPEC members with production targets under the deal fell to 29.888 million bpd last month, according to figures from secondary sources that OPEC uses to monitor its output. OPEC published the data in its monthly report on Monday. […]

OPEC’s Top Producer Is Turning to Wind and Solar Power

14 Feb 2017   Saudi Arabia, Solar, Wind

The nation most identified with its massive oil reserves is turning to wind and solar to generate power at home and help extend the life of its crucial crude franchise. Starting this year, Saudi Arabia plans to develop almost 10 gigawatts of renewable energy by 2023, starting with wind and solar plants in its vast northwestern desert. The effort could replace the equivalent of 80,000 barrels of oil a day now burned for power. Add in natural gas projects set to start later this decade, and the Saudis could quadruple that number, according to Wood MacKenzie Ltd. That could supplant all the crude burned in the kingdom during its winter months. The effort goes hand-in-hand with a drive by the royal family to broaden the economy following two years of budget deficits tied to low oil prices. More industry, though, means more energy, with the amount of power used […]

The Unlikely Alliance Between Trump And Saudi Arabia

9 Feb 2017   Saudi Arabia

An unlikely supporter of U.S. President Donald Trump’s energy policies spoke out this week, and it’s really appropriate in this mad mad word of alternative facts and logic be damned, that it’s someone Trump had vowed to take down. When asked by the BBC’s Lyse Doucet why he wasn’t worried when President Trump said he wanted the U.S. to have complete energy independence from its foes and the oil cartels, the Saudi Arabian Minister of Energy Khalid al-Falih calmly replied, “Well, we’re not the foes.” When Doucet pointed out, “But you are the oil cartel” he said he looked forward to working with the Energy Secretary. When pressed that there must be some concern for a country that was singled out by Trump during the election campaign as one that would find imports to the U.S. blocked, not a feather was ruffled. It is perhaps unsurprising given how much […]

Moelis wins biggest mandate for Saudi Aramco IPO

8 Feb 2017   Saudi Arabia

Moelis & Co has been chosen as the sole independent adviser for the planned initial public offering of Saudi Aramco, according to three people familiar with the process, scoring the New York boutique investment bank the biggest equity advisory mandate to date.  Winning the hotly contested mandate represents a coup for the independent firm, which was founded by veteran dealmaker Ken Moelis in the midst of the financial crisis in 2007. Other banks are still in the race to underwrite the offering.

Saudi officials hope to turn the state-owned oil group into the world’s most valuable publicly traded company, which they believe could carry a valuation of about $2tn.  Those close to the IPO planning have said the sale of a 5 per cent stake — potentially worth about $100bn — should happen next year, although the number of shares sold could increase, and the timing could slip.  The IPO proposal is the centrepiece of an ambitious strategy by the hard-charging deputy crown prince Mohammed bin Salman to overhaul the country’s economy, using a broad-based privatisation programme to boost employment and diversify the kingdom away from oil.

Saudis To Raise $10 Billion Ahead Of Aramco IPO

7 Feb 2017   Saudi Arabia

Saudi Arabia’s oil giant Saudi Aramco has hired four banks as advisers to its first bond sale, possibly by June this year, ahead of a planned initial public offering next year, Bloomberg reported on Monday, quoting people familiar with the matter. Aramco has picked HSBC Holdings’ local unit HSBC Saudi Arabia, as well as Riyad Capital, to advise it on the sale of riyal-denominated Islamic bonds, the so-called sukuk, before the end of the first half this year. In addition, NCB Capital Co and Alinma Investment Co are also said to be working on the sukuk sale, which is part of Saudi Aramco’s plans to generate US$10 billion in bond sale proceeds in 2017, according to one of Bloomberg’s sources. The sukuk issue could be followed by a dollar-denominated bond sale, according to others. Aramco’s possible bond sale would follow the Saudi Arabian government’s huge US$17.5 billion bond issue […]

Singapore Exchange holds talks with Saudi Aramco on secondary listing: sources

7 Feb 2017   Saudi Arabia

Singapore Exchange has held talks with Saudi Aramco on a secondary listing, two sources familiar with the matter said on Monday, after the oil and gas company suggested last week it would likely simultaneously list on more than one exchange. The planned listing next year of up to 5 percent of Aramco is expected to be the world’s biggest initial public offer (IPO). Saudi Energy Minister Khalid al-Falih said last week the company was evaluating concurrent listings on more than one exchange. The sources told Reuters that the SGX talks were still at an early stage as Saudi Aramco reviews several markets including New York, London, Hong Kong and Japan. “This transaction is very open and in the public space. The key thing is there is quite […]

