Amin Nasser: A homegrown engineer who reached the top

Nasser has become highly popular at Aramco by promoting a decentralized culture and spending time with both leaders and workers, analysts say.
Nasser has become highly popular at Aramco by promoting a decentralized culture and spending time with both leaders and workers, analysts say.
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Updated 14 August 2022

Amin Nasser: A homegrown engineer who reached the top

Amin Nasser: A homegrown engineer who reached the top

At an industry event this year in Riyadh, the Saudi energy minister paused at about 9 p.m. in front of some 1,000 people and told them it was bedtime for Amin Nasser, the chief executive of state-owned oil producer Saudi Aramco.

He was not joking.

Over a career of four decades, Nasser has earned a reputation for a style of dedication that means he will be making sure he is prepared for the challenges of the day ahead, not mingling into the early hours.

“It was kind of embarrassing you know with protocol and all these things, but it goes to show his work ethic and all that he tends to do to stand out,” an industry source, speaking on condition of anonymity said.

Aramco on Sunday reported a soaring 90 percent rise in second-quarter profit, beating analyst expectations, boosted by higher oil prices, volumes sold and refining margins.

The company expects “oil demand to continue to grow for the rest of the decade, despite downward economic pressures on short-term global forecasts,” Nasser said in Aramco’s earnings report.

The Saudi oil giant vies with Apple Inc. as the world’s most valuable company. It temporarily grabbed the top spot in May, helped by a rise in oil prices to 14-year-highs after Russia’s invasion of Ukraine on Feb. 24 raised concerns about energy supplies.

While juggling the daily management tasks of a company with 70,000 employees, Nasser has also addressed the questions that surround how to meet the world’s energy needs and become increasingly outspoken on the issue.

Climate change

In common with other oil majors, Aramco has defended the continued use of fossil fuels during the transition to cleaner energy.

Typically understated and diplomatic, Nasser broke from his usual convention last December to say a lack of spending on oil production could have serious social consequences and investment needed to continue in parallel with developing alternative sources.

Addressing the World Petroleum Congress in Houston, Texas, Nasser criticized an assumption that the world could shift to cleaner fuels “virtually overnight.”

“I understand that publicly admitting that oil and gas will play an essential and significant role during the transition and beyond will be hard for some,” Nasser told delegates.

“But admitting this reality will be far easier than dealing with energy insecurity, rampant inflation and social unrest as the prices become intolerably high and seeing net zero commitments by countries start to unravel.”

For some those comments in the US oil heartland of Texas have proved prescient as high energy prices and global inflation sent world leaders, including US President Joe Biden, knocking on Saudi Arabia’s door in search of extra barrels.

But as drought, record temperatures and flooding have increased global alarm about any new development of fossil fuels, many others say the overwhelming need is for investment in renewable and other domestic sources of energy.

“In some circles he (Nasser) is seen as a climate threat, due to Aramco’s aggressive plans to ramp up production to 13 million barrels per day by 2027,” said Jim Krane, energy research fellow at Rice University’s Baker Institute and author of the book Energy Kingdoms.

“But in Saudi circles, he is seen as an innovator willing to diversify Aramco’s successful business model by pushing into chemicals, hydrogen, and decarbonizing Aramco’s operations.”

 

Record IPO

Under Nasser, Aramco took over Saudi petrochemical giant SABIC under its downstream drive, launched an IPO in a record $29.4 billion listing in 2019, and released the company’s first report on its emissions after decades of secrecy.

The homegrown technocrat was an unknown quantity in the West. In contrast to other Aramco CEOs, he is not a product of a major US university and instead climbed the company’s ranks after receiving a Saudi education.

Nasser began his career as a petroleum engineer. Before becoming CEO in 2015, he held positions including vice president of upstream when he led the company’s largest capital investment program in its integrated oil and gas portfolio.

Nasser has become highly popular at Aramco by promoting a decentralized culture and spending time with both leaders and workers, analysts say.

During the Muslim fasting month of Ramadan, he makes a point of visiting an Aramco field or plant every evening and breaking the fast with crews. 

One of Nasser’s biggest tests came in 2019 when drones and missiles struck Aramco's Abqaiq and Khurais oil plants and halved Saudi Arabia’s crude output.

The US and Saudi Arabia blamed Iran for the attack. Tehran denied any involvement.

Nasser was at the Aramco emergency unit within seven minutes, said the industry source. He did not micro-manage and gave managers in the field the freedom to make decisions during a high-pressure moment.

“Despite 50 percent of Aramco’s operations being impacted by the attack, within a matter of a few weeks, Aramco was able to restore the bulk of its operations,” said Mazen Alsudairi, head of research at Al Rajhi Capital.

“This was possible because he continued the strong risk management policy of the company that leaves no scope for leniency.”


