Oil Updates — Crude steady; Chevron raises 2023 project spending budget to $17bn

Update Oil Updates — Crude steady; Chevron raises 2023 project spending budget to $17bn
Brent crude futures were up 67 cents or 0.87 percent at $77.84 per barrel by 08.10 a.m. Saudi time. (Shutterstock)
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Updated 08 December 2022

Oil Updates — Crude steady; Chevron raises 2023 project spending budget to $17bn

Oil Updates — Crude steady; Chevron raises 2023 project spending budget to $17bn

RIYADH: Oil rebounded on Thursday after four sessions of decline, boosted by hopes that easing anti-COVID measures in China will revive demand and by signs that some tankers carrying Russian oil have been delayed after a Group of Seven price cap came into effect.

China on Wednesday announced the most sweeping changes to its resolute anti-COVID regime since the pandemic began, while at least 20 oil tankers faced delays in crossing to the Mediterranean from Russia’s Black Sea ports.

Brent crude rose 46 cents, or 0.60 percent, to $77.63 a barrel at 03.00 p.m. Saudi time, while US West Texas Intermediate crude gained 67 cents, or 0.93 percent, to $72.68.

Meanwhile, Qatar has set its official selling price for its Marine crude at $1.85 a barrel above the Oman/Dubai average for January. 

Iraq’s November oil output down

Iraq produced 4.43 million barrels per day of crude in November, down by 221,000 bpd from October, Reuters reported, citing data from state-owned marketer SOMO.

According to the production figures, Iraq’s output was in line with its quota under the agreement made by the Organization of Petroleum Exporting Countries and its allies, known as OPEC+.

At 4.431 mln bpd, Iraq’s November ceiling was 220,000 bpd lower than October’s. Iraq achieved the decline by reducing internal consumption by 92,000 bpd, exports by 63,000 bpd, while stock levels fell, the data from SOMO show.

In October, Iraq’s then-oil minister Ihsan Abdul Jabbar said the country would adhere to its OPEC+ quota by managing internal oil consumption to preserve export capabilities. 

Chevron raises 2023 project spending budget to $17 billion

 

Chevron Corp. on Wednesday said it increased its 2023 capital spending budget by a double-digit percentage from this year to $17 billion, as inflation drives up energy production costs and the firm pours cash into low-carbon fuel projects.

Like other US energy companies that profited from this year’s rise in fuel prices, Chevron faces mounting pressure from the White House to invest more in fossil fuel supplies. The company is also preparing to expand operations in Venezuela.

Chevron indicated it will keep spending within a $15 billion to $17 billion range, despite this year’s surge in oil prices that generated all-time high profits and allowed for record amounts of cash distributions to shareholders.

“We’re maintaining capital discipline while investing to grow both traditional and new energy supplies,” said Chevron CEO Michael Wirth.

US tells Turkiye no need for additional checks on oil tankers

US Deputy Treasury Secretary Wally Adeyemo told Turkish Deputy Foreign Minister Sedat Onal in a call on Wednesday that the price cap on Russian oil does not necessitate additional checks on ships passing through Turkish territorial waters, the US Treasury Department said.

A Turkish measure in force since the start of the month has caused a logjam by requiring vessels to provide proof they have insurance covering the duration of their transit through the Bosphorus strait or when calling at Turkish ports.

(With inputs from Reuters)

 


Siemens Energy aims to support Saudi Arabia achieve its 2060 net-zero goals: CEO 

Siemens Energy aims to support Saudi Arabia achieve its 2060 net-zero goals: CEO 
Updated 10 sec ago

Siemens Energy aims to support Saudi Arabia achieve its 2060 net-zero goals: CEO 

Siemens Energy aims to support Saudi Arabia achieve its 2060 net-zero goals: CEO 

RIYADH: As the world is pushed to up the ante in energy transition, the Middle East region has a significant role to play in achieving this goal. Given the region’s dominant position in the energy sector, Siemens Energy recently launched an innovation hub in the UAE that will help the company drive the transition. 

The company’s CEO and President Christian Bruch, who attended Saudi Aramco’s ‘In-Kingdom Total Value Add’ forum, told Arab News he is excited about the opportunity to work with stakeholders in Saudi Arabia. 

As the Kingdom has some of the best universities as well as the world’s biggest oil and gas industries, Bruch said: “We are currently in various discussions with them and with the government agencies to identify opportunities for innovation.”  

