Oil rises as OPEC+ agrees to ‘keep its powder dry’

Oil rises as OPEC+ agrees to ‘keep its powder dry’
OPEC and its allies met to discuss the latest oil market developments. (File/Reuters)
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Updated 05 March 2021

Oil rises as OPEC+ agrees to ‘keep its powder dry’

Oil rises as OPEC+ agrees to ‘keep its powder dry’
  • Saudi Arabia leads move to curb output in uncertain global economy
  • The prince urged a continuation of the Kingdom’s “cautious and vigilant” policy toward oil supply

DUBAI: Oil prices rose on Friday after OPEC+, the alliance of oil producers led by Saudi Arabia and Russia, agreed to keep in place most of the production curbs that have been credited with the recent surge in the price of crude on global markets.

After a virtual meeting of energy ministers organized from the Organization of Petroleum Exporting Countries (OPEC) headquarters in Vienna, only Russia and Kazakhstan were allowed to increase output levels in April.

Saudi Arabia “rolled over” for another month the big 1 million barrel reduction that has kept markets balanced since the start of the year.

Oil prices rose more than 1 percent on Friday morning, extending gains from Thursday. Brent  gained 83 cents, or 1.2 percent, to $67.57 in early London trade.

Saudi Energy Minister Prince Abdul Aziz bin Salman told ministers: “The right course of action now is to keep our powder dry, and to have contingencies in reserve to ensure against any unforeseen outcomes.”

The prince urged a continuation of the Kingdom’s “cautious and vigilant” policy toward oil supply.

Reflecting on continuing worries about the post-pandemic economic recovery, Prince Abdul Aziz said: “Before we take our next step forward, let us be certain that the glimmer we see ahead is not the headlight of an oncoming express train.”

The prince said: “There is no doubt that the global oil market has improved since we last met in January,” citing a high level of compliance — 103 percent — to the cuts agreed on last year at the height of the oil crisis.

But the recovery in oil demand was not complete. 

“I have said for a long time that recovery in global oil demand is closely linked to vaccine acceptance and the speed at which these vaccines are being rolled out around the world,” Prince Abdul Aziz said. “The uncertainty surrounding the pace of recovery has not receded.”

Most OPEC+ countries backed the Kingdom’s cautious stance, but Russia and Kazakhstan were allowed to produce an extra 120,000 and 20,000 barrels a day for the next month because of the domestic need for fuel during the winter.

OPEC+ noted that since the historic meeting last April that turned around the collapse in oil demand, some 2.3 billion barrels of oil had been taken off the global market.

OPEC+ ministers said that while economic prospects and oil demand would remain uncertain in the coming months, the rollout of vaccines around the world would be a positive factor for the rest of the year, boosting the global economy and oil demand.

Brent crude, the global benchmark, jumped back above $65 a barrel as traders’ fears of a flood of oil hitting markets on April 1 proved unfounded.


Saudi Arabia’s key role in fight against climate change

Saudi Arabia’s key role in fight against climate change
Updated 20 min 20 sec ago

Saudi Arabia’s key role in fight against climate change

Saudi Arabia’s key role in fight against climate change
  • Aramco has spent billions on research and development into cleaner oil production technologies

DUBAI: Climate change is the big long-term issue of the post-pandemic world, and this weekend we will all be better placed to judge the global state of play when US President Joe Biden convenes the Leaders’ Summit on Climate he promised soon after moving into the White House.

Some 40 leaders have been invited to take part in the two-day event, including King Salman. In a demonstration of the importance Biden puts on the issue, and the impact of summitry drama, the event will be available for global public consumption via livestream.

The aim of the summit is for global leaders to update each other on their progress toward the goals of the Paris Agreements on climate change mitigation ahead of the COP26 (26th UN conference of the parties) meeting in November, when the targets can be adjusted according to the needs of the planet.

Most climate experts accept that there is an urgent need to accelerate the process of reducing greenhouse gas emissions. In Paris, all the nations of the world agreed to reduce emissions, however pollution levels have continued to increase over the past five years.

