ABU DHABI: Oil-producing countries should remain committed to current production limits for the rest of 2018, or even consider further cuts, until the global market reaches balance, according to Suhail Al-Mazrouei, the UAE energy minister.
He was speaking for the first time in his capacity as president of OPEC.
“I have no doubt that the market needs further correction. We still have more than 100 million barrels that needs to be taken care of,” he said at the UAE Energy Forum in Abu Dhabi.
“There is positive market sentiment we are seeing today. The market is balancing, but the issue is timing and how long it will take,” he said.
Last year OPEC and 10 other oil exporters agreed to continue output limits into 2018, with a commitment to review the deal in June.
“But this is not ‘mission accomplished.’ OPEC is committed to the deal for a full year,” Al-Mazrouei insisted.
He was confident that OPEC and other oil exporters — led by Russia, the world’s biggest oil producer — could maintain the alliance that has helped the oil price recover from the big declines of 2014.
The price of Brent crude rose marginally as he was speaking, at $69.32 per barrel just slightly below the psychologically important $70 level.
“This group (the OPEC and non-OPEC alliance) started something never attempted before, and I believe compliance will continue this year. OPEC will continue to be a strong organization. The phenomenon of getting others to join is something that is of increasing interest. Many other countries have expressed interest in joining OPEC,” he added.
Some analysts have recently forecast that geopolitical shocks could force the oil price to spike above $80 a barrel, but Al-Mazrouei said he was not worried about the effects of short-term shocks from producers like Venezuela and Iran.
“We can always help each other. For example, when Libya was experiencing problems a few years ago we came together. We will be responsive to countries that are experiencing exceptional problems,” he said.
On the US shale industry, which some experts predict will ramp up production as the price recovers and the US economy gets fiscal stimulus from President Trump’s tax reform, he said: “The American people chose their president and we respect that. The US market has been supportive of the oil industry. The only issues with shale oil is the pace of production.”
Al-Mazrouei added that US investors were increasingly looking at the economics of the shale industry, rather than simply increasing production.
“Investors are seeking a good return,” he said.
Asked if he thought Saudi Aramco would complete its initial public offering in 2018, as Saudi Arabian policymakers have pledged, he said: “I trust what the leadership in Saudi Arabia says it will do. They committed to raise fuel prices and bring in VAT, and they have done it. The Vision 2030 is a reality, people are excited about it.”
The forum, organized by the Gulf Intelligence information firm and attended by 200 industry experts, agreed that the Aramco IPO would take place this year. In an electronic poll, 65 percent said that it would happen in 2018.
In a similar vote, 62 percent of participants predicted that the average price of oil would be in the $60-70 range this year, with 20 percent saying it would be more than $70.
Oil producers should commit to cuts until market reaches balance says OPEC president
Oil producers should commit to cuts until market reaches balance says OPEC president
GAMI showcases achievements at maritime forum in Dhahran
RIYADH: Saudi Arabia’s General Authority for Military Industries highlighted its achievements in local military ship and boat manufacturing, as well as maintenance capabilities, at the 3rd International Saudi Maritime Forum.
In a press statement, GAMI noted that its pavilion also showcased specialized expertise in hull construction and system integration. Established in 2017, GAMI is tasked with regulating, monitoring, enabling, and licensing the Kingdom's military and security industries.
As part of its mission to strengthen the defense sector, GAMI aims to support the growth of Saudi Arabia's military industries and contribute to the country's economic development. The authority also plays a key role in achieving Saudi Vision 2030 by aiming to localize more than 50 percent of government defense spending by 2030.
The GAMI pavilion, inaugurated by Abdullah bin Abdulaziz Al-Hammad, GAMI’s deputy governor for strategic planning and execution, was presented to over 55 national and international organizations from 22 countries, including military specialists and academics from both Saudi Arabia and abroad.
The 3rd Saudi International Maritime Forum, organized by the Royal Saudi Naval Forces, kicked off on Nov. 19 in Dhahran and will run through Nov. 21.
The forum is focusing on key developments in regional and international maritime security, while also highlighting the latest technologies, equipment, and maritime systems at both local and global levels.
Saudi Arabia pledges support in combating global financial crimes
RIYADH: The global fight against money laundering, terrorism financing, and the proliferation of arms remains a pressing issue, as Saudi Arabia’s central bank governor emphasized the need for international collaboration to address these challenges.
