GIF Energy Tracker
2019December 3, 2019Kuwait Confirms $1Billion Investment in Saudi Aramco’s IPO
On Monday December 2, 2019, the Kuwait Investment Authority communicated its decision to invest in the Saudi Aramco IPO following government advisement that a stake was in the country’s strategic interest.
Kuwait’s move follows the UAE’s decision to invest $1.5 billion in Aramco. A second major investor from the Gulf region will be a relief for Saudi Arabia after plans to market the IPO globally were abandoned.
November 27, 2019Kuwait and UAE Considering Investing in Saudi Aramco IPO
Aramco officials have held investment talks with Kuwait and UAE, each of which have large sovereign funds totaling about $1.3 trillion in assets. The Abu Dhabi Investment Authority (ADIA) is considering investing at least $1 billion, with a final decision on the amount yet to be approved. The Kuwait Investment Authority (KIA) also has plans to invest in the IPO, although the size of their commitment is also unclear.
Saudi Arabia aims to sell a 1.5% stake in Aramco, valuing the company at $1.6 trillion to $1.7 trillion, a lower valuation than the $2 trillion target initially sought. These investments from its Gulf neighbors would help Riyadh as it strives to raise $25.6 billion from a domestic listing of the state-owned oil giant.
November 26, 2019Increasing Demand Raises Saudi Crude Imports in China to 76.3% in October
Saudi Arabian oil exports to China rose 76.3% in October, boosted by demand from new refiners. Saudi shipments grew to 1.98 million bpd in October compared to 1.74 million bpd in September and 1.12 million over the same period last year.
With this rise in exports to China, Saudi Arabia retains its position as the top supplier to the world’s biggest oil importer.
November 25, 2019Qatar LNG Expansion Project to Boost Production to 126 Million tons by 2027
On November 25, 2019, Qatar Petroleum (QP) CEO Saad al-Kaabi, confirmed that the productive layers of the North Field extend well into Ras Laffan, with gas reserves in the field now exceeding 1,760 trillion cubic feet.
Al-Kaabi also said, “This will raise Qatar’s LNG production from currently 77 million tons to 126 million tons per annum by 2027, representing an increase of about 64%.”
November 20, 2019Putin: Russia to Continue Cooperation with OPEC for a Balanced & Predictable Oil Market
On November 20, Russian President Vladimir Putin said that Russia’s “common goal with OPEC is for the market to be balanced, acceptable for producers and consumers, and most importantly, predictable.”
Meanwhile, Russian Energy Minister Alexander Novak declined to disclose Russia’s position for the upcoming OPEC+ meeting, but said that Russia will aim to stick to its commitments under the deal in November.
However, sources told Reuters that Russia is unlikely to agree to deepen oil cuts during the meeting but could commit to extending existing curbs to support Saudi Arabia. OPEC will be meeting on December 5th in Vienna, followed by talks with a group of other affiliated exporters, including Russia, known as OPEC+.
November 18, 2019Iraq Protesters Block Access to Oilfields in Basra
Protests in Basra are threatening Iraq’s largest oil fields as anti-government demonstrations in the south of the country have blocked access to the oil fields located west of Basra.
While Iraqi oil exports have remained steady there is a concern that escalation of protests could threaten oil production and exports.
November 18, 2019India’s Oil Imports from OPEC Hit Lowest since 2011
India’s imports of OPEC oil have fallen to their lowest level since 2011 as refiners purchased more fuel from the U.S. and other non-OPEC producers. Also, a combination of refinery maintenance and India’s desire to diversify sources of oil have also contributed to this decline.
OPEC’s share fell to 73% of India’s total oil imports in October, down eight percent from September.
November 13, 2019Bahrain’s First LNG Portal to Become Operational by Year’s End
Teekay LNG Partners, one of the companies behind Bahrain’s long-awaited LNG regasification terminal has announced that the facility will be operational by the end of 2019.
The startup of the terminal has been delayed twice without mentioning the reasons for the delay.
October 26, 2019U.S.-Saudi discussions for nuclear possession are in progress
As the world’s top oil exporter, Saudi Arabia talks about plans to use nuclear power to enhance its energy supply. However, conversations between the U.S. and Saudi Arabia have been difficult. Saudi Arabia does not want to be forced into a deal that would prevent them the possibility of enriching uranium or reprocessing spent fuel – both potential risks for a bomb.
October 24, 2019U.S. Businesses Licensed To Continue Work In North Sea Field Partly Owned By Iran
On October 24, 2019, the U.S. Treasury extended energy producer Serica’s license to continue operations at the Rhum field in the North Sea, until February 28, 2021. The waiver by the U.S. Office of Foreign Assets Control (OFAC) allows U.S. businesses such as oilfield service providers to work on the field while the National Iranian Oil Company is targeted by U.S. sanctions.
According to Serica CEO Mitch Flegg, Rhum was the third-largest gas producing field in the British North Sea in the second quarter of 2019. Serica owns 50% of the Rhum field, which it acquired from BP last year, and Iran’s national oil company owns the remaining 50%. Iran’s share of the revenues from the field goes into an escrow account.
October 23, 2019Japan and Saudi Arabia will renew crude oil storage deal
Japan and Saudi Arabia have acceded to extend their joint crude oil storage deal as it approaches expiration. This move will give the Middle East oil exporter quick and easy access to its essential customers in the Far East.
Currently, Aramco leases 8.18 million barrels of crude oil storage capacity at Okinawa for commercial usages in return for prioritizing supply to Japan in case of unexpected events occurring.
For Japan, storing oil domestically from its prudent suppliers such as Saudi Arabia has become paramount following the September 14th attacks on Aramco, where Japan counts on 90% of its crude import requirements.
October 22, 2019Masdar receives an offer to work on Uzbekistan solar project
Masdar, a branch of Mubadala Investment Company in the UAE, has confirmed it has earned a bid to develop Uzbekistan’s first public-private partnership (PPP) solar project.
As one of the world’s main renewable energy companies, Masdar will develop the 100-megawatt (MW) utility-scale solar plant, under the International Finance Corporation’s (IFC) Scaling Solar program.
October 21, 2019Omani oil production predicts 1.1 million bpd by 2022
Oman anticipates growing its oil production quantity to 1.1 million barrels per day (bpd) by 2022, from this year’s total of 970,000 bpd.
According to reports, “We also assume that gas production will expand, with new production coming on stream from the Khazzan II field in 2021 and the Mabrouk field in the medium term, beyond our forecast horizon. Higher gas production will in turn support the expansion of petrochemicals, power generation, and enhanced oil recovery projects.”
Despite these plans for expansion, negative effects will also be present in the process. These effects will include extrinsic debt and excessive funding costs between 2019-22.
October 20, 2019Secondary Circuit of Iran’s Arak Nuclear Reactor To Be Operational
On Sunday October 20, 2019, Ali Asghar Zarean, a special assistant to the chief of Iran’s Energy Organization, said that the secondary circuit of the Arak heavy water nuclear reactor would be ready within two weeks. This would not be in violation of the restrictions placed on Iran’s nuclear power under the JCPOA.
Iran has the capacity to produce up to 25 tons of heavy water per year, which can be employed in reactors to produce plutonium, a fuel used in nuclear warheads. Despite having nuclear technology, Iran has never pursued building or using nuclear weapons as it is forbidden by its religion, the country’s highest political authority, Ayatollah Ali Khamenei, said in early October.
October 16, 2019Yemen’s Safer Oil Company Resumes Production
Safer oil company, owned by the internationally recognized government of Yemen, resumed oil production from their fields in Shabwa to a terminal on the Arabian sea for international export.
Currently, Safer is pumping 5,000 barrels per day (bpd) and anticipates that oil production of the pipeline will reach up to 15,000 bpd.
Prior to the collapse of Yemen’s oil output, Yemen produced an average of 127,000 bpd of crude in 2014. Last year, only 50,000 bpd was produced with limited quantities for oil distribution abroad.
October 16, 2019US permits Iraq a waiver for Iranian energy resources
The US has authorized Iraq their fifth 120-day waiver that will allow them to continue with the imports of Iranian electricity and natural gas despite US sanctions.
According to a State Department spokesman, “”The waiver ensures that Iraq is able to meet its short-term energy needs while it takes steps to reduce its dependence on Iranian energy imports. We engage regularly with the Iraqi government to support measures that improve Iraq’s energy independence.”
October 15, 2019New Energy Deals between the UAE and Russia
Abu Dhabi National Oil Company (ADNOC) has confirmed to sell a portion in the Ghasha gas project to Lukoil, a Russian oil company, as well as agreed to a strategic deal with Gazprom Neft in terms of technological cooperation.
The two countries had previously talked about increasing bilateral energy sources, including their cooperation in the OPEC+ crude oil production cut deal. Also, both countries are members of the Gas Exporting Countries Forum.
ADNOC will grant Lukoil a 5% share in the Ghasha concession, which includes other sour gas fields offshore in Abu Dhabi.
October 14, 2019Iraq and Turkey Consider Rebuilding Oil Pipeline
As of October 14, 2019, Iraq and Turkey have announced that they were looking into constructing a second pipeline that could more than double existing export capacity. Due to the reestablishment of control by Iraqi militias and the Central Government over areas liberated from ISIS, Ankara is turning towards Baghdad for new energy deals.
The new pipeline would create an alternative route for Iraqi oil exports and would also connect to infrastructure in Central and Southern Iraq. This would improve the country’s energy security as oil exports can be diverted towards the north in case the Strait of Hormuz is choked off.
October 14, 2019Saudi Oil Output To Reach Pre-Attack Levels In October And November
On October 14, 2019, Saudi energy minister Prince Abdulaziz bin Salman said that Saudi Arabia’s oil production will recover in October and November to levels seen before the attacks on its oil fields in September and expected to reach 9.86 million bpd in October and November. According to the energy minister, production capacity would reach 12 million bpd by the end of November.
October 14, 2019Attacks On Saudi Oil Facilities Result in OPEC+ Production Cuts In September Leading To Compliance Rate Of More Than 200% of Cut Deal
On October 14 2019, sources reported that OPEC and its non-OPEC allies in the production cut deal achieved a compliance rate of more than 200% with their cuts in September, primarily due to the September attacks on vital oil facilities in OPEC’s largest producer Saudi Arabia. According to OPEC secondary sources, Saudi oil production plunged by 1.28 million bpd to 8.564 million bpd in September.
Other members with lower production include non-compliant Iraq and Nigeria who cut some of their overproduction but were still off target. In Iran production declined by 34,000 bpd to 2.159 million bpd. In Venezuela production plunged by 82,000 bpd to average just 644,000 bpd in September.
Russia, largest non-OPEC producer part of the pact, saw oil production inch down in September, to 11.25 million bpd from 11.29 million bpd in August, but still above Moscow’s cap under the deal.
Due to the attacks on Saudi Arabia, OPEC’s total production slumped by 1.318 million bpd from August to 28.491 million bpd in September. Additionally, it was found that OPEC pumped 28.45 million bpd of crude oil last month, down by 1.48 million bpd from August – the steepest monthly drop in nearly 17 years.
October 13, 2019Iran Discovers Natural Gas In Fars Province
On October 13, 2019, Reza Dehghan, director of development and engineering affairs at the National Iranian Oil Company, told reporters that the country had discovered a natural gas deposit in the Eram reservoir in the southern province of Fars.
The development of the Eram gas field will start in two or three years and the gas is set to be used for domestic consumption as well as for Eram itself to prevent a decline in pressure.
Eram also holds as much as 385 million barrels of condensates, whose value could be as much as $40 billion.
October 13, 2019Russia Takes Interest In Saudi Aramco IPO
On October 13, 2019, Kiril Dmitriev, chief executive officer of Russian sovereign wealth fund RDIF, said that Russian investors are interested in a planned IPO of Saudi Aramco.
Dmitriev was speaking ahead of Russian President Vladimir Putin’s visit to Saudi Arabia, where a global oil output deal between members of OPEC and non-OPEC countries would be discussed.
October 8, 2019Qatar Invites International Oil Firms to Participate in the Expansion of North Field
The Qatari Minister of State for Energy Affairs Saad Al-Kaabi said his country has recently invited international oil and gas companies (ExxonMobil, Shell, ConocoPhillips, and Total) to submit offers for the expansion of production and export capacity of the Qatari share of the North Field (the world’s largest gas field).
Qatar aims to increase its LNG production capacity by 43%, from the current annual amount of 77 million tons to 110 million tons. The plan is set to be completed by 2024.
October 2, 2019Saudi Oil Prices for Asia Are Expected to Increase in November
Saudi Arabia is expected to increase crude oil prices for the Asian market as a result of the attack on two Saudi oil facilities and the subsequent reduction in oil output. While the official selling price for Arab Light Crude is expected to jump more than 50 cents per barrel, experts say that prices for November are difficult to forecast due to additional supplies provided to Asian customers by Saudi Arabia, as well as a rapid return to pre-attack production levels.
September 26, 2019Saudi Oil Exports to China Increase While Iranian Exports Drop
Saudi Arabia held on to its place as China’s largest producer of oil in August, despite the recent oil facility attacks. According to the General Administration of Customs, Saudi Arabia exported 7.79 million tons of oil to China last month. In July, the total of exports was 6.99 million tons.
Meanwhile, Iranian oil exports to China in August dropped to 787,657 tons from 926,119 tons in July.
September 24, 2019Drop of Saudi Oil Exports After Abqaiq Attack
Saudi Arabia’s oil supply has slipped by approximately 1.5 million bpd since the September 14th attacks on Abqaiq. Nearly 5.7 million barrels per day have been lost as a result of the attack on the refining facilities.
Aramco and the Saudi officials have said that the company is currently working to restore the lost production capacity. According to Reid I’Anson , a global economist at Kpler said, “They have just over 55 million barrels left. They could go another four or five weeks realistically from the rates we’re seeing. That could change based on the internal situation, if they are able to get some of this back online.”
September 17, 2019Despite Anticipated Setbacks to Aramco Offering, Saudi IPO Planning Goes Forward
According to Reuters, an Aramco pre-IPO meeting with analysts will still go ahead as planned despite last weekend’s attack on oil facilities.
