Deal on oil cuts ‘close’ as Saudi Arabia enlists G20

Birol: Saudi Arabia has been a stabilizing factor in the markets for many years. (AFP)
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Updated 07 April 2020

Deal on oil cuts ‘close’ as Saudi Arabia enlists G20

  • ‘Virtual’ energy summit on Friday in new effort to stabilize market

DUBAI: Saudi Arabia plans to use its presidency of the powerful G20 group of nations in efforts to restore balance to global oil markets.

The Kingdom is organizing a special meeting of G20 energy ministers — including the other two biggest producers, the US and Russia — to discuss cuts to output.

The “virtual” summit is scheduled for Friday, the day after an OPEC+ meeting of oil producers. Crucially, the US, which is not an OPEC member, will be involved in the G20 summit, energy secretary Dan Brouillette said.

The initiative emerged after a weekend phone call between Prince Abdul Aziz bin Salman, the Saudi energy minister, and Fatih Birol, executive director of the International Energy Agency. The involvement of the G20 is part of the group’s remit, Birol told Arab News on Monday.

“The job description of the G20 is to provide and maintain financial stability, so it is in line with their aims,” he said.

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“The oil industry is going through one of the worst times in its history, and this could have major implications for the global economy, financial markets and employment. Saudi Arabia has been a stabilizing factor in the markets for many years.”

Saudi Arabia and Russia were “very, very close” to a deal to cut oil output, said Kirill Dmitriev, chief executive of the Russian Direct Investment Fund and a close confidant of President Vladimir Putin. An agreement would “bring so much important stability to the market,” he said.

Nevertheless, significant challenges remain. So far, talks between OPEC+ members have focused on a cut of about 10 million barrels per day. This would not be enough to outweigh global market oversupply estimated at more than 20 million barrels, amid a demand slump caused by the coronavirus pandemic.

There are also concerns about whether US producers would be permitted to take part in cuts. American antitrust law prohibits cartel practices, which would rule out a concerted move by its many oil companies.

Some energy experts have suggested that action by the Railroad Commission of Texas, which regulates the energy business in the biggest US oil state, could help limit overall US output.

On the markets, amid the continuing uncertainty, Brent crude was trading about 5 percent down, at just over $32.


Egypt inaugurates $3.4M hyrdocracking complex to produce petroleum products

Updated 27 September 2020

Egypt inaugurates $3.4M hyrdocracking complex to produce petroleum products

CAIRO: A new hydrocracking complex worth $3.4 million was inaugurated on Sunday by the Egyptian president in a ceremony north of Cairo.

The complex will produce 4.7 million tons of high-value petroleum products as part of Egypt’s ambitious program to enhance its refining industry, a local report said. 

It was established in cooperation with the private sector to produce high-octane gasoline and diesel. It converts low-value diesel into high-quality petroleum products, which include hydrocracking units for diesel, charcoal, vacuum distillation, sulphur treatment and naphtha repair, according to a report by Egypt Today news website. 

Work at the site, located in Musturud of Qalyubia governorate, began in 2011 but was halted due to the political turmoil that broke out that year, the Egyptian president said. 

President Abdel Fatah El-Sisi asked Egyptians to realize “the size of benefits from a complex like this for Egypt in the field of petroleum,” in statements quoted by Youm 7 newspaper.