Saudi Arabia Raises March Crude Oil Pricing for All Buyers

3 Feb 2017   Saudi Arabia

Saudi Arabia, the world’s largest crude exporter, raised pricing for March sales to buyers from the U.S. to Asia as output cuts by OPEC and other producers shore up oil prices. State-owned Saudi Arabian Oil Co., known as Saudi Aramco , boosted its official pricing for Arab Light crude to Asia by 30 cents to 15 cents a barrel more than the regional benchmark, it said Thursday in an e-mailed statement. The company had been expected to increase pricing for the grade to a premium of 10 cents more than the Oman-Dubai benchmark, according to the median estimate in a Bloomberg survey of six refiners and traders. Aramco raised pricing in Northwest Europe to the highest since 2015, except for the Heavy grade which was boosted to the highest since 2014. Pricing was increased in Asia to the highest this year. Buyers in the Mediterranean region will also see […]

Saudi Oil Minister Says Aramco Reserves Audit ‘Very Reassuring’

3 Feb 2017   Saudi Arabia

Aramco Said to Seek Advisers for IPO An audit of state oil producer Saudi Aramco ’s crude reserves is showing “very reassuring” results ahead of what could be the world’s biggest share sale when the company sells a stake to investors next year, the kingdom’s energy minister said. The independent audit will be completed in the near future, and its results will be part of the prospectus for the initial public offering by Saudi Arabian Oil Co. , known as Saudi Aramco, Energy Minister Khalid Al-Falih told reporters Thursday in Riyadh. Aramco will disclose its 2017 annual statements prior to the listing scheduled for next year, and the company is likely to sell shares on three stock exchanges, he said at a seminar earlier in the day. “So far, the correlation between what they have determined and what Aramco has booked […]

Saudis Raise March Crude Prices For All Customers

3 Feb 2017   Saudi Arabia

Saudi Arabia has raised the prices of all grades it will be shipping to Asia, the U.S., Northwest Europe and the Mediterranean countries, with prices for Asian buyers increased more than expected. Saudi Arabia’s state-held oil giant Saudi Aramco is raising March prices for Arab Light crude to Asia by $0.30 to a premium of $0.15 to the regional Oman/Dubai benchmark, Bloomberg reported on Thursday, citing an e-mailed statement by the company. A median estimate in a Bloomberg survey of six refiners and traders had pointed to Aramco raising the Arab Light official pricing to a premium of $0.10 over the Oman/Dubai benchmark, which many Middle East state oil companies use to price their crude grades bound for Asia. The majority of traders surveyed by S&P Global Platts expected earlier this week Aramco to raise the March official selling price of Arab Light crude for Asia by $0.10-$0.20. Reuters […]

Saudi Arabia cannot escape destiny as swing producer: Kemp

2 Feb 2017   Saudi Arabia

Saudi Arabia has been forced to return to the role of swing producer in the oil market, despite the country’s insistence for three decades it would never play the role again. Saudi Arabia and its allies in the Gulf Cooperation Council (GCC) account for the majority of production cuts made so far under the OPEC and non-OPEC accords reached in November and December. By cutting their own output deeply, Saudi Arabia and its allies have masked the low level of compliance from the rest of the organization. Outside OPEC, Russia has so far delivered only around a third of its promised cut of 300,000 barrels per day (bpd), according to sources. Russia and other producers have always pledged to phase in cuts, which are meant to be averaged over the first six […]

End of tax-free living in Saudi Arabia as oil revenues dry up

1 Feb 2017   Saudi Arabia

Saudi Arabia has introduced a value-added tax (VAT) with the approval of the International Monetary Fund (IMF), indicating the end of life without VAT across the Gulf. The decision was taken on Monday and implies a five percent levy on some goods across the six-member Gulf Cooperation Council, which unites Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Other Gulf countries are also expected to follow and introduce the VAT system by the beginning of 2018. The move has IMF backing, which recommended the Gulf States impose revenue raising measures. The countries have already introduced taxes on tobacco and fizzy drinks. “A Royal Decree has been prepared,” the official Saudi Press Agency said. The tax on tobacco, now at 50 percent, will be increased to 100 percent, the same level as those for energy drinks and sodas. Residents of the region had enjoyed the tax-free period […]

