Global oil demand expected to rise to 2.16m bpd in 2022: KAPSARC

Global oil demand expected to rise to 2.16m bpd in 2022: KAPSARC
This is a minor upward revision of 10,000 bpd from its previous forecast in the third quarter of 2022.  (Shutterstock)
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Updated 20 November 2022

Global oil demand expected to rise to 2.16m bpd in 2022: KAPSARC

Global oil demand expected to rise to 2.16m bpd in 2022: KAPSARC

RIYADH: While the world is struggling with economic challenges, global oil consumption is still expected to increase year-on-year by 2.16 million barrels per day to 99.89 mbpd in 2022, said King Abdullah Petroleum Studies and Research in its latest outlook for the fourth quarter of 2022.  

This is a minor upward revision of 10,000 bpd from its previous forecast in the third quarter of 2022.  

“These revisions reflect healthy reports by several countries on road, air and maritime activity, and slower economic activity in others, through 2022,” said the report titled KAPSARC Oil Market Outlook. 

It noted that declining gross domestic product growth in the fourth quarter of 2022 will add downward pressure to the underlying seasonality of oil demand trends in several countries, playing an important role in oil demand declines this quarter. 

Since the third quarter of this year, KAPSARC said global oil demand has finally caught up to pre-pandemic levels. “Overall, we anticipate quarter-on-quarter growth in OECD consumption of roughly 640 kbpd, while oil demand growth in non-OECD countries is expected to decline by roughly 120 kbpd,” the quarterly report noted. 

The report further noted that year-on-year growth demand from the Organisation for Economic Co-operation and Development countries will contribute 960 kbpd of the overall demand growth in 2022.  

Given a challenging GDP forecast for the first half of 2023 for several OECD countries, KAPSARC said OECD demand in 2023 is only expected to grow by another 520 kbpd.  

For 2022, OECD Americas, led by the US, will carry 490 kbpd of this year’s growth, it said. Whereas, Europe will follow with the growth of 320 kbpd, with the UK representing 40 percent of OECD Europe’s demand growth.  

The report noted that the remaining growth is expected to come from OECD Asia-Oceania, with South Korea representing roughly 50 percent of the region’s growth. Non-OECD demand growth is expected to reach 1.20 mbpd this year and 1.39 mbpd next year.  

KAPSARC has revised its projection for China’s previous demand growth down to 90 kbpd as a result of lower GDP growth projections, with lower transport activity accompanying its continuing stringent zero-COVID-19 strategy.  

In terms of non-OECD countries, the KAPSARC report made significant changes in Saudi Arabia with an upward revision to 180 kbpd growth in 2022. “While GDP growth plays an important factor in estimating demand growth for oil, we notice that Saudi aviation activity has almost doubled since last year and maritime activity has continued to rise,” the report noted.  

The Saudi advisory think tank said in its outlook report that global oil demand growth will continue its recovery from COVID-19 through 2024.  

On the supply side, the KAPSARC report predicted that the world would witness 230 kbpd of net global growth this quarter. However, it noted that the Organization of the Petroleum Exporting Countries and its allies concluded their 33rd OPEC and a non-OPEC ministerial meeting on Oct. 5 and agreed to “adjust downward the overall production by 2 mbpd from the August 2022 required production levels, starting November 2022.”  

This means that OPEC+ will witness an overall quarter-on-quarter decline of 465 kbpd, bringing global production to a decline of only 400 kbpd.  

“Despite healthy growth from non-OPEC+ producers, they are expected to stagnate this quarter with a mere 65 kbpd. One of the leading reasons for the stagnating production growth in liquids this quarter comes from Brazil’s seasonal biofuels, which tends to peak in Q3 then decline in Q4,” the report noted. 


PIF-owned Badeel, ACWA to develop MENA’s largest solar plant in KSA 

PIF-owned Badeel, ACWA to develop MENA’s largest solar plant in KSA 
Updated 11 sec ago

PIF-owned Badeel, ACWA to develop MENA’s largest solar plant in KSA 

PIF-owned Badeel, ACWA to develop MENA’s largest solar plant in KSA 

RIYADH: Saudi utility firm ACWA Power has signed power purchase agreements with the Water and Electricity Holding Co. to develop the biggest solar plant of its kind in the Middle East, with capacity to power 350,000 homes.