“We have a state-of-the-art manufacturing hub in Dammam, the largest facility of its kind in the region, where we plan to co-develop the technologies of the future.”   

Bruch believes that innovations are more crucial than ever, as 45 percent of all emissions savings in 2050 will come from technologies that are not yet on the market today. 

Renewable energy 

The CEO of one of the world's leading energy technology companies pointed out that the Gulf region in particular is impacted by climate change “because it’s warming twice as fast as the rest of the world and extreme heat and water shortages have been a reality here for decades.”  

However, he said, the good news is that the region has immense potential for generating renewable energy due to its geographic location. 

“We intend to harness this potential through renewable power generation and converting that to green hydrogen,” Brunch informed. 

He went on to cite the example of the UAE, where Siemens Energy is working on a hydrogen project with Masdar, TotalEnergies, Etihad Airways and Lufthansa.   

“In the first phase, we will focus on the production of green hydrogen for passenger cars and buses in the Masdar City area,” he said, adding that at the same time, a kerosene synthesis plant will convert the majority of the green hydrogen into sustainable aviation fuel. 

In the second phase, he revealed the company will produce decarbonized fuels for the maritime sector. 

Accelerating localization  

Bruch explained that Siemens Energy aims to support Saudi Arabia in its journey to reach its 2060 goal of net-zero emissions through its bridging solutions.  

“As part of its journey, the country wants to shift toward cleaner gas-burning instead of oil for its energy production. And we are supporting the country with our highly efficient gas turbine technologies that could later be used for hydrogen,” he said.  

Responding to a question on what needs to be done to accelerate the pace of localization and manufacturing to enable the Kingdom to become a manufacturing hub, Bruch said: “Localizing value chains for the manufacturing processes plays an integral part in Saudi Arabia’s vision to become a manufacturing hub.” 

In order to accelerate the pace to become a manufacturing hub, he feels Saudi Arabia should focus more on increasing knowledge transfer in the manufacturing process; strengthening the infrastructure for industries; improving access to funding; and encouraging innovation and development. 

Bruch went on to say that the Kingdom will also need to address gaps in the supply chain in order to minimize imports of components and rely on homegrown supply chains. 

The CEO revealed that Siemens Energy started its localization journey in Saudi Arabia in 2016 when it produced the first made-in-Saudi Arabia gas turbine from its factory in Dammam. “Since then, we have focused on training young Saudis and transferred knowledge and technology to create the largest facility of its kind in the region.” 

He stressed that they are continuing to expand this facility and increase their localization level in the country. “Because that’s what matters in the end, even if it sounds like a platitude: we only have one planet and we all have to work together to prevent climate catastrophe,” Bruch concluded. 


GCC project awards plunged during 2022, reaching second lowest since 2005: report

GCC project awards plunged during 2022, reaching second lowest since 2005: report
Updated 31 January 2023

GCC project awards plunged during 2022, reaching second lowest since 2005: report

GCC project awards plunged during 2022, reaching second lowest since 2005: report

RIYADH: Faced with mounting global economic challenges, Gulf Cooperation Council region project awards plunged during 2022, with the total value of contracts handed out dropping 18.7 percent to $93.6 billion from $115.2 billion the previous year, according to Kamco Invest. 

This was the lowest project awards amount since 2005, barring the pandemic-induced decline in 2020, the regional non-banking financial powerhouse based in Kuwait stated in its report. 

The decline of GCC contract awards was affected by high inflation and continuing supply chain problems, mainly due to China’s intermittent COVID-19 restrictions which are now lifted, it added. 

The drop in 2022 also reflected limited big-ticket projects outside the Saudi project market.

All GCC countries, barring Saudi Arabia, witnessed a year-on-year decline in their aggregate 2022 value of projects awarded. 

In addition, total value of project awards was above the $100-billion mark every year for the last decade with the exception of the pandemic year and 2022, it stated. 

Saudi Arabia remained the largest projects market in the GCC during 2022 recording a total of $54.2 billion worth of contracts awarded as compared to $53.9 billion in 2021. 

The UAE ranked second recording total contract awards of $19.2 billion versus $25.9 billion during 2021, Kamco Invest said in its report. 

Saudi Arabia, the UAE and Qatar accounted for a combined 93.6 percent of the total value of contracts awarded in the GCC during the year. 