Saudi Arabia may raise U.S. oil investments under Trump: Falih

1 Feb 2017   Saudi Arabia, USA

Saudi Arabia may increase its oil investments in the United States due to a more fossil fuel-oriented energy policy by the U.S. administration of President Donald Trump, the kingdom’s energy minister told the BBC in an interview. “President Trump has policies which are good for the oil industry and I think we have to acknowledge it,” Minister of Energy, Industry and Mineral Resources Khalid al-Falih told the BBC. Asked whether there is a worry about Trump’s promise to pursue energy independence, Falih said: “We have no problem with the growth of American indigenous oil supply. I have said it repeatedly as long as they grow in line with global energy demand, we welcome them,” Falih said. “We had billions of dollars invested in refining and distribution in the United States […]

Saudi Aramco Said to Weigh Up to $5 Billion Renewable Deals

30 Jan 2017   Saudi Arabia

Saudi Aramco , the world’s largest oil company, is considering as much as $5 billion of investments in renewable energy firms as part of plans to diversify from crude production, according to people with knowledge of the matter. Banks including HSBC Holdings Plc , JPMorgan Chase & Co. and Credit Suisse Group AG have been invited to pitch for a role helping Aramco identify potential acquisition targets and advising on deals, the people said, asking not to be identified as the information is private. The energy company is seeking to bring foreign expertise in renewable energy into the kingdom, the people said, adding that first investments under the plan could occur this year. Saudi Arabia is planning to produce 10 gigawatts of power from renewable energy sources including solar, wind and nuclear by 2023 and transform Aramco into a diversified energy company. The kingdom also plans to develop a […]

Is The $4 Trillion Saudi Reform Plan Inspired By China?

30 Jan 2017   China, Saudi Arabia

In an ironic decision, Saudi Arabia’s Muslim rulers, leading anti-Communists of the Cold War, may be adopting the economic management model of the atheist Communist Party of China. But rulers gotta rule… Prince Mohammad bin Salman Al Saud of Saudi Arabia recently announced Vision 2030 , the most ambitious Saudization project ever, likely driven by a $150 billion drop in reserves due to a steep decline in oil prices. Among the project’s stated objectives are some hardy perennials: reduce the role of the public sector and make the private sector the engine of the economy, reduce dependence on oil, increase participation of women in the work force, reduce corruption, and an unprecedented public share offering of 5 percent of Saudi Aramco (the Saudi Arabian Oil Company) to recapitalize the country’s reserves. But the key goal isn’t mentioned: ensure the continuing rule of the country by the Al-Saud family. Vision […]

Saudi Aramco Said to Weigh Up to $5 Billion Renewable Deals

Saudi Aramco , the world’s largest oil company, is considering as much as $5 billion of investments in renewable energy firms as part of plans to diversify from crude production, according to people with knowledge of the matter. Banks including HSBC Holdings Plc , JPMorgan Chase & Co. and Credit Suisse Group AG have been invited to pitch for a role helping Aramco identify potential acquisition targets and advising on deals, the people said, asking not to be identified as the information is private. The energy company is seeking to bring foreign expertise in renewable energy into the kingdom, the people said, adding that first investments under the plan could occur this year. Saudi Arabia is planning to produce 10 gigawatts of power from renewable energy sources including solar, wind and nuclear by 2023 and transform Aramco into a diversified energy company. The kingdom also plans to develop a […]

Independent Audit Confirms Saudi Aramco’s Huge Oil Reserves

28 Jan 2017   Saudi Arabia

The external audit of the oil reserves of Saudi Aramco ahead of its planned IPO has confirmed that Saudi Arabia’s oil giant has more than 261 billion barrels of reserves, Reuters reported on Friday, citing sources in the know. On Thursday, news broke that Saudi Aramco had hired two U.S. firms – a unit of Baker Hughes and a Dallas-based reserves auditing firm to look into how much oil reserves it really has. Saudi Aramco had tasked Baker Hughes’ energy consulting services unit Gaffney, Cline & Associates, as well as Dallas-based DeGolyer and MacNaughton, to perform the reserves auditing, various sources have told Reuters . According to The Wall Street Journal, which first broke the news of Aramco hiring Gaffney, Cline & Associates, Saudi Aramco had hired Gaffney, Cline & Associates late last year and its audit is now complete. Today, sources told Reuters that the independent audit of […]

