Kazakhstan update: Key oil field hit by protests; uranium output unaffected

Kazakhstan update: Key oil field hit by protests; uranium output unaffected
Protests erupt after fuel price rise in Almaty (REUTERS/Mariya Gordeyeva)
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Updated 06 January 2022

Kazakhstan update: Key oil field hit by protests; uranium output unaffected

Kazakhstan update: Key oil field hit by protests; uranium output unaffected
  • Kazakhstan is experiencing the worst street protests the country has seen since gaining independence three decades ago. 
  • Protests triggered by a spike in the price of fuel, but have now expanded

Kazatomprom, the world's biggest uranium producer, said on Thursday it was operating normally with no impact on output or exports despite unrest in Kazakhstan.

Uranium prices have risen after violent demonstrations in the central Asian country, initially spurred by protests against fuel price hikes, as Kazakhstan is responsible for about 40 percent of global supplies of the metal.

Spot prices hit $45.5 per pound on Wednesday, the highest since Nov. 30, according to a Platts assessment.

But the country's political turmoil does not seem to have so far affected key industries.

"Uranium mining is going according to plan there have been no stoppages. The company is fulfulling its export contracts," a Kazatomprom spokesperson said.

Oil 

Oil production at Kazakhstan's top field Tengiz was reduced on Thursday, its operator Chevron said, as some contractors disrupted train lines in support of protests taking place across the central Asian country.

Demonstrations in the west of the country against a New Year's Day fuel price hike have quickly grown into deadly anti-government riots with Russia sending in paratroopers to put down the countrywide uprising. read more

Kazakhstan is a major oil producer with an output of about 1.6 million barrels per day (bpd) in recent months and has rarely seen production disrupted by unrest or natural disaster.

“TCO production operations continue, however, there has been a temporary adjustment to output due to logistics,” Chevron, the largest foreign oil producer in Kazakhstan with a 50 percent stake in the Tengizchevroil (TCO) joint venture, said in a statement.

Protestors at the field have disrupted train activity which is used to export oil, sources told Reuters.

TCO produces around 700,000 bpd. It was not clear by how much output has been reduced. Other top fields in Kazakhstan are onshore Karachaganak and offshore Kashagan.

Besides Chevron, the three key projects involve most top foreign companies including Exxon Mobil, Lukoil, Royal Dutch Shell (RDSa.L), Eni, TotalEnergies (TTEF.PA), CNPC and Inpex.

A Shell spokesperson said production at the Karachaganak and Kashagan ventures was continuing.

“We are following developments in Kazakhstan closely. We are focusing on keeping our people and operations safe, working closely with our venture partners... We are keeping the situation under constant review.”

Despite the turmoil, which has seen Russia send paratroopers into the country to quell a violent uprising, there are no indications that oil production has been affected so far, Reuters reported.

Kazakhstan is a member of OPEC+, a group that includes the Organization of the Petroleum Exporting Countries, Russia and other producers,

"The political situation in Kazakhstan is becoming increasingly tense," Commerzbank said, adiding: "And this is a country that is currently producing 1.6 million barrels of oil per day."

The global benchmark Brent crude futures rose $1.09, or 1.4 percent, to $81.89 a barrel, by 1054 GMT.

US West Texas Intermediate crude futures gained $1.17, or 1.5 percent, to $79.02 a barrel.

Banks

Commercial banks in Kazakhstan have suspended work, official representative of the National Bank of the Republic Olzhas Ramazanov said on Thursday.

According to Russia's Interfax news agency, Ramazanov said the decision was taken "to protect the health and life of employees of financial organizations and consumers of financial services" after "taking into account the conduct of counter-terrorism operations by law enforcement agencies and taking into account temporary interruptions in the Internet."

Telegram channel Sputnik Kazakhstan quoted Ramazanov as saying that "from Jan. 6 the work of all second-tier banks as well as the Kazakhstan stock exchange has been suspended."

