Saudi Arabia calls ‘urgent’ meeting of oil producers

The price of crude has been under pressure as a result of collapsing demand due to the coronavirus crisis. (Reuters)
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Updated 02 April 2020

Saudi Arabia calls ‘urgent’ meeting of oil producers

  • Crude prices jump after move, which Kingdom says is part of efforts ‘to support global economy in these exceptional circumstances’

DUBAI: Saudi Arabia has called an urgent meeting of the Organization of Oil Exporting Countries and other oil exporters, to discuss restoring the “desired balance” in global energy markets.

The move — which prompted a big jump in the price of oil on global markets — is part of the Kingdom’s “constant efforts to support the global economy in these exceptional circumstances, and in appreciation of the request of the President of the USA, Donald Trump, and the request of friends in the USA,” according to a statement published by the official Saudi news agency.

Global oil prices reacted immediately. Brent crude, the Middle East benchmark, increased by 20 percent, taking it back above $30 a barrel.

The price of crude has been under pressure as a result of collapsing demand due to the coronavirus crisis, and Saudi Arabia’s determination to win market share from American and Russian producers.

During an OPEC meeting in Vienna last month, the Kingdom offered to implement further cuts in oil production but Russia refused to participate.

“Saudi Arabia would like to underscore its efforts during the past period to restore balance in the oil market, as it drew support for that from 22 counties of the OPEC+, but it was not possible to reach an agreement or get consensus,” according to the official Saudi statement.

Oil industry expert Daniel Yergin said: “This represents a recognition of how much the world has changed for oil in a single month as demand falls away so dramatically, and the impact of Donald Trump becoming personally engaged.”

The Saudi call for talks came after a hectic round of communications between the US, Russia and the Kingdom.

In a message posted on Twitter after the Saudi announcement, Trump wrote: “I just spoke to my friend Mohammed bin Salman, crown prince of Saudi Arabia, who spoke with President Putin and I expect and hope that they will be cutting back approximately 10m barrels, and maybe substantially more, which will be great for the oil and gas industry.”

However, officials in Riyadh downplayed any suggestion of a commitment to specific reductions in the levels of oil output. There is no indication yet of when the “urgent” meeting of OPEC and others might happen, nor what will be on the agenda, they said.

President Vladimir Putin denied that he had spoken to the crown prince about the price of oil. Novosti, the official Russian news agency, said there was no such conversation, but added that the president had discussed falling oil prices with other OPEC members and with the US.

“The Americans are worried because of their profitability for shale oil production,” said Putin. “This is also a difficult test for the American economy.”

This week, Saudi Arabia produced more oil in a single day than at any time in its history, with 12 million barrels flowing from pumps at Saudi Aramco, the world’s biggest oil company.
 


Egypt signs lucrative gas deals

Updated 3 min 29 sec ago

Egypt signs lucrative gas deals

  • Five agreements were signed during the last fiscal year

CAIRO: The Egyptian Natural Gas Holding Company (EGAS) has signed eight research and exploration agreements with investments of $934 million.

Five agreements were signed during the last fiscal year and three others during the first quarter of this fiscal year.

Minister of Petroleum and Mineral Resources Tarek El-Molla said that the integrated strategy adopted by the ministry to develop Egypt’s natural gas resources has succeeded in recording the highest rates of natural gas production in the history of the country, achieving gas self-sufficiency and resuming exports.

He said that natural gas plays a significant role in achieving economic returns, in addition to attracting new international companies to work in the field of research and exploration in Egypt.

El-Molla said a project to transform Egypt into a regional center for the handling and trade of gas and oil is being planned.

The minister stressed the importance of implementing the national project for providing natural gas to all Egyptian governorates and citizens.

Magdy Galal, EGAS head, reviewed the development of natural gas production rates during the past five years and the efforts to confront the natural decrease of wells.

He said that during the recent fiscal year, the company signed a total of five agreements. On top of the $934 million in investments, there were also signing grants worth $51 million.

He added that the company has 37 ongoing agreements, a result of a Ministry of Petroleum and Mineral Resources strategy, which attracted new investments and the entry of Exxon Mobil and Chevron in the field of research and exploration in Egypt, and an increase in investments from companies such as Shell and Total.

He said the company is finalizing six other agreements with investments of $731 million and $14 million in signing grants.