Saudi Arabia to cut oil production by additional 1 million bpd

Saudi Arabia to cut oil production by additional 1 million bpd
Saudi Aramco's Abqaiq oil processing plant. Saudi Arabia's energy ministry said it had asked Aramco to make an additional voluntary output cut of one million barrels per day. (AFP/File)
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Updated 12 May 2020

Saudi Arabia to cut oil production by additional 1 million bpd

Saudi Arabia to cut oil production by additional 1 million bpd
  • Voluntary cut for June is in addition to reductions already agreed with OPEC+ last month
  • Kuwait also announced additional cut for next month

Saudi Arabia will unilaterally cut an extra 1 million barrels of oil production per day from June in a renewed effort to stabilize global energy markets.

The Kingdom’s energy ministry told Saudi Aramco to further reduce the output level beyond the historic reductions agreed with OPEC+ countries last month, bringing the total the Kingdom is pledged to reduce to nearly 5 million barrels a day.

From next month, Saudi Arabia will produce only 7.5 million barrels, the lowest in two decades and well below capacity of more than 12 million barrels. 

“We want to expedite the process of returning back to normal,” Energy Minster Prince Abdul Aziz bin Salman said.

An energy ministry official said the new cut was intended to “encourage” other members of the OPEC+ alliance, which includes Russia, to implement the cuts they have already agreed on. The UAE and Kuwait signaled they were ready to follow the Saudi cuts with smaller cuts of their own.

OPEC+ will debate a possible extra round of cuts next month as the global oil glut continues.

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Some analysts saw the new cuts as an attempt to help the struggling American shale industry, which has been hit by closures and bankruptcy after the oil price collapse.

But Brent crude, the global benchmark, fell 3.4 percent after the announcement to $29.50, with West Texas Intermediate, the American standard, also down at $24.21 per barrel.

The move in the global oil market came after Saudi Arabia took drastic measures to overhaul its finances amid the global economic shock of the coronavirus pandemic.

The value added tax will be tripled to 15 percent, cost of living allowances for government employees cut, and capital spending on some big projects reduced or delayed.

But megaprojects such as NEOM and the Red Sea Development, core parts of the Vision 2030 reforms, will carry on. 

“It may not be as fast as it used to be, but they are continuing,” Finance Minister Mohammed Al-Jadaan said.

The increase in the VAT, bigger than the IMF has called for in the past, would add to the cost of living, but Al-Jadaan said the effect would be minimal because coronavirus lockdowns would depress consumer spending.

Some analysts said the measure was a return to “austerity” economics amid the global recession caused bythe pandemic. Tarek Fadlallah, chief executive of Nomura Asset Management in the Middle East, said: “The subtle approach to diversifying the Saudi economy and raising non-oil revenues has been too slow.

“The authorities have accepted the need to induce a painful and immediate overhaul of the economy in the hope of longer-term gains.”

 


Lebanon must fix debts, end prosecutor action or face power cut, says Turkish firm

Lebanon must fix debts, end prosecutor action or face power cut, says Turkish firm
Updated 11 May 2021

Lebanon must fix debts, end prosecutor action or face power cut, says Turkish firm

Lebanon must fix debts, end prosecutor action or face power cut, says Turkish firm
  • Turkey’s Karadeniz supplies electricity to Lebanon from power barges

ISTANBUL: Turkey’s Karadeniz, which supplies electricity to Lebanon from power barges, told Beirut to halt action by the Lebanese prosecutor to seize its vessels and said it must draw up a plan to settle arrears to avoid a cut in supplies, a spokesperson said.
The spokesperson for Karpowership, a unit of Karadeniz that operates floating power plants, was speaking on Tuesday after Lebanon’s Finance Ministry cited a lawmaker saying the country had been threatened with a cut to its supplies.
A Lebanese prosecutor issued a decision last week to seize the barges and fine the firm after TV channel Al-Jadeed reported corruption allegations tied to the power contract. The firm denies the charges and says it has not been paid for 18 months.


