Oil demand to return to 2019 levels by end of 2022: Baker Hughes CEO

Oil demand to return to 2019 levels by end of 2022: Baker Hughes CEO
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Updated 26 November 2021

Oil demand to return to 2019 levels by end of 2022: Baker Hughes CEO

Oil demand to return to 2019 levels by end of 2022: Baker Hughes CEO

RIYADH: Oil demand will return to 2019 levels by the end of 2022, despite some delays in projects due to repercussions from the pandemic, Baker Hughes CEO Lorenzo Simonelli told Al-Arabiya.

National oil companies in the Middle East have been preparing for the increased demand, while international oil companies, especially those in North America, have been maintaining financial discipline in returning funds to shareholders, he said.

However, some independent oil companies have already begun to increase their capital spending, he said.

Currently, Baker Hughes sees an improvement in oil and gas services activity, not only in North America, but also in international basins with low costs, he said.

When it comes to developing its products, Baker Hughes always takes into account carbon emissions and the Texas-based energy services company is trying to shift its sources in its manufacturing operations to renewables and has contracted with suppliers, Simonelli said.

The company pledged to reduce carbon emissions of the first and second scope by 50 percent by 2030, and to zero by 2050, Simonelli said. The company is now concerned with dealing with third scope emissions, he said.

 


Oil prices rise on supply fears amid tensions in Eastern Europe, Middle East

Oil prices rise on supply fears amid tensions in Eastern Europe, Middle East
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Updated 8 sec ago

Oil prices rise on supply fears amid tensions in Eastern Europe, Middle East

Oil prices rise on supply fears amid tensions in Eastern Europe, Middle East
  • OPEC+ compliance with long-installed oil production cuts rose to about 122 percent in December

Oil prices rose on Monday on worries about supply disruption amid rising tensions in Eastern Europe and the Middle East, which could make an already tight market even tighter, while OPEC and its allies continued to struggle to raise output.


Brent crude futures rose 81 cents, or 0.9 percent, to $88.70 a barrel by 0344 GMT, reversing a 0.6 percent loss on Friday.


US West Texas Intermediate crude futures gained 72 cents, or 0.9 percent, to $85.86 a barrel, having fallen 0.5 percent on Friday.


Both benchmarks rose for a fifth week in a row last week, gaining around 2 percent to hit their highest since October 2014. Prices are already up more than 10  percent. 
"Investors remained bullish due to geopolitical risk between Russia and Ukraine as well as in the Middle East, while OPEC+ continued to fail to reach its output target," said Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd.


"An expectation for higher heating oil demand in the United States amid cold weather also added to pressure," he said.


Fuelling fears of supply disruption in Eastern Europe, the United States on Sunday ordered the departure of family members of staff at its embassy in Ukraine, citing the continuing threat of military action from Russia.


The New York Times reported late Sunday that US President Joe Biden was considering deploying several thousand US troops to NATO allies in Eastern Europe and the Baltics.


Russia will face severe economic sanctions if it installs a puppet regime in Ukraine, a senior British government minister said on Sunday, after Britain accused the Kremlin of seeking to place a pro-Russian leader in power there.


In the Middle East, the United Arab Emirates' defence ministry said it destroyed two Houthi ballistic missiles targeting the Gulf country on Monday, with no casualties, the state news agency (WAM) reported.


The OPEC+, which groups the Organization of the Petroleum Exporting Countries with Russia and other producers, is struggling to hit its monthly output increase target of 400,000 barrels per day.


OPEC+ compliance with long-installed oil production cuts rose to about 122 percent in December, two sources from the producer group told Reuters, indicating that some members continue to struggle to raise their output.


"Expectations that OPEC+ members such as Saudi Arabia and Russia are likely to keep the current policy of gradual increase of output to maintain Brent oil prices between $85 and $90 a barrel are providing support to an overall sentiment," said Tetsu Emori, CEO of Emori Fund Management Inc.


Money managers raised their net long US crude futures and options positions in the week to Jan. 18, the US Commodity Futures Trading Commission said on Friday.


In the United States, petroleum inventories have continued to slide over the last month, while energy firms cut oil rigs this week for the first time in 13 weeks.

Analysts expect cold weather to boost heating demand over the next few weeks.


