Page 7 - MEOG Week 11

MEOG FInanCe & InVestment MEOG
ADNOC to increase supply to more than 4mn bpd
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STATE-OWNED Abu Dhabi National Oil Co. (ADNOC) announced plans to raise oil exports to more than 4mn barrels per day and accelerate a push to hike the UAE capacity by a quarter to 5 million bpd when the present OPEC+ output agreement runs out at the end of march.
TheADNOCmovefollowsasimilarpushby Saudi Aramco to boost both supplies and spare capacity in the hope of winning a quick mar- ket share battle against Russia and non-OPEC producers.
The news accompanied comments from ADNOC Group CEO Sultan Ahmed Al Jaber on recent market developments.
On 11 march he said: “Today, as a result of the steps we’ve taken over the last four years, ADNOC is far stronger and better positioned to respond to current market conditions. Our focus on driving performance, profitability and efficiency has made us more resilient, agile and responsive to market dynamics. These guiding principles remain unchanged as we move for- ward with projects across our value chain.
“in line with our production capacity growth strategy announced by the Supreme Petroleum Council (SPC), we are in a position to supply the market with over 4mn bpd in April. in addition, we will accelerate our planned 5mn bpd capacity target.
“in response to market conditions, and to
provide better forward visibility to our custom- ers, ADNOC will shortly announce forward prices for the months of march and April 2020. This decision has been made to ensure that our customers have visibility of the price so they can plan accordingly.
“AsannouncedinNovember2019,ADNOC remains firmly committed to moving from its current retroactive pricing mechanism to a new forward pricing mechanism for its flagship mur- ban crude oil.
This will be traded on a new independent exchange, iCE Futures Abu Dhabi (iFAD), which is expected to launch after the necessary regulatory approvals are obtained.
“As planned, we remain committed to cre- ating and maximising value from across our portfolio, while we advance our smart growth strategy.”
Last week MEOG reported on ADNOC’s lowering of the price of its flagship murban crude by $11.70 per barrel from $67.80 per bar- rel in January to $56.10 for February. The UAE’s largest producer was following Saudi Arabia’s lead in offering discounts to buyers after the col- lapse of the OPEC+ pact.
This and other output boosts will be a fresh blow to an oil market being hammered by the rapid spread of coronavirus and weak global eco- nomic activity.™
PoLICy
Turkey meddling in the murky waters of Kurdish oil
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iN February MEOG designated North-east Syria and its oil as a region to watch. Three weeks on and things are moving again.
At the heart of the latest developments is the fact that the region, which makes up more than a quarter of Syria, is home to sizeable ethnic Kurd- ish, Arab and Assyrian populations and is largely under the control of the Syrian Democratic Forces (SDF), which has a Kurdish backbone and gained its autonomy in 2012. This Kurdish presence is seen as a major threat by Turkey.
The next significant fact is that Turkey wants to push the SDF away from its border and Pres- ident Erdogan has said he would seek to relo- cate more than 1 million Syrian refugees in the
“safe zone” achieved by doing this, thereby both removing them from his country (where their presence has started to create a backlash) and complicating the demographic mix in what he fears could become an autonomous Kurdish state on his border.
The region is divided between Syrian regime forces, Syrian opposition militia and their Turk- ish allies, and areas still held by the SDF; there are also remnants of US forced guarding the oil. it has seen major activity involving forces of islamic State (iS) and is the location of its last stronghold of Raqaa
in this maelstrom of competing interests there are significant flows of oil, which help
Week 11 18•March•2020 w w w . N E W S B A S E . c o m P7