Oil Updates — US drillers cut oil rigs for 8th month in a row  

Oil Updates — US drillers cut oil rigs for 8th month in a row  
The oil and gas rig count, an early indicator of future output, fell by five to 664 in the week to July 28, the lowest since March 2022.  (Shutterstock)
Short Url
Updated 30 July 2023
Follow

Oil Updates — US drillers cut oil rigs for 8th month in a row  

Oil Updates — US drillers cut oil rigs for 8th month in a row  

RIYADH: US energy firms in July cut the number of oil rigs for an eighth straight month while adding natural gas rigs for the first time in three months, energy services firm Baker Hughes said in its closely followed report.  

Last week, drillers cut the number of oil and gas rigs operating for a third week in a row.  

The oil and gas rig count, an early indicator of future output, fell by five to 664 in the week to July 28, the lowest since March 2022.   

Baker Hughes said that puts the total rig count down 103, or 13 percent, below this time last year.  

US oil rigs fell by one to 529 this week, their lowest since March 2022, while gas rigs decreased by three to 128.  

For the month, drillers cut 10 total oil and gas rigs in July, the smallest decline in three months.  

Oil rigs dropped by 16 rigs in July. That put the oil count down for an eighth month in a row for the first time since drillers cut oil rigs for a record 12 consecutive months through November 2019.  

Gas rigs, meanwhile, rose by four rigs in July, their first increase in three months.  

Despite lower prices, especially for gas, US crude production was on track to rise from 11.9 million barrels per day in 2022 to 12.6 million bpd in 2023 and 12.9 million bpd in 2024, according to projections from the US Energy Information Administration in July.   

US gas production was on track to rise from a record 98.13 billion cubic feet per day in 2022 to 102.35 bcfd in 2023 and 102.40 bcfd in 2024, according to EIA’s projection.  

Calcasieu Pass 2 project gets final US environmental nod  

Venture Global LNG’s proposed Calcasieu Pass 2 project in Louisiana received the US Federal Energy Regulatory Commission’s environmental approval, clearing the way for a final vote by the commission on expanding the company’s natural gas liquefaction facility.  

CP2 was the first US liquefied natural gas project in 2023 to receive a final investment decision as the country seeks to expand exports of the super-chilled gas to meet growing global demand.  

FERC said the potential impacts of the project would not significantly affect local resources, adding that the commission had developed specific mitigation measures for the construction and operation of the project.  

Implementation of mitigation measures would avoid or reduce the impact of CP2 and CP Express, of a proposed connecting natural gas pipeline from Texas to the LNG facility, the regulator said in its environmental impact statement.  

The construction and operation of the project would increase the atmospheric concentration of greenhouse gases, but the FERC said it would not classify it as “significant or insignificant” and instead would made several recommendations to reduce its effects.  

Venture Global said the decision puts the company on track for a commission vote and commencement of construction later this year.  

About 9.25 million tons per annum of CP2’s 20 mtpa nameplate capacity have been sold under 20-year sales and purchase agreements, with discussions ongoing for the remaining capacity, the company said in its statement.  

CP2’s LNG customers include oil majors ExxonMobil, Chevron and Japan’s top liquefied natural gas buyer JERA among others, the company added.  

Brazil’s Petrobras to trim dividends under new policy  

Brazilian state-run oil firm Petrobras’ board of directors approved a new shareholder remuneration policy that will trim its hefty dividend and allow share buybacks, according to a securities filing.  

Under the new policy, Petrobras’ quarterly dividend will have to be at least 45 percent of its free cash flow, down from the current 60 percent, when the firm’s gross debt is below $65 billion.  

It will also allow the company to repurchase shares.  

The move is part of a broader strategy switch for the firm led by CEO Jean Paul Prates, who told Reuters earlier this month that investors should not get used to the blockbuster dividends they enjoyed last year, adding the new policy would be “adjusted” to the reality of a company investing in the future.  

The change in policy marks a shift from a period in which the company was a major cash cow to its investors, at times paying far more than any of the biggest international oil producers.  