The 2,060 MW solar photovoltaic plant will be built in Al Shuaibah, Makkah province and is expected to begin commercial operations by the fourth quarter of 2025. 

Known as Badeel, the Water and Electricity Holding Co., wholly owned by the Public Investment Fund, will jointly own the project with ACWA Power, with both companies holding a 50 percent equity stake each.  

The project will be executed through a newly formed joint company called Shuaibah Two Electrical Energy Co..

Yazeed A. Al-Humied, deputy governor and head of MENA Investments at PIF, said: "This marks a key achievement toward PIF’s commitment to develop 70 percent of Saudi Arabia’s renewable energy by 2030. 

“Utilities and renewables is one of PIF’s priority sectors as part of its domestic strategy, which focuses on unlocking the capabilities of promising sectors to enhance Saudi Arabia’s efforts in diversifying revenue sources.”  

In this regard, the Shuaibah Two Electrical Energy Co. signed a power purchase agreement with the Saudi Power Procurement Co..

 The $1.75-billion contract spread over 35 years will include the development, financing, building, own, and operation of 2060 MW of the Shuaibah Two PV solar energy plant.  

The project is part of Saudi Arabia’s energy transition strategy, highlighting how a giga-scale development in sustainable energy will play a key role in translating Vision 2030 goals.  

“Under the guidance of our visionary leadership and the Ministry of Energy, Saudi Arabia continues to accelerate its ambitious plans for diversifying its energy mix to include renewable energy. It is a great honor to partner with Badeel and SPPC in developing this milestone project which will set a benchmark for sustainable energy development in the region,” said Mohammad Abunayyan, chairman, ACWA Power.  

He said solar power is a key component in unlocking positive economic, environmental and social outcomes for the betterment of communities across our great nation, adding: “We remain committed to developing local capabilities in technology, supply chain, and talent and ensure they are realized to their fullest potential.”  

Badeel and ACWA Power will build, own, and operate Al Shuaibah 2 facility and the electricity produced will be sold to SPPC.  

Shuaibah 2 is ACWA Power’s sixth solar energy facility in Saudi Arabia, with its portfolio comprising 13 power, water desalination and green hydrogen plants. 

Badeel and ACWA Power are also developing the Sudair Solar PV 1500 MW project; which was the first cornerstone renewable energy project in PIF’s program.


NEOM’s hanging stadiums will help make the giga-project a top-rated tourist hub: CEO

NEOM’s hanging stadiums will help make the giga-project a top-rated tourist hub: CEO
Updated 18 min 22 sec ago

NEOM’s hanging stadiums will help make the giga-project a top-rated tourist hub: CEO

NEOM’s hanging stadiums will help make the giga-project a top-rated tourist hub: CEO

RIYADH: The hanging stadiums within Saudi Arabia’s $500 billion giga-project NEOM will make tourists reimagine and visualize the future, as the Kingdom steadily pursues its ambitions to become a global tourism hub by 2030, according to its CEO Nadhmi Al-Nasr.

Speaking at the World Travel and Tourism Council Global Summit in Riyadh on Nov. 30, Al-Nasr noted that everything in NEOM will be connected to tourism business models.

“In The Line, we want people to come and see how sports stadiums are built, and where they are built. The sports stadiums in NEOM are 300 meter high, loose and hanging in the air,” said Al-Nasr.

He added: “We did not build sports stadiums in NEOM loose just for the sake of having it loose. We believe in the best use of space.”

During his talk, Al-Nasr said that OXAGON, the industrial city in NEOM also has all the potential to become a world-class tourist destination, where visitors can come and see how the future will be.

“It is in OXAGON where all industries will be, and it is the port of NEOM. Yet, we would like to see tourists spending a day or two in OXAGON. They will see the future of industries in OXAGON. Everything in NEOM is built for the future era. We want them to come and see how future sea ports will operate,” he said.

According to Al-Nasr, NEOM’s location has all the potential to turn it into a global tourism hub.

“We are just two hours from Europe. Believe it or not, we see Africa within miles. We are a connection of three continents,” he noted.

Al-Nasr added that NEOM’s plan to launch a new airline is to ensure non-stop travel to visitors from their destination to Saudi Arabia’s mega city without any stop in the middle.

