Al-Naimi: OPEC ‘must combat US shale boom’

Updated 30 November 2014
0

Al-Naimi: OPEC ‘must combat US shale boom’

Petroleum and Mineral Resources Minister Ali Al-Naimi told fellow OPEC members in Vienna that they must combat the US shale oil boom, arguing against cutting crude output in order to depress prices and undermine the profitability of North American producers.
Ali Al-Naimi won the argument at Thursday’s meeting, although ministers from members such as Venezuela, Iran and Algeria had wanted to cut production to reverse a rapid fall in oil prices.
A Gulf delegate told Reuters that Al-Naimi had reassured members that the oil price would recover as demand will ultimately pick up. But he insisted that if OPEC cut output it would lose market share.
“Reaching a final decision took a lot of time convincing the others,” said another delegate.
Some members were not prepared to offer big cuts themselves, and, choosing not to clash with Saudi Arabia and their allies, ultimately agreeing to Al-Naimi’s suggestion.
“Al-Naimi spoke about market share rivalry with the US. And those who wanted a cut understood that there was no option to achieve it because Saudi Arabia wants a market share battle,” a source, who was briefed by a non-Gulf OPEC minister after Thursday’s meeting, told Reuters.
Oil hit a fresh four-year low below $72 per barrel on Friday.
A boom in shale oil production and weaker growth in China and Europe have sent prices down by over a third since June.
Secretary General Abdullah Al-Badri effectively confirmed OPEC was entering a battle for market share.
Asked on Thursday if the organization had a answer to rising US production, he said: “We answered. We keep the same production. There is an answer here.”
OPEC agreed to maintain — a ‘rollover’ in OPEC jargon — its ceiling of 30 million barrels per day, at least 1 million above its own estimate of demand for its oil in the first half of next year.
“We are together,” said Venezuelan Foreign Minister Rafael Ramirez when asked whether there was a price war within OPEC.
“OPEC is always fighting with the US because the US has declared it is always against OPEC... Shale oil is a disaster as a method of production, the fracking. But also it is too expensive. And there we are going to see what will happen with production,” he said.
Analysts, quoted by Reuters, said the decision not to cut output in the face of drastically falling prices was a strategic shift for OPEC.


Russia’s RDIF to boost investment deals in Saudi Arabia

Updated 17 January 2019
0

Russia’s RDIF to boost investment deals in Saudi Arabia

  • Fund's CEO Kirill Dmitriev leads a delegation of more than 20 Russian business figures to the Kingdom
  • The delegation discussed projects in oil refining, petrochemical, gas chemical and oilfield services

RIYADH: Russian sovereign wealth fund RDIF said on Wednesday it would significantly boost its investments deals with Saudi Arabia in 2019.

The fund’s CEO Kirill Dmitriev led a delegation of more than 20 Russian business figures to the Kingdom to discuss new projects.

Saudi Energy Minister Khalid Al-Falih met Dmitriev in Riyadh and expressed his happiness on the progress they made in the talks and the cooperation between the two countries. 

“Its not only commercial cooperation, but we are also working on scientific research, and we have opened a research center in Moscow University,” Al-Falih said.

The minister said the Russian delegation will also meet officials from Saudi Basic Industries Corporation SABIC and mining company Ma’aden among other companies during their three day visit to the Kingdom.

The delegation discussed projects in oil refining, petrochemical, gas chemical and oilfield services sectors, a Russian Direct Investment Fund statement said.

Al-Falih added that the Russian side has started a rubber plant project in Al-Jubail with Total and Novomet.

RDIF already has a $10 billion investment partnership with the Saudi Public Investment Fun (PIF), with more than $2 billion already invested in projects.

“We extend our cooperation not only on oil cuts but to cooperate in oil services, technology, LG and petrochemicals,” Dmitriev said. “We believe Saudi Aramco can be one of the greatest partners of Russia.”

The CEO said they were continuing to cooperate with PIF in Saudi Arabia through a number of energy investments.

Russian companies are also keen to invest in the Kingdom’s planned $500 billion mega-city NEOM.

“We have companies that have interest to invest in NEOM, we would like to build a port in NEOM, it can be a big port,” Dmitriev said.