Oil Updates — Crude dips on dampening demand outlook; Somalia rejects Genel Energy’s claim to oil permits

Oil Updates — Crude dips on dampening demand outlook; Somalia rejects Genel Energy’s claim to oil permits
Surging COVID-19 cases in China dimmed hopes of a recovery in fuel demand (Shutterstock)
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Updated 29 December 2022

Oil Updates — Crude dips on dampening demand outlook; Somalia rejects Genel Energy’s claim to oil permits

Oil Updates — Crude dips on dampening demand outlook; Somalia rejects Genel Energy’s claim to oil permits

RIYADH: Oil prices dipped on Thursday as surging COVID-19 cases in China dimmed hopes of a recovery in fuel demand for the world’s largest crude oil importer. 

Brent futures for February fell 43 cents, or 0.52 percent, to $82.83 a barrel by 10.15 a.m. Saudi time, while US crude fell 77 cents, or 0.98 percent, to $78.19 a barrel.

The scale of the latest outbreak and doubts over official data prompted some countries to enact new travel rules on Chinese visitors, even as China began easing the world’s strictest COVID regime of lockdowns and testing. 

Exxon sues EU in move to block new windfall tax on oil companies

US oil major Exxon Mobil Corp is suing the EU in a bid to force it to scrap the new windfall tax on oil groups, arguing Brussels exceeded its legal authority by imposing the levy.

Record profits this year by oil companies benefiting from high energy prices have boosted inflation around the world and led to fresh calls to further tax the sector.

The windfall profits tax is “counter-productive,” discourages investments and undermines investor confidence, Exxon spokesperson Casey Norton said on Wednesday. Exxon will factor in the tax as it considers future multibillion-euro investments in Europe’s energy supply and transition, he said.

“Whether we invest here primarily depends on how attractive and globally competitive Europe will be,” Norton said.

The Financial Times first reported the lawsuit on Wednesday.

Exxon said it invested $3 billion in the past decade in refinery projects in Europe. The projects are helping it deliver more energy products at a time when Europe struggles to reduce its imports from Russia, the company said.

“We will continue to work with EU leaders to address these issues. Thoughtful policy is critical,” the company said.

Chevron Corp. had also warned that taxing oil production would serve only to reduce energy supply by discouraging company investments.

“That goes against the intent of increasing suppliers and making energy more affordable,” Chevron’s chief financial officer Pierre Breber, told Reuters in October. 

Somalia rejects Genel Energy’s “illegal claim” to oil permits

Somalia rejected on Wednesday what it called an “illegal claim” by Genel Energy to oil exploration and exploitation rights in the country’s northern breakaway region of Somaliland, the country’s oil ministry said.

Somaliland claimed independence from Somalia in 1991 and has been largely peaceful while the rest of the country has grappled with three decades of civil war, but its leadership has failed to gain widespread international recognition.

In a statement, Somalia’s oil ministry said it “categorically rejects Genel Energy plc’s claim to own petroleum rights in Somalia’s northern regions and calls upon Genel Energy plc to cease its illegal claim to own petroleum rights.”

The oil ministry said it was the only institution legally authorized to grant permits in Somalia.

“Any authorization granted in violation of Somalia’s laws and regulations is unlawful and would be considered null and void,” the oil ministry said.

The company, which is listed on the London Stock Exchange, added Somaliland to its exploration portfolio in 2012, and signed a farm-out agreement with OPIC Somaliland Corporation for a block on the Ethiopian border last year, according to its website.

Earlier this month Genel said its geotechnical survey in Somaliland has been completed.  

(With input from Reuters)  


New law allowing foreigners to buy all kind of properties in KSA soon: Top official

New law allowing foreigners to buy all kind of properties in KSA soon: Top official
Updated 11 sec ago

New law allowing foreigners to buy all kind of properties in KSA soon: Top official

New law allowing foreigners to buy all kind of properties in KSA soon: Top official

RIYADH: Saudi Arabia is planning to relax its property ownership laws for foreigners as the Kingdom eyes attracting investments into the real estate sector as part of its strategy to diversify its economy. 

The new law that will allow foreigners to buy all kinds of real estate properties is “in its final stages and will be made public in a short period,” revealed the Kingdom’s Real Estate General Authority chief Abdullah Alhammad. 

This comes after Saudi Arabia issued a directive in 2021 allowing non-Saudis, legal residents of the country to buy a single property with some conditions.  

But the REGA CEO pointed out that the new law will be “broader and more comprehensive than the current law” for real estate ownership, as foreigners will be able to buy any kind of property including commercial, residential, and agricultural in accordance with the regulations. 

The earlier law had prohibited foreigners from buying properties in holy cities, but Alhammad said, “the initial reading of the law shows that it allows foreigners to own property everywhere in the Kingdom, including Makkah and Madinah.” 

