Page 17 - MEOG Week 36

MEOG NEWS IN BRIEF MEOG

higher oil prices,” Fitch Ratings’ global head of OIL global oversupply, its exports were slightly
sovereign ratings said in 2017. higher this year compared with the same
But the real threat to its grand Oman oil price decreases period a year ago, Refinitiv data showed, while
diversification plans turned out to be exactly many other producers have to reduce exports
the opposite—lack of funds caused by low oil The price of Oman oil has decreased, with significantly.
prices. prices for delivery by next November reaching The slope to Brent means that the price of
Perhaps Saudi Arabia’s enthusiasm did not $40.81 USD on the Dubai Energy Market on LNG is calculated as a percentage to a Brent
exactly wane when prices were high: news of Tuesday. crude contract.
a multibillion-dollar project continued to flow A statement issued online by the Oman On Friday, the front-month Brent futures
in as the Kingdom sought to secure future News Agency (ONA) said: “The official price price was on course for its biggest weekly
markets for its main export product. of Oman oil on the Dubai Energy Market for decline since June as weak demand figures
And then the second price crash in five delivery for next November reached $40.81 added to concern over a slow recovery from
years came. today.” the COVID-19 pandemic.
For the second quarter of this year, Saudi TIMES OF OMAN REUTERS
Arabia booked a deficit of $29 billion. Its
GDP is shrinking, as it is across the oil-rich
and oil-dependent Gulf. Austerity measures GAS SERVICES
are back, spending cuts are being made, and
Aramco must pay a dividend of $75 billion as Sinopec awards 10-year gas SPARK, NAPESCO plan
it promised when it listed 5 percent of its stock
in December last year. The company has to tender to Qatargas $100mn investment in oil
keep up these annual payments for the next
five years. It doesn’t have the luxury of cutting China’s Sinopec Corp has awarded a 10-year and gas facility
these dividends like the international oil tender to buy 1 million tonnes of liquefied
majors because its majority shareholder is the natural gas annually from Qatargas, two Saudi Arabia’s King Salman Energy Park
Saudi government and Aramco is its primary industry sources with knowledge of the matter (SPARK) and Kuwait’s National Petroleum
income source. said on Friday, to take advantage of current Services Company (NAPESCO) have agreed
With all these stressors, is Vision 2030 still low prices. to invest $100 million (SAR 375 million) to
on the horizon? Sinopec has agreed to pay at a slope of open an oilfield services equipment facility.
It is, but it may well stay there like a mirage. 10.19% to Brent crude on a delivered ex-ship SPARK tweeted that the facility will
A low-price environment is the right one basis, said one of the sources. manufacture downhole tools, gyroscopes, and
for diversification efforts, but these efforts in The deal shows how some buyers are other oilfield equipment. It recently signed
Saudi Arabia are incredibly costly because of taking advantage of the heavily oversupplied another deal with Target United Energy to
the scale of the program. Perhaps Riyadh will market, with industry sources saying many invest in another oilfield equipment and
choose flexibility and substitute some of these producers were taking part in the tender. services facility.
multibillion-dollar projects for smaller ones, The Chinese state oil and gas producer The construction of Phase 1 of SPARK
the way it reportedly did with its solar plans. issued the tender in July, seeking supplies reached 60% in July 2020, and the project is
That might be the most sensible path to starting 2023, after prices dropped due to slated to be completed by 2021.
take, after accepting an economy cannot the COVID-19 pandemic hammering global The park has investments worth $1.6
change overnight, even if you have hundreds demand for the fuel. billion (SAR 6 billion), and is expected to
of billions of dollars to spend on this change. China’s long-term gas demand is expected add $5.8 billion (SAR 21.8 billion) to Saudi
Economic diversification takes not just to grow, supported by the country’s push to Arabia’s gross domestic product by 2035.
money but time, as well as realistic planning. shift to the cleaner fuel from coal. OIL & GAS ME
Hopefully, the pandemic taught the world’s Sinopec and Qatargas did not immediately
second-largest oil producer a valuable lesson respond to emailed requests for comment.
about unforeseeable events and their effect on The low price slope to Brent crude also
diversification plans. shows how persistent Qatar could be in the
OILPRICE current market environment. Despite the

Week 36 09•September•2020 www. NEWSBASE .com P17