Russia’s Gazprom boosts investments to $24bn in 2022

Russia’s Gazprom boosts investments to $24bn in 2022
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Updated 25 November 2021

Russia’s Gazprom boosts investments to $24bn in 2022

Russia’s Gazprom boosts investments to $24bn in 2022
  • Gazprom is developing new gas production deposits, including in the Arctic Yamal peninsula

Russian gas giant Gazprom said on Thursday its management had approved investments worth 1.76 trillion roubles ($24 billion) for 2022, up from initial plans of 902 billion roubles for 2021, to fund new production and refining hubs.


Gazprom is developing new gas production deposits, including in the Arctic Yamal peninsula, which the government claims holds more than a fifth of global gas reserves.


The company said its other priority projects for funding are the Power of Siberia pipeline to China, as well as gas processing plants and the maintenance of its existing pipeline network.


Gazprom said capital expenditure was expected to be 1.4 trillion roubles next year, with further funds allocated to long-term financial investments and the purchase of long-term assets.


Borrowing outside the company was pegged at 272.79 billion roubles for 2022.


The Kremlin-controlled company revised up its investments for 2021 to 1.185 trillion roubles in September, while capex was increased to more than 1 trillion from 864 billion roubles approved in December last year.


Turkish industry copes with abrupt cut of gas flow from Iran

Gas flares from an oil production platform at the Soroush oil fields in the Persian Gulf, south of the capital Tehran. (REUTERS file photo)
Gas flares from an oil production platform at the Soroush oil fields in the Persian Gulf, south of the capital Tehran. (REUTERS file photo)
Updated 24 January 2022

Turkish industry copes with abrupt cut of gas flow from Iran

Gas flares from an oil production platform at the Soroush oil fields in the Persian Gulf, south of the capital Tehran. (REUTERS file photo)
  • Authorities should have taken necessary steps beforehand, energy expert tells Arab News
  • Record high losses for manufacturing facilities and disruption in export commitments feared

ANKARA: Following a decision by Iran to cut gas flows to Turkey last week, Ankara began ordering gas-fuelled power plants to decrease their gas use by 40 percent as of Monday.

The sudden move emphasized the need to diversify energy suppliers for the country. Households, schools and hospitals are, for now, exempt from the measures.

Iran’s natural gas consumption recently hit a record high at about 692 million cubic meters per day in households, commercial and smaller industries mainly because of harsh winter conditions, but the country cited a gas leak in a Turkish station for the disruption of exports to Turkey for up to 10 days.

Turkey is no exception to the record highs of daily gas consumption, which reached around 288 million cubic meters on Jan. 19.

Turkey is almost fully dependent on imported gas from Iran, Azerbaijan and Russia, while Iran alone provided about 16 percent of the country’s natural gas needs last year.

The decision worried several industrial representatives, as it did not discriminate between sectors with cold storage rooms or furnaces.

“Such a gas cut means greater financial loss for some key sectors such as glass, medicine and ceramic factories as well as those producing meat and dairy products,” Mehmet Ogutcu, a former diplomat and currently the president of London Energy Club, told Arab News.

The sectors that use the most electricity, namely the iron and steel sector, and the clothing industry, are expected to record high losses and will face disruption in export commitments.    

“The production could be at risk if the interruption continues to grow in the coming days,” Ogutcu said.

“It will damage the economy and industrial production especially at a time when exports and production were accelerating.”

Companies in industrial zones were notified of the three-day restriction on Friday and will be allowed to use gas only on allotted days.

The prospect of electricity cuts to industrial sites is also on the horizon, and might affect households as well, although gas prices have become discouraging for citizens, as they increased by 25 percent for residential use and 50 percent for industrial use in January.

Turkey’s domestic gas consumption rate increased from 48 billion cubic meters to 60 billion in a year, while there are some 18 million natural gas subscribers across the country.

“I have repeatedly warned about a potential outage for the last six months. It also happened in the European countries,” Ogutcu said.

“Turkey should have taken necessary measures beforehand when the first signs appeared.”

According to Ogutcu, Turkey either had to decrease gas demands and simultaneously develop plans to increase energy efficiency, or develop alternative energy resources like liquefied natural gas.

Turkey imports LNG from the US, Morocco, Qatar and Nigeria, but it still remains much more expensive than natural gas imports for Ankara.

About a third of Turkey’s natural gas needs are currently met through LNG deliveries.

“There are ongoing projects in the Black Sea for gas discoveries with some drilling testing. But it will take at least seven or eight years to reap the benefits of that project,” Ogutcu said.