Abdul Latif Jameel Energy-owned firm to develop $1bn battery energy storage platform in the UK

Abdul Latif Jameel Energy-owned firm to develop $1bn battery energy storage platform in the UK
Updated 18 sec ago

Abdul Latif Jameel Energy-owned firm to develop $1bn battery energy storage platform in the UK

Abdul Latif Jameel Energy-owned firm to develop $1bn battery energy storage platform in the UK

RIYADH: A division of Abdul Latif Jameel Energy has partnered with UK-based firm Tyler Hill Partners to develop a $1 billion battery energy storage platform in Britain, MEED reported.

Fotowatio has put forward the platform, known as FRV TH Powertek, which will be focused on designing, constructing and operating a portfolio of battery energy storage-system projects in the UK. 

It is expected to reach up to 1GW over the next five years with an estimated aggregate investment of £1 billion.

“A significant growth is expected in installed capacity of battery storage projects to keep the UK on track to meet its net zero targets for 2050,” MEED reported citing Abdul Latif Jameel Energy.

FRV expects to invest more than $1.5 billion to double its total installed capacity from 2GW in 2021 to 4GW in 2024.

BESS platforms are expected to play a crucial role in the global expansion of variable renewable energy capacity using solar and wind sources, according to MEED.


Oil target cuts free up capacity in case of crises, OPEC head says

Oil target cuts free up capacity in case of crises, OPEC head says
Updated 37 min 48 sec ago

Oil target cuts free up capacity in case of crises, OPEC head says

Oil target cuts free up capacity in case of crises, OPEC head says

DUBAI: Oil output target cuts agreed by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, will leave producers more supply to tap in the event of any crises, OPEC Secretary General Haitham Al-Ghais told Al Arabiya TV on Friday, according to Reuters.

OPEC+, which includes the 13 members of OPEC and 10 allies led by Russia, agreed on Wednesday to lower their output target by 2 million barrels per day.

OPEC’s de facto leader Saudi Arabia said the move was necessary to respond to rising interest rates in the West and a weaker global economy.

The decision was criticized by the US where the White House said it was a sign the group was aligning itself with Russia.

US President Joe Biden also faces mid-term elections next month in which high energy prices are a hot topic.

“This was not a decision from one country against another, and I want to be clear in saying this, and it’s not a decision from two or three countries against a group of other countries,” said Ghais.

“There are strong indicators that there is a high possibility that recession will happen, we decided in this meeting to be pre-emptive.”

Western nations worry higher energy prices will hurt the fragile global economy and hinder efforts to deprive Moscow of oil revenue following its invasion of Ukraine.

EU sanctions on Russian crude and oil products are also set to take effect, in December and February, respectively.

Asked about the sanctions and a EU proposal to cap the price of Russian oil, OPEC’s Ghais said he could not comment.

“The truth is, the shape of these proposed sanctions is not quite clear, and how they will be implemented is also unclear, so we cannot comment.”

Ghais also said OPEC+ does not target prices: “We are not targeting a price, we are targeting a balance in supply and demand.”

 

 


OPEC+ output cut decision to sustain markets, not raise prices: Saudi Energy Minister

OPEC+ output cut decision to sustain markets, not raise prices: Saudi Energy Minister
Updated 50 min 1 sec ago

OPEC+ output cut decision to sustain markets, not raise prices: Saudi Energy Minister

OPEC+ output cut decision to sustain markets, not raise prices: Saudi Energy Minister

RIYADH: Saudi Arabia’s Minister of Energy has insisted an agreement to cut oil production by two million barrels per day was made to sustain markets, not to raise prices.

Prince Abdulaziz bin Salman made the comments after the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, faced criticism for agreeing to reduce its output from November, with US President Joe Biden calling it “a disappointment”. 

The minister said in a press conference after the OPEC+ meeting on Wednesday that “our current priority is stability in the market in terms of demand and investment.”

In an interview with Bloomberg, he went further, responding to suggestions of prioritizing profit directly.

“That mantra maybe could be acceptable if it is meant to be that we are deliberately doing this to jack up prices and that is not on our radar, our radar is to make sure we sustain markets,” he told Bloomberg.

Oil prices have not surged compared to coal and gas thanks to the OPEC+ and the effectiveness of its decisions, Prince Abdulaziz added.

The group's goal is to create a disciplined market that serves its real objective, as liquidity in the markets was affected by sharp fluctuations that caused prices to surge, according to the minister.

Prince Abdulaziz also indicated that there is currently no need for an additional cut in oil production by Saudi Arabia, as the agreement is considered good and appropriate for the current time.

“I said it in the press conference that in order for us to be attentive we have to be certainly assertive, preemptive and we have to be proactive,” he said.