The attack on the Saudi oil facilities might highlight the potential vulnerability of its key infrastructure and raises questions over the appropriate level of risk to be factored in the valuation.
The state-owed company continues to prepare for a local IPO, which the sources said may happen as early as November.
September 17, 2019Oil Drops to 5% as the Saudis Indicate a Return to Normal Output
Saudi Energy minister, Prince Abdulaziz bin Salman, said in a press conference today that oil output will be back to pre-attack levels by the end of September.
The largest oil processing facility and the nearby oil field were attacked on Saturday knocking out 5.7 million barrels of daily oil production from Saudi Arabia.
September 14, 2019Saudi Arabia’s Oil Facility in Abqaiq Is Attacked
Saudi Arabia’s main oil facilities have been targeted at their core, causing an interference to their oil output this past weekend. The drone attacks targeted one of Saudi Arabia’s main oil industries, Abqaiq, as well as the nearby oilfields. The origin of these attacks remains unknown. The attack took off the market nearly 5.7 million barrel of Saudi production, which is more than 5% of the global oil supply.
September 9, 2019Qatar Shortlisted Oil Firms for a Stake in North Field Expansion
Qatar Petroleum CEO and Minister of State for Energy Saad al-Kaabi told Reuters that Doha has shortlisted international oil companies for a stake in the megaproject, North Field expansion.
Total, Exxon Mobil, Shell, and Italy’s Eni have all offered Qatar Petroleum stakes in prize assets abroad in a bid to win a stake in the multibillion project.
The minister said that his country might still choose to go alone in the project unless partnership offers Doha a significant value.
Qatar Petroleum plans to increase its LNG production from 77 to 110 million tons per year over the next five years by building four new production facilities.
September 9, 2019New Energy Minister in Saudi Arabia Reiterates Commitment to OPEC+
The newly appointed Saudi Energy Minister Abdulaziz bin Salman reiterated the importance of OPEC+ alliance for the market’s balance and the alliance is “staying for the long term”. The new minister told reporters that there will be no radical changes in the oil production policy of Saudi Arabia.
The new minister was appointed on Saturday replacing Khalid Al-Falih, the second change in the position in three years.
September 9, 2019Saudi Arabia Wants to Enrich Uranium
The newly appointed Saudi Energy Minister Abdulaziz bin Salman said today that his country wants to enrich uranium. The new minister told reporters “we are proceeding with it cautiously … we are experimenting with two nuclear reactors.”
The tender is expected in 2020 while firms from the U.S., Russia, South Korea, China, and France are involved in preliminary talks about the multi-billion-dollar project.
September 6, 2019Iraq’s Oil Production Hits a Record of $4.88 Million bpd
According to S&P Global Platts, OPEC’s second largest producer Iraq, has reached record oil production of 4.88 million bpd in August.
Iraq’s August production was a 370,000-bpd excess of its 4.51 million bpd cap set in the OPEC+ production cut policy.
September 6, 2019Kuwait’s Oil Production Up by 35,000 bpd
According to data released by the Kuwait Oil Company Kuwait’s oil production increased in August by 35.000 bpd to reach 2.69 million bpd. Despite this increase, the production remained below the cap set by OPEC+.
August 29, 2019Aramco Proposes Two-Stage IPO, Shunning London, Hong Kong
Aramco is considering launching its IPO in two stages. First, on the Saudi stock exchange, Tadawul, then internationally. Initially, the United Kingdom, United States, and China were considered for the second stage, but the unstable political situations in the United Kingdom and Hong Kong begged reconsideration. Aramco also fears facing lawsuits in the United States due to the 2016 Justice Against Sponsors of Terrorism Act, which allows the families of victims of terrorism to sue foreign countries.
August 28, 2019Crimea Offers Iran Help in Oil Shipping
The Deputy Prime Minister of Crimea, Georgy Muradov, suggested that “Iran can use our shipping capabilities, river-sea canals in such situation and carry oil over the Volga-Don canal, via Crimea, to the Black Sea.” This would allow Iran to bypass the Suez Canal and avoid potential confrontations with Saudi Arabia, Egypt, and the United States. Muradov’s statement comes weeks after Iran’s Grace 1 oil tanker was seized by British Royal Marines off the coast of Gibraltar.
August 26, 2019Iran Says It Sold Oil on Released Gibraltar Tanker
An Iranian government spokesperson said today that his country sold the oil from the tanker released in Gibraltar without identifying the recipient of the oil nor the destination.
The vessel carries 2 million barrels of oil, and a U.S. federal court has recently ordered the seizure of the tanker. Tehran threatened that a U.S. move to seize the tanker would have heavy consequences.
August 21, 2019U.S. Says Iran’s Oil Exports Fell to Below 100,000 bpd in July
US Department of State’s special representative for Iran Brian Hook said that US sanctions on Iran’s oil sector have caused a drop in Iranian oil exports to below 100,000 bpd, adding that the sanctions have disrupted nearly $50 billion in annual revenue for the Iranian government.
August 20, 2019Unit 3 in the UAE’s Barakah Nuclear Energy Plant was successfully Energized
On August 20th, The Emirates Nuclear Energy Corporation (ENEC) announced that it has safely and successfully energized Unit 3’s main power transformer and gas insulated bus. The agency said that the unit’s auxiliary power transformers and excitation transformer were energized in normal operating configuration.
The construction of the UAE’s Barakah nuclear power plant is moving ahead with Unit 1 complete, Unit 2 stands at 95%, Unit 3 at 91%, and Unit 4 at 82%.
August 20, 2019Aramco’s Motiva to Buy Flint Hills Port Arthur, Texas Chemical Plant
Aramco’s refinery branch in the United States, Motiva, signed an agreement to purchase the Flint Hills Resources chemical plant near its Port Arthur operations in Texas. The details of the agreement have yet to be released. Motiva’s Port Arthur refinery is the largest in the United States.
August 19, 2019Saudi Aramco Opens Bids for IPO
Saudi Arabia asked several banks to submit proposals for potential roles in the expected initial public offering. It is currently unknown which banks have received requests from Aramco, but Saudi energy minister, Khalid Al-Falih, said Aramco would go public by 2021.
August 18, 2019Dubai Electricity and Water Authority Awards $380 Million Contract for Hatta Dam
The contract was awarded to Strabag Dubai, Strabag AG, Andritz Hydro and Ozkar, to be commissioned by 2024. The dam is expected to generate 250MW of power. The project is part of a 2016 ten-year plan to transform the Hatta region.
August 12, 2019Oil Prices Stabilize as Saudi Arabia and Kuwait Are Expected to Reduce Output
Today oil price continued to stabilize despite fear of slowing oil demand as a result of the U.S.-China trade war. Oil price steadiness was motivated by statements from Kuwait’s oil minister who evidenced his country’s commitment to the production cut accord as Kuwait has lowered its oil production by more than required by the OPEC+ agreement.
Also, about Saudi Aramco’s IPO, an analyst at Price Futures Group said “The Saudis will need a higher price for oil for its IPO, and this confirms they’ll do whatever it takes to get oil prices up”
August 5, 2019Russian and Saudi Energy Ministers Meet in Moscow
Saudi Energy Minister Khalid Al-Falih met his Russian counterpart Alexander Novak in Moscow alongside the heads of several Russian energy companies involved in cooperation with Saudi Arabia.
The Russian president Vladimir Putin is set to visit Riyadh in October. Additionally, Saudi Aramco is among the contenders to join Russia’s Arctic LNG-2 project.
July 29, 2019Yemen Calls Oil on Companies to Resume Production
Ministry of Oil and Minerals Abdullah al-Awd urged national and international oil companies to resume production.
Yemen’s oil production has collapsed since the start of the war in 2015. Currently, Hadi’s government controls Yemen’s oil and gas fields in the south, while the Houthis control the oil terminal of Ras Issa on the western coast.
Last February al-Awad said Yemen has plans to increase production to 110,000 bpd. The country’s main oil streams are light and sweet Marib and medium-gravity and more sulfur-rich Masila.
July 29, 2019Oman to Increase its LNG Production by 10% in Two Years
Mohammed al-Naseeb, Chief Marketing Officer of Oman LNG told S&P Global Platts that his country is planning to increase its LNG production by 10% from 10.5 to 11.5 million mt/year through debottlenecking.
The sultanate is also investing in the exploration and development of several oil and gas fields.
July 26, 2019Saudi Arabia to Expand Export Capacity from East-West Pipeline
Saudi Energy Minister Khalid Al-Falih said his country is planning to increase oil exports by 40% through the east-west pipeline via the Yanbu port city on the Red Sea to avoid passing through the Strait of Hormuz.
Currently, the pipeline capacity is at 5 million bpd and the Saudi government is planning to increase it to 7 million bpd within two years.
July 26, 2019Oman Expects More Oil and Gas Discoveries in the Northwest
Omani Oil and Gas Minister Mohammed al-Rumhi said his country is expecting to discover more oil and gas in the northwest part of the sultanate near Mabrouk field which holds four trillion cubic feet of gas and 112 million barrels of condensate.
Oman is the biggest non-OPEC oil producer in the Middle East with production in June 2019 at one million bpd of oil and condensate. Muscat also produces 3 billion cubic feet of gas per day with plans to increase investment on gas production and exploration.
July 23, 2019New Agreement Between UAE’s ADNOC and China’s CNOOC
On the sides of MBZ’s visit to China, UAE’s ADNOC signed an agreement with China National Offshore Oil Co (CNOOC) to explore and develop oil and LNG fields.
CNOOC Group’s statement said the companies will share the latest technologies to develop ultra-acidic natural gas fields. The agreement also includes enlisting other Chinese companies to design, construct and provide services for ADNOC oilfields.
July 22, 2019Morgan Stanley Doesn’t See Gulf Tension Leading to a Sustained Jump in Oil Prices
As oil price went up by 2% today after Iranian seizure of a UK oil tanker, Morgan Stanley said that it does not expect the tension near the Strait of Hormuz to lead to a sustained increase in oil prices.
Morgan Stanley’s global oil strategist Martijn Rats told CNBC “There is a difference in the oil market this time around because non-OPEC is simply growing so fast. That is the real game changer and that’s why the price action is relatively benign,”
July 22, 2019Saudi Arabia to Start its First Wind Power Plant
Saudi Arabia plans to build its first wind power plant with French Electricite de France and Emirati Mubadala Investment Co.
The project is set to start generating power in three years while the Saudi government has pre-qualified 60 companies to bid for 12 renewable projects in 2019.
Riyadh has plans to increase its reliance on LNG and renewables to generate power instead of oil, of which it now uses 600,000 bpd.
July 19, 2019U.S. to Become the World’s Largest LNG Exporter by 2024
An official at the International Energy Agency expected that by 2024 the U.S. will become the world’s largest LNG exporter by exporting over 100 billion cubic meters, exceeding current top exporters Qatar and Australia.
The source also said China’s imports of LNG are expected to rise to over 100 billion cubic meters by 2024, exceeding those of Japan.
July 17, 2019UAE’s ADNOC State-Run Oil Company Plans Overhaul
Reuters report said UAE’s state-run oil company is planning an overhaul of its trading operations by launching regional oil benchmarks and hiring the former employees of private-sector peers. The company also plans to start full in-house trading for refined oil products.
UAE is OPEC’s third-largest oil producer and has plans to boost its oil production to 4 million bpd by 2020.
July 15, 2019IEA Forecasts an Oversupplied Oil Market in 2020
In a report released last Friday, The International Energy Agency revealed it expected an over-supply of oil for 2020. The IEA also expects oil demand from OPEC’s 14 members to drop to 28 million bpd during Q1 of 2020, the lowest in 16 years.
The Paris-based organization linked the oil glut to the stock buildup that has resulted from the market’s oversupply in 2018, 2019 and the growing production by the United States and other non-OPEC members.
July 12, 2019OPEC Forecasts Lower Demand in 2020
In its monthly report, OPEC expected lower oil demands in 2020 with a 1.34 million bpd drop from this year to be at 29.27 million bpd from the 14 member-states.
The drop of oil demands from OPEC members was linked to the increase of oil supply from non-OPEC oil producers, mainly the U.S.
This forecast will probably give the U.S. more room to keep sanctions on OPEC members, Iran and Venezuela.
July 10, 2019Saudi Arabia to Expand Marjan and Berri Oilfields
Saudi Aramco awarded an $18 billion contract to various companies for the expansion of Marjan and Berri oilfields with expectations to add 550,000 bpd of Arabian Crude to its production.
Amin Nasser, Armaco’s president and CEO said “These two programs will significantly enhance Saudi Aramco’s oil production and gas processing capabilities.”
July 10, 2019Oman’s Petrogas and HitecVision to Buy Total’s British North Sea Oilfields
HitecVision and Oman’s Petrogas have teamed up to buy a portfolio of Total’s British North Sea oilfields for $635 million.
The oilfields currently produce 25,000 bpd but the two companies have plans to expand the production to 100,000 bpd within 2-3 years.
July 9, 2019Saudi Arabia Pumped 9.7 Million bpd in June
According to a source at OPEC, Saudi Arabia pumped 9.78 million bpd in June, a slight increase from the 9.67 million bpd produced in May.
The production level remained below the 10.3 million bpd, Riyadh’s production quota in OPEC’s oil reduction pact.
July 2, 2019OPEC+ Agree to Extend Production Cut till March 2020
One day after OPEC members reached a deal to extend oil production cuts till March 2020, Russia and nine other non-OPEC oil producers joined the extension of the cuts.
Russian Energy Minister Alexander Novak told reporters that “it is right not to make any sudden movements now and maintain the situation as it is,” meanwhile, OPEC+ will monitor the situation and make necessary changes when needed.
June 28, 2019Saudi Arabia and Russia are Discussing the Extension of Supply Cuts
Russian Energy Minister Alexander Novak said today that his country and Saudi Arabia are still discussing the extension of the production cut policy.
An OPEC+ meeting is set for Tuesday, July 2 in Vienna, meanwhile, OPEC’s top producers, Saudi Arabia, Iraq, UAE and Kuwait have supported the extension of the deal.
June 28, 2019UAE Became Japan’s Largest Oil Supplier in May
Last May the UAE became Japan’s largest oil supplier as it increased oil exports to Japan by 42.8% from April to average 1.03 million b/d.
