Oil Updates — Crude prices retreat; Pakistan could start importing Russian oil  

Oil Updates — Crude prices retreat; Pakistan could start importing Russian oil  
Brent crude futures were down by 25 cents, or 0.29 percent, to $87.38 at 08.20 a.m. Saudi time. (Shutterstock)
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Updated 23 January 2023
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Oil Updates — Crude prices retreat; Pakistan could start importing Russian oil  

Oil Updates — Crude prices retreat; Pakistan could start importing Russian oil  

RIYADH: Oil prices drifted lower in early trade on Monday, thinned by the Lunar New Year holiday in east Asia, but held on to most of last week’s gains on the prospect of an economic recovery in top oil importer China this year. 

Brent crude futures were down by 25 cents, or 0.29 percent, to $87.38 at 08.20 a.m. Saudi time, while US West Texas Intermediate crude futures fell 21 cents, or down 0.26 percent, to $81.43 a barrel. 

Last week Brent rose 2.8 percent, while the US benchmark logged a 1.8 percent gain. 

Pakistan could start importing Russian oil after March 

Russia could start exporting oil to energy-starved Pakistan after March if terms are agreed, and is discussing with Islamabad whether the payment could be made in the currencies of “friendly” countries, Russia’s energy minister said. 

Pakistan has been battling a balance of payment crisis with foreign exchange reserves falling to $4.6 billion, barely enough to cover three weeks of imports — mostly for oil. 

It said in October it was considering buying discounted Russian crude, citing neighboring India, which has been purchasing from Moscow. 

Pakistani officials and Russian Energy Minister Nikolay Shulginov, who is in Islamabad for an annual inter-governmental commission on trade and economy, said the key elements of the deal had yet to be agreed upon. 

“As for the supply of crude oil and petroleum products, we conceptually agreed on the development and signing of an agreement that will determine and resolve all issues of logistics, insurance, payment, volumes,” Shulginov told reporters in Russian, according to the Russian state news agency RIA Novosti. 

Shulginov also said “negotiations are going on” about settlement in the currencies of “friendly” countries, meaning non-Western countries that have not imposed economic sanctions on Russia in response to its invasion of Ukraine. Oil is generally paid for in dollars. 

Shulginov said the two sides had “established a timeline of this agreement in our joint statement — which is late March,” according to RIA. 

Pakistan junior oil minister Musadik Malik told local Geo News TV separately that Islamabad wanted to import 35 percent of its total crude oil requirement. 

G7 agrees to review level of price cap on Russian oil in March 

Group of Seven officials have agreed to review the level of the price cap on exports of Russian oil in March, later than originally planned in order to give time to assess the market after more caps are placed on oil products from Russia, the US Treasury said on Friday. 

The G7 economies, the EU and Australia agreed on Dec. 5 to ban the use of Western-supplied maritime insurance, finance and brokering for sea-borne Russian oil priced above $60 per barrel as part of Western sanctions on Moscow for its invasion of Ukraine. 

The coalition plans on Feb. 5 to set two caps on Russian oil products, one on products that trade at a premium to crude, such as diesel or gas oil, and one for products that trade at a discount to crude, such as fuel oil. 

“The Deputies agreed that this approach will better calibrate the price cap policy for refined products, given the wide range of market prices at which these products trade,” Treasury said after US Deputy Treasury Secretary Wally Adeyemo met virtually with coalition officials on Friday. 

The coalition had initially planned to review the level of the cap sometime in February, two months after its implementation. 

Treasury officials have said the oil price cap has two goals: cutting Russia’s revenues by institutionalizing heavy discounts on its oil bought by big consumers like China and India, and ensuring global oil markets are well supplied. 

“As long as the price cap continues to meet the Coalition’s dual goals, the Deputies agreed to undertake a review of the level of the crude price cap in March,” Treasury said. 

The March date allows the coalition to assess developments in global markets after the implementation of the refined products caps, and to be briefed on an EU technical review of the crude price cap, it said. 

(With input from Reuters) 

 


Jordan’s GDP grows by 2.6% in Q2, most sectors in green: DoS

Jordan’s GDP grows by 2.6% in Q2, most sectors in green: DoS
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Jordan’s GDP grows by 2.6% in Q2, most sectors in green: DoS

Jordan’s GDP grows by 2.6% in Q2, most sectors in green: DoS

RIYADH: Jordan’s gross domestic product increased by 2.6 percent during the second quarter of 2023 compared to the same period last year, reported its statistical authority.  

According to the Jordan Department of Statistics, the GDP also rose 2.7 during the first half compared to the corresponding period in the previous year. 

Sector-wise estimations revealed that most economic sectors experienced growth during the second quarter compared to the same quarter last year. 

The report further stated that the agriculture, hunting, forestry and fishing sectors achieved the highest growth rate of 8.2 percent, followed by the transportation, storage and communications sector at 5.2 percent. 

Moreover, the mining and quarrying sector advanced 4.3 percent in the second quarter, while the manufacturing sector grew at 3.7 percent. 

Interestingly, the restaurant and hotel sector leaped over most other sectors to register a 5.9 percent growth between April and June.  

