DUBAI: Amin Nasser, president and chief executive of Saudi Aramco, expects a continuing improvement in the global oil market after the most difficult time he has ever seen in the energy business.
Nasser, speaking to Energy Intelligence ahead of a conference this week, said the events of the past six months — when oil demand was severely affected by worldwide economic lockdowns — were unlike any other cyclical downturn in crude markets.
“It’s completely different. My generation hasn’t seen anything like this. I don’t think the world has seen anything like this. If you look at the economic impact and what happened across the world, this is clearly significant,” he said.
But he said there were signs that the worst was over, despite the threat of second wave impacts from the COVID-19 pandemic. “At this stage we see the recovery picking up but, of course, this depends on whether there is a vaccine and how soon it will be available, if there is a second wave and how significant. We could see some back and forth, but there are good signs and we’re expecting to see a better market in the fourth quarter and next year,” he said.
In April daily global demand crashed from around 100 million barrels per day (bpd) to between 75 million and 80 million, and West Texas Intermediate crude, the American benchmark, fell briefly to minus $40 a barrel, meaning producers would pay customers to take oil away.
“It is encouraging to see that the worst is over and demand has sharply recovered from those exceptionally low levels. If you look at the forecasts from the International Energy Agency, they show demand recovering to 96 million by the fourth quarter of this year and 99 million toward the end of next year,” Nasser said.
The recovery was especially strong in Asia, he added. “What we see in Asia, especially China, which is our biggest market, is a strong recovery. In China, almost all demand for oil products is back to pre-COVID levels, except for jet fuel.”
Aramco, which listed on the Saudi Arabia stock market last year to become the world’s most valuable oil company, is monitoring its financial position in light of the revenue decline from low prices.
“We have intensified our cost discipline and are focusing on capital flexibility. We are being very prudent when it comes to capital spending, adhering to strict capital discipline. We are looking at all of our projects and stretching some discretionary ones out where necessary, while maintaining our maximum sustained capacity of 12 million bpd. Also, we are continuing to expand our gas portfolio in the Kingdom,” Nasser said.
“A lot of focus is on capital discipline and maximizing value for our shareholders. That’s what we have demonstrated in the first and second quarters, despite difficult conditions, while meeting our commitment when it came to dividends.”
He added that there were opportunities to “squeeze more value” from its existing assets, especially in downstream operations. Some energy experts have suggested Aramco should spin off or refinance assets such as its pipeline business.
“We’re going to do it right and will make sure what’s executed by this organization [the new Corporate Development unit within Aramco] is in line with our longterm view, the strategy of retaining our core businesses in-house and what can be optimized with our partners. This involves a careful review process that will take some time,” Nasser said.
He will be named Energy Executive of the Year 2020 in a ceremony at the conference next week. “Nasser has guided the world’s largest oil company through a period of considerable change and upheaval in Saudi Arabia itself and in global oil markets more generally,” Energy Intelligence said.
Oil recovering from 'worst time in my generation' — Aramco president
https://arab.news/bje24
Oil recovering from 'worst time in my generation' — Aramco president
- Nasser said there were signs that the worst was over, despite the threat of second wave impacts from the COVID-19 pandemic
- He will be named Energy Executive of the Year 2020 in a ceremony at the conference next week
Up to 40 Canadian firms eyeing investment in Saudi Arabia’s healthcare sector
RIYADH: Up to 40 Canadian firms are eying investment in Saudi Arabia’s healthcare sector amid efforts to strengthen economic ties between the countries.
The interest was highlighted at a healthcare event organized by the Federation of Saudi Chambers at its headquarters in Riyadh, which showcased various investment opportunities within the sector, the Saudi Press Agency reported.
This aligns with Saudi Arabia’s objective to boost private sector participation in healthcare to 25 percent by 2030, reflecting the rapid growth and expansion of the industry, along with attractive investment incentives. It also underscores the Kingdom’s broader efforts to strengthen ties with Canada, highlighted by the restoration of diplomatic relations in May 2023 after a five-year hiatus.