Japan is Asia’s third-largest energy consumer and the spike of oil imports from the UAE was to make up for the loss of Iranian oil as US waivers ended at the beginning of May.
June 26, 2019Oil Price Rose 2.4% As U.S. Oil Inventories Fell by 12.8 Million Barrels
Today oil price of West Texas Intermediate and Brent surged 3.3% and 2.4% respectively after the Energy Information Administration report said that the U.S. oil inventory fell by 12.8 million barrels last week, the largest decrease since September 2016.
June 26, 2019Saudi Aramco Signs 12 Agreements with South Korean Companies
During a visit of the Saudi Crown Prince Mohammad Bin Salman to South Korea, Aramco signed 12 new agreements with Korean companies on refining, oil sales, petrochemicals, and other industrial projects.
June 25, 2019Iran’s Oil Exports in June Drop to 300,000 bpd
Industry sources and tanker data show that Iran’s oil exports in June 2019 have dropped to 300,000 bpd from 400,000-500,000 bpd in May 2019, a fraction of Iran’s 2.5 million bpd of oil exports from May 2018 prior to U.S. sanctions.
June 25, 2019Platts Analytics: LNG Prices Could Double if Hormuz Strait is Disrupted
In its latest Global LNG Monthly Forecast, S&P Global Platts Analytics projected a 100% increase of LNG prices if Qatar LNG exports through Hormuz Strait is blocked.
The report said the closure of the Strait, Qatar’s only route to export LNG, will remove Qatar’s 280 million cu m/d, which makes 22% of the world’s demand.
June 19, 2019OPEC and OPEC+ to Meet in July 1 & 2
OPEC has announced on its website that its June meeting was pushed to July 1st, and the following day will be for the OPEC+ meeting in which oil producers are expected to discuss the extension of the production cut policy.
June 14, 2019ExxonMobil and Saudi SABIC to Build Petrochemical Project in Texas
Saudi Arabia’s petrochemical company SABIC and U.S. oil and gas corporation ExxonMobil agreed to proceed with the construction of a chemical facility and a 1.8 million metric ton ethane steam cracker in San Patricio County, Texas.
The project will create 6,000 jobs during construction and 600 permanent jobs. The economic output will exceed $50 billion during first six years.
June 12, 2019Brent Drops 3.7% to Reach $59.96 As U.S. Inventories Rose by 2.2 Million Barrels
Today Brent dropped by 3.7% to reach $59.96. The sharp drop was linked to data released by the U.S. Energy Information Administration which showed U.S. oil inventories increased by 2.2 million barrels in the week through June 7.
This price is 20% lower than the highest price reached in April and comes at a time when there are concerns that the ongoing U.S.-China trade war is weakening oil demands.
June 12, 2019BP Raises Estimates of Saudi Arabia’s Oil Reserves by 30 Billion Barrels
In a recent annual statistic report, BP raised oil reserve estimates for Saudi Arabia by 11% (30 billion barrels) to reach 297.7 billion barrels from 266.2 billion a year earlier. The new figure puts Saudi Arabia 6 billion barrels behind Venezuela which has the world’s largest oil reserve estimates.
The estimation increase happened as Saudi Arabia separated the estimations of oil, gas and natural gas reporting.
June 10, 2019Saudi Aramco Announces Plans to Invest in Russia’s LNG Sector
During his visit to Russia, Saudi Energy Minister Khalid Al-Falih said his country has made an offer to join Russian Novatek’s Arctic LNG 2 project.
Al-Falih also said that Riyadh is studying the possibility of future investments in Rosneft and Gazprom’s LNG projects, plus Russia’s Sibur petrochemical company.
June 10, 2019Iran Has No Plans to Leave OPEC
Iranian Oil Minister Bijan Zanganeh told the Iranian parliament news site ICANA that his country has no plans to leave OPEC despite his belief that Iran is treated like an enemy by Saudi Arabia and the UAE.
The minister regretted that OPEC has “turned into a political forum” and that some OPEC members “use oil as a weapon against us [Iran] in the global market and world.”
June 7, 2019IEA: Natural Gas Demand to Increase by 10% until 2024
The International Energy Agency said demand for natural gas grew 4.6% in 2018, the fastest annual growth in 10 years, and it is expected to increase by 10% until 2024 when it will reach more than 4.3 trillion cubic meters.
IEA said China will account for 40% of this increased demand as it shifts from coal and oil to cleaner energy sources. This increase is also expected in India, Bangladesh, and Pakistan.
June 6, 2019Putin Says Moscow Differs with OPEC on Fair Price
Two weeks before OPEC+ group meeting, Russian President Vladimir Putin said Moscow differs with OPEC’s members on what constitutes a fair oil price. He said a $60-$65 per barrel suites Moscow, while OPEC’s de facto leader Saudi Arabia seeks a higher price.
June 6, 2019Iraq Supports the Extension of OPEC’s Oil Production Cuts
Iraqi Oil Minister Thamer Ghadhban said his country supports the extension of OPEC’s oil production cut policy set to expire this month. The minister said the policy proved its effectiveness in stabilizing the oil market. The minister added that more measures should be taken considering recent developments in the market.
June 5, 2019Saudi Aramco and UAE’s ADNOC to Open Oil Trading Office in Fujairah Port
Saudi Arabia’s Aramco and the UAE’s ADNOC announced this week about the establishment of oil trading offices in UAE’s eastern Al-Fujairah port. Both companies aim to gain more access to the market in the world’s second largest bunkering hub, mainly as the port is increasing its storage capacity.
June 3, 2019Iraq Awards Hyundai a Deal to Construct Seawater Injection Facility
The director of Iraq’s state-run Basra Oil Company said Baghdad has awarded Hyundai Engineering & Construction Co Ltd a deal for the construction of a seawater injection facility with an estimated cost of $2.4 billion.
The project is set to be completed in four years, and is vital to the planned increase of Iraq’s oil production
June 3, 2019OPEC+ Deal For the Second Half of 2019 is Emerging
Saudi Energy Minister said a consensus among the OPEC+ group is emerging, and aims to ensure stability in the oil market.
Al-Falih said “We will do what is needed to sustain market stability beyond June. To me, that means drawing down inventories from their currently elevated levels,”
June 3, 2019Britain’s INEOS to Build Three Petrochemical Plants in Saudi Arabia
Saudi Aramco and France Total have signed an MoU with Britain’s INEOS to build three petrochemical plants in Saudi Arabia as part of the Jubail 2 complex with an estimated cost of $2 billion.
The three plants are expected to produce key building blocks for carbon fiber, engineering polymers and synthetic lubricants that are essential to economic growth in the region.
June 2, 2019Bahrain will Allow Foreign Investors to Own 100% Stakes of Oil & LNG Extraction Projects
On Sunday, the Bahraini Prime Minister issued an order allowing foreign companies to own 100% of oil and natural gas extraction projects.
May 31, 2019OPEC’s May Production Drops
Reuters survey showed that OPEC’s 14 members have pumped 30.17 million bpd in May, 60,000 bpd less than April and the lowest in four years.
The survey suggests that Saudi Arabia has pumped oil more than the previous month, yet it was less than its quota in the OPEC-led production cut deal and not enough to compensate for the loss of Iranian oil exports.
May 30, 2019Russia Considers the Extension of Oil Production Cut Policy
Russian First Deputy Prime Minister Anton Siluanov said Moscow will carefully consider the extension of oil production cut policy agreed with OPEC last December.
Siluanov said Russia will weigh the benefits of the extension on oil prices mainly as the U.S. shale oil production increase has gained new markets.
May 29, 2019Reuters: Iran’s May Oil Exports Drop to 400,000 bpd
Reuters report cited tanker data and industry sources that showed a drop in Iran’s oil exports in May to 400,000 bpd.
Oil exports have dropped from at least 2.5 million bpd in April 2018 as a result of U.S. sanctions on Tehran.
There is no definitive data about Iran’s oil exports since Iran stopped reporting its production figures to OPEC.
May 28, 2019Kuwaiti Oil Minister Expects Market to Balance
Kuwait oil minister told Reuters that he is expecting to see a balance in oil market by the end of 2019 as global inventories fall and demand remains strong.
The Kuwaiti minister explained that oil demand growth faces uncertainty as a result of the U.S.-China trade dispute, and at the same time, U.S. oil production continues to rise.
May 24, 2019Iran’s Oil Storage is Growing
Reuters report says Iran’s storage of oil is increasing as Tehran continues to pump oil even as exports are expected to continue dropping.
It is important for Iran to keep pumping oil from its aging fields since disruption could damage future production and because the high the costs of resuming production if it should come to a stop.
May 24, 2019India Ends All Oil Imports from Iran
The Indian Ambassador the U.S. Harsh Vardhan Shringla said his country has ended all oil imports from Iran after the expiration of waivers on May 2.
The Indian diplomat explained that the sanctions did hurt New Delhi as it used to import 10% of its oil supplies from Iran.
May 22, 2019Saudi Aramco Makes its First Direct Investment in U.S. LNG Sector
Aramco has made an agreement to buy LNG from the Port Arthur LNG export project developed by San Diego-based Sempra Energy.
The deal includes the purchase of 5 million tons of LNG per year and a 25% equity stake in the first phase of the multibillion-dollar project.
May 22, 2019Iraq to Increase Oil Production from West Qurna 1 Oilfield
A senior Iraqi oil official announced a decision to increase oil production from West Qurna 1 Oilfield from 440,000 to 490,000 bpd. The oilfield is developed and operated by ExxonMobil.
May 21, 2019Turkey is Compliant with U.S. Sanctions on Iranian Oil Exports
A Reuters report found that Turkey has complied with the U.S. sanctions by closing its ports to Iranian oil.
Earlier this month, the U.S. did not extend its sanctions waivers for Turkey and other nations to continue buying oil from Iran. The U.S. decision faced major criticism from Ankara.
May 20, 2019Bahrain’s Bapco to Expand Its Refining Capacity
State-run oil company Bahrain Petroleum Co (Bapco) has completed financing its refining capacity expansion plans. Expansion is expected to be completed by 2022 and will increase the company’s refining capacity from 267,000 bpd to 380,000 bpd.
According to Reuters, the financing has exceeded $4 billion and is to include five export credit agencies and a syndicate of 21 commercial banks.
May 20, 2019OPEC+ Group Meets in Saudi Arabia
Last weekend OPEC, Russia, and other oil producers met in Saudi Arabia to discuss the current supply of the oil market. Major oil producers did not make a decision about current production cuts and decided to leave the decision to their upcoming meeting in June.
The Saudi Energy Minister Khalid Al-Falih said oil producers agreed to gradually lower oil inventories to normal levels.
May 17, 2019Aramco to Supply India with Oil to Compensate for Lost Iranian Oil
Saudi Arabia will increase its supply to the Indian Oil Corp by two million barrels per month between this upcoming July and December to compensate for the lost oil exports from Iran.
Aramco has an agreement with the Indian Oil Corp to export 5.6 million tons of oil for the financial year 2019/20 that started on April 1st.
May 15, 2019Saudi Arabia Resumes Oil Pumping Via Its East-West Pipeline
Today Saudi Arabia resumed pumping oil via its East-West pipeline one day after it shut it down as a result of drone attacks on two pumping stations. The pipeline transports oil from the Eastern Province to Yanbu port.
May 14, 2019Oil Price Rise After Attack on Oil Infrastructure in Saudi Arabia
Oil prices rose today after reports of drone attacks by Yemen’s Houthis on two oil pumping stations in Saudi Arabia. Brent barrel increased by 1.3% to reach $71.14, and West Texas reached $61.67 per barrel, a 1.03% increase.
Saudi Energy Minister Khalid Al-Falih confirmed that the fire was contained and oil production was not interrupted as a result of the attack.
May 9, 2019Saudi Arabia to Meet All Orders From Former Buyers of Iranian Oil
Bloomberg report said Saudi Arabia is willing to meet all oil orders it received for June including from countries that stopped buying Iranian oil as a result of U.S. sanctions.
The report expected that Saudi oil exports for June will remain below 7 million bpd, well under the 10.311 million bpd quota agreed to by Riyadh in the production-cut agreement between OPEC and its allies.
May 7, 2019Asian Economies Buy More Oil from Saudi Arabia at a Higher Price
Bloomberg Report talked about an increase in oil supply and price from Saudi Arabia to Asian countries while these states are looking for a replacement of Iranian oil ousted from the market as a result of discontinued sanctions waivers.
The price of Arab Medium crude was set at the highest in more than four years, while Arab Heavy was set at the highest price in more than six years.
May 7, 2019Iraq is Close to Making a $53 Billion Deal with ExxonMobil & PetroChina
Iraqi Prime Minister said his country is close to finalizing a $53 billion deal with ExxonMobil and PetroChina to develop the Nahr Bin Umar and Artawi oilfields and raise their production from 125,000 to 500,000 bpd.
The development of the two fields is expected to make $400 billion over the 30 years the deal will be in effect.
May 6, 2019Oman’s 2018 LNG Revenues Increased by 60%
The 2018 annual report of Oman Liquefied Natural Gas Company showed that the company’s total revenues increased by 60% to reach $3.50 billion, a sharp increase from $2.19 billion in 2017. Meanwhile, its net income increased by 68% to $1.79 billion in 2018, from $642 million in 2017.
The report showed that Oman’s LNG production rate hit 10.4 million tons in 2018, up from 8.60 million tons in 2017. The jump in profit is attributed to increased production and price.
May 3, 2019Iran’s Oil Minister Warns OPEC is “likely to collapse”
After his meeting with OPEC Secretary General Mohammed Barkindo in Tehran yesterday, the Iranian Oil Minister Bijan Zangeneh said “OPEC is being threatened due to unilateralism by certain members and this organization is likely to collapse,”
Last Thursday the U.S. announced it was ending sanctions waivers for Iran’s top oil buyers, while President Trump said that the UAE and Saudi Arabia (both OPEC members) will increase oil production to cover any gap in global oil supply expected after ending Iran sanctions waivers.