According to the report, total projects awarded in Kuwait during 2022 reached $2.8 billion against $5.2 billion in 2021.

Similarly, Oman witnessed new project awards drop by 27.1 percent year-on-year to hit $2.2 billion, while the aggregate value of contracts awarded in Bahrain reached $96 million in 2022 as compared to $2.7 billion during 2021. 

In terms of sector, the major share of new contract awards went to the construction industry with the value registering a $3.2 billion year-on-year increase to reach a total of $34.3 billion during 2022. 

The growth in the GCC construction sector was mainly driven by the jump in total value of contract awards in Saudi Arabia’s construction sector

Of the total value of projects awarded in the GCC, nearly 59.2 percent was awarded by the Kingdom, stated the report. 

The outlook for 2023 remains bright for the GCC projects market with more than $110 billion worth of projects already in the tender stage, according to MEED Projects, that would mostly translate into awards.


King Abdulaziz Port flags off MSC service to widen trade horizons

King Abdulaziz Port flags off MSC service to widen trade horizons
Updated 31 January 2023

King Abdulaziz Port flags off MSC service to widen trade horizons

King Abdulaziz Port flags off MSC service to widen trade horizons

RIYADH: The Saudi Ports Authority, also known as Mawani, has announced the launch of a new freight service at King Abdulaziz Port operated by the Swiss-based container group MSC.  

The latest connection will bolster the Dammam-based port as a focal point for regional and global trade while strengthening the Kingdom’s hub credentials in fulfillment of the ambitions of the National Transport and Logistics Strategy.

Dammam will also enjoy weekly sailings to eight maritime destinations spanning the Arabian Gulf, South Asia and Southern Africa.  

These include the ports of Khalifa bin Salman in Bahrain, Khalifa in UAE, Qasim in Pakistan, Mundra and Hazira in India, Port Louis in Mauritius, and Durban and Coega in South Africa.  

The service started on Jan. 21 and will feature five vessels with an average carrying capacity exceeding 6,000 twenty-foot equivalent units.

As a world-class logistics center boasting top-tier infrastructure and capabilities, King Abdulaziz Port was an obvious choice for shipping liners looking to expand their routes in 2022.  

Some notable liners include SeaLead Shipping’s Far East to Middle East service, Emirates Shipping Line’s Jebel Ali Bahrain Shuwaikh service, Gulf-India Express 2 service by Aladin Express and Maersk’s Shaheen Express service. 

As Saudi Arabia’s eastern maritime gateway and the Kingdom’s main port on the Arabian Gulf, King Abdulaziz Port in Dammam is the primary entryway for cargo headed to the country’s eastern and central regions from all over the world.  

It has a direct railway connection with the dry port in Riyadh. Saudi Arabian Oil Co. built the dock to meet the rapidly increasing demands of the national oil industry under the orders of King Abdulaziz bin Abdulrahman.  

After further expansions, the port was officially renamed from Dammam Port to King Abdulaziz Port in 1961.

The port has 43 fully equipped berths with mega-ship capabilities, modern cargo handling equipment and general cargo support terminals. Other support terminals include a refrigerated cargo terminal, two cement terminals, a bulk grain terminal, an iron ore terminal, a vessel building berth, and oil and gas terminals.

The announcement comes just over a week after another trade link was added to the Kingdom’s Jubail Commercial Port.

The new shipping service line, India Gulf Service 1, has been added by Hapag-Lloyd, a German international shipping firm.

It will connect the Saudi port to Jebel Ali in the UAE, Karachi in Pakistan, Mundra in India, Sohar in Oman, Shuaiba in Kuwait, and Um Qasr in Iraq.

The new service will be launched weekly starting from Feb. 12 through voyages that include three ships with a total capacity of 2,400 twenty-foot equivalent units each.


China foreign minister seeks stronger economic ties with Saudi Arabia 

China foreign minister seeks stronger economic ties with Saudi Arabia 
Updated 31 January 2023

China foreign minister seeks stronger economic ties with Saudi Arabia 

China foreign minister seeks stronger economic ties with Saudi Arabia 

RIYADH: China's new foreign minister Qin Gang wants to build stronger ties with Saudi Arabia and set up a China-Gulf free trade zone "as soon as possible", according to a ministry statement published late on Monday. 