Suez Canal boss reveals expansion plans as revenues jump on trade rebound

Suez Canal boss reveals expansion plans as revenues jump on trade rebound
Updated 11 May 2021

Suez Canal boss reveals expansion plans as revenues jump on trade rebound

Suez Canal boss reveals expansion plans as revenues jump on trade rebound
  • Revenues rose almost 16 percent in April to $551million

RIYADH: Suez Canal revenues rose almost 16 percent in April to $551 million compared to a year earlier, Asharq Business reported, citing Suez Canal Authority Chairman Osama Rabie.
Rabie also discussed plans to expand and deepen the southern sector of the canal in which the container ship Ever Given was stuck in March, creating chaos across the global supply chain.
That incident which brought a large proportion of seaborne trade to a near halt for a week, highlighted the need to ensure the  smooth operation of the key trade artery.
Rabie also revealed plans for dredging works for the maintenance of the navigational channel of the canal.
A plan is being implemented to restructure the authority’s companies, he said.
This year witnessed a slight increase in the number of ships passing through the waterway to 1,840 in April 2021 from 1,731 in April 2020, Al Arabiya reported.


Egypt jobless rate rises amid pandemic second wave

Egypt jobless rate rises amid pandemic second wave
Updated 11 May 2021

Egypt jobless rate rises amid pandemic second wave

Egypt jobless rate rises amid pandemic second wave
  • The size of the workforce was estimated at 29,284 million, compared to 29,965 million during the previous quarter

RIYADH: Egypt’s unemployment rate reached 7.4 percent of the total labor force in the first quarter of 2021 — up from 7.2 percent in the previous quarter.
The new data from the Central Agency for Public Mobilization and Statistics (CAPMAS), reflects the impact of the second wave of the pandemic.
The size of the workforce was estimated at 29,284 million, compared to 29,965 million during the previous quarter, representing a decrease of 2.3 percent, Al Arabiya reported.
The labor force in urban areas reached 13,034 million, with 16,250 million living in rural areas.
Gehan Saleh, economic affairs adviser to Egypt’s prime minister said in April that the second stage of the country’s economic reform program would be launched soon.
She said the plan aims to improve the quality of life of citizens and tackle unemployment through job-creating investments.


Smugglers post gold from Dubai to India hidden in Tang

Smugglers post gold from Dubai to India hidden in Tang
Updated 11 May 2021

Smugglers post gold from Dubai to India hidden in Tang

Smugglers post gold from Dubai to India hidden in Tang
  • It is the latest ruse by smugglers trying to avoid hefty import duties for the precious metal by employing increasingly intriguing methods

DUBAI: Indian customs have foiled an attempt to post gold from Dubai disguised in containers of the popular Tang drink.

After sieving the contents of the drink mix, Chennai customs officials discovered it had been mixed with gold granules, according to a statement from the Commissioner of Customs at Chennai International Airport.
Officials probing the racket found that the address of the receiver had been misused.
It is the latest ruse by smugglers trying to avoid hefty import duties for the precious metal by employing increasingly intriguing methods.
Earlier this year officials at Chennai airport also nabbed two men trying to smuggle gold through the airport underneath their wigs.
The hapless pair were nabbed after their unusual hairstyles caught the attention of officials.

They were found to be carrying two gold paste packets weighing almost 700 g


UK-based tower operator to acquire Omantel sites in $575m deal

UK-based tower operator to acquire Omantel sites in $575m deal
Updated 11 May 2021

UK-based tower operator to acquire Omantel sites in $575m deal

UK-based tower operator to acquire Omantel sites in $575m deal
  • The move signals Helios Towers’ entry to the Middle East market as a major tower infrastructure provider

DUBAI: British telecommunications company Helios Towers has signed a deal with Omantel to acquire 2,890 sites for $575 million from the sultanate’s largest mobile network operator.
The move signals Helios Towers’ entry to the Middle East market as a major tower infrastructure provider.
The deal is expected to bring in a $59 million bump in revenues in the first full year of operations.
It also involves a $35 million plan to add 300 new build-to-suit sites over the next seven years.
“We view Oman as a very attractive and supportive market for foreign investments, with strong growth and exciting future prospects,” the UK-based company’s chief Kash Pandya said in a statement.
He said the acquisition strengthens its business through “further hard-currency revenues and diversification” in what the CEO described as the fastest growing markets in the region.
“We look forward to working with Omantel and the other MNOs over the coming years to further develop next generation mobile infrastructure solutions and services in Oman,” he added.
The partnership reflects Oman’s FDI aspirations, Omantel CEO Tala Said Al-Mamari said, adding it will create jobs and opportunities in the country.
“This move also allows the monetization of our towers at attractive valuation levels, de-lever our balance sheet, and will accelerate network development in next generation advanced technologies,” he noted.
He said it would allow Omantel’s management to focus on innovation and product development while outsourcing infrastructure management to an independent firm.
The transaction will close by the end of 2021, and the long-term partnership will last for an initial period of 15 years.