All Kazakhstan's banks except for the National Bank of Kazakhstan, fall under the definition of "second-tier banks" according to the country's banking law.

Airlines

Airlines in the Middle East cancelled flights to Kazakhstan's largest city, Almaty, as civil unrest continues to grow in the Central Asian country.

Air Arabia and flydubai have both grounded flights to the city, with Reuters quoting a spokesperson for the latter saying the two return Dubai-Almaty services scheduled for Thursday had been halted due to the “situation on the ground” there.

The website for Air Arabia showed its return Sharjah-Almaty flights scheduled for Thursday as cancelled.

Other reported developments include:

  • Internet access has been blocked in Almaty, as well as in some parts of the capital Nur-Sultan.
  • WhatsApp and Telegram messengers have been down since Tuesday Jan. 4.
  • Workers of oil fields in the natural-resource rich state have joined the protesters.
  • Almaty’s public health department said 190 people needed medical aid because of the protests — 137 police officers and 53 civilians. Seven of those — including four police officers — are in intensive care.
  • There have been restrictions imposed on travel as part of the state of emergency.
  • The EU Commission, asked whether it would suspent the EU's trade agreement with Kazakhstan, said it was premature to comment, according to Reuters.

Kazakhstan is experiencing the worst street protests the country has seen since gaining independence three decades ago. 

Government buildings have been set ablaze and at least eight law enforcement officers have been killed.

Almaty airport was reportedly overrun by anti-government protesters on Wednesday, forcing flights to be cancelled, before it was later retaken by government security forces.

The violent anti-government protests have led Kazakhstan's leaders to declare a two-week nationwide state of emergency.

The protests were triggered by a spike in the price of fuel, with prices for the liquified petroleum gas most people in western oil town of Zhanaozen use to power their cars doubling overnight on Saturday.

Demonstrations quickly expanded to a more general frustration with the Kazakhstan government, and on Wednesday President Kassym-Jomart Tokayev sought to placate the crowds by dismissing the entire government.

Later that day he adopted a tougher line against the protesters, accusing them of being in the service of international terrorist gangs.

A Russia-led military alliance agreed on Thursday to send peacekeepers to the country.  


Riyadh hopes to ‘work out an agreement with OPEC+ which includes Russia,’ says energy minister

Riyadh hopes to ‘work out an agreement with OPEC+ which includes Russia,’ says energy minister
Updated 22 May 2022

Riyadh hopes to ‘work out an agreement with OPEC+ which includes Russia,’ says energy minister

Riyadh hopes to ‘work out an agreement with OPEC+ which includes Russia,’ says energy minister
  • Prince Abdulaziz says OPEC+ will be needed to bring about ‘orderly adjustments’ in the future

RIYADH: Saudi Energy Minister Prince Abdulaziz bin Salman has said Riyadh was “hoping to work out an agreement with OPEC+ which includes Russia.”

Talking to Financial Times, the minister said politics should be kept out of OPEC+ and insisted the “world should appreciate the value” the alliance of oil producers.

Oil prices have reached their highest levels in a decade, a set of OPEC+ production quotas put in place in April 2020 is set to expire in three months.

With the havoc you see now it’s too premature to try to pinpoint (an agreement).

Prince Abdulaziz bin Salman

Prince Abdulaziz said it was too early to say what a new agreement might look like given the uncertainties in the market, but added that OPEC+ would increase production “if the demand is there.” 

“With the havoc you see now it’s too premature to try to pinpoint (an agreement),” he said in the interview. “But what we know is what we have succeeded to deliver is sufficient for people to say so far there is a merit, there is a value of being there, working together.”

OPEC+ has stuck to its 2020 agreement, under which the alliance members raise total production each month by the modest amount of 430,000 barrels a day. But Russia’s output has dropped since the start of the Ukraine war, falling from about 11 million barrels per day in March to an average of 10 million bpd in April, according to data provider OilX.