April 30, 2019OPEC Oil Supply in April Hits A Four-Year Low
Reuters survey found that April’s oil production from OPEC members was at 30.23 million bpd, 90,000 lower than March and is the lowest since 2015.
The four-year low oil supply is linked to production cut policy and the drop of exports from Iran and Venezuela as a result of U.S. sanctions.
The survey found that 11 of the 14 members achieved 132% of pledged cuts compared to 145% in March. Meanwhile, the involuntary production drop from Iran and Venezuela hit 150,000 bpd and 100,000 bpd respectively.
April 24, 2019Global Spare Oil Production Capacity Increased to 3.3 Million b/d
In a statement by the International Energy Agency (IEA), the organization said oil markets are adequately supplied and “global spare production capacity remains at comfortable levels.”
IEA estimated the global spare production capacity to be at 3.3 million bpd (2.2 million from Saudi Arabia and 1 million from the UAE, Iraq, and Kuwait). The statement linked the increase of spare production capacity to the oil producers’ high compliance with the production cut agreement in the OPEC+ group.
April 23, 2019Gulf States’ OPEC Members Are Ready to Increase Production
OPEC and oil industry sources said that Arab Gulf OPEC members are ready to increase production if there is a shortage in oil supply. This comes one day after the Trump Administration decided to not renew waivers for Iranian oil importers.
Reuters sources said that Saudi oil production for May is not expected to be much higher than April, while Saudi Energy Minister Khalid Al-Falih said that Riyadh will coordinate with other oil exporters to ensure adequate oil supplies to the market. Other sources in OPEC clarified that in order to increase output “There must be actual impact on the market and a real demand from customers,”
April 22, 2019Trump Will Not Renew Iran Sanction Waivers
The White House said today in a statement that President Donald Trump will not renew Iran sanction waivers with intentions to bring Iran’s oil exports to zero. The statement said that the U.S., along with Saudi Arabia and the United Arab Emirates will ensure that oil markets are adequately supplied.
Oil prices rose to $73.87 a barrel on Sunday and Monday with reports that the waivers will not be extended.
April 19, 2019Saudi Arabia Expects Oil Market to Balance in 2019
An official in the Saudi Energy Ministry expects the oil market to balance this year as a result of the oil production cut policy agreed between OPEC and its allies. Also, Russian Energy Minister Alexander Novak told reports in Moscow that Russia has been committed to the production cut policy.
April 17, 2019India Looks for Replacement for Iranian Oil
Prior to the expiration of U.S. waivers to buy oil from Iran, officials from India’s state-owned refineries told Reuters they are confident of securing oil imports from the U.S., Mexico, Saudi Arabia or Iraq.
The four refineries did not place oil supply orders with Iran for May, while last year several refineries signed agreements with Baghdad to import Iraqi oil during 2019.
April 16, 2019Oil Price Dropped and U.S. Oil Stockpiles Are Up
Oil price dropped slightly today after comments from Russia raised concerns about the renewal of the oil cuts agreed to by Russia and OPEC. Also, as analysts expected the U.S. oil stockpiles have increased by 1.9 million barrels last week, the fourth straight increase.
OPEC is set to meet in June to discuss the extension of the production cuts agreement to the end of 2019. In previous comments from officials in OPEC member-states, the cuts will be decided based on the status of oversupply in oil markets.
April 15, 2019Investors Are Avoiding Iranian Oil
Bloomberg report said Tehran has offered investors as much as 6 million oil barrels in 2019 and only one deal was closed for the minimum of 35,000 barrels. This week Iran has offered another million barrels of light crude for a 6% down payment and 90 days of credit.
Iranian oil exports have significantly dropped since the U.S. reinstated sanctions in 2018. Deputy head of the Iranian Association for Energy Economics, Morteza Behrouzifar said: “Iran’s crude is sanctioned and under no circumstances can anyone buy Iranian crude except those who were granted waivers.”
April 11, 2019OPEC May Raise Oil Production from July
Reuters report said OPEC might increase oil production starting from July if Iran and Venezuela oil production drops and prices increase.
Last month Venezuela’s oil production dropped to 1 million bpd, and it is expected that Iran’s oil exports will further drop in May.
OPEC is expected to meet on June 25-26 to decide whether or not to extend the oil cuts or not.
April 9, 2019Saudi Aramco Issues $12 Billion in Bonds
Saudi Arabia issued $12 billion of bonds for its state-run oil company Aramco. The demand for Saudi Aramco’s debut offering was so robust it allowed the company to borrow at a lower yield than its sovereign parent. The high demand to buy Aramco’s debt has also helped to lower the borrowing costs for Riyadh.
The bond sale was managed by JPMorgan, Morgan Stanley, Citigroup Inc., Goldman Sachs Group Inc., HSBC Holdings Plc, and NCB Capital Co.
April 9, 2019Oman Awards French Total Block 12 Exploration Rights
The Omani government awarded France Total 100% exploration and operatorship rights in onshore Block 12. The Block is spread over an area of 3860 square miles and believed to have significant gas resources.
Prior to that, Total, Oman’s Ministry of Oil and Gas and Oman Oil Company reached an agreement to execute their integrated gas project to develop gas resources in the Greater Barik area in Blocks 10 and 11. In 2018, Total’s oil production in Oman was 38,000 bpd.
April 8, 2019Saudi Energy Minister Says OPEC and non-OPEC to Make a Decision on Oil Cuts Extension in May
Saudi Energy Minister Khalid Al-Falih said OPEC and non-OPEC members will meet next month to make a decision about the extension of oil cuts.
The meeting -also known as JMMC- will include major oil producers such as Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Nigeria, and Kazakhstan.
About the possibility of Saudi Arabia making more output cuts, the Saudi minister said “I don’t think we will need (to do more) … the market is on its way toward balance. We have done a lot more than others,”
April 2, 2019Saudi Arabia Threatens to Stop Oil Trade in USD if NOPEC Passes
Reuters report said that Riyadh is threatening to use currencies other than U.S. dollar in its oil sales if NOPEC passes. The bill would expose OPEC member-states to antitrust lawsuits. The report mentioned that Riyadh has discussed the matter with other OPEC members, and communicated the threat to American officials.
April 2, 2019Saudi Arabia’s Largest Oil Field Produces Less Than Expected
An Aramco report released yesterday revealed the real production capacity of the Saudi Ghawar oil field, the world’s largest at 3.8 million bpd, well below the 5 million bpd widely known in the oil market.
Ghawar’s production capacity suggested in the report is 33% less than the U.S. government estimations in 2017 when the U.S. Energy Information Administration listed Ghawar’s production capacity at 5.8 million bpd. Also, the new figure puts the U.S. Permian oil production basin as the largest world’s producer since it pumped 4.1 million bpd in March.
April 1, 2019Survey Shows OPEC Oil Production Reached Four-Year low
According to Reuters survey, OPEC oil production during March reached a record low in four years due to Saudi Arabia’s production cuts and Venezuela’s sanctions and power outages.
The survey showed that OPEC member-states produced in March 30.40 million bpd, 280,000 less than February production. Also, last month 11 of the 14 OPEC member-states achieved 135% of the pledged cuts, 34% more than February. The biggest cuts came from Riyadh which produced 220,000 bpd less than February.
March 29, 2019Japanese Refineries Halt Oil Imports from Iran
According to industry sources and data on Refinitiv Eikon, Japanese Refineries halted imports of Iranian oil ahead of the expiry of a temporary waiver on U.S. sanctions. The waiver expires in early May, however, Japanese refineries want to ensure enough time for all cargoes to arrive to Japan and payment to be completed.
As its imports of Iranian oil fell, Japan has increased imports from other Gulf states, in addition to Russia and the Americas.
March 27, 2019Aramco Buys Majority Stakes in Sabic
Aramco reached a deal to buy majority stake in petrochemicals firm Sabic from Saudi Arabia’s sovereign wealth fund. In the deal Aramco will buy 70% stake in Sabic held by Saudi Arabia’s Public Investment Fund for $69.1 billion in a share purchase agreement.
The purchase is a major step for Aramco’s efforts to expand its footprint in refining and petrochemicals.
Public Investment Fund Managing Director described the deal as “a win-win-win transaction and a transformational deal for three of Saudi Arabia’s most important economic entities.”
March 26, 2019Bahrain LNG Terminal Begins Operations in May
Bahrain’s LNG terminal within the Khalifa bin Salman Port facility in Hidd will starts commercial operations in May. The first LNG shipment will mostly be imported from the UAE’s Abu Dhabi National Oil Company.
Bahrain’s National Oil and Gas Authority Chief Executive Jassem al Shirawi said his country made agreements with more than 25 companies and countries to import LNG from around the world.
March 20, 2019The U.S. is about to Claim Saudi Arabia’s Energy Exporting Crown
Rystad Energy research firm expects U.S. to surpass Saudi Arabia’s title as world’s largest exporter of oil, natural gas liquids and petroleum products.
Over the past decade, drilling innovation has increased shale oil production, and overall oil production in the U.S. has more than doubled in the last decade, which made the U.S. the world’s largest oil producer surpassing Saudi Arabia and Russia.
Saudi Arabia’s daily exports of oil, gas, and petrochemical liquids are 9 million barrels, exceeding the U.S. by one million barrel, a gap that will probably vanish according to Rystad experts.
March 20, 2019Morgan Stanley Sees Oil Prices Rising to $75
Morgan Stanley sees oil prices rising to $75 by the third quarter of 2019. Analysts at the American banking and investment company are more convinced now that OPEC is able to drain oversupply in the oil market since it has extended its production cuts and could possibly increase them.
The analysts also linked their forecast to the deteriorated situation in Venezuela which could affect the country’s oil production.
March 19, 2019Oman Awards Ibri II Solar Independent Power Project
A joint Saudi Kuwaiti companies consortium won a $400 million bid to develop the Ibri II Solar Independent Power Project for the Oman Power and Water Procurement Company.
The project has a generation capacity of 500 MW and will supply 33,000 homes with electricity which will offset 340,000 tones of carbon dioxide emissions a year.
March 19, 2019OPEC Cancels April Meeting
OPEC members decided to cancel their meeting planned for April, leaving the current production cuts in place until the group’s usual meeting in June.
Saudi Energy Minister Khalid Al-Falih said OPEC expects the oil market to remain oversupplied until June, and the delay will allow the group to assess U.S. sanctions’ impacts on Iran and Venezuela oil production.
March 17, 2019Iran Inaugurates Four New Phases of the South Pars Gas Field
Iranian President Hassan Rouhani inaugurated four new phases of the South Pars gas field. The field is the world’s largest gas field and it is shared with Qatar.
Iran has invested $11 billion to complete the new phases and it will increase its gas production capacity by 110 million cubic meters per day.
Oil minister expects gas production from the South Pars field to reach 750 million cubic meters per day by the end of this year.
March 15, 2019Venezuela Oil Production Could Drop; Would Saudi Arabia Increase its Output?
The International Energy Agency warns that power failure in Venezuela could disrupt oil supplies, which raises expectations of Saudi Arabia’s intervention to balance the market and cover any supply shortages, mainly because Riyadh made the highest production cuts among OPEC members in the recent OPEC production agreement.
March 14, 2019Iraq’s Oil Exports to Drop to 3.5 Million bpd in March
Iraqi oil minister said his country is planning to drop oil exports in March to 3.5 million bpd in compliance with Iraq’s quota decided by OPEC last January.
Iraq is OPEC’s second largest producer, and its new exports target is 100,000 bpd lower than Jan and Feb exports.
OPEC members will meet in Vienna next month to discuss extending production cuts till end of 2019.
March 14, 2019India’s Oil Imports from Iran Drop 60% from Last Year
India’s oil imports from Iran dropped to 260,000 bpd in February 2019; 60% lower than February 2018.
Iran was the third oil supplier to India in February 2018, while now it is ranked the eighth.
The sanctions waivers provided by the U.S. to India allows New Delhi to import up to 300,000 bpd from Iran until May 2019.
March 12, 2019Iran to Launch Four Development Phases At South Pars Gas Field
Iranian oil minister says his country will launch four new phases in the South Pars gas field with a production capacity 110 million cubic meters per day.
The field is the world’s largest gas field and it is shared between Iran and Qatar. Last month, Iran’s production capacity reached 610 million cubic meters per day.
Last year both French Total and China National Petroleum Corp ended the investment in the field as the U.S. re-imposed sanctions on Tehran.
March 11, 2019Saudi Arabia to Cut Oil Production and Exports for April
Saudi official source said Riyadh’s oil exports on April will be 7 million bpd while demands are at 7.6 million bpd.
The new exports target will keep production well below 10 million bpd, also below Riyadh’s 10.3 million bpd production quota agreed with OPEC members.
The decision shows Saudi Arabia’s determination to regain control over oil prices.
March 8, 2019United States to become World’s Leading Oil Exporter in 2019
CNN reports says the US will surpass Saudi Arabia in 2019 in the exports of oil and petroleum products to become the world’s leading exporter of oil.
This breakthrough is mainly attributed to technology which changed the landscape of energy market.
March 7, 2019Saudi Arabia Discovers Large Quantities of Gas in the Red Sea
On March 7, 2019, the Saudi Minister of Energy Khalid Al-Faleh said his country has discovered large quantities of gas in the Red Sea.
The minister also reiterated Saudi Arabia’s Aramco plans to invest in the U.S. LNG sector.
March 4, 2019Current OPEC’s Oil Production Cuts to be Extended Until June
According to Reuters, OPEC and its OPEC+ partners will likely extend the current oil production policy until June, instead of making a new decision during the upcoming meeting in April.
Last month supplies from OPEC members fell to lowest in four years, and today oil price went up 1% in light of reports about a possible agreement between China and the U.S. to end the “trade war”
February 28, 2019Qatar Petroleum and ExxonMobil Discover Natural Gas Field in the Mediterranean
Qatar Petroleum and ExxonMobil announced discovering the world’s third largest natural gas field found in the last two years which approximately contains 5 to 8 trillion cubic feet.
The field was found off the coast of Cyprus in the Eastern Mediterranean. State-owned Qatar Petroleum and ExxonMobil won in 2017 the rights to explore the area for gas and oil.
