Almarai sells stake in telecom Zain KSA for $21.6m, plans full divestment

Almarai sells stake in telecom Zain KSA for $21.6m, plans full divestment
The move comes as Zain KSA aims to refinance its debts through pledging shares to creditors. (File/Supplied)
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Updated 14 October 2021

Almarai sells stake in telecom Zain KSA for $21.6m, plans full divestment

Almarai sells stake in telecom Zain KSA for $21.6m, plans full divestment
  • Almarai is planning to sell the rest of its remaining stake in the next 12 months

DUBAI: Popular dairy producer Almarai has sold some of its shares in the Saudi unit of Zain telecom, for a cash value of SR81.1 million ($21.6 million). 

The company, which also produces a variety of juices, sold 5.6 million shares, according to a bourse filing, lowering its stake in Zain KSA to 0.4 percent by the end of September from 1.1 percent in June. 

Almarai is planning to sell the rest of its remaining stake in the next 12 months, the filing said. It owned 2.5 percent of 35 million shares of Zain KSA when the telecom firm was established in 2008. 

The move comes as Zain KSA aims to refinance its debts through pledging shares to creditors, and extending the debt repayment periods to the founders.

The telecom company owes Almarai a total of SR109.6 million in loans.


Brent tops $85 as Saudi oil minister vows to stick to output plan

Brent tops $85 as Saudi oil minister vows to stick to output plan
Updated 56 min 44 sec ago

Brent tops $85 as Saudi oil minister vows to stick to output plan

Brent tops $85 as Saudi oil minister vows to stick to output plan
  • Oil could reach $100 a barrel as demand rises, Russian President Vladimir Putin said

RIYADH: Brent crude passed $85 a barrel and WTI was headed for an eighth consecutive weekly advance as Saudi Oil Minister Abdulaziz bin Salman Al Saud insisted OPEC+ will stick to its plan to increase output at a steady pace in the coming months.

Brent gained 1 percent to $84.82 a barrel at 3:33 p.m. Riyadh time, headed for a 3 percent weekly gain. They earlier touched $85.10, a three-year high. West Texas Intermediate (WTI) also gained 1 percent, to $82.12, 3.5 percent higher on the week.

OPEC+, the alliance of OPEC and non-OPEC producers led by Saudi Arabia and Russia, would be adding 400,000 barrels per day (bpd) in November, and then again in the following months, the Kingdom’s energy minister told delegates at Russian Energy Week on Thursday.

While the market is tight today, it is set to be return to balance by the end of the year and be in surplus during 2022, according to OPEC forecasts.

The benefits of the approach OPEC+ has taken can be seen in the steady increase in the price of oil this year compared with the wild price swings in other markets, he said.

“What we see in the oil market today is an incremental (price) increase of 29 percent, vis-à-vis 500 percent increases in (natural) gas prices, 300 percent increases in coal prices, 200 percent increases in NGLs (natural gas liquids) ...,” he said. OPEC+ has done a “remarkable” job acting as “so-called regulator of the oil market.”

Such has been the success of OPEC+, other commodity markets should adopt similar arrangements, he said.

“Gas markets, coal markets, and other energy sources need to be regulated, people need to copy and paste what OPEC has done and what OPEC+ has achieved,” the Saudi minister added.

Saudi Arabia has proposed that Russia consider the possibility of cooperating in the natural gas market, Russian Deputy Prime Minister Alexander Novak said on Thursday, according to TASS news agency.

Oil prices were also supported by a bullish demand forecast from the International Energy Agency on Thursday, which predicted the energy crunch will boost crude demand by 500,000 barrels per day.

That would result in a supply gap of around 700,000 bpd through the end of this year, until the OPEC+ adds more supply as planned in January.

The structure of Brent crude oil futures is showing a “scarcity premium” that has widened to the most since 2013 this week, a sign of the tight market underpinning oil’s rally amid a wider energy crunch as economies recover from the COVID-19 pandemic.

The premium of the immediate Brent crude contract to the December 2022 price stood at $8.13 a barrel on Friday after reaching $8.30 on Monday. The value on Monday was the highest since 2013, according to Refinitiv Eikon data.

Also at Russian Energy Week, Putin said it was “quite possible” oil prices could climb above $100 as energy demand rises.

He also used an interview at the forum to deny Russia is using gas as a geopolitical weapon and instead is ready to help Europe with additional energy supplies.


Saudi non-oil exports surge to record $33.4bn in H1 2021

Saudi non-oil exports surge to record $33.4bn in H1 2021
Updated 15 October 2021

Saudi non-oil exports surge to record $33.4bn in H1 2021

Saudi non-oil exports surge to record $33.4bn in H1 2021
  • Non-oil exports jumped 37 percent to a record SR125.3 billion
  • Saudi Arabia exported to 170 countries in the first half

RIYADH: Saudi non-oil exports jumped 37 percent to a record SR125.3 billion ($33.4 billion) in the first half of 2021, SPA reported.

