OPEC chief says blame policymakers, lawmakers for oil price rises

OPEC exists to ensure the world gets enough oil, but ‘it’s going to be very challenging and very difficult if there is no buy-in into the importance of investing,’ Al-Ghais said.
OPEC exists to ensure the world gets enough oil, but ‘it’s going to be very challenging and very difficult if there is no buy-in into the importance of investing,’ Al-Ghais said.
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Updated 18 August 2022

OPEC chief says blame policymakers, lawmakers for oil price rises

OPEC chief says blame policymakers, lawmakers for oil price rises
  • Says keen to extend deal with Russia beyond 2022
  • Oil’s recent slide reflects fears, physical demand robust
  • Al-Ghais relatively optimistic on outlook for 2023

LONDON: Policymakers, lawmakers and insufficient oil and gas sector investments are to blame for high energy prices, not the Organization for the Petroleum Exporting Countries, the producer group’s new secretary-general, Haitham Al-Ghais, told Reuters on Thursday.

A lack of investment in the oil and gas sector following a price slump sparked by COVID-19 has significantly reduced OPEC’s spare production capacity and limited the group’s ability to respond quickly to further potential supply disruption.

The price of Brent crude came close to an all-time high of $147 a barrel in March, after Russia’s ordering of troops into Ukraine exacerbated supply concerns. While prices have since declined, they are still painfully high for consumers and businesses globally.

“Don’t blame OPEC, blame your own policymakers and lawmakers, because OPEC and the producing countries have been pushing time and time against for investing in oil (and gas),” Al-Ghais, who took office on Aug. 1, said in an online interview.

Oil and gas investment is up 10 percent from last year but remains well below 2019 levels, the International Energy Agency said last month, adding that some of the immediate shortfalls in Russian exports needed to be met by production elsewhere.

The OPEC official also pointed the finger at a lack of investment in the downstream sector, adding that OPEC members had increased refining capacity to balance the decline in Europe and the US.

“We are not saying that the world will live on fossil fuels forever ... but by saying we’re not going to invest in fossil fuels ... you have to move from point A to point B overnight,” Al-Ghais said.

OPEC exists to ensure the world gets enough oil, but “it’s going to be very challenging and very difficult if there is no buy-in into the importance of investing,” he said, adding that he hopes “investors, financial institutions, policymakers as well globally seriously take this matter (to) heart and take it into their plans for the future.”

Relatively optimistic 

Oil has tumbled since March and Brent hit a six-month low below $92 a barrel this week.

The slide reflects fears of economic slowdown and masks physical market fundamentals, Al-Ghais said as he took a relatively optimistic view on the outlook for 2023 as the world tackles rising inflation.

FASTFACTS

Oil and gas investment is up 10 percent from last year but remains well below 2019 levels, the International Energy Agency said last month, adding that some of the immediate shortfalls in Russian exports needed to be met by production elsewhere.

Oil has tumbled since March and Brent hit a six-month low below $92 a barrel this week.

OPEC, plus Russia and other allies, known as OPEC+, has unwound record oil-output cuts made in 2020 at the height of the pandemic and in September is raising output by 100,000 barrels per day.

Ahead of the next meeting which OPEC+ holds on Sept. 5, Al-Ghais said it was premature to say what it will decide.

“There is a lot of fear,” he said. “There is a lot of speculation and anxiety, and that’s what’s predominantly driving the drop in prices.”

“Whereas in the physical market we see things much differently. Demand is still robust. We still feel very bullish on demand and very optimistic on demand for the rest of this year.”

“The fears about China are really taken out of proportion in my view,” said Al-Ghais, who worked in China for four years earlier in his career. “China is a phenomenal place of economic growth still.”

OPEC, plus Russia and other allies, known as OPEC+, has unwound record oil-output cuts made in 2020 at the height of the pandemic and in September is raising output by 100,000 barrels per day.

Ahead of the next meeting which OPEC+ holds on Sept. 5, Al-Ghais said it was premature to say what it will decide, although he was positive about the outlook for next year.

“I want to be very clear about it — we could cut production if necessary, we could add production if necessary.”

“It all depends on how things unfold. But we are still optimistic, as I said. We do see a slowdown in 2023 in demand growth, but it should not be worse than what we've had historically.”

“Yes, I am relatively optimistic,” he added of the 2023 outlook. “I think the world is dealing with the economic pressures of inflation in a very good way.”