Saudi Aramco Selects US Firms To Audit Its Reserves For IPO

28 Jan 2017   Saudi Arabia

State oil giant Saudi Aramco has tasked two U.S. industry leaders in oil reserves auditing to review the content of its deposits as it pushes ahead with a share listing next year, industry sources said on Thursday. Aramco, whose fields are estimated to contain 15 percent of the world’s oil, has asked a unit of oilservices firm Baker Hughes – Gaffney, Cline and Associates – to carry out the review, three sources familiar with the move told Reuters. Two separate sources said Aramco had also asked Dallas-based DeGolyer and MacNaughton, one of the world’s oldest names in reserves auditing, to perform some work. Baker Hughes and Aramco declined to comment. DeGolyer did not immediately […]

Saudi Aramco Hires Firm to Assess Oil Reserves Before IPO

27 Jan 2017   Saudi Arabia

Saudi Arabia’s state oil company has hired an energy consultancy to assess its reserves of crude oil, people familiar with the matter said, opening a window onto a closely guarded secret ahead of its initial public offering. The audit by Gaffney, Cline & Associates, a U.K.-based consultancy hired late last year, is a prerequisite for listing Saudi Arabian Oil Co., better known as Aramco. The listing could happen as soon as next…

Saudi Aramco Axes Plans for Petronas Joint Venture

25 Jan 2017   Saudi Arabia

Saudi Arabian Oil Co., or Saudi Aramco, has given up plans to partner Malaysia’s national oil company for an up to 89 billion ringgit ($20.1 billion) refining and petrochemicals project in the southern state of Johor, according to three people familiar with the matter. The world’s largest oil firm concluded that the project led by Petroliam Nasional Bhd., or Petronas, wouldn’t generate sufficient returns after conducting a…

How The Saudi Rift With Egypt Is Spiraling Out Of Control

25 Jan 2017   Egypt, Saudi Arabia

Saudi Arabia’s rift with Egypt is spiraling out of control, with major strategic ramifications for both countries, as well as for the Yemen conflict and other Red Sea security challenges. Egypt, Saudi Arabia, the United Arab Emirates, and Kuwait had built solid economic and political ties following the election victory of Pres. Abdul Fatah Saeed Hussein Khalil al-Sisi in May 2014, with promises of extensive economic support for Egypt as Cairo’s relations with the US Barack Obama Administration withered. But Saudi Arabia and the UAE failed to make good on their promises of economic aid to, and investment in, Egypt, while at the same time the Saudi Government put immense pressure on Egypt to support its military offensive in Yemen. The crisis began over Pres. al-Sisi’s refusal to accept the dominance in the Saudi-Egypt relationship of Saudi Minister of Defense & Aviation and Deputy Crown Prince Prince Mohammed bin […]

Saudis Warn Computer Virus That Hit Aramco In 2012 Has Returned

25 Jan 2017   Saudi Arabia

Saudi Arabia has issued a warning to local organizations that the Shamoon virus that had hit state-held oil giant Saudi Aramco in 2012 has resurfaced in a new variant, Reuters reports, quoting an alert by the telecoms authority it had seen. The Shamoon 2, which completely wipes out computer disks, has reportedly targeted 15 government agencies and private organizations, according to Saudi state-run TV channel Al Ekhbariya TV, as quoted by Bloomberg. Saudi Arabia’s labor ministry was hit by the attack, while a chemicals company, Sadara Chemical – a joint venture of Saudi Aramco and Dow Chemical – said on Twitter that the firm had experienced a network disruption on Monday morning, but operations had not been affected. According to Adam Meyers, vice president with cyber security firm CrowdStrike, the hackers had probably worked on behalf of the Iranian government in 2012 and in the recent attacks, and the […]

Shell continues evolution by parting with Saudi corporation

Royal Dutch Shell said its move to sell off its share in a petrochemical joint venture with a Saudi partner is part of its effort to retool its regional focus. Shell sold its stake in a joint venture effort to Saudi Basic Industries Corp. for $820 million in a move that solidifies the Dutch supermajor’s shifting priorities in the wake of last year’s acquisition of BG Group. The agreement marks the end of a joint venture agreement that was set to expire in 2020. “This step will allow Shell to focus its downstream activities and make selective investments to support the growth of its global chemicals business,” the Dutch supermajor said in the weekend announcement. SABIC last week reported its full-year net profit in 2016 declined […]

