Saudi Aramco creates fuel retail subsidiary

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Saudi Aramco is establishing a domestic fuel retailing subsidiary as part of the national oil company’s drive to expand beyond crude oil production into downstream businesses. (File Photo/Reuters)
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Saudi Aramco signed a MoU with the Petroleum and Natural Gas Higher Institute of Technology and Training and the Al-Ayoun Charitable Society for Social Services to establish a center for date products in Al-Ahsa Governorate. (SPA)
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Saudi Aramco signed a MoU with the Petroleum and Natural Gas Higher Institute of Technology and Training and the Al-Ayoun Charitable Society for Social Services to establish a center for date products in Al-Ahsa Governorate. (SPA)
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Saudi Aramco signed a MoU with the Petroleum and Natural Gas Higher Institute of Technology and Training and the Al-Ayoun Charitable Society for Social Services to establish a center for date products in Al-Ahsa Governorate. (SPA)
Updated 10 January 2019
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Saudi Aramco creates fuel retail subsidiary

JEDDAH: Saudi Aramco is establishing a domestic fuel retailing subsidiary as part of the national oil company’s drive to expand beyond crude oil production into downstream businesses.
The new firm, Saudi Aramco Retail Co, will create a network of filling stations within Saudi Arabia to sell automotive fuels, Aramco said on Wednesday, without giving details of the size, cost or time-frame for the network.
In April, Aramco said it had signed a memorandum of understanding with French firm Total to evaluate the feasibility of jointly buying a retail service station network in Saudi Arabia.
But Wednesday’s statement did not mention Total or the possibility of buying existing stations. The new Saudi network will complement a global retail network which Aramco already operates through joint ventures, the company said.
In the long run, the new retail subsidiary could help Saudi authorities conduct an initial public offer of shares in Aramco.
Aramco is now focusing on a range of downstream projects, including the purchase of a major stake in petrochemical producer Saudi Basic Industries, which could boost its value and attractiveness to international investors, ultimately allowing the IPO to go ahead.
Meanwhile, Saudi Aramco signed a Memorandum of Understanding (MoU) with the Petroleum and Natural Gas Higher Institute of Technology and Training and the Al-Ayoun Charitable Society for Social Services to establish a center for date products in Al-Ahsa Governorate, in the framework of the company’s ongoing efforts to empower local communities.
The MoU aims to establish a date products center that works to develop high quality products, such as molasses, date paste, and date sweets.
The material returns of these products far outweigh the direct selling of dates, which is positively reflected on the community. There are about 100 beneficiaries, where people with low incomes and special needs in the province will benefit from this center.
The center will support the beneficiaries by qualifying them to the highest standards and developing their capabilities in the fields of recycling, packaging and the marketing of dates.
Saudi Aramco Vice President, Nabeel Al-Jama’, said that this initiative is part of Saudi Aramco’s objectives to contribute to empowering the community through a series of community-based programs to support people in dire need to enable them to support themselves and their families.
“It also serves an estimated segment of the people of the province of Al-Ahsa by supplying jobs that provide them with sustainable financial income,” he said.
He added “the agreement will promote sustainability, citizenship and local added value and the company will continue to provide development projects that contribute to increasing GDP in partnership with private and government institutions.”
He also said the agreement will preserve natural resources and benefit from the competitive advantages of the Kingdom’s regions, inorder to develop them to benefit future generations.


OPEC cut ‘biggest in almost 2 years’

Updated 18 January 2019
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OPEC cut ‘biggest in almost 2 years’

  • OPEC said in a monthly report its oil output fell by 751,000 barrels per day (bpd) in December to 31.58 million bpd
  • OPEC expects 2019 global oil demand growth to slow to 1.29 million bpd from 1.5 million in 2018

LONDON: OPEC said on Thursday it had cut oil output sharply in December before a new accord to limit supply took effect, suggesting producers have made a strong start to averting a glut in 2019 as a slowing economy curbs demand.
The Organization of the Petroleum Exporting Countries said in a monthly report its oil output fell by 751,000 barrels per day (bpd) in December to 31.58 million bpd, the biggest month-on-month drop in almost two years.
Worried by a drop in oil prices and rising supplies, OPEC and its allies, including Russia, agreed in December to return to production cuts in 2019. They pledged to lower output by 1.2 million bpd, of which OPEC’s share is 800,000 bpd.
The reduction in December means that should OPEC fully implement the new Jan. 1 cut, it will avoid a surplus that could weaken prices. Oil slid from $86 a barrel in October to below $50 in December on concerns of excess supply.
OPEC expects 2019 global oil demand growth to slow to 1.29 million bpd from 1.5 million in 2018 although it was more upbeat about the economic backdrop than last month and cited better sentiment in the oil market, where crude is back above $60.
“While the economic risk remains skewed to the downside, the likelihood of a moderation in monetary tightening is expected to slow the decelerating economic growth trend in 2019,” OPEC said.
“This has recently been reflected in global financial markets. The positive effect on market sentiment was also witnessed in the oil market,” it said.
The supply cut was a policy U-turn after the producer alliance known as OPEC+ agreed in June 2018 to boost supply amid pressure from US President Donald Trump to lower prices and cover an expected shortfall in Iranian exports.
OPEC changed course after the slide in prices starting in October. A previous OPEC+ supply curb starting in January 2017 — when OPEC production fell by 890,000 bpd according to OPEC figures — got rid of a glut formed in 2014-2016.
In a sign of excess supply, OPEC’s report said oil inventories in developed economies had stayed above the five-year average in November.
The biggest drop in OPEC supply last month came from Saudi Arabia and amounted to 468,000 bpd, the survey showed.
Saudi supply in November had hit a record above 11 million bpd.
The Kingdom told OPEC it lowered supply to 10.64 million bpd in December and has said it plans to go even further in January by delivering a larger cut than required under the OPEC+ deal.
The second-largest was an involuntary cut by Libya, where unrest led to the shutdown of the country’s biggest oilfield.
Output from Iran posted the third-largest decline, also involuntary, as US sanctions that started in November discouraged companies from buying its oil.
Iran, Libya and Venezuela are exempt from the 2019 supply cut deal and are expected by some analysts to post further falls, giving a tailwind to the voluntary effort by the others.
OPEC said in the report that 2019 demand for its crude would decline to 30.83 million bpd, a drop of 910,000 bpd from 2018, as rivals pump more and the slowing economy curbs demand.
Delivering the 800,000 bpd cut from December’s level should mean the group would be pumping slightly less than the expected demand for its crude this year and so avoid a surplus. Last month’s report had pointed to a surplus.
The figures for OPEC production and demand for its crude were lowered by about 600,000 bpd to reflect Qatar’s exit from the group, which now has 14 members.