Page 14 - DMEA Week 05

DMEA PETROCHEMICALS DMEA
Saudi petchem giant reports first quarterly loss in decade
SAUDI ARABIA
The company has weakened demand for petrochemicals as a result of economic slowdowns in China and Europe.
SAUDI petrochemicals giant SABIC swung to a loss in the fourth quarter, a er being stung by lower prices and a heavy impairment charge relating to one of its a liates.
e company booked a net loss of SAR720mn ($192mn) for the three months ending Decem- ber 31 – its rst quarterly loss in over a decade. It posted a SAR3.22bn pro t in the nal quarter of 2018.
SABIC CEO Yousef Al-Benyan blamed the poor result on a slowdown in economic growth, especially in China and Europe, which had in turn weakened demand for petrochemical products.
“At the same time, there is additional capacity coming to the market, speci cally from the US and China,” he told a press conference on Janu- ary 29. “ is has really put pressure on product margins and slowed demand in certain markets, therefore we have seen a slowdown in the second half of 2019 and we anticipate that the market will be more or less the same in 2020.”
Revenues were down 2.6% at SAR32.8bn.
SABIC also booked a SAR1.3bn non-re- curring charge in connection with a SAR2.8bn impairment provision at its affiliate Arabian Industrial Fibers Co. (Ibn Rushd). Ibn Rusdh
runs a complex in Yanbu, on Saudi Arabia’s Red Sea coast, that produces such as aromatics and puri ed terephthalic acid (PTA), used to manu- facture polyesters.
“SABIC will not exit Ibn Rushd and it will remain one of the main SABIC producers in the local market,” Benyan said.
Full-year results were also poor, with net prof- its toppling nearly 74% to SAR5.63bn.
“We are in a cyclical industry and the chal- lenges are not new to SABIC. Our strategy is geared toward stable and long-term growth, and enables us to remain resilient to the headwinds,” Benyan continued.
Despite the di culties, Benyan said SABIC would distribute dividends of SAR2.2 per share for the second half of 2019 – a similar amount to that issued for the rst half.
“Going forward, our dividend will continue to be supported by a disciplined approach to cap- ital allocation and by sustaining a strong balance sheet,” he said.
Saudi national oil giant Saudi Aramco agreed to buy a 70% stake in SABIC last year from the sovereign Public Investment Fund for $69.1bn. EU antitrust authorities will decide whether to clear the deal on February 27.™
Oman’s oil income up despite overall weaker GDP
e value added from Oman’s oil activities reached Omani Riyals (RO) 5.1 bn ($13.3 bn) at the end of the second quarter of 2019, up 2.1 per cent compared to RO 5 billion ($13 bn) at the end of the same period last year.
Rising crude prices contributed to the increase in the value add of oil activities, according to data issued by the National Centre for Statistics and Information (NCSI).
Government statistics showed that the value add of natural gas increased by 5.6 per cent to reach RO 793.5 mn ($2.06 bn) for the same period, compared to RO 751.6 million ($1.95 bn) at the end of the same quarter of 2018. Oman’s gross domestic product (GDP) declined by about 1.9
per cent at the end of the second quarter
NEWS IN BRIEF
of 2019, totalling RO 14 bn ($36.4 bn), compared to RO 14.3 billion ($37 bn) at the end of the same quarter of 2018.
Iran installs latest South Pars Phase 14 platform
Iranian oil and gas rms have successfully installed the last stage of South Pars Phase 14 called Platform 14D, according to ShANA on February 1.
South Pars is considered the largest gas eld in the world and is situated between Iranian and Qatari waters in the Persian Gulf. Qatar has had more success in extracting
gas and oil from several areas of the eld. is is while Iran has been hampered with
US sanctions repeatedly over the past
decade, slowing its production output and development with no help from international rms. e 2400-tonne platform which was
shipped from Sadra yard to its o shore spot at the end of January should add 500mn cubic feet (14.2mn c/m) of gas to the eld’s output, according to Pars Oil and Gas Company (POGC), which is solely in charge of the development.
Mohammad Mehdi Tavasoli-Pour,
the manager of phase 14, said that by the installation of the mentioned platform, the o shore section of phase 14 will be completed and production of 56 mcm/d of rich gas would be extracted from the project.
A previous platform, Platform 14B, was installed on its designated o shore spot in mid-July 2019. e platform was built in a 115-month period by Iranian rms.
e rst platform of phase 14 started operation in summer 2018 and the second platform namely 14C was shipped in September 2018 and the installation operation of this platform was completed in October 2018.
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Week 05 06•February•2020