Shell Exits Third Saudi Project After Ending Sabic Venture

23 Jan 2017   Saudi Arabia

Saudi Basic Industries Corp. agreed to buy out Royal Dutch Shell Plc ’s 50 percent stake in a petrochemical joint venture for $820 million, marking the third project with Saudi Arabia’s largest companies that the Anglo-Dutch company has exited since 2014. Sabic will take over full ownership of the Saudi Petrochemical Co. venture, or SADAF, it said in a statement Sunday. The Middle East’s biggest petrochemicals producer and Shell are ending their partnership earlier than its planned 2020 expiration, they said. SADAF has six petrochemicals plants with total production of about 4 million metric tons a year, they said. Shell’s acquisition of BG Group Plc last year has turned its attention to existing assets and is sending “mixed signals about its desired role” in the Middle East, Arab Petroleum Investments Corp., the investment arm of Organization of Arab Petroleum Exporting Countries, said in a report last week. Shell ended […]

Saudi Oil Minister Shrugs At U.S. Shale Recovery

When OPEC decided not to cap output in 2014, flooding the market with oil, it was trying to drive higher-cost producers – most notably U.S. shale – out of profitability range. It succeeded in contributing to the oil glut, collapsing the oil prices, and hurting many U.S. shale plays and producers who were waiting for better times before returning to activity. However, this strategy spectacularly backfired on OPEC’s biggest producer and de facto leader Saudi Arabia, which started to book budget deficits amid the low oil prices, with deficit an unthinkable concept five years ago. The recent U-turn in OPEC and Saudi strategy – cutting back output to try to draw down oversupply and prop up oil prices – comes with a caveat: at higher oil prices, higher-cost producers – U.S. shale in particular – have more economic reasons and profit-making motivation to increase drilling and M&A activity. And […]

Saudi Oil Shipments Soared Ahead of OPEC Production Cut

20 Jan 2017   Saudi Arabia

No compatible source was found for this media. OPEC’s Barkindo: ‘So Far, So Good’ on Production Cut Deal Saudi Arabia’s crude exports surged to a 13 1/2-year high in November, just before it led global producers in restricting supplies to curb the worst glut in decades. The world’s biggest exporter shipped 8.26 million barrels a day, according to data published Thursday on the website of the Joint Organisations Data Initiative in Riyadh. That was the biggest outflow for any month since May 2003. OPEC decided at the end of November to restrict supplies by 1.2 million barrels a day starting this month, with Saudi Arabia instrumental in the plan. Despite the extra barrels exported, Brent crude oil prices did rise that month, mostly because of the announcement of supply restrictions. Non-member producers, including Russia, pledged additional curbs. The initial signs are that producers are honoring their commitments to cut […]

Can Saudi Arabia Survive With Oil Below $60?

19 Jan 2017   Saudi Arabia

With the OPEC production deal holding, at least for the moment, questions have now arisen over how prospects look for the cartel’s biggest producer. It’s been a strange few years for the Kingdom of Saudi Arabia, as its endured budget deficits for the first time in its modern history, stagnation in oil prices and rising competition from other OPEC members and the American shale boom. Recently, talk has centered on the Saudi monarchy’s glimpse of the future: the Vision 2030 plan, whereby it hopes to diversify its economy and end its dependence on the mercurial oil and gas market. But can the world’s biggest oil producer and OPEC’s de facto leader pull it off? In the short term, Riyadh will continue to feel the pain of lower-than-normal oil prices. The growth outlook for Saudi Arabia has been slashed , as the International Monetary Fund (IMF) announced on January 16 […]

Saudi Aramco to continue building oil, gas capacity to meet demand : CEO

18 Jan 2017   Saudi Arabia

Saudi Aramco Chief Executive Amin Nasser said the state oil giant was working on building its oil and gas production capacity to meet future demand growth. “What we are doing at Saudi Aramco is building our capacity in oil, we are the most reliable oil producer, we have a maximum sustained capacity of 12 million barrels per day (bpd). The kingdom has a capacity of 12.5 million bpd,” Nasser said on Tuesday. He did not say there were immediate plans to expand Aramco’s oil production capacity beyond the current 12 million bpd‎. “We are expanding our gas portfolio, where we will be doubling our gas production over the next decade,” he said, speaking at the World Economic Forum in Davos, Switzerland. Nasser says the world will need to invest $25 trillion […]