Saudi Arabia to refinance $11.5bn of debt in 2022, NDMC says

Saudi Arabia to refinance $11.5bn of debt in 2022, NDMC says
Updated 38 min 45 sec ago

Saudi Arabia to refinance $11.5bn of debt in 2022, NDMC says

Saudi Arabia to refinance $11.5bn of debt in 2022, NDMC says

RIYADH: Saudi Arabia's funding requirement for 2022 will mainly focus on debt refinancing which amounts to approximately SR43 billion ($11.5 billion), the Kingdom's National Debt Management Center said in a statement.

NDMC Board of Directors, chaired by the Minister of Finance, Mohammed Al-Jadaan, endorsed the 2022 annual borrowing plan during its last meeting according to the statement.

The plan highlighted that the NDMC will continue to proactively monitor the market taking into consideration interest rate movements and will be seizing opportunities that will enhance the characteristics of the Kingdom's debt portfolio.

As per 2022 official budget statement, public debt is estimated to remain at approximately SR938 billion by 2022 year-end.

"Based on market conditions throughout 2022 and while maintaining the current debt strategy, the government might consider additional tactical funding activities through the available funding channels, either domestically or internationally including   debt capital markets and/or government alternative financing to fund opportunities that will promote economic growth such as capital expenditures and infrastructure financing," the statement added.

​Last December, the NDMC announced the completion of the 2021 borrowing plan, with total financing of SR125 billion. 60.5 percent of the debt raised in 2021 was from local sources, while the remaining 39.5 percent was made up of international borrowing.

The borrowing plan last year included several funding channels, of which the issuance of €1.5 billion of Euro denominated bonds, the largest negative yield issuance ever to be executed out of EU with 3.3 times coverage ratio, according to NDMC. 

A negative yield is when an investor receives less money at the bond’s maturity than the original purchase price for the bond. In other words, instead of receiving a return from the issuer, the depositors are paying the lender a net amount at maturity.

Additionally, the NDMC executed an exchange transaction of Sukuk and bonds maturing in 2022, with total size exceeding SR33 billion.

Last July, Fitch Ratings decided to revise the Kingdom’s outlook to stable from negative and affirmed its rating at ‘A’, reflecting “prospects for a smaller deterioration in key sovereign balance-sheet metrics,” a report on their website said.

Moody’s, another ratings agency, also followed suit, raising the country’s outlook to stable from negative in November. It said on its website that “the government will reverse most of the 2020 increase in its debt burden while also preserving its fiscal buffers.”


Here’s what you need to know before opening bell on Tadawul

Here’s what you need to know before opening bell on Tadawul
Updated 43 min 11 sec ago

Here’s what you need to know before opening bell on Tadawul

Here’s what you need to know before opening bell on Tadawul

RIYADH: Saudi stocks fell on Sunday as weak earnings data weighed on investor sentiment and losses hit some of the Kingdom’s major stocks.

TASI dropped 1.2 percent, snapping its ten-day winning streak, to close at 12,140 points, and the parallel Nomu market slipped 1.4 percent, reaching 25,707 points.

In line with Saudi Arabia, most GCC bourses were down on Sunday, except for Bahrain’s BAX which edged up by 0.1 percent.

Stock exchanges of Qatar, Oman, and Kuwait all registered losses between 0.2 and 0.3 percent.

Elsewhere in the Middle East, the Egyptian index EGX30 closed 0.6 percent lower.

In energy trading, Brent crude oil reached $88.7 per barrel, and US benchmark WTI crude oil was up to $85.8 per barrel as of 8:49 a.m. Saudi time.

Stock news

  • Saudi Real Estate Co., also known as Alakria, has completed the purchase of raw land in Riyadh worth SR727 million ($194 million)
  • Arabian Centres Co. is to distribute cash dividends at SR0.75 per share for the first have of the fiscal year ending Sept. 30, 2021
  • The National Co. for Glass Industries, known as Zoujaj, has signed an initial agreement with the Saudi Investment Recycling Co. to establish a JV specialized in producing raw material for glass manufacturing
  • Etihad Atheeb Telecom Co. got its board’s approval to decrease capital by 61 percent to amortize accumulated losses
  • Riyadh-based Saudi Public Transport Co., also known as SAPTCO, has signed a SR150 million deal for a public bus transport project in the Eastern Province
  • Logistics and transportation services provider Bahri has started trial commissioning of the first floating station under its SR760 million deal with Saline Water Conversion Corp.
  • The Saudi Arabian Mining Co., or Ma’aden, has appointed Robert Wilt as its new chief executive officer
  • Al Moammar Information Systems Co. has inked SR84.5 million worth of contracts with its subsidiary Edarat Communications and Information Technology Co. for cloud hosting and data center services
  • Al Dawaa Medical Services Co. has announced its intention to debut 25.5 million shares, representing 30 percent of capital, on the main stock index TASI