Ayman Al-Sayari, governor of the Saudi Central Bank, reiterated the Kingdom’s commitment to advancing these efforts, stating, “We affirm Saudi Arabia’s keenness to unify joint regional efforts in combating money laundering, financing terrorism and the proliferation of arms, and overcoming the challenges facing all countries.”
His comments came during the conference on “The Latest Developments in Combating Money Laundering, Financing Terrorism, and the Proliferation of Arms,” held on the sidelines of the 39th General Meeting of the Middle East and North Africa Financial Action Task Force in Riyadh.
Marking the 20th anniversary of MENAFATF’s establishment, Al-Sayari highlighted its role in raising awareness and supporting regional adherence to international standards. “Today we celebrate the 20th anniversary of the establishment of the MENAFATF group, which has contributed to raising awareness, deepening understanding of international requirements at the regional level, and helping relevant authorities enhance their commitment to these requirements,” he said.
Al-Sayari also praised Saudi Arabia’s domestic initiatives aimed at strengthening compliance and combating financial crimes.
“We commend the efforts of the relevant authorities in Saudi Arabia through standing committees to enhance efforts and raise commitment to international requirements,” he added.
According to a UN report, an estimated 2 to 5 percent of global gross domestic product—equivalent to $800 billion to $2 trillion—is laundered each year. However, the clandestine nature of money laundering makes it difficult to determine the exact volume of illicit funds in circulation.
Acknowledging the evolving nature of financial crimes, Al-Sayari emphasized the need for proactive legislative and regulatory measures. “In light of the rapid development of money laundering, terrorism financing, and arms proliferation methods, countries must strengthen their legislative and regulatory frameworks to keep pace with these fast-evolving challenges,” he said.
Al-Sayari also affirmed Saudi Arabia’s alignment with the Financial Action Task Force under Mexico’s presidency, reinforcing the Kingdom’s support for global efforts to combat illicit financial flows. “Saudi Arabia participates actively in the FATF’s discussions to ensure that cross-border transfers are more efficient, transparent, and comprehensive without compromising due diligence obligations and measures,” he added.
Elisa Madrazo, president of the FATF, also addressed the conference, highlighting the importance of coordinated global efforts to combat financial crimes. Her remarks underscored FATF’s ongoing commitment to fostering collaboration among member countries and ensuring adherence to international standards.
During the conference, Al-Sayari met with Madrazo to discuss recent developments and shared interests in anti-money laundering efforts, combating terrorist financing, and addressing the financing of arms proliferation.
Aramco signs agreement to advance SASREF expansion
RIYADH: Energy giant Saudi Aramco and China-based Rongsheng Petrochemical Co. have signed a framework agreement to boost the expansion of a subsidiary of the state-owned oil company.
According to a press statement, the tripartite agreement outlines a cooperation framework and detailed plans to design and develop Saudi Aramco Jubail Refinery Co. or SASREF. The initiative is expected to enhance SASREF’s refining and petrochemical capabilities.
The deal follows an announcement made in April that Aramco and Rongsheng Petrochemical had signed a partnership agreement related to the planned formation of a joint venture in SASREF.
Aramco’s long-standing relationship with China spans more than three decades.
This new framework agreement is part of the company’s broader strategy to solidify its position in the global energy landscape while supporting the Kingdom’s economic growth.
“By aligning our efforts, Aramco and Rongsheng Petrochemical aim to deliver additional value to our stakeholders,” said Aramco Downstream President Mohammed Al-Qahtani.
He added: “This development framework agreement underscores Aramco’s intentions to foster closer collaboration with key partners and progressing its strategic downstream expansion, both in Saudi Arabia and internationally. It also highlights the potential of the Kingdom’s downstream sector to attract overseas players.”
Li Shuirong, chairman of Rongsheng Petrochemical, said that the collaborative project will contribute to Saudi Arabia’s Vision 2030 program and China’s Belt and Road initiative.
“The signing of the development framework agreement sets the stage for Rongsheng Petrochemical’s in-depth participation in the SASREF expansion project,” said Shuirong.
He added: “Saudi Arabia has abundant energy resources and significant market potential, and Rongsheng Petrochemical will bring strong momentum to the partnership through our excellent operation and management capabilities and market competitiveness.”
