Saudi Arabia ramps up oil production to record level

Saudi Arabia will once more be the world’s biggest producer of crude oil under plans announced Wednesday to further increase the Kingdom’s output to a new record level. (Saudi Aramco)
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Updated 12 March 2020

Saudi Arabia ramps up oil production to record level

  • Saudi Aramco to increase its maximum sustainable capacity — the limit to the crude it can produce over the long term — to 13 million barrels per day
  • Increase would enable the Kingdom to leapfrog the US as the number one crude producer, pushing Russia into third place

DUBAI: Saudi Arabia will once more be the world’s biggest producer of crude oil under plans announced Wednesday to further increase the Kingdom’s output to a new record level.

Prince Abdul Aziz bin Salman, the Saudi energy minister, told Saudi Aramco to prepare to increase its maximum sustainable capacity — the limit to the crude it can produce over the long term — to 13 million barrels per day.

That would enable the Kingdom to leapfrog the US as the number one crude producer, pushing Russia into third place. Analysts said the new capacity would come from expansion and enhancement of production from existing fields.

Aramco, the biggest oil company in the world, had already announced it was planning to increase output to 12.3 million and would slash prices to customers around the world after the collapse of the OPEC+ agreement in Vienna at the end of last week.

A statement from Aramco to the Tadawul stock exchange, where its shares are quoted, said: “Saudi Aramco announces that it received a directive from the Ministry of Energy to increase its maximum sustainable capacity from 12 million barrels per day to 13 million,” in accordance with a 2017 royal decree.

In another sign of Saudi preparations for an oil export surge, the National Shipping Company, Bahri, was reported to be considering the hire of at last eight extra supertankers to export crude from the Kingdom.

The moves by the Saudi authorities represent a further escalation in the “price war” that broke out after Vienna, as another big Middle East producer, the UAE, also said it would dramatically increase production.

The Abu Dhabi National Oil Company (ADNOC) said it was planning to lift production from 3 million to 4 million barrels per day from next month, and would accelerate plans to lift the total to 5 million daily barrels, in addition to offering big discounts to customers.




‘We are in a position to supply the market with over four million barrels per day in April,’ Sultan Ahmed Al-Jaber, ADNOC’s group chief executive, said in a statement. (AFP)

“In response to market conditions, and to provide better forward visibility to our customers, we shortly announced forward prices for March and April,” said ADNOC chief executive Sultan Al-Jaber, adding that the new pricing would be based on its flagship Murban crude oil and traded in its new exchange ICE Futures Abu Dhabi.

Other big producers, including Nigeria and Iraq, have also said they would lift output. The price of Brent crude on international markets fell by nearly 4 percent to $36.25.

Shares in Saudi Aramco fell nearly 5 percent to $29.70, while the Tadawul Index, the TASI was down nearly 3 percent.

In Russia, whose unwillingness to participate in a further round of output cuts sparked the price war, energy minister Alexander Novak has called a meeting of the country’s top oil companies tomorrow to discuss the turmoil on global markets.

He said that the decision by Saudi Arabia to raise output and cut prices was “probably not the best option,” but that he remained in telephone contact with OPEC ministers and would take part in an OPEC+ technical committee later this month.

Another Russian businessman with strong ties to Saudi Arabia sought to defuse the tension.

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Kirill Dmitriev, chief executive of the Russian Direct Investment Fund, said that the two countries would continue to develop investment partnerships, “despite attempts to dissolve them.” 

The joint investment fund between Russia and Saudi Arabia would “continue to work”, he told journalists.

“There are differences on some energy issues but Russia has developed a partner relationship with Saudi Arabia and this relationship will continue,” Dmitriev said.

In the US, whose oil industry is regarded as especially vulnerable to a price war, the White House let it be known that it was considering federal aid to shale companies in politically-sensitive states like Texas and Pennsylvania. 

President Trump has greeted the fall in oil prices as “good for consumers” but is believed to be worried about the repercussions for heavily-indebted shale companies.

After two rollercoaster days on global stock markets because of coronavirus fears and the oil price war, the main Wall Street index, the S&P 500, opened around 3 percent down.


