Demand for petrochemicals growing: CEO of RDIF

An employee stands at the Hammar Mushrif new Degassing Station Facilities site inside the Zubair oil and gas field, north of the southern Iraqi province of Basra on May 9, 2018. (AFP)
Updated 25 January 2019

Demand for petrochemicals growing: CEO of RDIF

The CEO of the Russian Direct Investment Fund, Kirill Dmitriev, said that the demand for petrochemicals growing is growing and will be the “next wave” of oil use.

During a panel discussion at the World Economic Forum in Davos on Wednesday, Dmitriev said petrochemicals and plastics are needed, “even for electric cars.”

“The petrochemicals industry in Saudi Arabia is around 150 billion market cap, in Russia its only 30 billion,” he said.

Dmitriev also talked about the historic oil cooperation between Russia and Saudi Arabia.

“Before it happened, no one believed it was possible,” he said, however, explained that no Saudi-Russian cooperation has a well functioning mechanism to adjust to supply and demand in the oil market.

CEO of Crescent Petroleum, Majid Jafar, argues gas is not a “transition” fuel, but a complement to renewables.

“Gas is going to continue growing. It is necessary for renewables. The UAE, where we are headquartered, has put their energy strategy for 2050 to be almost equal: 40% gas, 40% renewables,” he said.  

Additonally, Jafar says investors see US shale as a positive. He says that it enabled natural gas to replace coal in the US and reduce its greenhouse emissions substantially.

 


Aramco profits fall in tough quarter, but sees partial recovery from COVID-19 impact

Updated 09 August 2020

Aramco profits fall in tough quarter, but sees partial recovery from COVID-19 impact

  • Aramco see’s “partial recovery” from pandemic impact
  • Aramco president says company remains resilient

DUBAI: Saudi Aramco, the world’s biggest oil company, reported a net income of $6.57bn for the second quarter of 2020, the period which witnessed the most volatile oil market conditions for many decades.

The result, announced to the Tadawul stock exchange in Riyadh where the shares are listed, compared with income of $24.7 bn last year.

Amin Nasser, president and chief executive, said: “Despite COVID-19 bringing the world to a standstill, Aramco kept going. We have proven our financial resilience and operational reliability, setting a record in our business operations, while at the same time taking steps to ensure the health and safety of our people.”

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Aramco’s dividend - a big attraction for the investors who bought into the world’s biggest initial public offering last year - will remain as pledged, Nasser added. Cash flow in the quarter amounted to $6.106 bn.

““Strong headwinds from reduced demand and lower oil prices are reflected in our second quarter results. Yet we delivered solid earnings because of our low production costs, unique scale, agile workforce, and unrivalled financial and operational strength. This helped us deliver on our plan to maintain a second quarter dividend of $18.75 billion to be paid in the third quarter,” he said.

Aramco said the loss was “mainly reflecting the impact of lower crude oil prices and declining refining and chemicals margins, partly offset by a decrease in production royalties resulting from lower crude oil prices and a decrease in the royalty rate from 20 per cent to 15 per cent, lower income taxes and zakat as a result of lower earnings, and higher other income related to sales for gas products.”

Sales and revenue in the period - which saw oil prices collapse on “Black Monday” in April - fell 57 per cent to $32.861 bn from the comparable period last year. 

Nasser said he was cautiously optimistic that the world economy was slowly recovering from the depths of the pandemic lockdowns.

“We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies. Meanwhile, we continue to place people’s safety first and have adapted to the new normal, implementing wide-ranging precautions to limit the spread of COVID-19 wherever we operate.

“We are determined to emerge from the pandemic stronger and will continue making progress on our long-term strategic journey, through ongoing investments in our business – which has one of the lowest upstream carbon footprints in the world,” he added.

Aramco expects capital expenditure to be at the lower end of the $25bn to $30bn range it has already indicated for this year.