In 2022, Petrobras paid a total of 215.8 billion reais ($45.6 billion) to its shareholders, including the Brazilian government, which holds a controlling stake in the firm.  

Petrobras will announce its second-quarter dividends and earnings on Aug. 3 after the market closes.  

(With input from Reuters)   


Boeing focuses on quality management enhancement amidst safety concerns, says top official

Boeing focuses on quality management enhancement amidst safety concerns, says top official
Updated 9 sec ago
Follow

Boeing focuses on quality management enhancement amidst safety concerns, says top official

Boeing focuses on quality management enhancement amidst safety concerns, says top official

RIYADH: Aerospace giant Boeing is enhancing its quality management system to meet regulatory standards, ensuring passenger safety, a top official told Arab News.

Speaking on the sidelines of the Future Aviation Forum in Riyadh, Omar Arakat, vice president of commercial sales and marketing of Boeing in the Middle East and Africa, said that the company is putting “a lot of emphasis” to meet the safety standards proposed by regulators. 

The US plane maker is revamping its management in response to increasing pressure from airlines, regulators, and investors as it faces a deepening crisis following a mid-air panel blowout on a 737 MAX plane in January. 

An Alaska Airlines Boeing 737-9 MAX experienced a mid-cabin exit door panel blowout shortly after takeoff, triggering multiple investigations, including one by the Federal Aviation Administration in the US. 

When asked about safety developments, Arakat said: “I’m assuming you are referring to the quality issues that have made headlines, and I assure you that Boeing’s number one priority is safety and quality. We are doing a lot of plans to strengthen our quality management system.”  

He added: “We’re also sharing with our customers all the steps that were taken to make sure that they feel the comfort that Boeing is doing the right thing.”  

Detailing Boeing’s initiatives to enhance safety standards, Arakat added that the company is directly engaging with its suppliers and increasing involvement by inspecting various stages in the aircraft production cycle. 

He expressed his enthusiasm about the progress in Saudi Arabia’s aviation sector during the discussion. 

“We are very optimistic, and we are very excited about what is going on in Saudi Arabia in general, and specifically within the aviation sector. There is a lot of commitment by the leadership of Saudi Arabia to support aviation, and they recognize it as one of the most important pillars of developing infrastructure and moving forward,” said Arakat.  

He added: “If you look at the mandates of Vision 2030, it really indicates that aviation has a very bright future because it sets some very real targets that the Kingdom is very serious about achieving. We are very proud to be part of that.”  

The executive further noted that Boeing’s relationship with Saudi Arabia spans over seven decades, during which the company has delivered over 240 aircraft to airlines operating in the Kingdom. 

Last year, Riyadh Air, owned by the Public Investment Fund, announced ordering up to 72 Boeing 787-9 Dreamliner airplanes in a significant deal. This included 39 confirmed aircraft and an option for an additional 33 wide-body 787-9 Dreamliners, reflecting Saudi Arabia’s ambitions to establish itself as a prominent player in global aviation. 

National carriers collectively announced plans to purchase up to 121 787 Dreamliners, marking one of Boeing’s largest commercial orders by value.


Energy security is vital for prosperity among Arab citizens, says top official 

Energy security is vital for prosperity among Arab citizens, says top official 
Updated 21 min 30 sec ago
Follow

Energy security is vital for prosperity among Arab citizens, says top official 

Energy security is vital for prosperity among Arab citizens, says top official 

RIYADH: A comprehensive and integrated approach is needed to ensure energy security amongst citizens, according to the Assistant Secretary-General and Head of the Economic Affairs Sector at the Arab League, Ali Al-Maliki.

During the 12th celebration of Arab Energy Efficiency Day, Al-Maliki urged the adoption of new measures to address this critical issue.  

“Energy security is a fundamental issue due to its direct impact on economic growth, national security, and the well-being of all Arab citizens,” he stated in a speech delivered on his behalf by the Director of the Energy Department at the General Secretariat of the Arab League, Jamila Mattar.

“We are all aware of the challenges we face in terms of energy security and the transition to more sustainable sources,” the speech said.  