‘Dubai will be my new Beirut,’ say grieving Lebanese workers

Updated 13 August 2020

‘Dubai will be my new Beirut,’ say grieving Lebanese workers

  • About 350,000 Lebanese now live and work in the six Gulf nations

DUBAI: Just days after the enormous blast that shattered Beirut, Ali Hammoud found himself looking down on the rubble from an airplane window, leaving behind his family and hometown.

Born and raised in Lebanon’s capital, the 30-year-old IT engineer finally decided to head for Dubai after the explosion destroyed his last hopes of ever seeing Beirut prosper.

“It’s not easy at all, but I had to finally leave. I feel I’ve betrayed the city I love to death, but there is nothing left for me there except depression,” Hammoud said after arriving in the Gulf emirate.

“Now I can start a professional career, live in peace and send money back to my family,” said Hammoud, who had spent a year looking in vain for work before the Aug. 4 disaster that left more than 170 people dead and compounded Lebanon’s financial crisis.

Like many of his compatriots longing for safety and stability, the young man has applied for a job in Dubai. He joins tens of thousands of Lebanese who helped build a glitzy city that reminds them of their parents’ tales of the glamor of old Beirut — but with glimmering skyscrapers instead of Ottoman-era and French colonial villas.

Last week’s explosion of a long-neglected stock of ammonium nitrate at Beirut’s port ripped through the vibrant coastal city known for its rich history as well as legendary nightlife and cuisine.

The fact that Lebanese officials had long tolerated a ticking time-bomb in the heart of the Mediterranean city has served as proof to many of the rot at the core of the state apparatus.

“My aim is to overcome the guilt of leaving,” said Hammoud. “Dubai will be my new Beirut.”

Long before the explosion, Lebanon was heading downhill fast. The country was mired in its worst economic crisis since the 1975-1990 civil war, with runaway inflation and bank capital controls fueling angry street protests.

Political life in the country has been dominated for three decades by former warlords who exchanged their military fatigues for suits.

Among Sunni Muslim, Christian and myriad other groups, the most powerful force is the Shiite Hezbollah movement.

After years of systematic corruption, unsolved assassination cases, wars with neighboring Israel, and lack of basic services, many Lebanese now see the country’s elite as fighting over the spoils. They are viewed as beholden to their personal and sectarian interests, rather than the good of the nation of 6 million.

“I can’t explain how frustrated I am. I had to leave my country years ago because of those warlords. They stole from us and now they kill us?” said Firas Rachid, a 31-year-old salesman who has lived in Dubai since 2016.

Beirut, once famous for top educational and medical establishments, has lost much of its pre-civil war identity and its reputation as an oasis of enlightenment.

Millions of Lebanese, from doctors to engineers, to teachers and other professions, have emigrated over the years, seeking a better life in the Gulf and beyond.

About 350,000 Lebanese now live and work in the six Gulf nations, more than 100,000 of them in the United Arab Emirates alone, mostly in Dubai.

“Why Dubai? We drive in lanes here, we don’t fear militiamen holding guns to our heads, we have basic services, and we get paid well,” said Rachid. “My parents always describe Beirut as a hub for the region in the ‘60s and ‘70s, but this is exactly what Dubai is now.”

In his book “My Story,” Dubai’s ruler Sheikh Mohammed Bin Rashid Al Maktoum recalls his first visit to Beirut, years before the civil war that brought the “Paris of the Middle East” to its knees.

“In the early 1960s, its streets were clean, neighborhoods beautiful, its markets modern. It was a source of inspiration for me. I had a dream for Dubai to become like Beirut some day,” he wrote.

Decades later, Dubai has become a magnet for millions of Arabs whose countries have been ravaged by poverty and conflict.

Jordanians, Palestinians, Moroccans and others have opted to build their future in the desert city.

It does not have the history or cultural heritage of their homelands, but for many it is a fair tradeoff for peace and financial security.

At a basketball game in Dubai last year between two Lebanese clubs with different sectarian ties, there was no violence, no sectarian chants, only the slogan: “Three, two one! We are one!“