Al-Nasr further noted that NEOM’s tourism will be a blend of past and future, as the region is 5,000 years old with a rich heritage.

“NEOM is where all religions have passed through, and this is the region where prophets have passed through. So, in NEOM, we will blend the past and the future,” said Al-Nasr.

He added that 95 percent geographical area of NEOM, which is equal to 25,000 kilometers, will be an untouchable natural reserve.

Al-Nasr went on to say that everything that is being built in NEOM will be a piece of art which will elevate the tourism sector in Saudi Arabia.

“In NEOM, we will never use the term solar panels or plants, instead, we call them solar parks. Everything we are developing, we wanted it to be a piece of art, a piece of attention and a piece of attraction to our tourism,” said Al-Nasr.


Saudi hotelier Elaf Group expands its presence with newly launched brand Joudyan 

Saudi hotelier Elaf Group expands its presence with newly launched brand Joudyan 
Updated 30 November 2022

Saudi hotelier Elaf Group expands its presence with newly launched brand Joudyan 

Saudi hotelier Elaf Group expands its presence with newly launched brand Joudyan 

RIYADH: Elaf Group, one of the leading hospitality players in the region, is now set to focus on expanding its presence with the opening of its first property under the newly launched hotel brand Joudyan in Riyadh later this week. 

This will be Elaf Group’s first hotel in Riyadh and the opening of Joudyan in the capital will be followed up with other cities outside of Riyadh.  

In an exclusive interview with Arab News on the sidelines of the World Travel & Tourism Council Global Summit in Riyadh, Ahmed Al-Azzouni, director of marketing and public relations, Elaf Group, said they intend to expand in the Eastern Province and the north and south as well.  

“Joudyan will be the focus of Elaf Group’s expansion plan in the Kingdom,” he said. 

Elaf Group which offers a mix of five- and four-star hotels, promises to offer a “unique experience” of the local feel of the Kingdom to the visitors. 

Al-Azzouni added: “The hotel in Jeddah will be in the Red Sea Mall. We’re currently renovating the property and it will be reopened as Joudyan brand.” 

He said they are confident that Joudyan will soon carve a niche for itself in the hospitality industry. 

"The new brand would have multiple locations across the Kingdom,” informed Al-Azzouni. “The official opening of the first Joudyan brand would be in Riyadh this week. It will soon be followed by the opening of the second hotel in Jeddah during the second half of 2023.” 

Talking about the new brand name, Al-Azzouni explained that when you dissect the word Joudyan, joud is from the Arabic word which means alkaram or generosity. “We made sure that we created a new name that reflects that (generosity),” Al-Azzouni explained. 

“Generosity is part of the Saudi culture. And that’s what we intend to make sure our guests feel about us when they come visit us. We will also make sure that that is our core brand essence and how we do business,” he continued. 

As for Elaf hotels, Al-Azzouni informed they will be concentrated in Makkah and Madinah due to the Elaf name having its roots in the holy cities. 

The company is also planning to expand across the Gulf Cooperation Council and the Middle East regions while setting its eyes on the European market. 

“We are open to any kind of ventures and investment opportunities that is mutually beneficial to all parties,” Al-Azzouni said talking about the company’s future plans.  

Going on to discuss the overall outlook of the hospitality industry, Al-Azzouni said things were catching up with 2019. “We have seen positive numbers and things are going back to where we were in 2019,” he informed. “We’re almost there and we can feel it in different sectors including hospitality and travel and tourism. We see a positive outlook for 2023 and beyond.”   

Not surprisingly then that the group is currently working on the completion of extensive renovation and upgrading efforts in all its hotels in order to keep pace with the rapid growth in the tourism and hospitality sectors.   


Oil Updates — Crude up; Iraq plans to raise oil exports by 250k bpd in 2023 

Oil Updates — Crude up; Iraq plans to raise oil exports by 250k bpd in 2023 
Updated 30 November 2022

Oil Updates — Crude up; Iraq plans to raise oil exports by 250k bpd in 2023 

Oil Updates — Crude up; Iraq plans to raise oil exports by 250k bpd in 2023 

RIYADH: Oil prices posted gains of more than 1 percent in Asian trade on Wednesday on falling US crude inventories and a lower greenback.  