Last month, the DoS announced a decline of 9.3 percent in Jordan’s trade deficit during the first eight months to 5.3 billion Jordanian dinars ($7.4 billion) compared to the year-ago period. 

In May, Fitch Ratings also affirmed Jordan’s long-term foreign-currency issuer default rating at “BB-” with a stable outlook. 

This move comes against the backdrop of the country showing macroeconomic stability, progress in reforms, and resilience in the banking sector while having a buoyant public pension fund.   

The rating agency estimated that Jordan’s general government budget deficit declined to 2.7 percent of the GDP in 2022.  

This deficit was below its 3.8 percent forecast in August due to continued growth in tax collection combined with expenditure restraint and reprioritization to accommodate temporary fuel subsidies phased out at the end of 2022.   

“We forecast fiscal consolidation to gradually continue, with the deficit declining to 2.3 percent and 1.9 percent in 2023-2024,” said Erich Arispe Morales, primary rating analyst at Fitch, at that time.   

“The sustainability of the current fiscal strategy will depend on the ongoing reforms aimed at lifting growth prospects and generating employment. Fiscal space is limited, given the high level of debt and a rigid expenditure profile,” added Morales.   

However, the ratings were constrained by high government debt, weak growth, domestic and regional political risks, a sizable current account deficit, and net external debt higher than rating peers.   


UK’s Petrofac gets over $600m carbon capture contract from ADNOC Gas 

UK’s Petrofac gets over $600m carbon capture contract from ADNOC Gas 
Updated 03 October 2023
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UK’s Petrofac gets over $600m carbon capture contract from ADNOC Gas 

UK’s Petrofac gets over $600m carbon capture contract from ADNOC Gas 

RIYADH: UK oil services firm Petrofac said on Tuesday it got a more than $600 million contract from ADNOC Gas for the Habshan carbon capture and storage project, as the Abu Dhabi-based company steps up its decarbonization plan. 

Energy producers globally have identified CCS as key to cutting emissions without scaling back oil and gas output, and have started to invest in such technology at a time when countries around the world are increasingly pushing towards cleaner fuels. 

CCS technology removes carbon dioxide produced by industrial processes from the atmosphere, or captures it at the point of emission, and stores it underground. 

The engineering, procurement and construction contract from ADNOC Gas would be a boost for Jersey-based Petrofac, which in August posted a half-yearly loss, hurt by subdued activity at its largest unit of engineering and construction. 

The ADNOC contract involves delivery of carbon capture units, associated pipeline infrastructure and a network of wells for carbon dioxide recovery and injection, the London-listed company said in a statement. 


Saudi PMI rises to 57.2 in September as non-oil private sector grows  

Saudi PMI rises to 57.2 in September as non-oil private sector grows  
Updated 29 min 52 sec ago
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Saudi PMI rises to 57.2 in September as non-oil private sector grows  

Saudi PMI rises to 57.2 in September as non-oil private sector grows  

RIYADH: Saudi Arabia’s purchasing managers' index rose to 57.2 in September, up from 56.6 in August, as business confidence in the non-oil private sector improved, showed an economy tracker.  

According to the Riyad Bank Saudi Arabia PMI report, compiled by S&P Global, the Kingdom witnessed a sharp increase in economic activity and new businesses in the non-oil private sector in September, signaling improved market conditions and rising client orders. 

The upswing was attributed to increased business intake, with 27 percent of surveyed firms reporting output growth in each of the four major sectors monitored by the survey.  

“The non-oil economy continues its growth despite the challenges arising from the current monetary policy conditions,” commented Naif Al-Ghaith, chief economist at Riyad Bank in the report.

He added: “Our view is that non-oil GDP (gross domestic product) will continue to support growth and remain above 5.5 percent for 2023 supported by the ongoing reforms under the Vision 2030.” 

Sales growth also played a vital role in bolstering economic activity. 

According to the report, both improved market conditions and discounts offered by firms to combat competition were key catalysts for the increase in client orders. 

However, despite contributing to the growth in sales, competitive pressures have limited sales for some businesses and led to a drop in selling charges for the second time in three months. 

Purchasing activity has increased to meet input requirements and, according to the report, employment levels have witnessed a modest but noteworthy rise, marking the fastest increase in five years. 

Therefore, with rising raw material costs and higher wages, the increase in purchasing and employment has further constrained profit margins but led to a significant reduction in outstanding business, which was the quickest in a year. 

The report concluded that output expectations picked up sharply in September as firms were hopeful that market conditions and rising sales would continue to support expansion in activity.   


Saudi Arabia to establish special desk to facilitate Pakistan’s IT firms’ registration

Saudi Arabia to establish special desk to facilitate Pakistan’s IT firms’ registration
Updated 02 October 2023
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Saudi Arabia to establish special desk to facilitate Pakistan’s IT firms’ registration

Saudi Arabia to establish special desk to facilitate Pakistan’s IT firms’ registration
  • Development coincides with signing of MoU to bolster cooperation in field of digital sciences

RIYADH: Saudi Arabia is set to create a dedicated desk to streamline the registration of Pakistani IT companies seeking to establish themselves in the Kingdom, announced Pakistan’s caretaker IT Minister Umar Saif on Sunday.