OPEC+ began to restrain supply in 2017 to tackle a supply glut that built up in 2014-2016, and OPEC is keen to ensure Russia remains part of the OPEC+ oil production deal after 2022, Al-Ghais said.

“We would love to extend the deal with Russia and the other non-OPEC producers,” he said.

“This is a long-term relationship that encompasses broader and more comprehensive forms of communication and cooperation between 23 countries. It’s not just in terms of production adjustment.”


MENA total startup funding drops 54 percent month on month: Wamda 

MENA total startup funding drops 54 percent month on month: Wamda 
Updated 16 sec ago

MENA total startup funding drops 54 percent month on month: Wamda 

MENA total startup funding drops 54 percent month on month: Wamda 

RIYADH: Startups in the Middle East and North Africa region raised $173 million across 51 deals in September, marking a 54 percent decrease compared to the month before. 

Saudi Arabia’s logistics startup TruKKer was responsible for the bulk of that funding as it secured a $100 million pre-initial public offering round, according to Wamda.

The Kingdom raised a total of $114 million in startup funding in just six deals, while the UAE had 12 deals with a total of $27 million. 

Aside from Trukker’s fundraise, fintech companies managed to get the highest amount of funding with $28 million followed by food tech startups with $22 million. 

Foreign investment was high in September as US investors participated in 11 deals while UK investors were the second active with seven deals. 


TASI ends the week lower on watch of unstable oil prices: Closing bell

TASI ends the week lower on watch of unstable oil prices: Closing bell
Updated 42 min 17 sec ago

TASI ends the week lower on watch of unstable oil prices: Closing bell

TASI ends the week lower on watch of unstable oil prices: Closing bell

RIYADH: Saudi Arabia’s main index ended the last trading session of the week lower as investors kept a keen eye on the unstable oil prices this week.

The Tadawul All Share Index slipped 0.11 percent to end Thursday at 11,757, while the parallel market Nomu finished almost flat at 20,223.

In the energy sector, Brent crude reached $93.22 per barrel, while WTI crude traded at $87.61 per barrel as of 3:14 p.m. Saudi time.

Saudi oil giant Aramco ended the session with a 0.14 percent increase, while Rabigh Refining and Petrochemical Co. edged up 1.21 percent.

The Saudi National Bank, the Kingdom’s largest lender, dropped 0.77 percent, while Saudi British Bank declined by 2.31 percent.

The Kingdom’s most valued bank Al Rajhi fell 0.71 percent, while Alinma Bank shed 0.26 percent.

Despite leading Wednesday’s fallers, Tihama Advertising and Public Relations Co. surged 9.81 percent, topping the market, after receiving the Capital Market Authority’s clearance to hike its capital by 700 percent.

Dar Al Arkan Real Estate Development Co. declined 2.87 percent to lead the fallers, closely followed by Riyad REIT Fund with a decline of 2.76 percent.


‘Hold back emissions, not progress’ says ADNOC chief as he issues energy security warning

‘Hold back emissions, not progress’ says ADNOC chief as he issues energy security warning
Updated 50 min 56 sec ago

‘Hold back emissions, not progress’ says ADNOC chief as he issues energy security warning

‘Hold back emissions, not progress’ says ADNOC chief as he issues energy security warning

RIYADH: The CEO of one of the region’s largest oil firms believes people in his position have a responsibility for energy security as he hit out at suggestions oil and gas production should be reduced.

Speaking at the Energy Intelligence Forum in London, Sultan Ahmed Al-Jaber, managing director and group CEO of Abu Dhabi National Oil Co., insisted that firms such as his need to be “in the room” when energy transition plans are drawn up.

Al-Jaber, who also serves as the UAE’s minister of Industry and Advanced Technology, warned that pulling the plug on current energy systems before developing new ones is misguided, as abandoning oil and gas production could take a toll on energy security. 

“We have seen that all progress starts and ends with energy security. And, as the world’s energy leaders, our responsibility in maintaining that energy security has never been more evident,” said Al-Jaber. 

He added: “We must all commit to mitigating the impact of global energy supplies, but let’s keep our focus on capturing carbon, not canceling production. Let’s hold back emissions, not progress.” 

According to Al-Jaber, energy transition is the most complex and capital-intensive project in human history, and a partnership with the energy sector is necessary to ensure a successful transformation. 

“For the energy transition to succeed, the energy professionals need to be in the room, as equal partners alongside all other stakeholders,” he said. 