He clarified that any concerns about the negative effects of foreign ownership of the property were monitored in advance while solutions were developed for all problems and unacceptable practices. 

Saudi Arabia is looking to transform its real estate sector by bringing in new laws while making the sector attractive to foreign investors as the Kingdom eyes to improve the sector’s contribution to the national gross domestic product.  

The Kingdom’s latest move can open up new investment destinations for expats and global investors looking for green pastures, away from traditional markets, including the UAE.  

Amid rising urbanization, Saudi Arabia’s major cities including Riyadh and Jeddah have been chronically under-supplied – something that industry reports suggest is driving property prices high, making it unaffordable to many.  

Saudi Arabia’s Real Estate General Authority acknowledged that real estate prices in Saudi Arabia are high on a supply-demand imbalance. 

Expressing concern about the rising property prices, the REGF chief said high prices negatively impact the real estate sector. 

He pointed out that the majority of people looking for real estate today lack the means to buy and the price of the property today is more than the purchasing power, making it challenging to find a suitable property. 

“The investors were also affected by the high prices of the real estate,” noted Alhammad. 

He explained that the landowners are unable to make easier transactions due to the high prices of the land. "When the landowner wants to sell, he reduces prices to be able to sell it.”  

According to Alhammad, the real estate market is an open market subject to supply and demand. 

The authority’s chief also noted that the initiative to impose taxes on white lands was taken in 2017.  

White land is basically vacant land that is allocated for residential, or commercial residential use, and located within the urban boundary limits in the Kingdom. 

In 2016, Saudi Arabia decided to capitalize on undeveloped land in urban areas, which makes up 30 percent of those areas. The government decided to impose a 2.5 percent tax, based on land value, on landowners who had purchased plots but left them undeveloped. 

By way of imposing the White Land Tax, the government wants to increase the volume of plots available for development in urban areas.  

REGA chief added that the Ministry of Municipal and Rural Affairs started working on plans to boost or raise the efficiency of fees by an additional 10 percent. 


China emerges as Saudi Arabia’s top export destination in January

China emerges as Saudi Arabia’s top export destination in January
Updated 23 min 25 sec ago

China emerges as Saudi Arabia’s top export destination in January

China emerges as Saudi Arabia’s top export destination in January

RIYADH: China emerged as the top global export destination for Saudi Arabia in January 2023 accounting for 14.8 percent of total Saudi exports valued at SR15.6 billion. It was followed by Japan and India with exports valued at SR11.7 billion (11.2 percent of total exports) and SR10.8 billion (10.2 percent) respectively, data released by the General Authority for Statistics showed on Monday.


PIF’s SEVEN appoints Egis to manage entertainment destinations  

PIF’s SEVEN appoints Egis to manage entertainment destinations  
Updated 27 March 2023

PIF’s SEVEN appoints Egis to manage entertainment destinations  

PIF’s SEVEN appoints Egis to manage entertainment destinations  

RIYADH: SEVEN, the investment and entertainment execution arm of the Public Investment Fund, has appointed global consulting firm Egis as the project management company for destinations in Northwestern and Southern Provinces, including a recently announced development in Tabuk.  

Egis will oversee the design of these destinations and overlook all development stages, including the identification of potential specialist partnerships required as well as the construction and project management services needed.  

“Our commitment to Saudi Vision 2030 is ongoing with our projects, presence and people in the Kingdom. We are excited to further emphasize this with our involvement on the project with SEVEN, which is set to change the entertainment industry across the country,” Alaa AbuSiam, CEO of Egis in the Middle East and South Asia, said.  

Egis has been operating in Saudi Arabia for almost 30 years and is currently working on more than 25 projects spread across the Kingdom including Riyadh Metro, Green Riyadh, AlUla development, Riyadh Airport and NEOM.  

“We are delighted to be working with Egis, who are leaders in their field with a strong track record of delivering projects to the highest of standards. We will work together to achieve our shared vision of elevating the quality of life for the people of Saudi Arabia by providing unrivaled experiences at our world-class entertainment destinations across the Kingdom,” Abdullah AlDawood, chairman of SEVEN, said.  

SEVEN is one of the main players in Saudi Arabia’s entertainment industry having made significant efforts directed at developing the ecosystem in line with Vision 2030.  

“SEVEN will bring world-class entertainment which will contribute to the improvement of the sector and the quality of life of the Kingdom’s population; an objective both Egis and SEVEN have in common,” AbuSiam added.  