Turkey’s 405 billion cubic meter gas discoveries in the Black Sea were accepted as the largest offshore gas discovery in the world in 2020.

Similar gas supply cuts have happened in the past, but did not result in power outages in the industrial sector on such a great scale.

Experts emphasized the need to learn lessons from this latest crisis and to design alternative energy sources.

Turkish President Recep Tayyip Erdogan recently announced that Turkey is still interested in transporting Israeli gas to Europe — a potential step to diversify much-needed gas sources.

Last week, a blast in the southeastern province of Maras resulted in another disruption in the flow of crude oil through the Kirkuk-Ceyhan pipeline.

“In the past decade, Turkey has succeeded in further diversifying its energy sources with more energy suppliers, the growing use of LNG and renewables,” Gallia Lindenstrauss, a senior research fellow at the Institute for National Security Studies in Israel, told Arab News.

“The first unit in the Rosatom-built nuclear power plant in Akkuyu is expected to be operational in 2023 and Turkey has discovered gas reserves in the Black sea that will be another future source of energy.”

According to Lindenstrauss, the problem today is less related to the issue of diversification and more to the sharp devaluation of the Turkish lira alongside rising energy prices, which translates into difficulties for the purchase of LNG.

“Obviously, Turkey would also benefit if it were able to sign contracts to import gas, or be a transit route for gas, from the Eastern Mediterranean, but this has not been possible until today mainly because of political reasons,” she said.

Even in the unlikely scenario that neighboring states overcome the hurdles between them, Lindenstrauss thinks that it is still only part of the solution to Turkey’s growing energy needs, and short-term energy shortage problems from time to time will be a recurring problem.

This year, Turkey’s natural gas storage capacity has reached 3.8 billion cubic meters.


Kuwait estimates 74.2% decrease in deficit according to a budget draft report

Kuwait estimates 74.2% decrease in deficit according to a budget draft report
Updated 24 January 2022

Kuwait estimates 74.2% decrease in deficit according to a budget draft report

Kuwait estimates 74.2% decrease in deficit according to a budget draft report
  • The Kuwaiti Ministry of Finance expects a budget deficit decrease by 74.2 percent from previous year

Riyadh: The Kuwaiti Ministry of Finance submitted on Monday a budget draft report for 2022-2023 fiscal year, with an expected deficit of 3.1 billion dinars ($10.26 billion), decreasing 74.2 percent from previous year, according to a Reuters report citing a ministry statement. 

The report also stated that the OPEC member country expects oil income of 16.7 billion dinars during the fiscal year ending in March 2023, an increase of 83.4 percent from 2021-2022.

Total revenues are estimated at 18.8 billion dinars and expenditures at 21.9 billion dinars in the 2022-2023 fiscal year.


Tesla countersues JPMorgan over contract affected by Musk tweet

Tesla countersues JPMorgan over contract affected by Musk tweet
Updated 24 January 2022

Tesla countersues JPMorgan over contract affected by Musk tweet

Tesla countersues JPMorgan over contract affected by Musk tweet
  • Tesla Inc. fought back on Monday against JPMorgan Chase & Co over a disputed bond contract

NEW YORK: Tesla Inc. fought back on Monday against JPMorgan Chase & Co over a disputed bond contract, countersuing the bank for seeking a “windfall” following Chief Executive Elon Musk’s notorious 2018 tweet that he might take his electric car company private.

In a court filing, Tesla accused JPMorgan of “bad faith and avarice” for claiming it was owed $162.2 million after unilaterally changing the terms of warrants it received when Tesla sold convertible bonds in 2014.

By changing the terms, “JPMorgan dealt itself a pure windfall,” Tesla said in its countersuit filed in Manhattan federal court.

“JPMorgan pressed its exorbitant demand as an act of retaliation against Tesla both for it having passed over JPMorgan in major business deals and out of senior JPMorgan executives' animus toward Mr. Musk,” it added.

A bank spokesman, Brian Marchiony, said in an email: “There is no merit to their claim. This comes down to fulfilling contractual obligations.”

The countersuit escalates the battle between the largest U.S. bank and world’s most valuable car company, which have done little business with each other since the disputed contract.

Warrants give holders the right to buy company stock at a set “strike” price and date.

In its Nov. 15 lawsuit JPMorgan said Musk’s Aug. 7, 2018 tweet that he might take Tesla private and had “funding secured,” and his abandoning that plan 17 days later, created share price volatility to justify lowering the strike price on its warrants.