“To confront these challenges, the world needs to adopt a comprehensive and integrated approach to energy security that takes into account the need to increase energy efficiency, develop renewable energy, protect vital energy infrastructure, and work to reduce harmful carbon emissions,” the text added. 

Al-Maliki emphasized that efficiency is one of the basic pillars of energy security, according to a report by Bahrain News Agency. 

He noted that achieving energy security involves providing services at the lowest cost without compromising quality and managing demand by introducing various concepts related to efficiency.

This approach aims to reduce consumption without conflicting with the developmental plans of each country.  

Al-Maliki highlighted the council’s efforts to monitor the stages of efficiency in the Arab region. This includes developing, implementing, and monitoring national efficiency plans.  

The council has also prepared the Renewable Energy and Energy Efficiency Guide in Arab Countries, which provides statistical information on policies and programs adopted in nations to enhance the efficiency of production and consumption and the use of renewables.  

Additionally, the guide details the institutional and legal frameworks and the necessary financial incentives implemented or planned in these fields. 


Saudia orders additional 105 aircraft from Airbus

Saudia orders additional 105 aircraft from Airbus
Updated 31 min 41 sec ago
Follow

Saudia orders additional 105 aircraft from Airbus

Saudia orders additional 105 aircraft from Airbus

RIYADH: Saudia Group has signed an order for an additional 105 A320neo family aircraft, marking the largest aircraft deal with Airbus in the Kingdom’s history.

Announced at the Future Aviation Forum in Riyadh, the order comprises 12 A320neo and 93 A321neo aircraft, and increases Airbus aircraft order backlog from the Saudi Arabia’s national flag carrier to 144 A320neo family aircraft.

Saudia Group is set to receive the first aircraft in the first quarter of 2026. These aircraft will be distributed between Saudia and flyadeal, the group's low-cost carrier.

The agreement was announced in the presence of Minister of Transport and Logistic Services Saleh bin Nasser AI-Jasser, Director General of Saudia Group Ibrahim Al-Omar, and Benoît de Saint-Exupéry, executive vice president sales of Airbus.

Al-Omar said: “Saudia has ambitious operational objectives to meet growing demand. We are increasing flights and seat capacity across our existing 100+ destinations on four continents, with plans for further expansion.

“The progress of Saudi Vision 2030 is attracting more visits, tourists, entrepreneurs, and pilgrims each year. This motivated our decision to secure this significant deal, which will create jobs, increase local content, and contribute to the national economy.”

De Saint-Exupéry said the new aircraft will play a “vital role” in contributing to Saudi Arabia’ ambitious Vision 2030 plan.

He added: “It will enable Saudia Group’s strategy to advance the Kingdom’s aviation capabilities while enabling both airlines to benefit from the A320neo Family’s exceptional efficiency, superior economics, highest level of passenger comfort as well as lower fuel-burn and emissions.”


Saudi-Chinese financial ties to strengthen as top officials meet in Beijing

Saudi-Chinese financial ties to strengthen as top officials meet in Beijing
Updated 20 May 2024
Follow

Saudi-Chinese financial ties to strengthen as top officials meet in Beijing

Saudi-Chinese financial ties to strengthen as top officials meet in Beijing

RIYADH: Saudi and Chinese top officials are holding joint meetings in Beijing focused on fostering international economic growth.

The sessions, which are slated to take place from May 20 - 21 in Beijing, include the Kingdom’s Minister of Finance Mohammed Al-Jadaan, the newly appointed Vice Minister of Finance Abdulmuhsen Al-Khalaf, along with officials from the Ministry of Finance, the National Center for Privatization, and the Saudi Central Bank.

Officials from the Capital Market Authority, Zakat, Tax and Customs Authority as well as the National Development Fund, are also part of the delegation, as well as representatives from the Saudi Fund for Development, and the National Infrastructure Fund.

In a post on his X account, Al-Jadaan said: “Today (May 20), as part of my visit to China, I met with the Chinese Minister of Finance, Lan Fo’an. We discussed ways to enhance the finance, trade and investment cooperation between Saudi Arabia and China to advance prosperity and growth for the global economy.”

