Saudi Arabia makes hard-hitting call for full OPEC+ compliance on cuts

Saudi Arabia makes hard-hitting call for full OPEC+ compliance on cuts
Prince Abdul Aziz warned nations to comply with oil cuts during a meeting of an OPEC+ ministerial committee. (Twitter)
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Updated 18 September 2020

Saudi Arabia makes hard-hitting call for full OPEC+ compliance on cuts

Saudi Arabia makes hard-hitting call for full OPEC+ compliance on cuts
  • Energy minister Prince Abdul Aziz warns: ‘compliance is not an act of charity’
  • Only six of the OPEC+ members had stuck to agreed production levels to stabilize market

DUBAI: Saudi Arabia has called on its partners in the OPEC+ alliance to be vigilant, disciplined and transparent in their commitment to the oil cuts agreement that have brought global crude back from the chaos of earlier this year.

In hard-hitting opening remarks, Prince Abdul Aziz bin Salman, the Kingdom’s energy minister, said it was essential for all members of the 23-strong organization to comply fully with the terms of their agreements.

“Full compliance is not an act of charity. It is an integral part of our collective effort to maximize the interest and gains of every individual member of this group. And compliance is a sovereign decision that we have all taken willingly and responsibly,” he told delegates at the monthly virtual meeting of the Joint Ministerial Monitoring Committee (JMMC) that oversees OPEC+ affairs.

The meeting had heard a technical report showing that only six of the OPEC+ members had stuck by agreed production levels in the period from May to August.

Saudi Arabia cut by far the biggest amount in that period, while the UAE - traditionally a diligent conformer to OPEC+ agreements - missed its production targets by a significant amount, which has widened over the past two months.

But the overall level of compliance to the cuts was at a historical high level in August, with 101 per cent conformity among all OPEC+ members.

The Prince said a “key lesson of the past few weeks is that being transparent with the market, and with this group, about production and compliance always pays off.

“Attempts to outsmart the market will not succeed, and are counter-productive, when we have the eyes, and the technology, of the world upon us,” he added.

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In a meeting with journalists, Suhail Al-Mazrouei, the UAE energy minister who was seated alongside the Saudi Prince in Riyadh, reaffirmed his full support for the OPEC+ commitments. “We have always been a transparent and full partner to all out colleagues in these agreements,” he said.

Prince Abdul Aziz said he wanted to “dispel any concerns that may have been assumed by analysts, the media or the market” about the UAE’s commitment to the OPEC+ cuts.  

Under-complying countries, including the UAE, have agreed to cut more crude in the future to compensate for past shortfalls, but Prince Abdul Aziz warned: “The compensation mechanism was not established as a substitute for full compliance, nor to encourage non-compliance. Not fully complying, and then compensating, should not become the norm.”

He added he would like to see the compensation scheme ended this year, and the JMMC was considering that possibility.

Some analysts had expected the OPEC+ meeting to agree to reverse some of the increases brought in under phase two of the historic April cuts deal, but this was never under serious consideration.

“In the face of uncertainty, the market will be increasingly looking to us for direction. We must demonstrate that we are disciplined and fully committed to our agreement, and as a group we are pro-active and pre-emptive, and ready to act when it is needed,” Prince Abdul Aziz said.

“There is no other choice or panacea. This is the only effective medicament to see us through these challenging times,” he added.

Prince Adbul Aziz had a blunt message for speculators looking to make profits in volatile trading. “To those who want to short the market, I say - make my day.”

The strong Saudi message to OPEC+ was echoed by the Russian energy minister, Alexander Novak, who said: “I urge everyone to continue sticking to this and to maintain the high level we have achieved.”

Global oil prices, which have been under pressure in recent weeks on fears of a COVID-19 resurgence and falling oil demand, recovered some lost ground to trade over $43 a barrel.

 


Saudi Arabia’s Amkest Group signs deal with US green energy firm

Amr Khashoggi, Chairman of Amkest Group and Scott Poulter, Chief Executive of Pacific Green Technologies
Updated 05 December 2020

Saudi Arabia’s Amkest Group signs deal with US green energy firm

Saudi Arabia’s Amkest Group signs deal with US green energy firm
  • Its expansion into Saudi Arabia through this joint venture is no surprise since the Kingdom is aiming for 30 percent of its energy to come from renewable sources by 2030

RIYADH: US-based Pacific Green Technologies Inc. (PGTK) has signed a joint venture agreement with Amr Khashoggi Trading Co. Ltd. (Amkest Group) to incorporate a company in Saudi Arabia for the sale of Pacific Green environmental technologies.
Amkest Group, founded in 1983, has a history of success in the Kingdom. Its diverse business portfolio includes construction material production and supply, property development and consulting services.
Commenting on the partnership, Scott Poulter, PGTK’s CEO, said: “Saudi Arabia under its Vision 2030 strategic framework, which calls for 9.5 GW of the Kingdom’s energy to be supplied through renewables by 2030, is set to undergo rapid growth.”
Poulter added: “Pacific Green’s technologies, particularly in the solar power, desalination and battery energy storage system sectors, provide the perfect solution to the Kingdom’s growing demand, and we are excited to leverage Amkest Group’s hard-earned relationships to contribute toward the goals of Vision 2030.”
Amr Khashoggi, chairman of Amkest Group, said: “We believe the combination of our experience and knowledge of the Saudi market, coupled with Pacific Green’s portfolio of technologies, provides the foundation for an incredible partnership and the opportunity to offer multiple complementary technologies.”
Pacific Green is focused on addressing the world’s need for cleaner and more sustainable energy. Its expansion into Saudi Arabia through this joint venture is no surprise since the Kingdom is aiming for 30 percent of its energy to come from renewable sources by 2030.
The deal comes on the back of an expectation that Saudi Arabia will attract more than $20 billion in investments in renewables over the next decade. This forecast was made by the CEO of Saudi National Grid in October, according to a report by S&P Global.