Qin, who was just recently named to the position, made the suggestion in a telephone conversation with his Saudi Arabian counterpart, Prince Faisal bin Farhan Al Saud, adding that China highly appreciates Saudi Arabia's consistent firm support on issues involving China's core interests. 

He said the sides should further expand cooperation on economy, trade, energy, infrastructure, investment, finance, and high technology. 

In addition, Qin pressed for continuously strengthening the China-Gulf strategic partnership and building "the China-Gulf Free Trade Zone as soon as possible." 

During the phone call, Prince Faisal congratulated Qin Gang on his new post as foreign minister and the two officials reviewed Saudi-Chinese relations. 

Prince Faisal said that Saudi Arabia regards relations with China as an important cornerstone of foreign relations, and that Saudi Arabia fully adheres to the one-China principle, according to the statement from the Chinese foreign ministry. 

They also discussed bilateral cooperation, developments in regional and international events, efforts exerted with regard to these events in order to enhance security and stability, and the most important issues of common concern. 

Qin, who just wrapped up a tour to several African countries, also had telephone conversations with Dutch Deputy Prime Minister and Foreign Minister Wopke Hoekstra and Argentine Foreign Minister Santiago Cafierro, according to state media. 

Meanwhile, Saudi Arabia’s Crown Prince Mohammed bin Salman received a phone call from Russian President Vladimir Putin on Monday. 

During the call, the two leaders reviewed bilateral relations and ways of developing them in various fields. 

A number of issues of common concern were also discussed. 

This comes as Saudi Arabia remained the top supplier of crude oil to China in 2022, according to Reuters. 

The Kingdom shipped a total of 87.49 million tons of crude to China in 2022, equivalent to 1.75 million bpd, customs data showed, on par with the level in 2021. 

China’s state-backed oil refiners largely fulfilled their term contracts with Saudi Arabia in 2022 despite the sluggish domestic demand. 

Saudi Arabia is expected to remain a key, if not the dominant, crude exporter to China after President Xi Jinping’s visit to Riyadh in December, where he told Gulf leaders that China would work to buy oil in Chinese yuan, rather than US dollars. 

(With inputs from Reuters)


Saudi Millennials show higher drive toward career advancement than Gen Z, LinkedIn data reveals 

Saudi Millennials show higher drive toward career advancement than Gen Z, LinkedIn data reveals 
Updated 31 January 2023

Saudi Millennials show higher drive toward career advancement than Gen Z, LinkedIn data reveals 

Saudi Millennials show higher drive toward career advancement than Gen Z, LinkedIn data reveals 

CAIRO: Almost two-thirds of Saudi workers are considering changing jobs in 2023 as they seek higher pay,  a better work-life balance, and feel confident in their ability to land better positions, according to a survey by networking firm LinkedIn. 

Despite hiring levels slowing down in the Middle East in 2022 compared to 2021, LinkedIn’s research has shown that 68 percent of the Saudi workforce are optimistic about securing a new job. 

The growing appetite for switching employers is highest among millennials, who show almost 15 percent more confidence in job searching, interviewing and in their abilities to secure new and better jobs in 2023 than their younger colleagues. 

This is attributed to the fact that around 80 percent of the millennial age group – typically those born between 1980 and 1995 – feel a lack of investment from their employer, in addition to feeling undervalued, unmotivated, and underpaid. 

Gen Z employees – those under 25 years old – have reported great worry about job security as they are concerned that their employers have not dealt with the current economic uncertainty very well. 

“Despite economic uncertainty and the slump in global hiring that’s trickled its way into the region, we’re still seeing a significant number of professionals looking to either grow within their organizations or switch jobs in 2023, many driven by the desire for bigger salaries as the global cost of living goes up,” Ali Matar, Head of LinkedIn in the Middle East and North Africa growth hub, said. 

Additionally, Saudi professionals are also confident in pushing for promotions and new opportunities with their current employers as seven out of ten employees feel assured of a pay raise. 

“Workforces clearly know their value within the job market and are taking charge of their career by investing in new skills. It’s clear that since the pandemic, professionals have become much more resilient and we’re seeing this in their confidence to tackle the year ahead,” Matar added. 

The survey reveals that while many workers feel more confident in their career prospects, concerns about job security and a preference for remote work options remain prevalent.

 Six out of every ten workers surveyed said that they would decline new in-office job offers in favor of hybrid or remote work.