The Saudi finance minister and his Beijing counterpart co-chaired the third meeting of the Financial Sub-Committee for the High-level Chinese-Saudi Joint Committee, where Al-Jadaan emphasized that China is a key partner in the Kingdom’s transformation under Vision 2030, according to a statement by the Saudi Finance Ministry.

The release added that the minister would participate in a roundtable discussion organized by the NCP in cooperation with the Industrial and Commercial Bank of China.

Al-Jadaan will also speak with various Chinese ministers, officials, and investors, focusing on recent economic and financial developments, shared interests, and investment prospects in Saudi Arabia, aligning with the Kingdom’s Vision 2030 goals.

Meanwhile, Al-Khalaf and the Chinese Vice Minister of Finance, Liao Min, will co-chair a roundtable meeting hosted by the Chinese Ministry of Finance and organized by the China Development Bank and the China Investment Corp.

Al-Jadaan’s visit to the Asian powerhouse comes after he used a panel discussion at the Qatar Economic Forum on May 14 to urge financial planners to optimize their strategies to curb “economic leakage” and prevent resources or funds from being wasted.

Calling for the adoption of prudent fiscal policies, the minister said at the event that spending during a time of global inflation results in increased project costs, which he believes further fuels inflation and “overheats” the economy.

Diplomatic and economic ties between Saudi Arabia and China have been strengthening in recent years, and in November the Kingdom’s central bank, also known as SAMA, and the People’s Bank of China signed a local currency swap agreement worth $6.93 billion.

The agreement will last three years, but China’s central bank said at the time it can be extended after two years by mutual agreement.


Saudi Arabia’s first quantum computer on its way after Aramco, Pascal deal

Saudi Arabia’s first quantum computer on its way after Aramco, Pascal deal
Updated 20 May 2024
Follow

Saudi Arabia’s first quantum computer on its way after Aramco, Pascal deal

Saudi Arabia’s first quantum computer on its way after Aramco, Pascal deal

RIYADH: Saudi Arabia's first quantum computer is set to be installed after energy giant Aracmo signed an agreement with computing firm Pasqal.

Under the deal, the French company will install, maintain and operate a 200-qubit device, scheduled for deployment in the second half of next year, according to a press statement. 

A quantum computer uses qubits to run multidimensional algorithms, and these machines are capable of solving complex problems faster than traditional computers.

Ahmad Al-Khowaiter, executive vice president of technology and innovation at Aramco, said the deal with Pasqal is expected to bring high-performance information processing to Saudi Arabia. 

“In a rapidly evolving digital landscape, we believe it is crucial to seize opportunities presented by new, impactful technologies and we aim to pioneer the use of quantum computing in the energy sector,” said Al-Khowaiter. 

He added: “Our agreement with Pasqal allows us to harness the expertise of a leading player in this field as we continue to build state-of-the-art solutions into our business. It is also further evidence of our contribution to the growth of the digital economy in Saudi Arabia.” 

The quantum computer that will be installed in Saudi Arabia will initially use an approach called “analog mode.”

Within the following year, the system will be upgraded to a more advanced hybrid “analog-digital mode,” which is more powerful and able to resolve more complex tasks, the statement added. 

The agreement follows a memorandum of understanding signed between Aramco and Pasqal in 2022 to collaborate on quantum computing capabilities and their applications in the energy sector.

Georges-Olivier Reymond, CEO and co-founder of Pasqal, noted that the agreement would see the commercial adoption of quantum computers in the Kingdom. 

“This isn’t just any quantum computer; it will be the most powerful tool deployed for industrial usages, unlocking a new era of innovation for businesses and society,” said Reymond. 

Earlier this month, Aramco also signed three MoUs with US firms, including Aeroseal, Spiritus, and Rondo, to accelerate the development of potential lower-carbon solutions.

In May, Aramco also announced its financial results for the first three months of this year. 

The company revealed that its net profit reached $27.27 billion in the first quarter, representing a rise of 2.04 percent compared to the last quarter of 2023.