Founded in 2017, SEVEN is planning to invest more than $13.3 billion to build 21 entertainment destinations across the Kingdom. Its most recent project is a $266 million attraction in Tabuk that was announced in January. 


stc expands 5G network by 130% in the Grand Holy Mosque in preparation of Umrah season 

stc expands 5G network by 130% in the Grand Holy Mosque in preparation of Umrah season 
Updated 27 March 2023

stc expands 5G network by 130% in the Grand Holy Mosque in preparation of Umrah season 

stc expands 5G network by 130% in the Grand Holy Mosque in preparation of Umrah season 

RIYADH: Saudi Arabia’s leading telecom provider stc Group is boosting its 5G network scope in the Grand Holy Mosque by 130 percent compared to last year to ensure better performance during the Umrah season. 

The company also increased its network capabilities by 13 percent in Makkah and 18 percent in Madinah compared to last year, while expanding 5G coverage by 25 percent and 13 percent in the respective locations. 

The group has prepared an emergency plan with authorities to achieve a rapid response to any crisis in addition to deploying network stability, technical support, and maintenance teams ready around the clock. 

The digital infrastructure of the Grand Holy Mosque and the Prophet's Mosque was established to receive millions during the holy month of Ramadan. 

The Group aims to prepare all sites for Umrah performers, worshipers, and visitors to the Grand Holy Mosque and the Prophet's Mosque in a way that guarantees a distinguished digital experience and raises the level of quality of services provided to them. 

These early preparations aim to ensure the readiness of the Group's services and digital solutions to provide a unique experience for visitors. 

Saudi Arabia receives millions of visitors during its Hajj and Ramadan seasons with Umrah visitors reaching seven million in 2022, according to the Ministry of Hajj. 

In 2022, the ministry, for the first time, allowed people who had a tourist visa to the Kingdom to perform Umrah during their stay. 

Last year’s Umrah performers increased by half a million compared to the year before. The Kingdom also expects to reach nine million Umrah visitors this year. 

At the beginning of March, stc signed an agreement with Ericsson to explore deployment options and future network architectures for delivering 5G services. 

The agreement aims to support stc’s goal to evolve towards cloud-native technologies and open network designs as well as increase the company’s flexibility in its 5G infrastructure.  


Aramco expands its presence in China with 10% stake in Rongsheng Petrochemical Co.

Aramco expands its presence in China with 10% stake in Rongsheng Petrochemical Co.
Updated 27 March 2023

Aramco expands its presence in China with 10% stake in Rongsheng Petrochemical Co.

Aramco expands its presence in China with 10% stake in Rongsheng Petrochemical Co.

RIYADH: Global energy giant Saudi Arabian Oil Co. has further expanded its presence in China by acquiring a 10 percent stake in Shenzhen-listed Rongsheng Petrochemical Co. for $3.6 billion.

According to a press release, Aramco will supply 480,000 barrels per day of Arabian crude oil to Rongsheng affiliate Zhejiang Petroleum and Chemical Co. under a long-term sales agreement.

It further noted that Aramco Overseas Co., a wholly owned subsidiary of Aramco, will acquire the interest in Rongsheng.

“This announcement demonstrates Aramco’s long-term commitment to China and belief in the fundamentals of the Chinese petrochemicals sector,” said Aramco Executive Vice President of Downstream Mohammed Y. Al-Qahtani.

He added: “It is an important acquisition for Aramco in a key market, supporting our growth ambitions and advancing our liquids to chemicals strategy. It also promises to secure a reliable supply of essential crude to one of China’s most important refiners.”

Rongsheng owns a 51 percent equity interest in ZPC, which in turn owns and operates the largest integrated refining and chemicals complex in China with a capacity to process 800,000 bpd of crude oil and produce 4.2 million metric tons of ethylene per year.

“This strategic cooperation will take our long-term friendship and mutual trust to a new level and paves the way for a bright future for the high-quality development of the world’s petrochemicals industry,” said Rongsheng Chairman Li Shuirong.

Shuirong added that Aramco’s involvement will help Rongsheng implement its petrochemical growth strategy.

On March 26, Aramco inked a deal with China’s Norinco Group and Panjin Xincheng Industrial Group to form a joint venture named Huajin Aramco Petrochemical Company, aimed at constructing a refinery and petrochemical complex in the Asian giant’s Liaoning province.

Aramco holds a 30 percent stake in HAPCO, and the Saudi firm will supply up to 210,000 bpd of crude oil feedstock to the complex.

Combined, the partnership with Rongsheng and the HAPCO joint venture would see Aramco supply a total of 690,000 bpd of crude to high chemical conversion assets, the press release added.

During the China Development Forum in Beijing on Sunday, Aramco CEO Amin Nasser affirmed its support for China’s long-term energy security and development.

“We want to be an all-inclusive source of energy and chemicals for China’s long-term energy security and China’s high-quality development — to the horizon, and even beyond,” said Nasser.

He added: “That’s why we are doubling down on China’s energy supply, including new lower carbon products, chemicals, and advanced materials, all supported by emissions reduction technologies.”