February 27, 2019Saudi Oil Exports to U.S. Gulf Refineries Down by Half
According to U.S. Customs data, Saudi oil shipments to U.S. Gulf refineries reached 2.69 million barrel in January and 1.6 million in February comparing to 5.75 million last year.
Total Saudi oil exports to the U.S. fell in the third week of February to 346,000 bpd, the lowest in almost nine years.
An expert expected West Coast refineries to continue importing Saudi oil due to limited supply options.
February 26, 2019Bahrain Discusses with U.S. Oil Companies Developing Recently Discovered Fields
Last April Bahrain discovered its biggest oilfield since the 1930s with estimation to contain 80 billion barrels of tight oil.
Yesterday, Bahraini oil minister said Manama is considering the development of the oilfield by American companies with shale oil expertise.
February 26, 2019Saudi Arabia Plans Major Investments in LNG
Saudi Arabia announces plans to become a major player in the growing natural gas industry and looking to make investments in Russia, Australia, the U.S., and Africa.
Saudi Aramco Chief Executive said: “Gas is a major market and we want to be one of the largest players,”
Riyadh is planning to increase its LNG export to 3 billion cubic feet per day by 2030, and replace the 800,000 oil barrels used daily to generate electricity with LNG.
GIF Energy Tracker
Kuwait Confirms $1Billion Investment in Saudi Aramco’s IPO
On Monday December 2, 2019, the Kuwait Investment Authority communicated its decision to invest in the Saudi Aramco IPO following government advisement that a stake was in the country’s strategic interest.
Kuwait’s move follows the UAE’s decision to invest $1.5 billion in Aramco. A second major investor from the Gulf region will be a relief for Saudi Arabia after plans to market the IPO globally were abandoned.
Kuwait and UAE Considering Investing in Saudi Aramco IPO
Aramco officials have held investment talks with Kuwait and UAE, each of which have large sovereign funds totaling about $1.3 trillion in assets. The Abu Dhabi Investment Authority (ADIA) is considering investing at least $1 billion, with a final decision on the amount yet to be approved. The Kuwait Investment Authority (KIA) also has plans to invest in the IPO, although the size of their commitment is also unclear.
Saudi Arabia aims to sell a 1.5% stake in Aramco, valuing the company at $1.6 trillion to $1.7 trillion, a lower valuation than the $2 trillion target initially sought. These investments from its Gulf neighbors would help Riyadh as it strives to raise $25.6 billion from a domestic listing of the state-owned oil giant.
Increasing Demand Raises Saudi Crude Imports in China to 76.3% in October
Saudi Arabian oil exports to China rose 76.3% in October, boosted by demand from new refiners. Saudi shipments grew to 1.98 million bpd in October compared to 1.74 million bpd in September and 1.12 million over the same period last year.
With this rise in exports to China, Saudi Arabia retains its position as the top supplier to the world’s biggest oil importer.
Qatar LNG Expansion Project to Boost Production to 126 Million tons by 2027
On November 25, 2019, Qatar Petroleum (QP) CEO Saad al-Kaabi, confirmed that the productive layers of the North Field extend well into Ras Laffan, with gas reserves in the field now exceeding 1,760 trillion cubic feet.
Al-Kaabi also said, “This will raise Qatar’s LNG production from currently 77 million tons to 126 million tons per annum by 2027, representing an increase of about 64%.”
Putin: Russia to Continue Cooperation with OPEC for a Balanced & Predictable Oil Market
On November 20, Russian President Vladimir Putin said that Russia’s “common goal with OPEC is for the market to be balanced, acceptable for producers and consumers, and most importantly, predictable.”
Meanwhile, Russian Energy Minister Alexander Novak declined to disclose Russia’s position for the upcoming OPEC+ meeting, but said that Russia will aim to stick to its commitments under the deal in November.
However, sources told Reuters that Russia is unlikely to agree to deepen oil cuts during the meeting but could commit to extending existing curbs to support Saudi Arabia. OPEC will be meeting on December 5th in Vienna, followed by talks with a group of other affiliated exporters, including Russia, known as OPEC+.
Iraq Protesters Block Access to Oilfields in Basra
Protests in Basra are threatening Iraq’s largest oil fields as anti-government demonstrations in the south of the country have blocked access to the oil fields located west of Basra.
While Iraqi oil exports have remained steady there is a concern that escalation of protests could threaten oil production and exports.
India’s Oil Imports from OPEC Hit Lowest since 2011
India’s imports of OPEC oil have fallen to their lowest level since 2011 as refiners purchased more fuel from the U.S. and other non-OPEC producers. Also, a combination of refinery maintenance and India’s desire to diversify sources of oil have also contributed to this decline.
OPEC’s share fell to 73% of India’s total oil imports in October, down eight percent from September.
Bahrain’s First LNG Portal to Become Operational by Year’s End
Teekay LNG Partners, one of the companies behind Bahrain’s long-awaited LNG regasification terminal has announced that the facility will be operational by the end of 2019.
The startup of the terminal has been delayed twice without mentioning the reasons for the delay.
U.S.-Saudi discussions for nuclear possession are in progress
As the world’s top oil exporter, Saudi Arabia talks about plans to use nuclear power to enhance its energy supply. However, conversations between the U.S. and Saudi Arabia have been difficult. Saudi Arabia does not want to be forced into a deal that would prevent them the possibility of enriching uranium or reprocessing spent fuel – both potential risks for a bomb.
U.S. Businesses Licensed To Continue Work In North Sea Field Partly Owned By Iran
On October 24, 2019, the U.S. Treasury extended energy producer Serica’s license to continue operations at the Rhum field in the North Sea, until February 28, 2021. The waiver by the U.S. Office of Foreign Assets Control (OFAC) allows U.S. businesses such as oilfield service providers to work on the field while the National Iranian Oil Company is targeted by U.S. sanctions.
According to Serica CEO Mitch Flegg, Rhum was the third-largest gas producing field in the British North Sea in the second quarter of 2019. Serica owns 50% of the Rhum field, which it acquired from BP last year, and Iran’s national oil company owns the remaining 50%. Iran’s share of the revenues from the field goes into an escrow account.
Japan and Saudi Arabia will renew crude oil storage deal
Japan and Saudi Arabia have acceded to extend their joint crude oil storage deal as it approaches expiration. This move will give the Middle East oil exporter quick and easy access to its essential customers in the Far East.
Currently, Aramco leases 8.18 million barrels of crude oil storage capacity at Okinawa for commercial usages in return for prioritizing supply to Japan in case of unexpected events occurring.
For Japan, storing oil domestically from its prudent suppliers such as Saudi Arabia has become paramount following the September 14th attacks on Aramco, where Japan counts on 90% of its crude import requirements.
Masdar receives an offer to work on Uzbekistan solar project
Masdar, a branch of Mubadala Investment Company in the UAE, has confirmed it has earned a bid to develop Uzbekistan’s first public-private partnership (PPP) solar project.
As one of the world’s main renewable energy companies, Masdar will develop the 100-megawatt (MW) utility-scale solar plant, under the International Finance Corporation’s (IFC) Scaling Solar program.
Omani oil production predicts 1.1 million bpd by 2022
Oman anticipates growing its oil production quantity to 1.1 million barrels per day (bpd) by 2022, from this year’s total of 970,000 bpd.
According to reports, “We also assume that gas production will expand, with new production coming on stream from the Khazzan II field in 2021 and the Mabrouk field in the medium term, beyond our forecast horizon. Higher gas production will in turn support the expansion of petrochemicals, power generation, and enhanced oil recovery projects.”
Despite these plans for expansion, negative effects will also be present in the process. These effects will include extrinsic debt and excessive funding costs between 2019-22.
Secondary Circuit of Iran’s Arak Nuclear Reactor To Be Operational
On Sunday October 20, 2019, Ali Asghar Zarean, a special assistant to the chief of Iran’s Energy Organization, said that the secondary circuit of the Arak heavy water nuclear reactor would be ready within two weeks. This would not be in violation of the restrictions placed on Iran’s nuclear power under the JCPOA.
Iran has the capacity to produce up to 25 tons of heavy water per year, which can be employed in reactors to produce plutonium, a fuel used in nuclear warheads. Despite having nuclear technology, Iran has never pursued building or using nuclear weapons as it is forbidden by its religion, the country’s highest political authority, Ayatollah Ali Khamenei, said in early October.
Yemen’s Safer Oil Company Resumes Production
Safer oil company, owned by the internationally recognized government of Yemen, resumed oil production from their fields in Shabwa to a terminal on the Arabian sea for international export.
Currently, Safer is pumping 5,000 barrels per day (bpd) and anticipates that oil production of the pipeline will reach up to 15,000 bpd.
Prior to the collapse of Yemen’s oil output, Yemen produced an average of 127,000 bpd of crude in 2014. Last year, only 50,000 bpd was produced with limited quantities for oil distribution abroad.
US permits Iraq a waiver for Iranian energy resources
The US has authorized Iraq their fifth 120-day waiver that will allow them to continue with the imports of Iranian electricity and natural gas despite US sanctions.
According to a State Department spokesman, “”The waiver ensures that Iraq is able to meet its short-term energy needs while it takes steps to reduce its dependence on Iranian energy imports. We engage regularly with the Iraqi government to support measures that improve Iraq’s energy independence.”
New Energy Deals between the UAE and Russia
Abu Dhabi National Oil Company (ADNOC) has confirmed to sell a portion in the Ghasha gas project to Lukoil, a Russian oil company, as well as agreed to a strategic deal with Gazprom Neft in terms of technological cooperation.
The two countries had previously talked about increasing bilateral energy sources, including their cooperation in the OPEC+ crude oil production cut deal. Also, both countries are members of the Gas Exporting Countries Forum.
ADNOC will grant Lukoil a 5% share in the Ghasha concession, which includes other sour gas fields offshore in Abu Dhabi.
Iraq and Turkey Consider Rebuilding Oil Pipeline
As of October 14, 2019, Iraq and Turkey have announced that they were looking into constructing a second pipeline that could more than double existing export capacity. Due to the reestablishment of control by Iraqi militias and the Central Government over areas liberated from ISIS, Ankara is turning towards Baghdad for new energy deals.
The new pipeline would create an alternative route for Iraqi oil exports and would also connect to infrastructure in Central and Southern Iraq. This would improve the country’s energy security as oil exports can be diverted towards the north in case the Strait of Hormuz is choked off.
Saudi Oil Output To Reach Pre-Attack Levels In October And November
On October 14, 2019, Saudi energy minister Prince Abdulaziz bin Salman said that Saudi Arabia’s oil production will recover in October and November to levels seen before the attacks on its oil fields in September and expected to reach 9.86 million bpd in October and November. According to the energy minister, production capacity would reach 12 million bpd by the end of November.
Attacks On Saudi Oil Facilities Result in OPEC+ Production Cuts In September Leading To Compliance Rate Of More Than 200% of Cut Deal
On October 14 2019, sources reported that OPEC and its non-OPEC allies in the production cut deal achieved a compliance rate of more than 200% with their cuts in September, primarily due to the September attacks on vital oil facilities in OPEC’s largest producer Saudi Arabia. According to OPEC secondary sources, Saudi oil production plunged by 1.28 million bpd to 8.564 million bpd in September.
Other members with lower production include non-compliant Iraq and Nigeria who cut some of their overproduction but were still off target. In Iran production declined by 34,000 bpd to 2.159 million bpd. In Venezuela production plunged by 82,000 bpd to average just 644,000 bpd in September.
Russia, largest non-OPEC producer part of the pact, saw oil production inch down in September, to 11.25 million bpd from 11.29 million bpd in August, but still above Moscow’s cap under the deal.
Due to the attacks on Saudi Arabia, OPEC’s total production slumped by 1.318 million bpd from August to 28.491 million bpd in September. Additionally, it was found that OPEC pumped 28.45 million bpd of crude oil last month, down by 1.48 million bpd from August – the steepest monthly drop in nearly 17 years.
Iran Discovers Natural Gas In Fars Province
On October 13, 2019, Reza Dehghan, director of development and engineering affairs at the National Iranian Oil Company, told reporters that the country had discovered a natural gas deposit in the Eram reservoir in the southern province of Fars.
The development of the Eram gas field will start in two or three years and the gas is set to be used for domestic consumption as well as for Eram itself to prevent a decline in pressure.
Eram also holds as much as 385 million barrels of condensates, whose value could be as much as $40 billion.
Russia Takes Interest In Saudi Aramco IPO
On October 13, 2019, Kiril Dmitriev, chief executive officer of Russian sovereign wealth fund RDIF, said that Russian investors are interested in a planned IPO of Saudi Aramco.
Dmitriev was speaking ahead of Russian President Vladimir Putin’s visit to Saudi Arabia, where a global oil output deal between members of OPEC and non-OPEC countries would be discussed.
Qatar Invites International Oil Firms to Participate in the Expansion of North Field
The Qatari Minister of State for Energy Affairs Saad Al-Kaabi said his country has recently invited international oil and gas companies (ExxonMobil, Shell, ConocoPhillips, and Total) to submit offers for the expansion of production and export capacity of the Qatari share of the North Field (the world’s largest gas field).
Qatar aims to increase its LNG production capacity by 43%, from the current annual amount of 77 million tons to 110 million tons. The plan is set to be completed by 2024.
Saudi Oil Prices for Asia Are Expected to Increase in November
Saudi Arabia is expected to increase crude oil prices for the Asian market as a result of the attack on two Saudi oil facilities and the subsequent reduction in oil output. While the official selling price for Arab Light Crude is expected to jump more than 50 cents per barrel, experts say that prices for November are difficult to forecast due to additional supplies provided to Asian customers by Saudi Arabia, as well as a rapid return to pre-attack production levels.
Saudi Oil Exports to China Increase While Iranian Exports Drop
Saudi Arabia held on to its place as China’s largest producer of oil in August, despite the recent oil facility attacks. According to the General Administration of Customs, Saudi Arabia exported 7.79 million tons of oil to China last month. In July, the total of exports was 6.99 million tons.
Meanwhile, Iranian oil exports to China in August dropped to 787,657 tons from 926,119 tons in July.