He further noted that substantial investments are required in hydrocarbons, the energy source the world will rely upon in the future.

Al-Jaber revealed that the UAE is open to working with partners to mitigate the impact of hydrocarbons on the climate and build on its expertise to emerge as a reliable energy leader with zero carbon emissions. 

He noted that ADNOC is making use of advanced technologies, along with renewable solar and nuclear energy to reduce the carbon intensity of its oil and gas by a further 25 percent by the end of this decade. 

Al-Jaber added that ADNOC will also expand the use of carbon capture and storage. 

Speaking at the same event on Oct 4, Saudi Aramco CEO Amin Nasser said that global oil demand is expected to grow until 2030 and beyond, as the world has a flawed plan for the energy transition. 

During the speech, Nasser noted that alternatives to replace oil and gas are not ready yet and added that measures should be taken to decarbonize oil and gas, along with developing carbon capture and storage technology.  


Digital payments soar in Saudi Arabia as preference for cash dips: report

Digital payments soar in Saudi Arabia as preference for cash dips: report
Updated 06 October 2022

Digital payments soar in Saudi Arabia as preference for cash dips: report

Digital payments soar in Saudi Arabia as preference for cash dips: report

 

RIYADH: Digital payment penetration is continuing its high growth in Saudi Arabia, as a report reveals more than one in ten Saudis spend money online at least once a day via e-commerce platforms.

According to global payment solutions provider Checkout.com’s report titled ‘Digital Transformation in MENA 2022’, Saudis who prefer cash for payments reduced from 27 percent in 2021 to 20 percent in 2022.

The report further noted that 91 percent of Saudi shoppers regularly buy from e-commerce platforms, and 14 percent of them shop at least once per day.

Some 78 percent of consumers in Saudi Arabia who took part in the survey said they will maintain or increase their current level of e-commerce spending into 2023.

The popularity of digital wallets is also steadily increasing in Saudi Arabia, as 26 percent of consumers consider these payment platforms the most preferred method for e-commerce, a near doubling of the figures from 2021.

Some 10 percent of the participants said that Buy Now Pay Later is their most preferred payment method for online shopping.

The report further added that consumers between the age of 25 and 45 have significantly less attachment to cash on delivery, while it is the youngest and oldest shoppers who rely on this payment method.

“The Kingdom is the largest economy in the Middle East, with a mature retail sector and a relatively affluent, digitally savvy population that is moving in the direction of digital payments steadily,” said Remo Giovanni Abbondandolo, senior vice president for MENA at Checkout.com.

He added: “The growing trust in online payments by shoppers means the digital transformation of the region’s retail sector is well underway.”

Saudi Arabia’s youth population has a growing affinity toward crypto currencies post the appointment of Mohsen AlZahrani by Saudi Arabia’s central bank to lead the Kingdom’s virtual assets and central digital currency program.

The report revealed that 44 percent of Saudis aged between 18 and 40 have held digital assets such as crypto, stablecoins and NFTs, while 54 percent of them would like to be able to pay for goods and services in crypto or stablecoins in the next 12 months.


Saudi-based SaaS startup raises $1.3m in seed funding

Saudi-based SaaS startup raises $1.3m in seed funding
Updated 06 October 2022

Saudi-based SaaS startup raises $1.3m in seed funding

Saudi-based SaaS startup raises $1.3m in seed funding

RIYADH: Saudi-based SaaS startup Glamera raised $1.3 million in a seed funding round led by venture capital firm Riyadh Angels Investors.

Established in Egypt in 2020, Glamera relocated to Saudi Arabia where it covers Riyadh, Jeddah, Dammam, Taif, Qassim, Madinah, Tabuk as well as Cairo and Alexandria in Egypt.

The company is an all-in-one platform for beauty and lifestyle service providers where consumers can find and book sessions.

Since its establishment, the platform has managed to achieve huge growth in the region as it facilitated a gross merchandise value of $45 million in addition to continued growth in revenue and client acquisition.

“Now we can confidently work toward leading the market with our fully integrated solutions and play a part in the Saudi Digital Transformation Vision 2030. We aim to work with over 2,500 clients and achieve $500 million GMV by the end of 2023,” Mohamed Hassan, founder and CEO, said in a statement.

Omar Fathy, co-founder and chief technical officer of the startup, said that the company will use its funding to develop and launch new services as well as expand into Gulf markets.