Non-oil exports were SR91.7 billion in the first half of 2020.

They increase by 8 percent in quantity, equivalent to 34.7 million tons, suggesting a rebound in prices as volumes returned to normal.

Global trade collapsed last year as the COVID-19 pandemic forced much of the world into lockdown. However, trade has rebounded strongly this year and last week the WTO upgraded its forecast for global merchandise trade volume growth to 10.8 percent in 2021 and 4.7 percent in 2022.

Saudi Arabia exported to 170 countries in the first half, led by SR17.0 billion of goods to the UAE, followed by SR16.8 billion to China, and SR7.1 billion to India.

The petrochemical sector was the biggest source of exports with a value of SR73.6 billion in the period, up from SR51.2 billion during the same period last year, representing growth of 44 percent.

The H1 report follows data from the General Authority for Statistics that showed July’s non-oil exports increased 17.9 percent year on year to SR20.8 billion.

The total value of exports amounted to SR91.8 billion in July 2021, up from 51.1 billion riyals in July 2020, led by a 112.1 percent increase in oil exports.

However, oil exports continued to dominate Saudi trade with crude’s share increasing from 65.5 percent in July 2020 to 77.4 percent in July 2021.

Saudi Arabia is pushing to increase non-oil exports as it seeks to ween its economy off dependency on oil sales with a goal of raising the percentage of non-oil exports to 50 percent by 2030 and foreign direct investment from 3.8 percent to an international average of 5.7 percent.

The Kingdom is in negotiations with 11 countries on possible free-trade agreement, including China, India, Pakistan, Australia, New Zealand, Britain, Indonesia, the Philippines, Bangladesh, Sri Lanka, and the US.

The Kingdom aims to export services including transport, distribution, professional and financial services, communication services, postal services as well as express mail, media, hotel, construction and contracting, education and training, travel and tourism, environmental, and entertainment.

In August, the Saudi Export Development Authority said more than 900 Saudi companies with over 2,000 locally manufactured products had registered with the Kingdom’s “Made in Saudi” program, an initiative to boost the competitiveness of Saudi products at home and abroad.

The program gives top priority to 16 different economic sectors including chemicals and polymers, building materials, electronics, and packaging.

Additionally, the Saudi Exports Development Authority said in August it will identify over 120 international tendering opportunities in a number of target countries, mainly covering construction and industrial supplies and infrastructure projects.

In the same month, The Saudi Export-Import Bank signed a memorandum of understanding with the Federation of Saudi Chambers to provide importers and exporters loans and other financial services.


Saudi Energy Ministry launches tender for dry gas network in Dammam

Saudi Energy Ministry launches tender for dry gas network in Dammam
Updated 15 October 2021

Saudi Energy Ministry launches tender for dry gas network in Dammam

Saudi Energy Ministry launches tender for dry gas network in Dammam
  • Tender is for a pipeline network from the connection point with Aramco, which provides the gas, to all factories that need fuel in the city

RIYADH: The Saudi Ministry of Energy announced a public tender for a license to establish, own and operate a dry gas network in the Third Industrial City in Dammam in the Eastern Province.

The project includes a pipeline network from the connection point with Aramco, which provides dry gas, to all factories that need fuel within the region, the ministry said in a statement.

The license requires the design, construction, operation and maintenance of the dry gas local network in Dammam 3 at the expense of the license applicant for a period of 35 years in return for a service tariff approved by the ministry.

The license holder must meet 75 percent of requests in the industrial city within nine months from the date of granting the license, the ministry said.

Through the installation of the gas networks, the ministry is aiming to make Saudi Arabia’s industrial cities a more attractive environment for investors, to raise the efficiency and competitiveness of factories, and to reduce carbon emissions and the number of trucks that transport liquid fuels, it said.

Saudi Arabia is increasing its use of natural gas and renewables in power generation with a goal of a achieving a 50/50 split between the two by 2030.

Saudi Aramco is preparing to restart development of the giant Jafurah gas field in the eastern region of the country with plans to invest about $110 billion in the project, CNBC Arabiya reported in September.

The largest natural gas field in the Kingdom, stretching 170 km by 100 km, is estimated at 200 trillion cubic feet of rich raw gas.

Aramco has resubmitted several tenders for field development, including for the construction of the field’s dedicated power plant early next December, unnamed sources in the oil and gas industry told CNBC.

The Jafurah field will place Saudi Arabia third in the world in natural gas production by 2030, the Ministry of Energy has said.

Aramco expects the production from the Jafurah field to commence in early 2024 and reach about 2.2 billion cubic feet of gas per day by 2036. The field will also be able to produce about 425 million cubic feet of ethane per day, and about 550 thousand barrels per day of gas liquids and condensates.


