Power play: India to cut dependence on Mideast oil

Power play: India to cut dependence on Mideast oil
A view of the Guru Gobind Singh oil refinery in the northern Indian state of Punjab. (REUTERS file photo)
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Updated 02 April 2021

Power play: India to cut dependence on Mideast oil

Power play: India to cut dependence on Mideast oil
  • Indian refiners to cut imports from the Kingdom by a quarter in May
  • India 'saddened' by OPEC+ decision to maintain cuts through April

NEW DELHI: When India’s government last month asked refiners to speed up diversification and reduce dependence on the Middle East — days after OPEC+ said it would maintain production cuts — it sent a message about its clout and foreshadowed changes to the world’s energy maps.
It was a move that had been in the works for years, fueled by repeated comments from Indian Oil Minister Dharmendra Pradhan, who in 2015 called oil purchases a “weapon” for his country.
When the Organization of Oil Exporting Countries and Major Producers (OPEC+) extended the production cuts into April, India unsheathed that weapon. Indian refiners plan to cut imports from the Kingdom by about a quarter in May, sources told Reuters, dropping them to 10.8 million barrels from monthly average of 14.7-14.8 million barrels.
Oil secretary Tarun Kapoor, the top bureaucrat in the ministry, told Reuters that India is asking state refiners to jointly negotiate with oil producers to get better deals, but declined to comment on plans to cut Saudi imports.
“India is a big market so sellers have to be mindful of our country’s demand as well to keep the long-term relationship intact,” he said.
The Saudi state oil company Saudi Aramco and the Saudi energy ministry declined to comment.
Pradhan, who sees high oil prices as a threat to India’s recovering economy, said he was saddened by the OPEC+ decision. India’s fuel import bill has rocketed, and fuel prices – inflated by government taxes imposed last year — have hit records.
The International Energy Agency forecasts India’s consumption to double and its oil import bill to nearly triple from 2019 levels to more than $250 billion by 2040.
An oil ministry official, who declined to be named because of the sensitivity of the matter, said the OPEC+ cuts have created uncertainty and made it difficult for refiners to plan for procurement and price risk.
It also creates opportunities for companies in the Americas, Africa, Russia and elsewhere to fill the gap.
If India is successful, it will set an example for other countries. As buyers see more affordable choices and renewable energy becomes increasingly common, the influence of big producers like Saudi Arabia could wane, altering geopolitics and trade routes.
India’s oil demand has risen by 25 percent in the last seven years — more than any other major buyer — and the country has surpassed Japan as the world’s third-largest oil importer and consumer.
The country has already curbed its reliance on the Middle East from more than 64 percent of imports in 2016 to below 60 percent in 2019.
That trend reversed in 2020, however, when the pandemic pummelled fuel demand and forced Indian refiners to make committed oil purchases from the Middle East under term contracts, shunning spot purchases.
As India shifts gears again after Pradhan’s call for faster diversification, refineries are looking for new suppliers, the oil ministry official said.
Costly refinery upgrades that allow for the processing of cheaper, heavier oil grades have encouraged importers to seek out far-flung sources. HPCL-Mittal Energy Ltd. bought the country’s first cargo from Guyana this month, and Mangalore Refinery and Petrochemicals Ltd. just imported Brazilian Tupi crude for the first time.
In past years, refiners have jointly negotiated oil deals with sanctions-hit Iran, which offered free shipping and price discounts, and now plan to do the same with other producers.
Since the break with Saudi Arabia began, Pradhan has had meetings with United Arab Emirates’ minister of state and chief executive of Abu Dhabi National Oil Co. (ADNOC), Sultan Ahmed Al Jaber, and US energy secretary Jennifer Granholm to strengthen energy partnerships.
Pradhan recently said African nations could play a central role in India’s oil diversification. The country is looking at signing long-term oil supply deal with Guyana and exploring options to raise imports from Russia, the oil ministry source said.
A separate Indian government source said the government expects Iranian sanctions to ease in three to four months, potentially offering India a cheaper alternative to Saudi oil.
Two traders agreed that Iran stood a good chance to benefit from India’s shift, as did Venezuela, Kuwait and the United States. An Indian refinery source said the US, Africa, Kazakhstan’s CPC Blend and Russian oil would probably get a look too.
Although Indian importers will scoop up increasing volumes of attractively priced global grades, most analysts expect the Middle East to remain India’s primary oil supplier, mainly because of lower shipping costs.
India’s oil ministry is working with refiners on a framework to jointly negotiate terms with suppliers.
“Buyers have alternatives in today’s market and these alternatives are going to multiply going forward,” Kapoor said. “There are so many companies in India that do buying at their own level, so these companies coming together also becomes quite a big bloc.”
On Thursday,  OPEC+ agreed after discussions with US officials to ease oil curbs beginning in May.
Analysts say the oil spat does not need to spill over into broader strategic ties in other sectors, including defense.
 