During the gathering, Chairman of the Saudi-Canadian Business Council Mohammed bin Nasser Al-Duleim highlighted the body’s pivotal role in boosting trade relations and fostering investment between the Kingdom and the North American country.
Al-Duleim also provided an overview of Vision 2030 initiatives and talked up the incentives and support offered by Saudi Arabia to foreign investors.
The Ambassador of Canada to the Kingdom Jean-Philippe Linteau commended the efforts to strengthen economic ties between countries.
He emphasized the joint business council’s contributions and highlighted the strong interest of Canadian firms in Saudi Arabia’s healthcare sector.
In December, economic cooperation was the focus of a high-level meeting between a senior Saudi official and the Canadian ambassador, reflecting the ongoing progress in relations between the two nations.
The Kingdom’s Minister of Economy and Planning Faisal Al-Ibrahim held talks with Linteau at his department’s headquarters in Riyadh, SPA said at the time.
Since normalizing relations, Canada is keen to build a “great relationship” with the Kingdom, Linteau said during an interview with Arab News in February.
His commets came a month after Saudi Arabia and Canada agreed to re-exchange trade delegations, aiming to improve economic relations and increase trade and investment volumes.
Hassan Al-Huwaizi, president of the Saudi Chambers of Commerce, emphasized at the time that establishing a joint business council would provide a platform for business leaders to promote activities and engage in partnerships, facilitating continuous interaction and information exchange about market opportunities.
In 2022, Saudi exports to Canada stood at $2.5 billion, with imports valued at $959 million, according to online data visualization and distribution platform Observatory of Economic Complexity.
Saudi Arabia, Palestine to boost trade with formatioin of new business council
- Formation of the Saudi-Palestinian Business Council represents a significant step in strengthening economic ties
- It comes two after a ceasefire deal came into effect between Israel and Hamas
RIYADH: Saudi Arabia and Palestine have agreed to form a business council to boost bilateral trade and promote investments between both nations.
The agreement to form the first Saudi-Palestinian Business Council was made during a meeting between Hassan Al-Huwaizi, chairman of the Federation of Saudi Chambers, and Mazen Ghanem, Palestinian ambassador to the Kingdom, in Riyadh, the Saudi Press Agency reported.
The formation of the Saudi-Palestinian Business Council represents a significant step in strengthening economic ties, particularly as trade between the two countries continues to grow.
In the third quarter of 2024, the Kingdom’s overall exports to Palestine stood at SR118.3 million ($31.53 million), representing a 35 percent rise compared to the previous three months, according to data from the General Authority for Statistics.
Saudi Arabia also imported Palestinian goods worth SR4 million in the third quarter of 2024.
During the meeting, Al-Huwaizi stressed the need to empower Palestinian business owners to invest in Saudi Arabia and market products from the West Asian nation in the Kingdom’s market.
He also reaffirmed the federation’s support for holding exhibitions and conferences to introduce and market Palestinian products in the Kingdom.
The new agreement comes just two after a ceasefire deal came into effect between Israel and Hamas, allowing some displaced residents to return to their homes.
To stabilize the economy, the Palestine Monetary Authority issued new instructions to banks to ease the burden of accumulated installments on borrowers in Gaza and the West Bank during the war period.
The authority also instructed banks to stop collecting installments in Gaza until the end of June, with the possibility of scheduling and postponing it further.
Other instructions from the monetary authority include reducing interest rates on new loans and stopping the collection of commissions and late fees.
Earlier this month, Palestinian President Mahmoud Abbas met with Nayef bin Bandar Al-Sudairi, the Saudi ambassador to Palestine, and honored him with the Star of Al-Quds medal, a top-rated decoration provided by the state.
During the meeting, Abbas extended his greetings to King Salman and Crown Prince Mohammed bin Salman and thanked Saudi Arabia for the support offered to the Palestinian people and their cause.