$25 Trillion Investment Needed To Meet Future Oil Demand

The world needs to invest US$25 trillion in new oil-producing capacity over the next 25 years to meet growing demand, Saudi Aramco’s chief executive Amin Nasser said at the World Economic Forum in Davos on Tuesday. According to the CEO of Saudi Arabia’s giant state-held oil company, global demand for oil and gas will still grow in the coming decades, so if capital investment drops, it could create “spikes” in prices and hurt the global economy, CNBC reports . Demand is still healthy and oil “will be with us for decades”, CNBC quoted Nasser as telling a Wall Street Journal panel at the Davos forum. The global oil and gas industry needs to expand and requires more investment, Nasser said. After two years of significantly lowered capital investment by the industry, a recent report by Wood Mackenzie suggests that “the global investment cycle will show the first signs of […]

Aramco CEO Says Oil Tax Will Be Cut to Lure Investors to IPO

18 Jan 2017   Saudi Arabia

No compatible source was found for this media. Saudi Aramco CEO: Oil-Tax Rate Would Be Reduced for IPO Saudi Arabia has promised it will reduce the overall tax rate paid by its national oil company to make its 2018 initial public offering — potentially one of the largest in history — more appealing to investors. “Definitely the fiscal regime will be changed,” Saudi Arabian Oil Co. Chief Executive Officer Amin Nasser said in a Bloomberg Television interview on Tuesday in Davos, Switzerland. “When you look at the fiscal regime and the taxes, it has to be aligned with other listed companies.” Aramco, as the company is commonly known, currently pays a 20 percent royalty on its revenue plus an 85 percent tax on income, Nasser said. He declined to say what tax rate the kingdom is considering. Saudi officials said Aramco’s tax rate wouldn’t need to be slashed because […]

Saudi pledges adherence to oil cut, confident others will

17 Jan 2017   Saudi Arabia

Saudi Arabia will adhere strictly to its commitment to cut output under the global agreement among oil producers, its energy minister said on Monday, expressing confidence that OPEC’s plan to prop up prices would work. Saudi Energy Minister Khalid al-Falih, speaking at an industry event in Abu Dhabi, also said he was encouraged by signs of commitments by other participants in the deal since it took effect on Jan. 1. “Many countries are actually going the extra mile and cutting beyond what they’ve committed… I am confident about the impact… and I am very encouraged about those first two weeks,” Falih said. The comments are the latest in a series of assurances from officials that participants will follow through on the […]

IMF Slashes Saudi Arabia Growth Forecast on Lower Oil Output

17 Jan 2017   Saudi Arabia

The International Monetary Fund cut its growth outlook for Saudi Arabia on lower oil production, underscoring the challenges facing the kingdom as it seeks to overhaul its economy. Gross domestic product will expand 0.4 percent in 2017, the lender said in its World Economic Outlook report update on Monday, citing the impact of the recent deal by the Organization of the Petroleum Exporting Countries to reduce output. It compares with the fund’s October prediction of 2 percent, and a median estimate of 0.9 percent in a Bloomberg survey. The forecast reflects cuts in government spending as well as the impact of lower oil production, Gian Maria Milesi-Ferretti, deputy director of the IMF’s research department, told reporters on Monday. “There is a big adjustment in spending downwards,” he said. “There is an adjustment in taxes upwards, and as a result non-oil growth is not going to be as good as […]

Saudi Plans for Early End to OPEC Pact Risk Leaving Job Undone

17 Jan 2017   Saudi Arabia

Saudi Arabia says OPEC is on track to wrap up its production curbs by the middle of the year. That would leave its aim of clearing a global oil glut unfinished. OPEC and Russia won’t need to prolong output cuts beyond June because the agreed reductions will have already ended the oversupply in world crude markets, Saudi Minister of Energy and Industry Khalid Al-Falih said in Abu Dhabi on Monday. However, ending the deal by mid-year and restoring production would mean the surplus just starts building again, thwarting OPEC’s ambition of whittling down bloated oil inventories. The Organization of Petroleum Exporting Countries said that draining off a stockpile “overhang” of more than 300 million barrels — enough to supply China for almost a month — was the main aim of supply curbs agreed with Russia and other producers. Twenty-four nations signed up to a joint cutback of 1.8 million […]