This development coincided with the signing of a memorandum of understanding in Riyadh between the two nations to bolster bilateral cooperation in information technology.

According to a statement by the Pakistan Embassy in Riyadh, the agreement focuses on accelerating digital transformation, fostering innovation and advancing digital infrastructure.

The MoU, signed by the Saudi Minister of Communication and Information Technology Abdullah Al-Swaha, stated that both countries will encourage small and medium-sized enterprises and startup ecosystems. 

They plan to collaborate on initiatives related to the transfer of businesses and the exchange of information on accelerators and incubators for emerging technology. 

On an official visit to the Kingdom, the Pakistani minister held meetings with several high-profile officials.

“We’re looking at opportunities for our startups to come here and raise investments from Saudi investors. These startups have raised over $800 million in just the last two years and are now at a point where they’re about to take off. I think each of these startups has the potential to become a billion-dollar company,” Saif told Arab News. 

He announced his “incredibly productive meeting” with Saudi Minister of Investment Khalid Al-Falih on social media platform X. “He (Al-Falih) has instructed (the Ministry of Investment) to establish a special desk for Pakistani IT companies to get registered in KSA (Kingdom of Saudi Arabia) and to grant (them) licenses to operate in KSA,” said Saif.

The Pakistani minister added: “I think there are huge opportunities for investment in Pakistan. We met with a lot of investors today (Sunday) and could meet with a few more with the PIF (Public Investment Fund) and STC to explore how they could come and be part of the telecom infrastructure, connectivity and payment systems in Pakistan.”  

Furthermore, Saif mentioned that the Saudi minister of communication tasked him with identifying the top 100 Pakistani talents globally — individuals potentially poised to win Nobel Prizes and establish billion-dollar companies.

“There is certainly a commitment to now forge these partnerships and relationships beyond the call of duty,” said the Pakistani minister.

Furthermore, he emphasized the significance of chip manufacturing, which involves producing semiconductor chips in various electronic devices. This area of interest is mutually vital for both countries.

“The Kingdom has put together a lot of resources and facilities for the fabrication of semiconductors. We can do it, but we don’t have the resources. However, we certainly have the technical expertise to collaborate on this,” he said.

The minister concluded the interview by highlighting Pakistan’s substantial lithium reserves, recognizing their potential for lithium-ion battery production, which could play a crucial role in future sustainable energy solutions.

“We don’t have the resources to put our facilities to convert our lithium reserves into lithium-ion batteries and products,” he commented, adding that this is “an area in which there could be deep collaboration between the two countries.” 

According to the embassy’s statement, the two nations will collaborate to explore how entrepreneurs and businesses can harness technology investments and venture capital. 

Their primary objective is strengthening their digital economy connections by assessing and certifying companies for collaborative opportunities within their information and communication technology markets.

Furthermore, the agreement will facilitate cooperation in e-governance, smart infrastructure, e-health, e-education and emerging technologies such as artificial intelligence, robotics and blockchain. 

Both countries will enhance their digital infrastructure, including fiber optic networks, data centers and cloud computing resources. 

The agreement also encourages engagement in each other’s international events and fosters information exchange between their public and private sector entities involved in IT development and electronics.


Number of Saudis in private sector rises 10.5% in Q2

Number of Saudis in private sector rises 10.5% in Q2
Updated 02 October 2023
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Number of Saudis in private sector rises 10.5% in Q2

Number of Saudis in private sector rises 10.5% in Q2

RIYADH: The number of Saudi nationals in the private sector rose 10.5 percent in the second quarter of 2023 to reach 2.2 million, a report by the National Labor Observatory showed.

It revealed an average quarterly growth of about 42,000 citizens in the private sector until the current year's second quarter.

The rise was attributed to a strong economic rebound that led to an increase in the workforce.

The report also reviewed industry changes and Saudization figures for jobs in private sector establishments based on different regions across the Kingdom.

It showed that the number of Saudi employees recorded the most significant increase for both genders, with males standing at 1.3 million, compared to about 900,000 females, bringing the total Saudization rate to 22.3 percent.

The Eastern Province took the lead, recording the highest Saudization rate of 27 percent, followed by Makkah at 24 percent and Riyadh and Madinah at 21 percent each.

The information and communications sector also achieved a strong participation rate for male citizens, reaching 60 percent, while education achieved the highest engagement of female citizens at 53 percent.

In May 2022, the Saudi Ministry of Human Resources and Social Development announced that it was focusing on a skills strategy to improve professional standards for workers and those entering the labor market, according to Abdullah Abuthnain, the vice minister.

Abuthnain noted that the initiative would benefit more than 200 professions, with councils establishing employment standards and on-the-job training programs in critical economic sectors.

“We, at HRDF, will work to develop and implement labor market policies by creating a sustainable national workforce, developing human cadres’ skills, providing them with knowledge and qualifications, and aligning them with labor market and job needs,” he said at the time.