Drop of Saudi Oil Exports After Abqaiq Attack
Saudi Arabia’s oil supply has slipped by approximately 1.5 million bpd since the September 14th attacks on Abqaiq. Nearly 5.7 million barrels per day have been lost as a result of the attack on the refining facilities.
Aramco and the Saudi officials have said that the company is currently working to restore the lost production capacity. According to Reid I’Anson , a global economist at Kpler said, “They have just over 55 million barrels left. They could go another four or five weeks realistically from the rates we’re seeing. That could change based on the internal situation, if they are able to get some of this back online.”
Despite Anticipated Setbacks to Aramco Offering, Saudi IPO Planning Goes Forward
According to Reuters, an Aramco pre-IPO meeting with analysts will still go ahead as planned despite last weekend’s attack on oil facilities.
The attack on the Saudi oil facilities might highlight the potential vulnerability of its key infrastructure and raises questions over the appropriate level of risk to be factored in the valuation.
The state-owed company continues to prepare for a local IPO, which the sources said may happen as early as November.
Oil Drops to 5% as the Saudis Indicate a Return to Normal Output
Saudi Energy minister, Prince Abdulaziz bin Salman, said in a press conference today that oil output will be back to pre-attack levels by the end of September.
The largest oil processing facility and the nearby oil field were attacked on Saturday knocking out 5.7 million barrels of daily oil production from Saudi Arabia.
Saudi Arabia’s Oil Facility in Abqaiq Is Attacked
Saudi Arabia’s main oil facilities have been targeted at their core, causing an interference to their oil output this past weekend. The drone attacks targeted one of Saudi Arabia’s main oil industries, Abqaiq, as well as the nearby oilfields. The origin of these attacks remains unknown. The attack took off the market nearly 5.7 million barrel of Saudi production, which is more than 5% of the global oil supply.
Qatar Shortlisted Oil Firms for a Stake in North Field Expansion
Qatar Petroleum CEO and Minister of State for Energy Saad al-Kaabi told Reuters that Doha has shortlisted international oil companies for a stake in the megaproject, North Field expansion.
Total, Exxon Mobil, Shell, and Italy’s Eni have all offered Qatar Petroleum stakes in prize assets abroad in a bid to win a stake in the multibillion project.
The minister said that his country might still choose to go alone in the project unless partnership offers Doha a significant value.
Qatar Petroleum plans to increase its LNG production from 77 to 110 million tons per year over the next five years by building four new production facilities.
New Energy Minister in Saudi Arabia Reiterates Commitment to OPEC+
The newly appointed Saudi Energy Minister Abdulaziz bin Salman reiterated the importance of OPEC+ alliance for the market’s balance and the alliance is “staying for the long term”. The new minister told reporters that there will be no radical changes in the oil production policy of Saudi Arabia.
The new minister was appointed on Saturday replacing Khalid Al-Falih, the second change in the position in three years.
Saudi Arabia Wants to Enrich Uranium
The newly appointed Saudi Energy Minister Abdulaziz bin Salman said today that his country wants to enrich uranium. The new minister told reporters “we are proceeding with it cautiously … we are experimenting with two nuclear reactors.”
The tender is expected in 2020 while firms from the U.S., Russia, South Korea, China, and France are involved in preliminary talks about the multi-billion-dollar project.
Iraq’s Oil Production Hits a Record of $4.88 Million bpd
According to S&P Global Platts, OPEC’s second largest producer Iraq, has reached record oil production of 4.88 million bpd in August.
Iraq’s August production was a 370,000-bpd excess of its 4.51 million bpd cap set in the OPEC+ production cut policy.
Kuwait’s Oil Production Up by 35,000 bpd
According to data released by the Kuwait Oil Company Kuwait’s oil production increased in August by 35.000 bpd to reach 2.69 million bpd. Despite this increase, the production remained below the cap set by OPEC+.
Aramco Proposes Two-Stage IPO, Shunning London, Hong Kong
Aramco is considering launching its IPO in two stages. First, on the Saudi stock exchange, Tadawul, then internationally. Initially, the United Kingdom, United States, and China were considered for the second stage, but the unstable political situations in the United Kingdom and Hong Kong begged reconsideration. Aramco also fears facing lawsuits in the United States due to the 2016 Justice Against Sponsors of Terrorism Act, which allows the families of victims of terrorism to sue foreign countries.
Crimea Offers Iran Help in Oil Shipping
The Deputy Prime Minister of Crimea, Georgy Muradov, suggested that “Iran can use our shipping capabilities, river-sea canals in such situation and carry oil over the Volga-Don canal, via Crimea, to the Black Sea.” This would allow Iran to bypass the Suez Canal and avoid potential confrontations with Saudi Arabia, Egypt, and the United States. Muradov’s statement comes weeks after Iran’s Grace 1 oil tanker was seized by British Royal Marines off the coast of Gibraltar.
Iran Says It Sold Oil on Released Gibraltar Tanker
An Iranian government spokesperson said today that his country sold the oil from the tanker released in Gibraltar without identifying the recipient of the oil nor the destination.
The vessel carries 2 million barrels of oil, and a U.S. federal court has recently ordered the seizure of the tanker. Tehran threatened that a U.S. move to seize the tanker would have heavy consequences.
U.S. Says Iran’s Oil Exports Fell to Below 100,000 bpd in July
US Department of State’s special representative for Iran Brian Hook said that US sanctions on Iran’s oil sector have caused a drop in Iranian oil exports to below 100,000 bpd, adding that the sanctions have disrupted nearly $50 billion in annual revenue for the Iranian government.
Unit 3 in the UAE’s Barakah Nuclear Energy Plant was successfully Energized
On August 20th, The Emirates Nuclear Energy Corporation (ENEC) announced that it has safely and successfully energized Unit 3’s main power transformer and gas insulated bus. The agency said that the unit’s auxiliary power transformers and excitation transformer were energized in normal operating configuration.
The construction of the UAE’s Barakah nuclear power plant is moving ahead with Unit 1 complete, Unit 2 stands at 95%, Unit 3 at 91%, and Unit 4 at 82%.
Aramco’s Motiva to Buy Flint Hills Port Arthur, Texas Chemical Plant
Aramco’s refinery branch in the United States, Motiva, signed an agreement to purchase the Flint Hills Resources chemical plant near its Port Arthur operations in Texas. The details of the agreement have yet to be released. Motiva’s Port Arthur refinery is the largest in the United States.
Saudi Aramco Opens Bids for IPO
Saudi Arabia asked several banks to submit proposals for potential roles in the expected initial public offering. It is currently unknown which banks have received requests from Aramco, but Saudi energy minister, Khalid Al-Falih, said Aramco would go public by 2021.
Dubai Electricity and Water Authority Awards $380 Million Contract for Hatta Dam
The contract was awarded to Strabag Dubai, Strabag AG, Andritz Hydro and Ozkar, to be commissioned by 2024. The dam is expected to generate 250MW of power. The project is part of a 2016 ten-year plan to transform the Hatta region.
Oil Prices Stabilize as Saudi Arabia and Kuwait Are Expected to Reduce Output
Today oil price continued to stabilize despite fear of slowing oil demand as a result of the U.S.-China trade war. Oil price steadiness was motivated by statements from Kuwait’s oil minister who evidenced his country’s commitment to the production cut accord as Kuwait has lowered its oil production by more than required by the OPEC+ agreement.
Also, about Saudi Aramco’s IPO, an analyst at Price Futures Group said “The Saudis will need a higher price for oil for its IPO, and this confirms they’ll do whatever it takes to get oil prices up”
Russian and Saudi Energy Ministers Meet in Moscow
Saudi Energy Minister Khalid Al-Falih met his Russian counterpart Alexander Novak in Moscow alongside the heads of several Russian energy companies involved in cooperation with Saudi Arabia.
The Russian president Vladimir Putin is set to visit Riyadh in October. Additionally, Saudi Aramco is among the contenders to join Russia’s Arctic LNG-2 project.
Yemen Calls Oil on Companies to Resume Production
Ministry of Oil and Minerals Abdullah al-Awd urged national and international oil companies to resume production.
Yemen’s oil production has collapsed since the start of the war in 2015. Currently, Hadi’s government controls Yemen’s oil and gas fields in the south, while the Houthis control the oil terminal of Ras Issa on the western coast.
Last February al-Awad said Yemen has plans to increase production to 110,000 bpd. The country’s main oil streams are light and sweet Marib and medium-gravity and more sulfur-rich Masila.
Oman to Increase its LNG Production by 10% in Two Years
Mohammed al-Naseeb, Chief Marketing Officer of Oman LNG told S&P Global Platts that his country is planning to increase its LNG production by 10% from 10.5 to 11.5 million mt/year through debottlenecking.
The sultanate is also investing in the exploration and development of several oil and gas fields.
Saudi Arabia to Expand Export Capacity from East-West Pipeline
Saudi Energy Minister Khalid Al-Falih said his country is planning to increase oil exports by 40% through the east-west pipeline via the Yanbu port city on the Red Sea to avoid passing through the Strait of Hormuz.
Currently, the pipeline capacity is at 5 million bpd and the Saudi government is planning to increase it to 7 million bpd within two years.
Oman Expects More Oil and Gas Discoveries in the Northwest
Omani Oil and Gas Minister Mohammed al-Rumhi said his country is expecting to discover more oil and gas in the northwest part of the sultanate near Mabrouk field which holds four trillion cubic feet of gas and 112 million barrels of condensate.
Oman is the biggest non-OPEC oil producer in the Middle East with production in June 2019 at one million bpd of oil and condensate. Muscat also produces 3 billion cubic feet of gas per day with plans to increase investment on gas production and exploration.
New Agreement Between UAE’s ADNOC and China’s CNOOC
On the sides of MBZ’s visit to China, UAE’s ADNOC signed an agreement with China National Offshore Oil Co (CNOOC) to explore and develop oil and LNG fields.
CNOOC Group’s statement said the companies will share the latest technologies to develop ultra-acidic natural gas fields. The agreement also includes enlisting other Chinese companies to design, construct and provide services for ADNOC oilfields.
Morgan Stanley Doesn’t See Gulf Tension Leading to a Sustained Jump in Oil Prices
As oil price went up by 2% today after Iranian seizure of a UK oil tanker, Morgan Stanley said that it does not expect the tension near the Strait of Hormuz to lead to a sustained increase in oil prices.
Morgan Stanley’s global oil strategist Martijn Rats told CNBC “There is a difference in the oil market this time around because non-OPEC is simply growing so fast. That is the real game changer and that’s why the price action is relatively benign,”
Saudi Arabia to Start its First Wind Power Plant
Saudi Arabia plans to build its first wind power plant with French Electricite de France and Emirati Mubadala Investment Co.
The project is set to start generating power in three years while the Saudi government has pre-qualified 60 companies to bid for 12 renewable projects in 2019.
Riyadh has plans to increase its reliance on LNG and renewables to generate power instead of oil, of which it now uses 600,000 bpd.
U.S. to Become the World’s Largest LNG Exporter by 2024
An official at the International Energy Agency expected that by 2024 the U.S. will become the world’s largest LNG exporter by exporting over 100 billion cubic meters, exceeding current top exporters Qatar and Australia.
The source also said China’s imports of LNG are expected to rise to over 100 billion cubic meters by 2024, exceeding those of Japan.
UAE’s ADNOC State-Run Oil Company Plans Overhaul
Reuters report said UAE’s state-run oil company is planning an overhaul of its trading operations by launching regional oil benchmarks and hiring the former employees of private-sector peers. The company also plans to start full in-house trading for refined oil products.
UAE is OPEC’s third-largest oil producer and has plans to boost its oil production to 4 million bpd by 2020.
IEA Forecasts an Oversupplied Oil Market in 2020
In a report released last Friday, The International Energy Agency revealed it expected an over-supply of oil for 2020. The IEA also expects oil demand from OPEC’s 14 members to drop to 28 million bpd during Q1 of 2020, the lowest in 16 years.
The Paris-based organization linked the oil glut to the stock buildup that has resulted from the market’s oversupply in 2018, 2019 and the growing production by the United States and other non-OPEC members.
OPEC Forecasts Lower Demand in 2020
In its monthly report, OPEC expected lower oil demands in 2020 with a 1.34 million bpd drop from this year to be at 29.27 million bpd from the 14 member-states.
The drop of oil demands from OPEC members was linked to the increase of oil supply from non-OPEC oil producers, mainly the U.S.
This forecast will probably give the U.S. more room to keep sanctions on OPEC members, Iran and Venezuela.
Saudi Arabia to Expand Marjan and Berri Oilfields
Saudi Aramco awarded an $18 billion contract to various companies for the expansion of Marjan and Berri oilfields with expectations to add 550,000 bpd of Arabian Crude to its production.
Amin Nasser, Armaco’s president and CEO said “These two programs will significantly enhance Saudi Aramco’s oil production and gas processing capabilities.”
Oman’s Petrogas and HitecVision to Buy Total’s British North Sea Oilfields
HitecVision and Oman’s Petrogas have teamed up to buy a portfolio of Total’s British North Sea oilfields for $635 million.
The oilfields currently produce 25,000 bpd but the two companies have plans to expand the production to 100,000 bpd within 2-3 years.
Saudi Arabia Pumped 9.7 Million bpd in June
According to a source at OPEC, Saudi Arabia pumped 9.78 million bpd in June, a slight increase from the 9.67 million bpd produced in May.
The production level remained below the 10.3 million bpd, Riyadh’s production quota in OPEC’s oil reduction pact.
OPEC+ Agree to Extend Production Cut till March 2020
One day after OPEC members reached a deal to extend oil production cuts till March 2020, Russia and nine other non-OPEC oil producers joined the extension of the cuts.
Russian Energy Minister Alexander Novak told reporters that “it is right not to make any sudden movements now and maintain the situation as it is,” meanwhile, OPEC+ will monitor the situation and make necessary changes when needed.
Saudi Arabia and Russia are Discussing the Extension of Supply Cuts
Russian Energy Minister Alexander Novak said today that his country and Saudi Arabia are still discussing the extension of the production cut policy.
An OPEC+ meeting is set for Tuesday, July 2 in Vienna, meanwhile, OPEC’s top producers, Saudi Arabia, Iraq, UAE and Kuwait have supported the extension of the deal.
