Page 14 - MEOG Week 40 2021

MEOG NEWS IN BRIEF MEOG

per cent in Fertiglobe while the remaining 42 stated emission reduction target of 20 per cent Medium, Basrah Heavy and Kirkuk blend
per cent is controlled by Adnoc. It operates by 2030. for their 2022 allocations, and makes no
four production facilities across the Mena “Fertiglobe continues to show the reference to Basrah Light. Two direct clients
countries including UAE, Egypt and Algeria, multitude of benefits we envisaged when and two other trade sources corroborated this
creating a single platform that has the largest we created it and Fertiglobe is increasingly information.
net ammonia export production capacity in becoming the ideal platform to capture the Basrah Light supplies will be earmarked
the region. opportunities offered by the emerging yet for domestic consumption next year, while
Fertiglobe is the world’s largest seaborne rapidly growing hydrogen economy and Basrah Medium and Heavy will be prioritised
exporter of urea and ammonia combined, generate strong cash flows,” said Nassef for export, according to an Iraqi source.
the largest nitrogen fertiliser producer in the Sawiris, executive chairman of OCI NV and Running more Basrah Light at Iraqi refineries
Mena region by production capacity, and an vice-chairman of Fertiglobe. will free up extra Basrah Medium and Heavy
early mover in clean ammonia. Ahmed EL Hoshy, OCI NV CEO and for export, although it is unclear if the entire
In April, Reuters had reported the two Fertiglobe CEO, said the company has the Basrah Light stream will be used domestically.
companies could raise at least $1 billion potential to offer attractive future dividends A market source said that 300,000 b/d could
through Fertiglobe IPO. underpinned by a robust free cash flow profile be blended into Basrah Medium.
“The launch of Fertiglobe’s IPO follows the throughout commodity cycles. Somo could yet change course before
very recent and highly successful listing of MENAFN deciding 2022 allocations. If it proceeds, it
Adnoc Drilling on the Abu Dhabi Securities will be removing Basrah Light from export
Exchange, exemplifying Adnoc’s pivotal role markets just a year after splitting its two
in driving the growth and diversification of OIL Basrah streams into three. Prior to January
the nation’s economy, supporting the further 2021, the company nominally exported a
development of the UAE’s private sector Aramco cuts November 34°API Basrah Light grade and a 26°API
and equity capital markets, and attracting Basrah Heavy stream. The quality of both
foreign direct investment into Abu Dhabi and crude price to Asia grades fell sharply below their on-paper
the UAE,” said Dr Sultan Ahmed Al Jaber, specifications, leading to compensation
UAE Minister of Industry and Advanced Top oil exporter Saudi Arabia cut the reimbursements that eroded Somo’s revenues.
Technology, Adnoc managing director and November official selling price (OSP) to Asia As of the start of this year, Somo’s offerings
Group CEO and chairman of Fertiglobe. for its flagship Arab Light crude to $1.30 a have included a 33°API Basrah Light, a
“The offering will be the first listing of barrel above the Oman/Dubai average, the 29°API Basrah Medium and a 24°API Basrah
a free zone company onshore in the UAE country’s state oil producer Aramco said on Heavy. Basrah Light has since lost popularity
and is open to all citizens and residents of Tuesday. among European refiners, with some traders
the UAE as well as local and international Saudi Arabia set its Arab Light OSP to pointing to its relatively unattractive official
institutional investors in a number of northwest Europe at a discount of $2.40 a formula price.
countries… Adnoc, like OCI, will remain a barrel against ICE Brent for November and its The Basrah grades make up the bulk of
long-term and committed major shareholder OSP to the United States was at a premium of Iraq’s crude exports. Argus tracking data show
in Fertiglobe and will continue to partner $1.25 a barrel over Argus Sour Crude Index 2.86mn b/d was shipped in the first half of the
with the company on emerging opportunities, (ASCI). year, of which 1.01mn b/d was Basrah Light.
including the development of a new state- REUTERS These figures include Somo-marketed exports
of-the-art blue ammonia project at Ta’ziz in and supplies received by equity producers,
Ruwais,” said Al Jaber. Somo removes Basrah Light which are repaid in crude for their investment
It is estimated that the demand for low in Iraq’s upstream oil and gas sector.
carbon ammonia is expected to increase from 2022 term options Somo’s term crude customers must state
from zero now to approximately 26 million their requirements for 2022 by 30 October.
tons in 2030, and 40 million tons in 2035. Iraq’s state-owned oil marketer Somo may not The nominations will be evaluated, subject
In addition to developing its low-carbon offer the Basrah Light grade to its term crude to Somo’s crude availabilities and internal
ammonia capabilities, Fertiglobe plans customers next year. standards.
decarbonisation by investing in low carbon In a recent letter seen by Argus, the ARGUS
initiatives to meaningfully contribute to OCI’s company asks buyers to nominate Basrah

P14 www. NEWSBASE .com Week 40 06•October•2021