Abbas also praised Al-Sudairi’s efforts to strengthen the friendly relations between Palestine and the Kingdom.
Saudi Arabia, Gulf region ‘well positioned’ to take lead on global energy transition, says S&P executive
- Under President Donald Trump’s renewed leadership, energy policy in the US is expected to shift toward an emphasis on increasing crude and gas production
DAVOS: The Middle East, particularly Saudi Arabia, is poised to play a pivotal role in the global energy transition, according to Mark Eramo, co-president of S&P Global Commodity Insights.
Speaking to Arab News at the annual meeting of the World Economic Forum in Davos, Eramo highlighted the region’s growing renewable energy capabilities and its potential to balance traditional energy demands with advancing sustainability goals.
“The renewable energy capabilities in the Middle East are primed to be part of the energy transition and will also continue to support what we would now call traditional energy as it’s needed,” Eramo said.
He emphasized the ongoing importance of energy affordability and security, noting their priority for governments worldwide.
Eramo said Saudi Arabia, with its growing investments in the renewable energy sector, as well as ammonia production for hydrogen, is poised to emerge as a worldwide leader, adding: “The Kingdom is really positioned well to be an energy transition provider and take a global leadership role in that.”
With this in mind, Eramo highlighted S&P’s significant footprint in the Middle East and said the organization was in the process of expanding its presence in the region, something he said he was “excited about.”
He continued: “I manage S&P Global Commodity Insights and watch closely what is happening in Saudi Arabia and the region is near and dear to the work that we do. It’s a fundamental part of what we’re doing, whether it be downstream chemicals or just fundamental oil and gas and renewable energy. So, our plan is to increase our footprint in the region and be there.”
Eramo also reflected on the global energy outlook, touching on the implications of potential US policy shifts.
Under President Donald Trump’s renewed leadership, energy policy in the US is expected to shift toward an emphasis on increasing crude and gas production and expanding export terminal capacity, something which was paused under the administration of Joe Biden.
Citing that Trump this week declared an “energy emergency” in the US, Eramo said that the new administration’s focus on lower energy prices would aim to curb inflation and prioritize security.
Globally, he also noted the varied and pragmatic approach to the pace of energy transition, shaped by differing regional priorities.
“There are challenges in Europe, Asia Pacific, and South Asia. Each country, whether it’s China or India, will respond differently,” he said.
“It’s not about whether energy transition is over but understanding that it’s been going on for decades, driven by carbon emission reductions and fuel efficiency advancements,” he added.
Eramo acknowledged the historical resilience of energy players in navigating geopolitical uncertainties, especially in the Middle East in the past two years.
“I think there’s a long history of geopolitical turmoil in different parts of the world, and I think the major players in energy supply, including in the Middle East, have always found a way to work with their partners — whether in Europe, APAC (Asia-Pacific) or in the Americas — to navigate those waters and respond accordingly,” he said.
Saudi education spending surges 91.5% amid school return
RIYADH: Education spending in Saudi Arabia surged by 91.5 percent to SR220.76 million ($58.8 million) between Jan. 12 and 18, fueled by students returning to school after the midyear break.
According to the latest point-of-sale transactions bulletin, this sector was the only one to register positive growth during the week, with the number of transactions rising by 60 percent to 153,000.
In contrast, overall POS transactions in Saudi Arabia declined by 12.1 percent, dropping to SR11.77 billion from SR13.4 billion the previous week, as spending in other sectors cooled, revealed the bulletin issued by the Saudi Central Bank.
Spending on clothing and footwear saw the sharpest decline, falling 27.5 percent to SR663.16 million. Expenditure on hotels followed with a 19.9 percent dip to SR324.45 million, while recreation and culture recorded a 19.7 percent drop to SR221.8 million.
Similarly, spending on food and beverages recorded a decrease of 9.2 percent to SR1.73 billion, claiming the biggest share of the total POS value. Expenditure in restaurants and cafes followed, recording an 18 percent decrease to SR1.73 billion.