UAE Became Japan’s Largest Oil Supplier in May
Last May the UAE became Japan’s largest oil supplier as it increased oil exports to Japan by 42.8% from April to average 1.03 million b/d.
Japan is Asia’s third-largest energy consumer and the spike of oil imports from the UAE was to make up for the loss of Iranian oil as US waivers ended at the beginning of May.
Oil Price Rose 2.4% As U.S. Oil Inventories Fell by 12.8 Million Barrels
Today oil price of West Texas Intermediate and Brent surged 3.3% and 2.4% respectively after the Energy Information Administration report said that the U.S. oil inventory fell by 12.8 million barrels last week, the largest decrease since September 2016.
Saudi Aramco Signs 12 Agreements with South Korean Companies
During a visit of the Saudi Crown Prince Mohammad Bin Salman to South Korea, Aramco signed 12 new agreements with Korean companies on refining, oil sales, petrochemicals, and other industrial projects.
Iran’s Oil Exports in June Drop to 300,000 bpd
Industry sources and tanker data show that Iran’s oil exports in June 2019 have dropped to 300,000 bpd from 400,000-500,000 bpd in May 2019, a fraction of Iran’s 2.5 million bpd of oil exports from May 2018 prior to U.S. sanctions.
Platts Analytics: LNG Prices Could Double if Hormuz Strait is Disrupted
In its latest Global LNG Monthly Forecast, S&P Global Platts Analytics projected a 100% increase of LNG prices if Qatar LNG exports through Hormuz Strait is blocked.
The report said the closure of the Strait, Qatar’s only route to export LNG, will remove Qatar’s 280 million cu m/d, which makes 22% of the world’s demand.
OPEC and OPEC+ to Meet in July 1 & 2
OPEC has announced on its website that its June meeting was pushed to July 1st, and the following day will be for the OPEC+ meeting in which oil producers are expected to discuss the extension of the production cut policy.
ExxonMobil and Saudi SABIC to Build Petrochemical Project in Texas
Saudi Arabia’s petrochemical company SABIC and U.S. oil and gas corporation ExxonMobil agreed to proceed with the construction of a chemical facility and a 1.8 million metric ton ethane steam cracker in San Patricio County, Texas.
The project will create 6,000 jobs during construction and 600 permanent jobs. The economic output will exceed $50 billion during first six years.
Brent Drops 3.7% to Reach $59.96 As U.S. Inventories Rose by 2.2 Million Barrels
Today Brent dropped by 3.7% to reach $59.96. The sharp drop was linked to data released by the U.S. Energy Information Administration which showed U.S. oil inventories increased by 2.2 million barrels in the week through June 7.
This price is 20% lower than the highest price reached in April and comes at a time when there are concerns that the ongoing U.S.-China trade war is weakening oil demands.
BP Raises Estimates of Saudi Arabia’s Oil Reserves by 30 Billion Barrels
In a recent annual statistic report, BP raised oil reserve estimates for Saudi Arabia by 11% (30 billion barrels) to reach 297.7 billion barrels from 266.2 billion a year earlier. The new figure puts Saudi Arabia 6 billion barrels behind Venezuela which has the world’s largest oil reserve estimates.
The estimation increase happened as Saudi Arabia separated the estimations of oil, gas and natural gas reporting.
Saudi Aramco Announces Plans to Invest in Russia’s LNG Sector
During his visit to Russia, Saudi Energy Minister Khalid Al-Falih said his country has made an offer to join Russian Novatek’s Arctic LNG 2 project.
Al-Falih also said that Riyadh is studying the possibility of future investments in Rosneft and Gazprom’s LNG projects, plus Russia’s Sibur petrochemical company.
Iran Has No Plans to Leave OPEC
Iranian Oil Minister Bijan Zanganeh told the Iranian parliament news site ICANA that his country has no plans to leave OPEC despite his belief that Iran is treated like an enemy by Saudi Arabia and the UAE.
The minister regretted that OPEC has “turned into a political forum” and that some OPEC members “use oil as a weapon against us [Iran] in the global market and world.”
IEA: Natural Gas Demand to Increase by 10% until 2024
The International Energy Agency said demand for natural gas grew 4.6% in 2018, the fastest annual growth in 10 years, and it is expected to increase by 10% until 2024 when it will reach more than 4.3 trillion cubic meters.
IEA said China will account for 40% of this increased demand as it shifts from coal and oil to cleaner energy sources. This increase is also expected in India, Bangladesh, and Pakistan.
Putin Says Moscow Differs with OPEC on Fair Price
Two weeks before OPEC+ group meeting, Russian President Vladimir Putin said Moscow differs with OPEC’s members on what constitutes a fair oil price. He said a $60-$65 per barrel suites Moscow, while OPEC’s de facto leader Saudi Arabia seeks a higher price.
Iraq Supports the Extension of OPEC’s Oil Production Cuts
Iraqi Oil Minister Thamer Ghadhban said his country supports the extension of OPEC’s oil production cut policy set to expire this month. The minister said the policy proved its effectiveness in stabilizing the oil market. The minister added that more measures should be taken considering recent developments in the market.
Saudi Aramco and UAE’s ADNOC to Open Oil Trading Office in Fujairah Port
Saudi Arabia’s Aramco and the UAE’s ADNOC announced this week about the establishment of oil trading offices in UAE’s eastern Al-Fujairah port. Both companies aim to gain more access to the market in the world’s second largest bunkering hub, mainly as the port is increasing its storage capacity.
Iraq Awards Hyundai a Deal to Construct Seawater Injection Facility
The director of Iraq’s state-run Basra Oil Company said Baghdad has awarded Hyundai Engineering & Construction Co Ltd a deal for the construction of a seawater injection facility with an estimated cost of $2.4 billion.
The project is set to be completed in four years, and is vital to the planned increase of Iraq’s oil production
OPEC+ Deal For the Second Half of 2019 is Emerging
Saudi Energy Minister said a consensus among the OPEC+ group is emerging, and aims to ensure stability in the oil market.
Al-Falih said “We will do what is needed to sustain market stability beyond June. To me, that means drawing down inventories from their currently elevated levels,”
Britain’s INEOS to Build Three Petrochemical Plants in Saudi Arabia
Saudi Aramco and France Total have signed an MoU with Britain’s INEOS to build three petrochemical plants in Saudi Arabia as part of the Jubail 2 complex with an estimated cost of $2 billion.
The three plants are expected to produce key building blocks for carbon fiber, engineering polymers and synthetic lubricants that are essential to economic growth in the region.
Bahrain will Allow Foreign Investors to Own 100% Stakes of Oil & LNG Extraction Projects
On Sunday, the Bahraini Prime Minister issued an order allowing foreign companies to own 100% of oil and natural gas extraction projects.
OPEC’s May Production Drops
Reuters survey showed that OPEC’s 14 members have pumped 30.17 million bpd in May, 60,000 bpd less than April and the lowest in four years.
The survey suggests that Saudi Arabia has pumped oil more than the previous month, yet it was less than its quota in the OPEC-led production cut deal and not enough to compensate for the loss of Iranian oil exports.
Russia Considers the Extension of Oil Production Cut Policy
Russian First Deputy Prime Minister Anton Siluanov said Moscow will carefully consider the extension of oil production cut policy agreed with OPEC last December.
Siluanov said Russia will weigh the benefits of the extension on oil prices mainly as the U.S. shale oil production increase has gained new markets.
Reuters: Iran’s May Oil Exports Drop to 400,000 bpd
Reuters report cited tanker data and industry sources that showed a drop in Iran’s oil exports in May to 400,000 bpd.
Oil exports have dropped from at least 2.5 million bpd in April 2018 as a result of U.S. sanctions on Tehran.
There is no definitive data about Iran’s oil exports since Iran stopped reporting its production figures to OPEC.
Kuwaiti Oil Minister Expects Market to Balance
Kuwait oil minister told Reuters that he is expecting to see a balance in oil market by the end of 2019 as global inventories fall and demand remains strong.
The Kuwaiti minister explained that oil demand growth faces uncertainty as a result of the U.S.-China trade dispute, and at the same time, U.S. oil production continues to rise.
Iran’s Oil Storage is Growing
Reuters report says Iran’s storage of oil is increasing as Tehran continues to pump oil even as exports are expected to continue dropping.
It is important for Iran to keep pumping oil from its aging fields since disruption could damage future production and because the high the costs of resuming production if it should come to a stop.
India Ends All Oil Imports from Iran
The Indian Ambassador the U.S. Harsh Vardhan Shringla said his country has ended all oil imports from Iran after the expiration of waivers on May 2.
The Indian diplomat explained that the sanctions did hurt New Delhi as it used to import 10% of its oil supplies from Iran.
Saudi Aramco Makes its First Direct Investment in U.S. LNG Sector
Aramco has made an agreement to buy LNG from the Port Arthur LNG export project developed by San Diego-based Sempra Energy.
The deal includes the purchase of 5 million tons of LNG per year and a 25% equity stake in the first phase of the multibillion-dollar project.
Iraq to Increase Oil Production from West Qurna 1 Oilfield
A senior Iraqi oil official announced a decision to increase oil production from West Qurna 1 Oilfield from 440,000 to 490,000 bpd. The oilfield is developed and operated by ExxonMobil.
Turkey is Compliant with U.S. Sanctions on Iranian Oil Exports
A Reuters report found that Turkey has complied with the U.S. sanctions by closing its ports to Iranian oil.
Earlier this month, the U.S. did not extend its sanctions waivers for Turkey and other nations to continue buying oil from Iran. The U.S. decision faced major criticism from Ankara.
Bahrain’s Bapco to Expand Its Refining Capacity
State-run oil company Bahrain Petroleum Co (Bapco) has completed financing its refining capacity expansion plans. Expansion is expected to be completed by 2022 and will increase the company’s refining capacity from 267,000 bpd to 380,000 bpd.
According to Reuters, the financing has exceeded $4 billion and is to include five export credit agencies and a syndicate of 21 commercial banks.
OPEC+ Group Meets in Saudi Arabia
Last weekend OPEC, Russia, and other oil producers met in Saudi Arabia to discuss the current supply of the oil market. Major oil producers did not make a decision about current production cuts and decided to leave the decision to their upcoming meeting in June.
The Saudi Energy Minister Khalid Al-Falih said oil producers agreed to gradually lower oil inventories to normal levels.
Aramco to Supply India with Oil to Compensate for Lost Iranian Oil
Saudi Arabia will increase its supply to the Indian Oil Corp by two million barrels per month between this upcoming July and December to compensate for the lost oil exports from Iran.
Aramco has an agreement with the Indian Oil Corp to export 5.6 million tons of oil for the financial year 2019/20 that started on April 1st.
Saudi Arabia Resumes Oil Pumping Via Its East-West Pipeline
Today Saudi Arabia resumed pumping oil via its East-West pipeline one day after it shut it down as a result of drone attacks on two pumping stations. The pipeline transports oil from the Eastern Province to Yanbu port.
Oil Price Rise After Attack on Oil Infrastructure in Saudi Arabia
Oil prices rose today after reports of drone attacks by Yemen’s Houthis on two oil pumping stations in Saudi Arabia. Brent barrel increased by 1.3% to reach $71.14, and West Texas reached $61.67 per barrel, a 1.03% increase.
Saudi Energy Minister Khalid Al-Falih confirmed that the fire was contained and oil production was not interrupted as a result of the attack.
Saudi Arabia to Meet All Orders From Former Buyers of Iranian Oil
Bloomberg report said Saudi Arabia is willing to meet all oil orders it received for June including from countries that stopped buying Iranian oil as a result of U.S. sanctions.
The report expected that Saudi oil exports for June will remain below 7 million bpd, well under the 10.311 million bpd quota agreed to by Riyadh in the production-cut agreement between OPEC and its allies.
Asian Economies Buy More Oil from Saudi Arabia at a Higher Price
Bloomberg Report talked about an increase in oil supply and price from Saudi Arabia to Asian countries while these states are looking for a replacement of Iranian oil ousted from the market as a result of discontinued sanctions waivers.
The price of Arab Medium crude was set at the highest in more than four years, while Arab Heavy was set at the highest price in more than six years.
Iraq is Close to Making a $53 Billion Deal with ExxonMobil & PetroChina
Iraqi Prime Minister said his country is close to finalizing a $53 billion deal with ExxonMobil and PetroChina to develop the Nahr Bin Umar and Artawi oilfields and raise their production from 125,000 to 500,000 bpd.
The development of the two fields is expected to make $400 billion over the 30 years the deal will be in effect.
Oman’s 2018 LNG Revenues Increased by 60%
The 2018 annual report of Oman Liquefied Natural Gas Company showed that the company’s total revenues increased by 60% to reach $3.50 billion, a sharp increase from $2.19 billion in 2017. Meanwhile, its net income increased by 68% to $1.79 billion in 2018, from $642 million in 2017.
The report showed that Oman’s LNG production rate hit 10.4 million tons in 2018, up from 8.60 million tons in 2017. The jump in profit is attributed to increased production and price.
Iran’s Oil Minister Warns OPEC is “likely to collapse”
After his meeting with OPEC Secretary General Mohammed Barkindo in Tehran yesterday, the Iranian Oil Minister Bijan Zangeneh said “OPEC is being threatened due to unilateralism by certain members and this organization is likely to collapse,”
Last Thursday the U.S. announced it was ending sanctions waivers for Iran’s top oil buyers, while President Trump said that the UAE and Saudi Arabia (both OPEC members) will increase oil production to cover any gap in global oil supply expected after ending Iran sanctions waivers.
OPEC Oil Supply in April Hits A Four-Year Low
Reuters survey found that April’s oil production from OPEC members was at 30.23 million bpd, 90,000 lower than March and is the lowest since 2015.
The four-year low oil supply is linked to production cut policy and the drop of exports from Iran and Venezuela as a result of U.S. sanctions.
The survey found that 11 of the 14 members achieved 132% of pledged cuts compared to 145% in March. Meanwhile, the involuntary production drop from Iran and Venezuela hit 150,000 bpd and 100,000 bpd respectively.
