Saudi Aramco and ADNOC sign MoU to explore investment opportunities in gas sector

Saudi Aramco and ADNOC sign strategic cooperation agreement on natural gas and LNG. (SPA)
Updated 12 November 2018

Saudi Aramco and ADNOC sign MoU to explore investment opportunities in gas sector

  • Two of the worlds largest oil companies have signed a cooperation agreement to meet global demands for natural gas
  • Saudi Aramco and UAE's ADNOC have been focusing on raising their gas production

ABU DHABI: The state energy giants of Saudi Arabia and the United Arab Emirates, Aramco and ADNOC, signed a cooperation deal Monday aimed at bolstering gas production and revenue.
The agreement was signed by CEO of Saudi Aramco Amin Hassan Al-Nasser and UAE Minister of State and CEO of ADNOC Group Sultan Ahmed Al-Jaber.
The framework deal saw the two biggest Arab oil firms agree to jointly explore investment opportunities and exchange technical expertise as they seek to tap into natural gas and Liquefied Natural Gas (LNG) markets.
The deal also follows an agreement between the two companies earlier this year to participate in an integrated refining and petrochemical project in India.
“This agreement focuses on attractive and valuable investment opportunities in the field of natural gas and liquefied natural gas and represents a collaborative framework between two global giants of the oil and gas industry,” said Al-Nasser.
“Enhancing cooperation with ADNOC will have a positive impact on the sustainability objectives and will benefit the two companies economically,” he said, adding “we have recently announced our intention to invest in a large-scale refinery on the western coast of India.”
“Saudi Aramco is expanding both conventional and non-conventional gas operations and this new agreement helps us accelerate growth in natural gas and liquefied natural gas, enhance our competitive advantage, diversify our business and expand our international gas investment activities,” Al-Nasser said.
Meanwhile, Al-Jaber said the UAE and Saudi Arabia have a close relationship based on history, vision and common strategic interests. 
“Increased cooperation between ADNOC and Aramco will ensure greater energy security and long-term economic prosperity for both nations,” Al-Jaber said.
No further details on the specifics of the agreement were provided but the two companies have been focusing on raising their gas production.
Last week, UAE’s supreme petroleum council approved investments worth $132 billion over the next five years to boost oil and gas production.
Under the investment plan, both countries aim to become self sufficient in natural gas and later net exporters.
As part of its energy push, ADNOC on Sunday granted French major Total an exploration and production concession agreement for natural gas.
LNG is the fastest growing hydrocarbon at 4% per annum. Global demand for this gas is expected to exceed 500 million tons per year by 2035, up from the demand levels in 2017 which amounted to about 300 million tons. 
The concession agreement aims at producing one billion cubic feet daily of gas by 2030.
ADNOC Gas LNG, a subsidiary of ADNOC, is a reliable supplier of LNG. It has a proven track record of 40 years in this field and accounts for 2% of the global market share of LNG.

* With AFP

Gulf defense spending ‘to top $110bn by 2023’

Updated 15 February 2019

Gulf defense spending ‘to top $110bn by 2023’

  • Saudi Arabia and UAE initiatives ‘driving forward industrial defense capabilities’
  • Budgets are increasing as countries pursue modernization of equipment and expansion of their current capabilities

LONDON: Defense spending by Gulf Arab states is expected to rise to more than $110 billion by 2023, driven partly by localized military initiatives by Saudi Arabia and the UAE, a report has found.

Budgets are increasing as countries pursue the modernization of equipment and expansion of their current capabilities, according to a report by analytics firm Jane’s by IHS Markit.

Military expenditure in the Gulf will increase from $82.33 billion in 2013 to an estimated $103.01 billion in 2019, and is forecast to continue trending upward to $110.86 billion in 2023.

“Falling energy revenues between 2014 and 2016 led to some major procurement projects being delayed as governments reigned in budget deficits,” said Charles Forrester, senior defense industry analyst at Jane’s.

“However, defense was generally protected from the worst of the spending cuts due to regional security concerns and budgets are now growing again.”

Major deals in the region have included Eurofighter Typhoon purchases by countries including Saudi Arabia and Kuwait.

Saudi Arabia is also looking to “localize” 50 percent of total government military spending in the Kingdom by 2030, and in 2017 announced the launch of the state-owned military industrial company Saudi Arabia Military Industries.

Forrester said such moves will boost the ability for Gulf countries to start exporting, rather than purely importing defense equipment.

“Within the defense sector, the establishment of Saudi Arabia Military Industries (SAMI) in 2017 and consolidation of the UAE’s defense industrial base through the creation of Emirates Defense Industries Company (EDIC) in 2014 have helped consolidate and drive forward industrial defense capabilities,” he said.

“This has happened as the countries focus on improving the quality of the defense technological work packages they undertake through offset, as well as increasing their ability to begin exporting defense equipment.”

Regional countries are also considering the use of “disruptive technologies” such as artificial intelligence in defense, Forrester said.

Meanwhile, it emerged on Friday that worldwide outlays on weapons and defense rose 1.8 percent to more than $1.67 trillion in 2018.

The US was responsible for almost half that increase, according to “The Military Balance” report released at the Munich Security Conference and quoted by Reuters.

Western powers were concerned about Russia’s upgrades of air bases and air defense systems in Crimea, the report said, but added that “China perhaps represents even more of a challenge, as it introduces yet more advanced military systems and is engaged in a strategy to improve its forces’ ability to operate at distance from the homeland.”