Miscellaneous goods and services accounted for the third biggest POS share with a 12.3 percent downstick, reaching SR1.42 billion.
Spending in the leading three categories accounted for approximately 41.5 percent or SR4.8 billion of the week’s total value.
At 2.1 percent, the smallest decrease occurred in spending on construction materials, leading total payments to reach SR340.1 million.
Expenditures on transportation followed dipping by 2.6 percent to SR661.6 million, while public utilities recorded a 6 percent fall to SR48.1 million.
Geographically, Riyadh dominated POS transactions, representing around 35.5 percent of the total, with expenses in the capital reaching SR4.18 billion — a 9 percent decrease from the previous week.
Jeddah followed with a 12.5 percent dip to SR1.71 billion, and Dammam came in third at SR602.91 million, down 7.1 percent.
Madinah experienced the most significant decrease in spending, dipping by 19.6 percent to SR471 million.
Hail and Makkah followed recording decreases of 18.6 percent and 17 percent reaching SR171.87 million and SR497.28 million, respectively.
Madinah and Makkah saw the largest decreases in terms of number of transactions, slipping 13.5 percent and 12.7 percent, respectively, to 7.98 million and 8.18 million transactions.
PIF to sell Thiqah to Elm in $907m deal to strengthen Saudi Arabia’s ICT sector
- Deal involves the purchase of 45,000 shares, each with a nominal value of $266.56
- Sale aims to foster digital transformation, create high-skilled jobs, and support economic diversification
RIYADH: Saudi digital solutions company Elm has agreed to acquire Thiqah Business Services Co., owned by the Public Investment Fund, in a deal valued at $907 million to boost the information and communications technology sector.
Elm has signed a share purchase agreement with PIF to acquire Thiqah in a cash transaction following discussions initiated in 2023, the company said in a bourse filing.
The deal involves the purchase of 45,000 shares, each with a nominal value of SR1,000 ($266.56), representing the entire issued share capital of Thiqah.
The acquisition is expected to play a pivotal role in advancing Saudi Vision 2030’s goal of fostering digital transformation, creating high-skilled jobs, and supporting economic diversification, the company said in a press release.
“This is an important transaction for Elm, as it enhances integration, rationalizes spending, increases profitability, and provides qualitative advantages for both parties and the market,” said Mohammad Abdulaziz Al-Omair, the CEO of Elm.
He said the integrated entity will be better positioned to deliver advanced national smart services, meeting market requirements and client needs.
“It will also contribute to facilitating innovative operations and capabilities to develop products in the business field with cost advantages, while achieving economies of scale,” added Al-Omair.
The transaction, subject to regulatory approvals and fulfilment of agreement conditions, marks a strategic move to enhance Saudi Arabia’s information and communication technology ecosystem.
The transaction further aligns with PIF’s broader strategy of enabling the Kingdom’s digital transformation by supporting high-impact investments in key sectors.
“PIF is committed to enabling the creation of national champions who contribute to driving the development and growth of the Saudi economy. said Shahd Attar, head of technology and media, MENA Investments, at PIF.
“PIF’s sale of Thiqah to Elm will enhance the ICT sector’s vital role and strengthen efforts to localize technology and drive innovation,” Attar added.
The ICT industry is considered a fundamental enabler for multiple other sectors, including entertainment, financial services, health care, transport and logistics, and utilities and renewables.
As one of the world’s largest and most influential sovereign wealth funds, PIF plays a leading role in driving Saudi Arabia’s economic transformation.
Since 2015, PIF has significantly expanded its investments, establishing 99 companies and focusing on 13 strategic sectors domestically and globally.
PIF’s Vision 2030-aligned investment strategy prioritizes key industries contributing to local content development, private sector partnerships, and technological localization.
The sale of Thiqah to Elm is part of PIF’s broader efforts to maximize the value of Saudi assets while reinforcing its commitment to a knowledge-based digital economy.