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 56 min 2 sec ago

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.


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.


Abu Dhabi’s G42 forms big data JV with Israeli defense company Rafael

Abu Dhabi’s G42 forms big data JV with Israeli defense company Rafael
Updated 19 April 2021

Abu Dhabi’s G42 forms big data JV with Israeli defense company Rafael

Abu Dhabi’s G42 forms big data JV with Israeli defense company Rafael
  • The joint venture will have a research and development site in Israel and will develop products for sectors including banking, health care and public safety

DUBAI: Abu Dhabi-based technology company Group 42 (G42) has formed a joint venture with Israel’s state-owned Rafael Advanced Defense Systems to commercialize artificial intelligence and big data technologies, the companies said on Monday.
The joint venture, called Presight.AI, will have a research and development site in Israel and will develop products for sectors including banking, health care and public safety, to be sold in Israel, the United Arab Emirates and internationally.
Israel and the UAE agreed to normalize relations in August, triggering a number of announcements from businesses stating their intention to cooperate across the two countries.
UAE Ambassador to Israel Mohamad Al-KHajja said the joint venture strengthened the relationship between Israel and the UAE and opportunities for bilateral economic growth.
G42 is an Abu Dhabi-based artificial intelligence and cloud computing company set up in 2018 which works with government and private clients. In September it became the first UAE company to open an international office in Israel.
UAE national security adviser Sheikh Tahnoon bin Zayed Al Nahyan is its chairman and a shareholder. Abu Dhabi’s sovereign fund Mubadala in November invested in G42 and last week US private-equity firm Silver Lake invested to help the company expand.
G42 rose to prominence last year as it led Phase III clinical trials of a vaccine developed by Sinopharm’s China National Biotec Group (CNBG) in the UAE and regional countries, as well as offering medical diagnostic services.
The joint venture agreement is subject to regulatory approvals by Israeli and UAE authorities.


More than 1,000 Saudi businesses benefit from $586.5m in Monshaat funding

More than 1,000 Saudi businesses benefit from $586.5m in Monshaat funding
Updated 19 April 2021

More than 1,000 Saudi businesses benefit from $586.5m in Monshaat funding

More than 1,000 Saudi businesses benefit from $586.5m in Monshaat funding
  • Overall, the ‘Kafalah’ program has provided more than SR14.407 billion in 8,718 guarantees

RIYADH: The General Authority for Small and Medium Enterprises (Monshaat) has financed 1,130 SMEs with about SR2.2 billion ($586.5 million) over 15 months through the end of March 2021.
Overall, the ‘Kafalah’ program has provided more than SR14.407 billion in 8,718 guarantees, Monshaat told the Al-Eqtisadiah newspaper.
The Kafalah program was founded in 2006 as a joint initiative between the Kingdom’s ministry of finance and Saudi commercial banks to help overcome SME financing constraints.
Monshaat said that financing could reach a maximum of SR7.5 million and there is no minimal range for applicants.
Enterprise Support Centers also offer a package of programs to develop small and medium enterprises and entrepreneurs, the Authority added.
Support is also offered in the form of training and networking with other companies operating in a similar field.

 


PIF-backed Noon signs deal with UAE emirate to support small businesses

PIF-backed Noon signs deal with UAE emirate to support small businesses
Updated 19 April 2021

PIF-backed Noon signs deal with UAE emirate to support small businesses

PIF-backed Noon signs deal with UAE emirate to support small businesses
  • SMEs in Ajman will be able to promote and sell their products through the e-commerce’s company’s “Noon Mahali” platform

DUBAI: The UAE emirate of Ajman has struck a deal with online retailer Noon to support the growth of small businesses.
It will help members of the emirate’s Tazz program for small and medium-sized enterprises, as well companies that are signed up to the Riyada program for small business owners and e-commerce license holders.
“Through this cooperation, we aim to inspire innovation, encourage local entrepreneurs and assist in the SMEs’ digital transformation in the emirate,” Abdulla Bin Nassir Al-Nuaimi, Ajman DED’s director of planning and development, said.
SMEs in Ajman will be able to promote and sell their products through the e-commerce’s company’s “Noon Mahali” platform, which is specifically designed for them.
There will also be training sessions and other activities to guide sellers in making the most of Noon’s platform.
Al-Nuaimi said the private sector “has become a major partner and supporter of the government sector” in strengthening local businesses.
The move follows the UAE’s wider push to revitalize its SME scene as the country diversifies its income sources and encourage more economic activity amid a pandemic-induced slowdown.