Saudis Seek Up to $50 Billion in Renewable-Energy Expansion

17 Jan 2017   Saudi Arabia

Saudis Seek Up to $50 Billion for Renewables Plan Saudi Arabia will start soliciting bids in the next few weeks for the first phase of a “massive” renewable-energy program costing $30 billion to $50 billion, Energy Minister Khalid Al-Falih said. OPEC’s biggest producer plans to generate close to 10 gigawatts from renewables, primarily solar and wind power, by 2023, he said at an energy conference in Abu Dhabi. The first tender may be for 700 megawatts of capacity at a cost of about $700 million, according to Roberto de Diego Arozamena, chief executive officer of Saudi power developer Abdul Latif Jameel Energy, which plans to bid for the contract. Saudi Arabia plans by 2030 to produce 70 percent of its power from natural gas and 30 percent from renewables and other sources, Al-Falih said Monday. He didn’t say how much renewables […]

Saudi energy minister: unlikely to extend producers’ agreement

16 Jan 2017   Saudi Arabia

OPEC and non-OPEC producers are unlikely to extend their agreement to cut oil output beyond six months, because of the level of compliance with the deal and the rebalancing of the market, Saudi Arabian Energy Minister Khalid al-Falih said on Monday. However Falih, speaking to reporters on the sidelines of an industry event in Abu Dhabi, also said producers would reassess the situation and extend the agreement if necessary. “We don’t think it’s necessary given the level of compliance…and given the expectations of demand,” he said. “My expectations (are)…that the rebalancing that started slowly in 2016 will have its full impact by the first half.” Falih said: “Based on my judgment today it’s unlikely that we will need to continue (the agreement) – demand will pick up in the summer […]

Saudi Arabia Sees No Need to Extend OPEC Deal Beyond Six Months

16 Jan 2017   Saudi Arabia

OPEC probably won’t need to extend a deal it reached with other crude producers to cut output, given the level of their compliance with the reductions and the outlook for an increase in global demand, Saudi Energy Minister Khalid Al-Falih said. The re-balancing of the oil market should take place by the end of the first half of the year, Al-Falih told reporters during an energy event in the United Arab Emirates capital of Abu Dhabi. Demand will pick up in the summer, and OPEC wants to make sure markets are well-supplied, he said. Khalid Al-Falih on Jan. 16. Photographer: Nezar Balout/AFP via Getty Images “We don’t think it’s necessary, given the level of compliance we have seen and given the expectations of demand,” Al-Falih said Monday. “The re-balancing which started slowly in 2016 will have its full impact by the first half. Of course, there are many variables […]

Oil steady as Saudi Arabia says has cut output, but oversupply worries linger

14 Jan 2017   Prices, Saudi Arabia

Oil prices were steady on Friday, supported by reports on details of OPEC output cuts, although lingering doubts over producer compliance with supply reduction targets weighed on the market. U.S. West Texas Intermediate (WTI) crude oil futures were trading at $53.01 per barrel at 0052 GMT, unchanged from their last settlement. Brent crude futures, the international benchmark for oil prices, were yet to trade. Traders said that prices received some support from statements from top crude exporter Saudi Arabia that its output had fallen below 10 million barrels per day (bpd), a level last seen in February 2015. That would also mean that the kingdom has cut production more than the 486,000 bpd it agreed to late last year under a global deal to curb production and stem a fall in oil prices. However, hard evidence […]

Saudi energy minister: still expects Aramco IPO in 2018

12 Jan 2017   Saudi Arabia

Faisal Al Nasser Saudi Arabian Energy Minister Khalid al-Falih said on Thursday that he still expected national oil giant Saudi Aramco IPO-ARMO.SE to conduct a public offer of its shares in 2018. Falih was speaking at a conference in Abu Dhabi. Riyadh has said it plans to sell up to 5 percent of the company in what could be the world’s largest initial public offer of equity, raising tens of billions of dollars. Officials have been working since early last year on complex details of the offer, including legal conditions, how to value Aramco’s assets, and on which exchanges its shares would be listed. (Reporting by Stanley Carvalho; Writing by Andrew Torchia)

Saudi Arabia to cull billions of dollars of projects

12 Jan 2017   Saudi Arabia

Saudi Arabia is planning to cull billions of dollars of projects as part of its latest cost-cutting measures to narrow a gaping budget deficit and balance the books by 2020. The government, which has been forced to slash spending because of low oil prices, has awarded a contract to PwC, the consultancy group, to identify between SR50bn and SR75bn ($13bn-$20bn) in savings, say people aware of the matter. The focus of the cuts will be on capital expenditure, such as infrastructure projects, as Riyadh hopes to avoid any politically sensitive spending reductions after austerity measures last year triggered an outburst of public discontent. “PwC will be doing big number crunching, lots of accountancy work trying to understand the liabilities the ministries already have, who is doing what, and where the cuts can most easily be made,” said one executive aware of the contract. PwC and the government declined to comment. The project review, which will span ministries such as transport, health and municipal services, is another blow to construction companies and other businesses that have come under financial strain since Riyadh began tightening its belt after oil prices fell in mid-2014.