Even the massive hit to the global economy and transport last year due to the coronavirus disease (COVID-19) pandemic caused only a blip in the rising curve, which is expected to climb sharply upwards this year and next as economic recovery accelerates.

The question — both for the Biden summit and COP26 — is what can be done about it, and this is where Saudi Arabia has a unique contribution to make.

The Kingdom, of course, is the biggest exporter of hydrocarbons in the world, and sits on huge reserves of oil and gas. Its resources have fueled economic development at home and around the globe for decades.

Some people do not appreciate this. The eco-warriors of Europe and North America appear to want nothing at all to do with the most powerful and efficient fuel in history and would like to scrap all further investment in hydrocarbons as a prelude to some green utopia where the streets are crammed with Teslas and all business is conducted via Zoom.

HIGHLIGHTS

• The recent announcement of the Sakaka solar project was a massive step toward the Kingdom’s ambitions in renewables, with the promise of more to come.

• Saudi Aramco already produces the cleanest oil in the world, according to independent scientific studies.

But — and this will probably come as news to Swedish environmental activist Greta Thunberg and her friends — the Kingdom has also been hyperactive in the climate change campaign over the past couple of years. This is the message it wants to reinforce at Biden’s summit.

It pioneered the framework of the Circular Carbon Economy, an integrated intellectual strategy for tackling emissions while enabling economic growth. This was endorsed by G20 leaders at the summit under Saudi presidency last year.

It has committed the Kingdom to satisfying 50 percent of its domestic energy needs from renewables by 2030, at the same time launching a project — the Saudi Green Initiative — to plant 10 billion trees in the country to mitigate CO2 emissions.

The recent announcement of the Sakaka solar project was a massive step toward the Kingdom’s ambitions in renewables, with the promise of more to come.

Saudi Aramco — which already produces the cleanest oil in the world, according to independent scientific studies — has spent billions on research and development into cleaner oil production technologies and more efficient engineering to optimize hydrocarbon fuel usage in internal combustion engines.

The Kingdom has pioneered the use of hydrogen, in “green” and “blue” forms, which some energy visionaries see as the fuel of the future. Saudi Aramco shipped the first ever consignment of the fuel last summer.

Saudi Arabia, similar to the rest of the world, still has plenty of work to do. In particular, along with other participants at the Biden summit, it must refine and adjust its national commitments under the Paris Agreements.

And it must strive to ensure its ambitious measures to combat climate change come through as fully implemented and actionable policies.

It could also take the lead in investment to find an economically viable technology for carbon capture, utilization, and storage, which some experts see as the silver bullet against CO2 pollution.

But above all it must hammer home the point that economic growth, which the world urgently needs after the COVID-19 pandemic recession, can only be fueled by the responsible and sustainable use of the world’s precious hydrocarbon wealth.


Toyota to review climate stance as investors turn up the heat

Toyota to review climate stance as investors turn up the heat
Updated 4 min 26 sec ago

Toyota to review climate stance as investors turn up the heat

Toyota to review climate stance as investors turn up the heat
  • The carmaker came under scrutiny after siding with the Trump administration in 2019 in a bid to bar the state of California from setting its own fuel efficiency rules

TOKYO: Japan’s Toyota Motor Corp. signaled a shift in its climate change stance on Monday, saying it would review its lobbying and be more transparent on what steps it is taking as it faces increased activist and investor pressure.

The carmaker came under scrutiny after siding with the Trump administration in 2019 in a bid to bar the state of California from setting its own fuel efficiency rules. Toyota “will review public policy engagement activities through our company and industry associations to confirm they are consistent with the long-term goals of the Paris Agreement,” it said in a statement, adding that actions will be announced by the end of this year.

The automaker also said it will “strive to provide more information so that our stakeholders can understand our effort to achieve carbon neutrality.”

A company spokeswoman, who confirmed that “public policy engagement activities” includes lobbying, was not able to respond immediately to questions about pressure from investors.