Global Spare Oil Production Capacity Increased to 3.3 Million b/d
In a statement by the International Energy Agency (IEA), the organization said oil markets are adequately supplied and “global spare production capacity remains at comfortable levels.”
IEA estimated the global spare production capacity to be at 3.3 million bpd (2.2 million from Saudi Arabia and 1 million from the UAE, Iraq, and Kuwait). The statement linked the increase of spare production capacity to the oil producers’ high compliance with the production cut agreement in the OPEC+ group.
Gulf States’ OPEC Members Are Ready to Increase Production
OPEC and oil industry sources said that Arab Gulf OPEC members are ready to increase production if there is a shortage in oil supply. This comes one day after the Trump Administration decided to not renew waivers for Iranian oil importers.
Reuters sources said that Saudi oil production for May is not expected to be much higher than April, while Saudi Energy Minister Khalid Al-Falih said that Riyadh will coordinate with other oil exporters to ensure adequate oil supplies to the market. Other sources in OPEC clarified that in order to increase output “There must be actual impact on the market and a real demand from customers,”
Trump Will Not Renew Iran Sanction Waivers
The White House said today in a statement that President Donald Trump will not renew Iran sanction waivers with intentions to bring Iran’s oil exports to zero. The statement said that the U.S., along with Saudi Arabia and the United Arab Emirates will ensure that oil markets are adequately supplied.
Oil prices rose to $73.87 a barrel on Sunday and Monday with reports that the waivers will not be extended.
Saudi Arabia Expects Oil Market to Balance in 2019
An official in the Saudi Energy Ministry expects the oil market to balance this year as a result of the oil production cut policy agreed between OPEC and its allies. Also, Russian Energy Minister Alexander Novak told reports in Moscow that Russia has been committed to the production cut policy.
India Looks for Replacement for Iranian Oil
Prior to the expiration of U.S. waivers to buy oil from Iran, officials from India’s state-owned refineries told Reuters they are confident of securing oil imports from the U.S., Mexico, Saudi Arabia or Iraq.
The four refineries did not place oil supply orders with Iran for May, while last year several refineries signed agreements with Baghdad to import Iraqi oil during 2019.
Oil Price Dropped and U.S. Oil Stockpiles Are Up
Oil price dropped slightly today after comments from Russia raised concerns about the renewal of the oil cuts agreed to by Russia and OPEC. Also, as analysts expected the U.S. oil stockpiles have increased by 1.9 million barrels last week, the fourth straight increase.
OPEC is set to meet in June to discuss the extension of the production cuts agreement to the end of 2019. In previous comments from officials in OPEC member-states, the cuts will be decided based on the status of oversupply in oil markets.
Investors Are Avoiding Iranian Oil
Bloomberg report said Tehran has offered investors as much as 6 million oil barrels in 2019 and only one deal was closed for the minimum of 35,000 barrels. This week Iran has offered another million barrels of light crude for a 6% down payment and 90 days of credit.
Iranian oil exports have significantly dropped since the U.S. reinstated sanctions in 2018. Deputy head of the Iranian Association for Energy Economics, Morteza Behrouzifar said: “Iran’s crude is sanctioned and under no circumstances can anyone buy Iranian crude except those who were granted waivers.”
OPEC May Raise Oil Production from July
Reuters report said OPEC might increase oil production starting from July if Iran and Venezuela oil production drops and prices increase.
Last month Venezuela’s oil production dropped to 1 million bpd, and it is expected that Iran’s oil exports will further drop in May.
OPEC is expected to meet on June 25-26 to decide whether or not to extend the oil cuts or not.
Saudi Aramco Issues $12 Billion in Bonds
Saudi Arabia issued $12 billion of bonds for its state-run oil company Aramco. The demand for Saudi Aramco’s debut offering was so robust it allowed the company to borrow at a lower yield than its sovereign parent. The high demand to buy Aramco’s debt has also helped to lower the borrowing costs for Riyadh.
The bond sale was managed by JPMorgan, Morgan Stanley, Citigroup Inc., Goldman Sachs Group Inc., HSBC Holdings Plc, and NCB Capital Co.
Oman Awards French Total Block 12 Exploration Rights
The Omani government awarded France Total 100% exploration and operatorship rights in onshore Block 12. The Block is spread over an area of 3860 square miles and believed to have significant gas resources.
Prior to that, Total, Oman’s Ministry of Oil and Gas and Oman Oil Company reached an agreement to execute their integrated gas project to develop gas resources in the Greater Barik area in Blocks 10 and 11. In 2018, Total’s oil production in Oman was 38,000 bpd.
Saudi Energy Minister Says OPEC and non-OPEC to Make a Decision on Oil Cuts Extension in May
Saudi Energy Minister Khalid Al-Falih said OPEC and non-OPEC members will meet next month to make a decision about the extension of oil cuts.
The meeting -also known as JMMC- will include major oil producers such as Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Nigeria, and Kazakhstan.
About the possibility of Saudi Arabia making more output cuts, the Saudi minister said “I don’t think we will need (to do more) … the market is on its way toward balance. We have done a lot more than others,”
Saudi Arabia Threatens to Stop Oil Trade in USD if NOPEC Passes
Reuters report said that Riyadh is threatening to use currencies other than U.S. dollar in its oil sales if NOPEC passes. The bill would expose OPEC member-states to antitrust lawsuits. The report mentioned that Riyadh has discussed the matter with other OPEC members, and communicated the threat to American officials.
Saudi Arabia’s Largest Oil Field Produces Less Than Expected
An Aramco report released yesterday revealed the real production capacity of the Saudi Ghawar oil field, the world’s largest at 3.8 million bpd, well below the 5 million bpd widely known in the oil market.
Ghawar’s production capacity suggested in the report is 33% less than the U.S. government estimations in 2017 when the U.S. Energy Information Administration listed Ghawar’s production capacity at 5.8 million bpd. Also, the new figure puts the U.S. Permian oil production basin as the largest world’s producer since it pumped 4.1 million bpd in March.
Survey Shows OPEC Oil Production Reached Four-Year low
According to Reuters survey, OPEC oil production during March reached a record low in four years due to Saudi Arabia’s production cuts and Venezuela’s sanctions and power outages.
The survey showed that OPEC member-states produced in March 30.40 million bpd, 280,000 less than February production. Also, last month 11 of the 14 OPEC member-states achieved 135% of the pledged cuts, 34% more than February. The biggest cuts came from Riyadh which produced 220,000 bpd less than February.
Japanese Refineries Halt Oil Imports from Iran
According to industry sources and data on Refinitiv Eikon, Japanese Refineries halted imports of Iranian oil ahead of the expiry of a temporary waiver on U.S. sanctions. The waiver expires in early May, however, Japanese refineries want to ensure enough time for all cargoes to arrive to Japan and payment to be completed.
As its imports of Iranian oil fell, Japan has increased imports from other Gulf states, in addition to Russia and the Americas.
Aramco Buys Majority Stakes in Sabic
Aramco reached a deal to buy majority stake in petrochemicals firm Sabic from Saudi Arabia’s sovereign wealth fund. In the deal Aramco will buy 70% stake in Sabic held by Saudi Arabia’s Public Investment Fund for $69.1 billion in a share purchase agreement.
The purchase is a major step for Aramco’s efforts to expand its footprint in refining and petrochemicals.
Public Investment Fund Managing Director described the deal as “a win-win-win transaction and a transformational deal for three of Saudi Arabia’s most important economic entities.”
Bahrain LNG Terminal Begins Operations in May
Bahrain’s LNG terminal within the Khalifa bin Salman Port facility in Hidd will starts commercial operations in May. The first LNG shipment will mostly be imported from the UAE’s Abu Dhabi National Oil Company.
Bahrain’s National Oil and Gas Authority Chief Executive Jassem al Shirawi said his country made agreements with more than 25 companies and countries to import LNG from around the world.
The U.S. is about to Claim Saudi Arabia’s Energy Exporting Crown
Rystad Energy research firm expects U.S. to surpass Saudi Arabia’s title as world’s largest exporter of oil, natural gas liquids and petroleum products.
Over the past decade, drilling innovation has increased shale oil production, and overall oil production in the U.S. has more than doubled in the last decade, which made the U.S. the world’s largest oil producer surpassing Saudi Arabia and Russia.
Saudi Arabia’s daily exports of oil, gas, and petrochemical liquids are 9 million barrels, exceeding the U.S. by one million barrel, a gap that will probably vanish according to Rystad experts.
Morgan Stanley Sees Oil Prices Rising to $75
Morgan Stanley sees oil prices rising to $75 by the third quarter of 2019. Analysts at the American banking and investment company are more convinced now that OPEC is able to drain oversupply in the oil market since it has extended its production cuts and could possibly increase them.
The analysts also linked their forecast to the deteriorated situation in Venezuela which could affect the country’s oil production.
Oman Awards Ibri II Solar Independent Power Project
A joint Saudi Kuwaiti companies consortium won a $400 million bid to develop the Ibri II Solar Independent Power Project for the Oman Power and Water Procurement Company.
The project has a generation capacity of 500 MW and will supply 33,000 homes with electricity which will offset 340,000 tones of carbon dioxide emissions a year.
OPEC Cancels April Meeting
OPEC members decided to cancel their meeting planned for April, leaving the current production cuts in place until the group’s usual meeting in June.
Saudi Energy Minister Khalid Al-Falih said OPEC expects the oil market to remain oversupplied until June, and the delay will allow the group to assess U.S. sanctions’ impacts on Iran and Venezuela oil production.
Iran Inaugurates Four New Phases of the South Pars Gas Field
Iranian President Hassan Rouhani inaugurated four new phases of the South Pars gas field. The field is the world’s largest gas field and it is shared with Qatar.
Iran has invested $11 billion to complete the new phases and it will increase its gas production capacity by 110 million cubic meters per day.
Oil minister expects gas production from the South Pars field to reach 750 million cubic meters per day by the end of this year.
Venezuela Oil Production Could Drop; Would Saudi Arabia Increase its Output?
The International Energy Agency warns that power failure in Venezuela could disrupt oil supplies, which raises expectations of Saudi Arabia’s intervention to balance the market and cover any supply shortages, mainly because Riyadh made the highest production cuts among OPEC members in the recent OPEC production agreement.
Iraq’s Oil Exports to Drop to 3.5 Million bpd in March
Iraqi oil minister said his country is planning to drop oil exports in March to 3.5 million bpd in compliance with Iraq’s quota decided by OPEC last January.
Iraq is OPEC’s second largest producer, and its new exports target is 100,000 bpd lower than Jan and Feb exports.
OPEC members will meet in Vienna next month to discuss extending production cuts till end of 2019.
India’s Oil Imports from Iran Drop 60% from Last Year
India’s oil imports from Iran dropped to 260,000 bpd in February 2019; 60% lower than February 2018.
Iran was the third oil supplier to India in February 2018, while now it is ranked the eighth.
The sanctions waivers provided by the U.S. to India allows New Delhi to import up to 300,000 bpd from Iran until May 2019.
Iran to Launch Four Development Phases At South Pars Gas Field
Iranian oil minister says his country will launch four new phases in the South Pars gas field with a production capacity 110 million cubic meters per day.
The field is the world’s largest gas field and it is shared between Iran and Qatar. Last month, Iran’s production capacity reached 610 million cubic meters per day.
Last year both French Total and China National Petroleum Corp ended the investment in the field as the U.S. re-imposed sanctions on Tehran.
Saudi Arabia to Cut Oil Production and Exports for April
Saudi official source said Riyadh’s oil exports on April will be 7 million bpd while demands are at 7.6 million bpd.
The new exports target will keep production well below 10 million bpd, also below Riyadh’s 10.3 million bpd production quota agreed with OPEC members.
The decision shows Saudi Arabia’s determination to regain control over oil prices.
United States to become World’s Leading Oil Exporter in 2019
CNN reports says the US will surpass Saudi Arabia in 2019 in the exports of oil and petroleum products to become the world’s leading exporter of oil.
This breakthrough is mainly attributed to technology which changed the landscape of energy market.
Saudi Arabia Discovers Large Quantities of Gas in the Red Sea
On March 7, 2019, the Saudi Minister of Energy Khalid Al-Faleh said his country has discovered large quantities of gas in the Red Sea.
The minister also reiterated Saudi Arabia’s Aramco plans to invest in the U.S. LNG sector.
Current OPEC’s Oil Production Cuts to be Extended Until June
According to Reuters, OPEC and its OPEC+ partners will likely extend the current oil production policy until June, instead of making a new decision during the upcoming meeting in April.
Last month supplies from OPEC members fell to lowest in four years, and today oil price went up 1% in light of reports about a possible agreement between China and the U.S. to end the “trade war”
Qatar Petroleum and ExxonMobil Discover Natural Gas Field in the Mediterranean
Qatar Petroleum and ExxonMobil announced discovering the world’s third largest natural gas field found in the last two years which approximately contains 5 to 8 trillion cubic feet.
The field was found off the coast of Cyprus in the Eastern Mediterranean. State-owned Qatar Petroleum and ExxonMobil won in 2017 the rights to explore the area for gas and oil.
Saudi Oil Exports to U.S. Gulf Refineries Down by Half
According to U.S. Customs data, Saudi oil shipments to U.S. Gulf refineries reached 2.69 million barrel in January and 1.6 million in February comparing to 5.75 million last year.
Total Saudi oil exports to the U.S. fell in the third week of February to 346,000 bpd, the lowest in almost nine years.
An expert expected West Coast refineries to continue importing Saudi oil due to limited supply options.
Bahrain Discusses with U.S. Oil Companies Developing Recently Discovered Fields
Last April Bahrain discovered its biggest oilfield since the 1930s with estimation to contain 80 billion barrels of tight oil.
Yesterday, Bahraini oil minister said Manama is considering the development of the oilfield by American companies with shale oil expertise.
Saudi Arabia Plans Major Investments in LNG
Saudi Arabia announces plans to become a major player in the growing natural gas industry and looking to make investments in Russia, Australia, the U.S., and Africa.
Saudi Aramco Chief Executive said: “Gas is a major market and we want to be one of the largest players,”
Riyadh is planning to increase its LNG export to 3 billion cubic feet per day by 2030, and replace the 800,000 oil barrels used daily to generate electricity with LNG.