Saudis Curb Oil to China, Southern Asia as Others Spared

11 Jan 2017   China, Saudi Arabia

Saudi Arabia was said to cut February crude sales to China and southern Asian nations while largely sparing countries including Japan and South Korea, as it curbs supply as part of a deal between OPEC and other producers. Two Southeast Asian refiners received cuts of about 30 percent from the world’s biggest crude exporter, according to two people with knowledge of the matter who asked not to be identified because the information is confidential. Reductions to a buyer in India were about 20 percent, one of the people said. Overall term supplies to Asia for next month declined between 5 and 10 percent, according to one of the people. The reductions will primarily be focused on the medium and heavy oil varieties as the producer concentrates more on sales of lighter grades to stay in the battle for market share against U.S. and African rivals. Saudi Arabia is trying […]

Kuwait Says Saudi Arabia to U.A.E. Comply With OPEC Output Cuts

Oil producers from Saudi Arabia to the United Arab Emirates are complying with production cuts promised last year to stabilize the market, Kuwait’s governor to the Organization of Petroleum Exporting Countries said. Qatar, Kuwait and Oman are also complying, having announced cuts to customers, Nawal Al-Fezaia, Kuwait’s OPEC governor, said in an interview Monday in Kuwait City where OPEC’s Secretary General Mohammad Barkindo is scheduled to have talks on the cuts with Kuwait Oil Minister Essam Al-Marzouk and other officials. OPEC and crude producers outside the group, including Russia, are implementing production cuts of about 1.8 million barrels a day this year after crude prices slumped from more than $100 a barrel since 2014 amid oversupply. Libya and Nigeria are exempt from the cuts because of conflict. Brent crude is little changed this year at $56.84 a barrel after rallying 51 percent last year. “It’s a good time to […]

Saudis, Russia to diverge on speed of oil output cuts: Kemp

OPEC and non-OPEC members have pledged to cut their combined oil production by an average of just over 1.7 million barrels per day (bpd) in the first six months of 2017. Saudi Arabia and its Gulf allies are expected to implement most of their cuts immediately, but other producers both within and outside the Organization of the Petroleum Exporting Countries are likely to phase in the reductions gradually. The collective cut should increase progressively over the first half of 2017 and have its biggest impact on the supply-demand balance from the second quarter onwards. Market tightening should be felt at the start of summer as output cuts are fully phased in, U.S. refineries ramp […]

Saudi Aramco explores Feb oil supply cuts of 3-7 percent to meet OPEC target

6 Jan 2017   OPEC, Saudi Arabia

Saudi Aramco has started talks with customers globally to discuss possible cuts of 3 percent to 7 percent in February crude loadings to comply with OPEC production cuts, four sources with knowledge of the matter said on Thursday. The Organization of the Petroleum Exporting Countries (OPEC) agreed in late November to cut production in the first half of 2017 to reduce global oversupply and prop up prices. Under the deal, Saudi Arabia, the world’s biggest oil exporter, agreed to cut output by 486,000 barrels per day (bpd), or 4.61 percent of its October output of 10.544 million bpd. “Aramco is approaching all its customers for possible cuts from February and discussing likely (supply) […]

Aramco Raises Oil Pricing to Asia and U.S. as OPEC Cuts Output

6 Jan 2017   Saudi Arabia

Saudi Arabia raised pricing for February oil sales to Asia and increased premiums for light grades to the U.S. as the world’s largest crude exporter prepares to reduce output to help counter a global oversupply. State-owned Saudi Arabian Oil Co., known as Saudi Aramco , increased its official pricing for Arab Light crude to Asia by 60 cents a barrel to 15 cents below the regional benchmark, it said in an e-mailed statement. The company had been expected to increase the pricing for shipments of Arab Light crude by 50 cents a barrel, according to the median estimate in a Bloomberg survey of five refiners and traders. Oil jumped 52 percent last year, its first annual gain in four years as OPEC agreed to reduce production for the first time in eight years. The Organization of Petroleum Exporting Countries and 11 […]