Crypto has value but not for oil trading, says Russia’s Putin

Crypto has value but not for oil trading, says Russia’s Putin
Updated 15 October 2021

Crypto has value but not for oil trading, says Russia’s Putin

Crypto has value but not for oil trading, says Russia’s Putin
  • Russia has sought alternatives to trading in dollars since being slapped with sanctions in 2014 following the annexation of Crimea

RIYADH: Russian President Vladimir Putin signaled tolerance of cryptocurrencies, but is still not convinced they can replace the US dollar in settling oil trades.

“I believe that it has value,” he told CNBC in an interview at the Russian Energy Week event in Moscow Wednesday, the transcript of which was posted on the Kremlin’s website.

“It is legitimate and can be used in settlements, no doubt about that, but it is too early to use it for trading in oil or other raw materials and energy sources,” he said.

This comes after repeated warnings from the Bank of Russia that the crypto market is extremely volatile, and digital currencies are not allowed to be used for domestic payments.

Putin made it clear that contracts dominated in crypto would be a premature step as they are not stable.

In order to mine crypto, you need a lot of energy, and for that people have to use traditional sources of energy, primarily hydrocarbons, he said.

Russia has sought alternatives to trading in dollars since being slapped with sanctions in 2014 following the annexation of Crimea.

Crypto backers argue decentralized money will eventually replace fiat currencies issued by central banks.

“I believe the US is making a big mistake using the dollar as a sanction tool,” he said. “We are forced. We have no other choice but to move to transactions in other currencies.”

Putin also pointed out that the country is reducing the share of the US dollar in its reserves, as well as in settlements. “This is not always possible, but we try to switch to national currencies,” he said.

Some months ago, Russia’s deputy prime minister, Alexander Novak, suggested the country could move away from greenback-denominated crude contracts if the US continues to impose targeted economic sanctions.

In June, Russia announced it would drop US dollar assets from its sovereign wealth fund.


Bitcoin hits $60,000 for first time in six months on ETF regulation report: crypto wrap

Bitcoin hits $60,000 for first time in six months on ETF regulation report: crypto wrap
Updated 15 October 2021

Bitcoin hits $60,000 for first time in six months on ETF regulation report: crypto wrap

Bitcoin hits $60,000 for first time in six months on ETF regulation report: crypto wrap

RIYADH: Bitcoin hit $60,000 for the first time in six months on Friday, nearing its record high, with traders growing confident that US regulators would approve the launch of the first US exchange-traded fund (ETF) based on its futures contracts, Reuters reported.

Bitcoin, the world’s biggest cryptocurrency, rose 4.5 percent to its highest level since Apr. 17 and was at $59,787.37 at 4:43 p.m. Riyadh time.

It has risen by more than half in value since September 20 and is now close to its all-time high of $64,895.

The U.S. Securities and Exchange Commission (SEC) is set to allow the US. bitcoin futures ETF to begin trading next week, Bloomberg News reported on Thursday.

“It is clear that the recent spike in bitcoin's price is directly related to the rumour that the SEC will move ahead with the US first Bitcoin ETF approval, said Mikkel Morch, executive director and risk management at crypto hedge fund ARK36. "It is becoming increasingly likely that at least one of the major contenders for a BTC futures ETF, such as Valkyrie or Van Eck, could be approved in the coming days and ahead of SEC's hard November deadlines."

The crypto market involves many tokens which may be unregistered securities and leaves prices open to manipulation and millions of investors vulnerable to risks, SEC Chairman Gary Gensler has previously said.

Proposals by ProShares and Invesco are based on futures contracts and were filed under mutual fund rules that Gensler has said provide "significant investor protections", a Bloomberg report revealed, citing people familiar with the matter.

Russian President Vladimir Putin signaled tolerance of cryptocurrencies, but is still not convinced they can replace the US dollar in settling oil trades.

“I believe that it has value,” he told CNBC in an interview at the Russian Energy Week event in Moscow Wednesday, the transcript of which was posted on the Kremlin’s website.

“It is legitimate and can be used in settlements, no doubt about that, but it is too early to use it for trading in oil or other raw materials and energy sources,” he said.

This comes after repeated warnings from the Bank of Russia that the crypto market is extremely volatile, and digital currencies are not allowed to be used for domestic payments.

Putin made it clear that contracts dominated in crypto would be a premature step as they are not stable.

In order to mine crypto, you need a lot of energy, and for that people have to use traditional sources of energy, primarily hydrocarbons, he said.

Russia has sought alternatives to trading in dollars since being slapped with sanctions in 2014 following the annexation of Crimea.

Crypto backers argue decentralized money will eventually replace fiat currencies issued by central banks.