Prince Abdulaziz blamed soaring prices on a lack of global refining capacity and taxes. “The determinant of the market is refinery capacity, and how do you unlock it,” he said. “At least for the last three years, the whole world lost around 4 million barrels of refining capacity, 2.7 million of them just from the beginning of COVID-19.” 

The Saudi energy minister said the OPEC+ alliance would be needed to bring about “orderly adjustments” in the future amid uncertainty about coronavirus lockdowns in China, global growth and supply chains.

He said to ease bottlenecks in production and refinery capacity governments have to encourage the industry to invest in hydrocarbons even as nations switch to cleaner energy sources. “This situation needs people to sit together, focus, take out the masquerade and the so-called political correctness … it’s about trying to relate to existing reality and find remedies to it.”

 

 


Uplift projects worth $247m inaugurated in Al-Qassim


Uplift projects worth $247m inaugurated in Al-Qassim

Updated 22 May 2022

Uplift projects worth $247m inaugurated in Al-Qassim


Uplift projects worth $247m inaugurated in Al-Qassim


RIYADH: Saudi Arabia’s Al-Qassim region on Sunday witnessed the inauguration of 27 development projects in the environment, water and agriculture sectors valued at SR927 million ($247 million). 

The newly launched projects are inclusive of everything related to the Ministry of Environment, Water and Agriculture, Saudi Press Agency reported citing Gov. Faisal bin Mishaal bin Saud. 


Lucid Motors delivers 300 EV units in April, to launch Air Pure later this year

Lucid Motors delivers 300 EV units in April, to launch Air Pure later this year
Updated 22 May 2022

Lucid Motors delivers 300 EV units in April, to launch Air Pure later this year

Lucid Motors delivers 300 EV units in April, to launch Air Pure later this year
  • By 2025, the company will accelerate its technology to reduce cost, energy consumption

JEDDAH: US-based electric vehicle manufacturer Lucid Motors delivered 360 cars to consumers during the first quarter of 2022. In contrast, the company sold 300 vehicles last month alone.
It is an encouraging sign considering that the EV manufacturer started its production last year and delivered its first car in October 2021.
“We are growing rapidly, and the Arizona factory can extend its production to 350,000 units a year by 2025,” Peter Rawlinson, CEO of Lucid Motors, told Arab News.
The prices of Lucid’s units range from $87,000 to $179,000, and it is planning to launch an edition later this year named Air Pure at the price of $87,000. Air Pure could cover over 400 miles on a single charge.

No one is even close to us. I think we are several years ahead of everyone else.

Peter Rawlinson

“We are defining a luxury brand with a high-end product, and when you look at what’s available in the market, that is a very good value,” he added.
By 2025, the company will accelerate its technology to reduce cost and energy consumption.
“The obstacle of EV is the prices of a vehicle. We can use our technological advantage to make cars that go further with fewer batteries, which means we can make the cars more affordable to buy and run because it consumes less energy,” said Rawlinson.
“When we move to the middle of the decade, our middle-size platform will become available, and that’s when we can drive the price down to closer to $50,000 in today’s prices,” he added.
 

Setting out on Arabian Safari
The company partnered with Saudi Arabia’s Public Investment Fund in 2018, which Rawlinson described as a turning point for Lucid Motors. The company was short on capital, and the PIF backed it up.
“We have got an alignment of mindset here with Saudi Arabia’s Vision 2030, and this could extend beyond just the cars. Certainly, it will extend into stimulating the economy with a supply chain and the infrastructure supporting manufacturing,” he said.
The EV startup went public in July last year. Its shares began trading on the Nasdaq stock exchange, where it raised $4.5 billion in fresh capital.
“In theory, we can break even in a few years. The question is do you want to do that?” said Rawlinson on the sidelines of Lucid’s factory signing ceremony.
To Rawlinson, the best value for shareholders is to continue on a rapid expansion, maximizing the share value return for an investor, rather than meeting short-time demands of breaking even.
Lucid Motors signed agreements on May 18 to build a production factory in King Abdullah Economic City, the western part of the Kingdom, with an annual capacity of 150,000 zero-emission EVs.
With this deal, Lucid is estimated to receive up to $3.4 billion in finance and incentives over the next 15 years to build and run the manufacturing facility in the Kingdom.