Four funds with about $235 billion in assets under management are pressuring Toyota before its annual shareholder meeting in June to draw a line under its lobbying against international efforts to prevent catastrophic global warming.

“This move must not be a PR exercise but instead signal a clear end to its role in negative climate lobbying which has given it a laggard status,” Jens Munch Holst, chief executive officer of Danish pension fund AkademikerPension, told Reuters.

AkademikerPension has “escalated via intense direct engagement” with Toyota after a decade of communicating with the automaker through a third party, Troels Børrild, spokesman at the Danish fund, told Reuters.

AkademikerPension will consider preparing a shareholders resolution to submit at next year’s annual general meeting if “Toyota fails to deliver on its commitment,” Børrild said.

The fund would consider selling its Toyota holding if there is no change, but the spokesman said fund officials did not believe it would come to that.

“Right up until now, the company has repeatedly undermined climate action, from opposing the UK government’s ban on internal combustion engines by 2030 to opposing car fuel economy standards in the US,” Munch Holst said. The Toyota spokeswoman told Reuters that it would need more time to respond to Munch Holst’s comments.

The other investors are Church of England Pensions Board, Sweden’s AP7 and Norway’s Storebrand.

Toyota was among major automakers that supported the Trump administration in its attempt to bar California from setting its own fuel efficiency rules or zero emission requirements.

They have since dropped that support in a “gesture of good faith an to find a constructive path forward” with the Biden administration.

With pressure growing on carmakers to slash emissions, Toyota is also scrambling to produce EVs that can compete globally with rivals’ models.

Toyota this year settled a lengthy Justice Department civil probe into its delayed filing of emissions-related defect reports for $180 million.


Oilfields Supply Center to invest $570m in new facility at Saudi energy park

Oilfields Supply Center to invest $570m in new facility at Saudi energy park
Updated 19 April 2021

Oilfields Supply Center to invest $570m in new facility at Saudi energy park

Oilfields Supply Center to invest $570m in new facility at Saudi energy park
  • The OSC base will contribute to Saudi Arabia’s Vision 2030 efforts to localize more of the energy supply chain

RIYADH: Oilfields Supply Center Limited (OSC) is to invest $570 million building a center at the King Salman Energy Park (SPARK).

The OSC base, measuring 1 million square meters and including multiple areas and zones, will contribute to Saudi Arabia’s Vision 2030 efforts to localize more of the energy supply chain.

“OSC is providing pre-built industrial solutions which de-risk the set-up phase for investors and give them flexibility to rent industrial facilities and workshops on demand, in addition to providing a full set of supporting services,” Dr. Mohammad Yahya Al-Qahtani, chairman of the SPARK board of directors, said in a press statement on Monday. “The base is expected to create thousands of jobs in the energy fields.” 

Iqbal Mohammad Abedin, OSC’s director and corporate affairs general manager, said all phases of work on the site were due to be completed by the fourth quarter of 2023. 

Dr. Mohammad Yahya Al-Qahtani

“The creation of an oil and gas supply base on site at SPARK, the region’s only fully integrated energy hub, is another example of how the project complements Aramco’s In-Kingdom Total Value Add Program, which encourages the development of a diverse, sustainable and globally competitive energy sector in the Kingdom,” Abedin said. 

SPARK will be built in three phases. Last month, it announced that 80 percent of the infrastructure work for phase one had been completed, with the remaining 20 percent due to be finished this year. 

The first phase’s near-completion means the allotted land is ready for investment, and 35 investment applications have been approved for companies and their support services. Contracts have already been signed with 23 other companies, the company said in March.

Two strategic agreements have also been signed with the Industrialization and Energy Services Co. (TAQA) and the Arab Minerals Co. (AMCO).

Under the agreement, TAQA is seeking to expand its local operations through the TAQA Industrial Complex, with an initial investment of up to SR300 million ($80 million). AMCO is investing SR260 million to develop a new center in the city.