The minister moved to quell suggestions that Saudi Arabia was the driving force behind the production cuts, insisting that the decisions taken in the group are unanimous and taken with the participation of all members.

Prince Abdulaziz said that the risks to the market come from strength of the dollar and higher interest rates.

He also indicated that it is not possible currently to judge the impact of the decision to set a price cap on Russian oil, until the passing of the next two months, given the state of uncertainty and lack of details and until the situation becomes clearer. 

He added that it will then be possible to clarify the reaction of players and producers and accordingly make better decisions.

Lack of clarity on price cap adds uncertainty, he said, adding that uncertainty could go either way.

“Our hope that people can bring more certainty in many aspects, certainty in terms of interest rates, in terms of growth, in terms of foreign exchange, in terms of what this issue from Bargo caps and the rest of it including the zero covid policies,” he said. 

The situation is now incomparable to any other throughout his 35-year career in the sector, according to the minister.

Prince Abdulaziz noted that even during the pandemic period, the market faced one variable which is COVID while currently, the market is facing a number of issues whose impact on the market may be positive or negative or a combination of both.

“It is a variety of convoluting uncertainties and they could go astray altogether, and to the positive side, or the negative side, or it could be a combination,” he said.


Tawadul Group awards $36.7m contract for fit-out works in new HQ in KAFD

Tawadul Group awards $36.7m contract for fit-out works in new HQ in KAFD
Updated 07 October 2022

Tawadul Group awards $36.7m contract for fit-out works in new HQ in KAFD

Tawadul Group awards $36.7m contract for fit-out works in new HQ in KAFD

RIYADH: Saudi Tadawul Group Holding Co. has awarded a SR137.98 million ($36.7 million) contract for fit-out works to its new headquarters in King Abdullah Financial District, according to a bourse statement.

The contract was given to Riyadh-based Construction & Planning Co., the statement said, and covers fit-out works for some designated floors in the new Riyadh HQ.

Tadawul Tower has been designed by Japan’s Nikken Sekkei and will host the Saudi stock exchange, major banks and financial institutions, according to the Nikken Sekkei website. 

The construction and equipment works at the KAFD are nearing completion and have reached their final stages, Al Arabiya reported in May 2022.

The Public Investment Fund's KAFD is located in the heart of Riyadh and covrs an area of more than 3 million sq. m..


Britain launches oil, gas licensing round to boost domestic supply

Britain launches oil, gas licensing round to boost domestic supply
Updated 07 October 2022

Britain launches oil, gas licensing round to boost domestic supply

Britain launches oil, gas licensing round to boost domestic supply

LONDON: Britain launched its first oil and gas exploration licensing round since 2019 on Friday to try and boost domestic hydrocarbon output as Europe weans itself off Russian fuel, according to Reuters.

The British North Sea, home to the global Brent benchmark grade, is an aging basin where oil and gas production has fallen from a 1999 peak of around 4.4 million barrels of oil equivalent to around 1.5 million boed.

Britain is hoping to increase domestic supplies as it grapples with record high energy prices which have forced it to plow billions of pounds into schemes to help limit the impact on homes and business and to curb spiralling inflation.

In the new licensing round, the North Sea Transition Authority is offering 898 blocks, encouraging applications especially for the Southern North Sea where hydrocarbons are close to existing infrastructure allowing for swift development.

Depending on the number and quality of applications, around 100 licenses might be awarded, the NSTA said.

It estimates the time from oil or gas discovery to production has fallen significantly in recent decades to around five years.

While hosting the COP26 climate summit last year, Britain decided not to join an alliance of countries vowing to stop new oil and gas projects on their territory.

The government says continued oil and gas production does not stand in the way of its aim to build a carbon neutral economy by 2050.

“Security of supply and net zero should not be in conflict,” NSTA chief executive Andy Samuel said.

Greenpeace said the focus should be on insulating homes better and growing renewable power.

“New oil and gas licenses won’t lower energy bills for struggling families this winter or any winter soon nor provide energy security in the medium term,” Philip Evans, energy transition campaigner for Greenpeace said.

“More fossil fuels... solve neither of those problems but will make the climate crisis even worse.”

The government is reviewing its plans on how to reach its carbon neutral goal with a renewed focus on energy costs for businesses, energy secretary Jacob Rees-Mogg, who has previously expressed skepticism about the need to fight climate change, said on Sept. 26.

“Ensuring our energy independence means exploiting the full potential of our North Sea assets,” Rees-Mogg said.

Britain imported close to 40 percent of its energy last year, according to government data. In terms of oil and gas, British fields provided around 38 percent of its gas and 75 percent of its oil demand, according to the OEUK offshore industry body.

Oil and gas firms can apply for licenses until Jan. 12 with licenses expected to be awarded in the second quarter of next year, the NSTA said.