The SASREF expansion project is located in Jubail Industrial City along the Arabian Gulf coast in the Kingdom’s Eastern Province.
The project, which is currently in the pre-front-end engineering design stage, envisages the construction of large-scale steam crackers and the integration of associated downstream derivatives into the existing SASREF complex, enhancing its ability to meet the growing demand for high-quality petrochemical products, the statement added.
Earlier in November, Aramco, in partnership with China Petrochemical & Chemical Corp. and Fujian Petrochemical Co., started the construction of a refinery and petrochemical complex in the Asian nation’s Fujian province.
The undertaking, which is expected to be fully operational by the end of 2030, includes an oil refinery with a capacity of 320,000 barrels per day, according to a press statement.
It will also have a 1.5 million tonnes-per-year ethylene unit, a 2 million tonnes paraxylene and downstream derivatives capacity, and a 300,000 tonnes crude oil terminal.
COP29: Azerbaijan unveils Baku Harmoniya Climate Initiative
RIYADH: Azerbaijan has launched the Baku Harmoniya Climate Initiative, a program designed to help farmers combat global warming while ensuring food security.
The initiative, which prioritizes knowledge sharing and climate finance solutions, was announced during a press conference by Azerbaijan’s Minister of Agriculture, Majnun Mammadov, at COP29.
This effort aligns with Azerbaijan’s revised Nationally Determined Contributions, which pledge a 40 percent reduction in emissions by 2050, conditional on international support. The energy sector, responsible for over half of the country’s greenhouse gas emissions, remains a focal point of Azerbaijan’s climate strategy.
“I am proud to officially announce the launch of the Baku Harmonia Climate Initiative for farmers. It is an inclusive platform designed particularly for women and youth, and aims to strengthen global collaboration,” Mammadov said.
He highlighted that the initiative will focus on promoting technology investments, sustainable practices, and crop diversification.
“Harmonia focuses on sharing knowledge, facilitating climate finance, and addressing the unique challenges farmers face,” he added.
Mammadov emphasized the importance of enhancing farmers’ participation, advancing research and innovation, improving water management systems, and implementing subsidy programs to encourage sustainability.
Also speaking during the conference, COP29 Lead Negotiator Yalchin Rafiyev underlined the initiative’s significance, noting the momentum gained from international cooperation.
“We have been encouraged by the positive signals from the G20 to our ongoing efforts,” Rafiyev said. However, he stressed that current climate finance levels remain insufficient and require scaling up.
As a significant producer of fossil fuels, Azerbaijan’s hosting of COP29, like last year’s host, the UAE, signifies a shift toward sustainable climate policies.
COP29 President Mukhtar Babayev recently told Arab News that hosting the conference reflects his country’s commitment to driving change.
Closing Bell: Saudi main index closes in green at 11,876
RIYADH: Saudi Arabia’s Tadawul All Share Index edged up on Tuesday, as it gained 45.53 points or 0.38 percent to close at 11,875.91.
The total trading turnover of the benchmark index was SR6.09 billion ($1.62 billion) with 138 stocks advancing, while 90 declining.
The parallel market, Nomu, however, marginally slipped by 0.09 percent to 29,570.56.
The MSCI Tadawul Index gained 4.76 points to close at 1,491.83.
The best-performing stock of the day was Shatirah House Restaurant Co., also known as Burgerizzr. The company’s share price increased by 9.98 percent to SR22.26.
The share price of Fawaz Abdulaziz Alhokair Co. increased by 8.29 percent to SR14.10, while the stock price of Development Works Food Co. surged by 6.85 percent to SR131.
Conversely, the share price of Al-Baha Investment and Development Co. slipped by 9.68 percent to SR0.28.
On the parallel market, the best performer was Knowledge Tower Trading Co., whose share price surged by 9.61 percent to SR10.84.
On the announcements front, Molan Steel Co. said it signed a memorandum of understanding with Yara International Limited Co. to acquire 100 percent of Mayar International Industry.
In a Tadawul statement, the company said that the financial consideration for the transaction depends on the results of the financial evaluation and due diligence.
The company added that the transaction will be financed through Molan Steel’s cash flows and resources.
According to the statement, the acquisition will be subject to a number of regulatory approvals including relevant authorities in the Kingdom.
Molan Steel Co.’s share price increased by 2.84 percent to SR3.26.