Calendar

Jan. 24, 2022

  • Start of East Pipes Integrated Co.’s initial public offering subscription

Jan. 25, 2022

  • End of East Pipes Integrated Co.’s initial public offering subscription
  • Saudia Dairy and Foodstuff Co., SADAFCO, to pay cash dividends at SR3 per share for the first half of its fiscal year

Jan. 27, 2022

  • End of Gas Arabian Services’ IPO book-building
  • End of Scientific and Medical Equipment House’s IPO book-building

Jan. 28, 2022

  • End of Elm Co.’s IPO book-building

 


IKTVA: Oil and gas still essential despite global energy transition, Aramco chief says

IKTVA: Oil and gas still essential despite global energy transition, Aramco chief says
Updated 4 min 51 sec ago

IKTVA: Oil and gas still essential despite global energy transition, Aramco chief says

IKTVA: Oil and gas still essential despite global energy transition, Aramco chief says
  • The three-day forum is being held at the Dhahran Expo Center in the Kingdom’s Eastern Province

The In-Kingdom Total Value Add, or IKTVA, has kicked off on Monday in Dhahran, highlighting the oil giant’s role in boosting local opportunities in Saudi Arabia. 

The three-day forum, held at the Dhahran Expo Center in the Kingdom’s Eastern Province, will feature opportunities for businesses who are “committed to boosting local content within the Saudi energy economy.”

Read more: Saudi Aramco balances competing priorities as IKTVA enters 6th year

Aramco’s CEO Amin Nasser opened the event with a keynote speech on the importance of IKTVA, especially amid the global energy transition. 

He said oil and gas will remain essential despite the global energy transition, highlighting a “lack of investments” in the sector.

“We have to back up our sustainability goals with investments,” he added.

Yasir Al-Rumayyan, chairman of Aramco, is also addressing the event. Saudi Energy Minister Prince Abdulaziz bin Salman and the governor of the Eastern Province, Said bin Nayef, are also set to speak. 

Launched in 2015, the IKTVA program set out Aramco’s drive to increase domestic value creation as part of the Kingdom’s ambitious economic transformation objectives.

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“The most important measurement of success is the impact that IKTVA is having on people’s lives; creating jobs, encouraging learning, expanding career options, and enhancing the Saudi business environment,” according to the event’s website. 

The event ends on Jan. 26.


Saudi-Iraqi businessmen and trade officials meet in Riyadh today

Saudi-Iraqi businessmen and trade officials meet in Riyadh today
Updated 24 January 2022

Saudi-Iraqi businessmen and trade officials meet in Riyadh today

Saudi-Iraqi businessmen and trade officials meet in Riyadh today

RIYADH: The head of the Saudi-Iraqi Coordination Council on Sunday stressed the importance of relations and common interests between Riyadh and Baghdad, especially in the commercial and investment fields.

Abdulrahman bin Ahmed Al-Harbi, who is also the governor of the General Authority for Foreign Trade, said that “the Kingdom, under the leadership of King Salman and Crown Prince Mohammed bin Salman, attaches great importance to relations with Iraq and the establishment of the Saudi-Iraqi Coordination Council is meant to strengthen the historical relations between the two countries in all fields.”

The secretary-general was speaking a day ahead of the Kingdom hosting the Saudi-Iraqi Business Forum and Council in Riyadh, a statement issued by Saudi Press Agency said.

Al-Harbi said that hosting the forum and the council was also in line with the Kingdom’s Vision 2030 and its role in making the most of economic opportunities and the rapid transformation taking place in the country.

Al-Harbi said that trade relations between the two countries had reached unprecedented levels, with the volume of trade exchange from 2016 to 2021 amounting to nearly SR20 billion ($5.3 billion).

He added that the Saudi-Iraqi Business Forum and the Saudi-Iraqi Business Council were expected to sign a number of agreements and memoranda of understanding between the Saudi and Iraqi private sectors.