HIGHLIGHTS

The prices of Lucid’s units range from $87,000 to $179,000. It is planning to launch an edition later this year named Air Pure at the price of $87,000.

Air Pure could cover over 400 miles on a single charge.

Lucid Motors signed agreements on May 18 to build a production factory in King Abdullah Economic City with an annual capacity of 150,000 zero-emission EVs.

 

Production plans in the Kingdom
“We will ship semi-knocked-down kits of Lucid Airs from Arizona to KAEC, and we assemble those SKD kits here in Saudi Arabia,” Rawlinson said.
The production will start next year, and a complete assembly will be ready by 2025.
“And we will grow this volume up through 2026 to get to 150,000 units a year as soon as possible, and that’s the installed capacity of the factory we are building,” he added
Part of the factory’s function in KAEC will manufacture all-electric powertrains in-house, including battery packs, motors, inverters and transmissions.
“We make the most advanced battery pack globally, and we are well known for that,” he said.


The strategy will involve sending workers from Saudi Arabia to Arizona, where they will be trained to replicate the whole process in the Kingdom.
“This is not just an assembly plot where we build cars together; the core technology is actually built in-house,” he added.
Besides Lucid, only Tesla builds its technology in-house, which Rawlinson believes is the reason behind Tesla’s success. 
“I think they are four to five years ahead of everybody else, but today if you look at our technology, we are probably about three years ahead of what Tesla is,” he said.
Rawlinson measures this on efficiency, as he believes that the right way of measuring an EV technology is in miles per kilowatt-hour efficiency, given the size and sector the car is in.
“No one is even close to us. I think we are several years ahead of everyone else,” he said.


NEOM's The Line project to receive bids for spine's water infrastructure by June 1

NEOM's The Line project to receive bids for spine's water infrastructure by June 1
Updated 22 May 2022

NEOM's The Line project to receive bids for spine's water infrastructure by June 1

NEOM's The Line project to receive bids for spine's water infrastructure by June 1

RIYADH: Saudi Arabia’s The Line project, a 170-km long linear urban development in NEOM, is set to receive bids for its main work package to build spine water transmission by June 1, MEED reported. 

This package, which will be the latest in a series of tenders for the Line and Spine components, includes design, build, testing and commissioning work for a pressurized permanent water system. 

As part of the project, the contractors are required to create the complete design — right from the concept to the detailed design — besides providing supply, construction and installation services for the SWT line.

The water system includes the SWT line within a reinforced concrete box culvert running along the length of NEOM’s Spine.

According to MEED, some bidders have requested an extension of the deadline for the package.

The SWT culvert will run parallel to the Spine’s alignment about 360 meters north of the centreline of the Line alignment. The estimated 35-km SWT line will provide potable water for NEOM's Spine infrastructure and Line buildings. 

Whereas, contractors of the 160-km long rail line are also expecting NEOM to issue requests for prequalification within the next two months for the work on the high-speed rail line that forms the backbone of The Line. 

This development stretches from the coast towards Tabuk.


Saudi Arabia launches national military academy to train locals

Saudi Arabia launches national military academy to train locals
Updated 22 May 2022

Saudi Arabia launches national military academy to train locals

Saudi Arabia launches national military academy to train locals

RIYADH: Saudi Arabia’s General Authority for Military Industries has announced the establishment of the National Academy of Military Industries to train national cadres to work in the sector. 

The announcement comes as part of an extension of the military industry sector’s strategy that was approved by the council of ministers in April last year, the governor of GAMI said in a statement. 

The academy will be the largest supporter of the sector’s strategy that bets on the national human resource, Ahmed Al-Ohali added.

The move aims to achieve the sector’s target of localizing 50 percent of government spending on military equipment and services by 2030.