Brent crude futures firmed 95 cents or 1.14 percent to $83.98 per barrel by 0411 GMT, while US West Texas Intermediate crude futures climbed 80 cents or 1.02 percent to $79.00 per barrel. 

Venezuela to sign new contracts to boost oil output at joint ventures 

Venezuela will soon sign new contracts to boost oil joint ventures between state firm PDVSA and private energy companies, the country’s Oil Minister Tareck El Aissami said on Tuesday, a move that will benefit Chevron Corp.  

The US Treasury Department on Saturday authorized the No. 2 US oil producer to expand operations at its Venezuela joint ventures. That authorization is expected to help the country grow crude production and exports following almost four years of harsh US oil trading sanctions. 

US President Joe Biden’s administration has said sanctions on Venezuela could be eased further depending on the progress of key political talks that resumed this month in Mexico aimed at agreeing to a presidential election and other demands. 

El Aissami made the announcement on Twitter following a meeting with Chevron’s top executive in Venezuela, Javier La Rosa. Chevron was authorized earlier this year by Washington to meet Venezuelan officials, including those individually sanctioned like El Aissami. 

“It is a regular practice for Chevron Venezuela leadership to meet with authorized PDVSA and government representatives in relation to the activities that the company is authorized to undertake in the country,” Chevron said in a statement.  

Chevron is a minority partner in four oil joint ventures in Venezuela with PDVSA, which have produced this year between 60,000 and 100,000 barrels per day of crude. The new license authorizes the US company to export its projects’ oil to the US.  

Iraq plans to raise oil exports by 250,000 bpd in 2023 

Iraq has plans to raise oil exports by 250,000 barrels per day in the second half of next year to reach 3.6 million bpd from the current 3.35 million bpd, Iraq’s state news agency quoted Saadoun Mohsen, a senior official at the country’s state oil marketer SOMO, as saying on Tuesday. 

EU inches toward deal on Russian oil price cap this week 

EU countries are inching toward a deal this week on a price cap on Russian oil, a way to adjust the cap in future, and on linking it to a package of new sanctions against Moscow over its invasion of Ukraine, diplomats said on Tuesday. 

The deadline for a deal is Dec. 5 because that is when the EU’s own full embargo on purchases of Russian seaborne oil, agreed upon at the end of May, kicks in. 

The price cap, a softer measure proposed by the Group of Seven nations, is supposed to replace the tougher EU plan to protect global supply and prevent a price surge, but there is disagreement among the 27 EU countries on the level of the cap. 

“Consultations have been ongoing since last Wednesday and we are inching toward an agreement, we are closer and closer,” Reuters reported quoting one senior EU diplomat involved in the negotiations.  

The G7 proposal, presented to EU governments by the European Commission, was a price cap in the range of $65-70 per barrel — a level that diplomats said was fixed in September when Russian oil traded at $68-76 per barrel on the market. 

“The idea was that a cap of around 5 percent below the market price would work to make the Russians sell while reducing their revenues,” a second senior diplomat said. “But since then prices have kept falling and are now below the cap level, so that level achieves no objective,” he said. 

Poland, Lithuania and Estonia, therefore, rejected the G7 proposal saying the cap should be closer to Russian production costs, which are estimated at about $20-25 per barrel. The three countries, which all border Russia, back a $30 price cap. 

They also argued that, given changing global oil markets and Russia’s ability to finance the war, the price cap should not be set in stone, but be a dynamic tool that could be reviewed often under a mechanism yet to be agreed. 

(With input from Reuters)  


Saudi Tourism Development Fund signs partnership agreement with Hilton

Saudi Tourism Development Fund signs partnership agreement with Hilton
Updated 30 November 2022

Saudi Tourism Development Fund signs partnership agreement with Hilton

Saudi Tourism Development Fund signs partnership agreement with Hilton
  • The new accord will help them launch several projects in the hospitality sector

RIYADH: Saudi Arabia’s Tourism Development Fund signed an agreement with Hilton on Tuesday to promote strategic partnerships between the two entities. 
The new accord will help them launch several projects in the hospitality sector, wrote state agency SPA.
Hilton will provide its global experience to help the Tourism Development Fund develop hospitality establishments and entertainment facilities for tourists. 
The changes are inspired by the needs of family-oriented attractions, such as water parks, restaurants and cafes, and adventure activities.