JPMorgan accused Tesla of defaulting because it failed to hand over shares or cash when the warrants expired in June and July 2021, by which time Tesla’s share price had risen about 10-fold.

In its countersuit, Tesla accused JPMorgan of having “put its thumb on the scale” to demand even more money, after already receiving a “multibillion-dollar payout” because of the soaring stock price.

Musk’s tweets resulted in a U.S. Securities and Exchange Commission civil lawsuit that ended in $20 million fines against both him and Tesla and forced him to give up Tesla's chairmanship.

Tesla’s lawsuit seeks unspecified damages.


IKTVA contributed $100bn to Saudi Arabia economy: Aramco Chairman

IKTVA contributed $100bn to Saudi Arabia economy: Aramco Chairman
Updated 24 January 2022

IKTVA contributed $100bn to Saudi Arabia economy: Aramco Chairman

IKTVA contributed $100bn to Saudi Arabia economy: Aramco Chairman

RIYADH: IKTVA has contributed around SR375 billion ($100 billion) into Saudi Arabia’s economy since its inception in 2015, Chairman of Aramco, Yasir Al-Rumayyan spoke at IKTVA 2022 Forum and Exhibition on Monday.

Capital expenditure attracted by the program’s investments were estimated at $7 billion which created a competitive industrial base enabling the Kingdom to export to more than 40 countries, according to his statement.

Larger volumes and more varied products labeled ‘Made in Saudi Arabia’ are being created now in the Kingdom, as the localization of goods by IKTVA is creating a supportive ecosystem to the Kingdom’s industrialization efforts, he added.

One of the program’s achievements is establishing a hub to pioneer new technologies and services in the non-metallic industry, which is expected to contribute $10 billion to the Kingdom’s GDP by 2030, Al-Rumayyan said. Whereas Aramco suppliers have quadrupled their R&D spend in the Kingdom, from $21 million to $91 million, providing a catalyst for innovation within the Kingdom.

Fifty percent more Saudis were employed by IKTVA, making one out of every four people working in Aramco’s supply chain a Saudi. The number of female employees working in the supply chain more than doubled, he added.

The program aims at reaching Vision 2030 goals of economic diversification and industrialization by focusing on both conventional sectors including energy, chemicals and mining, as well as emerging business sectors including Fourth Industrial Revolution technologies, logistics and services. 


Dubai stocks sees biggest fall in over a month after Houthi attack intercepted

Dubai stocks sees biggest fall in over a month after Houthi attack intercepted
Updated 24 January 2022

Dubai stocks sees biggest fall in over a month after Houthi attack intercepted

Dubai stocks sees biggest fall in over a month after Houthi attack intercepted
  • Most stock markets in the Gulf ended lower on Monday

Dubai: Most stock markets in the Gulf ended lower on Monday, in line with global shares, while the Dubai index saw its biggest fall in over a month as the United Arab Emirates intercepted another attack by the Houthis.

Dubai’s main share index declined 2 percent, dragged down by a 3.5 percent drop in blue-chip developer Emaar Properties and a 1.9 percent fall in top lender Emirates NBD.

The United Arab Emirates on Monday said it had foiled another Houthi missile attack following last week’s deadly assault on the Gulf state as the Iran-aligned group takes aim at the safe haven status of the region’s tourism and commercial hub.

The Abu Dhabi index eased 0.1 percent, with conglomerate International Holding losing 0.6 percent.

 “Global markets are set to remain sensitive to fresh policy clues out of the Federal Reserve this week. Since the start of the new year, risk assets have been realigning with the more aggressive Fed rate hikes expected for 2022,” said Han Tan, chief market analyst at Exinity Group.

Saudi Arabia’s benchmark index fell 0.6 percent, hit by a 1.3 percent fall in Al Rajhi Bank and a 2.5 percent decline in Saudi National Bank.

The Saudi market continued its correction, after hitting its highest in over 15 years earlier this month, as investors try to secure their gains, said Wael Makarem, senior market strategist at Exness.

Crude prices, a key catalyst for the Gulf’s financial markets, rose on elevated geopolitical risks in Europe and Middle East.

Outside the Gulf, Egypt’s blue-chip index decreased 0.3 percent, with Commercial International Bank losing 0.4 percent.

SAUDI ARABIA     down 0.6% to 12,068
ABU DHABI                down 0.1% to 8,701
DUBAI                  down 2% to 3,147
QATAR                up 0.3% to 12,523
EGYPT                  down 0.3% to 11,616
BAHRAIN              down 0.3%  to 1,810
OMAN                   down 0.5% to 4,202
KUWAIT               down 0.2% to 8,000