SPARK is being built on an area of 50 square kilometers. Phase one will be 14 square kilometers, in addition to a dedicated logistics zone and dry port.

OSC is owned by the Dubai government and was established in the early 1960s.


Libya’s NOC declares force majeure on Hariga port in statement

Libya’s NOC declares force majeure on Hariga port in statement
Updated 19 April 2021

Libya’s NOC declares force majeure on Hariga port in statement

Libya’s NOC declares force majeure on Hariga port in statement

TRIPOLI:  Libya's National Oil Corp (NOC) declared force majeure on Monday on exports from the port of Hariga and said it could extend the measure to other facilities due to a budget dispute with the country's central bank.
Daily lost income "may exceed 118 million dinars ($26 million)", NOC said in its statement.
Arabian Gulf Oil Co (AGOCO), the NOC subsidiary which runs Hariga, said on Sunday it had suspended output because it had not received its budget since September. Its Hariga port manager and an oil engineer said production had been reduced.
NOC said the Central Bank of Libya (CBL) had refused to finance the oil sector for months, adding that "this painful reality may extend to the rest of the companies".
Libyan oil output was halted for much of last year after eastern-based forces in the country's civil war blockaded oil terminals, causing NOC to declare force majeure on all exports.
Production resumed after a deal that emerged after fighting ended last summer, but before the major peacemaking effort that has led to a new unity government.


UAE’s Emaar Entertainment in $270m plan to expand cinema brand in KSA

UAE’s Emaar Entertainment in $270m plan to expand cinema brand in KSA
Updated 19 April 2021

UAE’s Emaar Entertainment in $270m plan to expand cinema brand in KSA

UAE’s Emaar Entertainment in $270m plan to expand cinema brand in KSA
  • The partners plan to invest about SR1 billion ($270 million) launching Reel Cinemas in Saudi Arabia over the next five years
  • The first outlet will be launched in Riyadh in December

RIYADH: UAE-based Emaar Entertainment, a unit of the developer behind Dubai Mall and Burj Khalifa, has entered into a partnership with Saudi Arabia’s GOSI Investment Ventures to expand its Reel Cinemas chain into the Kingdom.

“The partnership plans an aggressive expansion into the Kingdom’s entertainment market, which means reaching cinema fans no matter where they are in Saudi Arabia,” the companies said in a statement on Monday.

“Within the next five years, audiences can look forward to twenty new venues which will include both cinemas and family entertainment centres across the Kingdom.”

The partners plan to invest about SR1 billion ($270 million) launching Reel Cinemas in Saudi Arabia over the next five years. The first outlet will be launched in Riyadh in December.

The announcement comes just days after the third anniversary of the reopening of cinemas in the Kingdom.

The first cinema was opened in Riyadh on April 18, 2018, and the most recent opened last week in Hail with 10 screens and 1,309 seats, the Saudi Press Agency (SPA) reported.

During the past three years, 34 cinemas were opened in 12 Saudi cities. Eleven companies have opened 342 screens with more than 35,000 seats, with another 70 cinema outlets expected to open in the short term.

The SPA said around 12 million cinema tickets were sold in those three years, and the sector has created around 2,500 direct jobs.

Saudi Arabia’s first home-grown cinema chain, MUVI Cinemas, earlier this month announced a SR820 million expansion plan.

It intends to grow to 307 screens nationwide over the next 12 months, launching 23 new sites and adding 204 screens.

The expansion will initially see nine new sites in Riyadh, seven in Jeddah, and two each in Taif, Alkhobar, Khamis Mushait and Al-Kharj. Buraidah and Uniazah will soon welcome their first-ever MUVI locations.

MUVI CEO Sultan Alhokair said the company’s plan for 2021 “far exceeds” its original goals for the year.

“After seeing the potential opportunities across the Kingdom, and in light of the strong box office growth and market share obtained, we’re now confidently in a position to inaugurate 23 new locations — all of which will feature the world’s most cutting-edge cinema technologies,” he added.