Page 11 - EurOil Week 34 2022

EurOil POLICY EurOil

Prince Abdulaziz: OPEC ready to

make cuts to correct price drop

GLOBAL SAUDI Arabia’s Energy Minister and OPEC because without sufficient liquidity, markets
kingpin Prince Abdulaziz bin Salman Al Saud can’t reflect the realities of the physical funda-
Concerns about Chinese said this week that the OPEC+ group is prepared mentals in a meaningful way and can give a false
demand and recession to reduce oil output as a means to correct the sense of security at times when spare capacity is
in the West have seen recent fall in prices. severely limited and the risk of severe disrup-
crude prices fall by Speaking to Bloomberg, he said the group tions remains high.”
around $25 per barrel had shown that it was prepared to act to coun- Noting that the paper and physical markets
in recent weeks. teract market volatility and was committed to do are becoming increasingly disconnected, he
so again if required. added that the market is “in a state of schizophre-
Noting that oil futures have dropped owing nia”, with “erroneous signals” being sent “at times
to perception rather than physical shortages, when greater visibility and clarity and well-func-
Prince Abdulaziz said: “The paper oil market tioning markets are needed more than ever to
has fallen into a self-perpetuating vicious cir- allow market participants to efficiently hedge
cle of very thin liquidity and extreme volatility and manage the huge risks and uncertainties
undermining the market’s essential function of they face.”
efficient price discovery, [which makes] the cost Having announced a quota increase of just
of hedging and managing risks for physical users 100,000 barrels per day (bpd) following its latest
prohibitive.” meeting, OPEC and its deal with non-member
Concerns about Chinese demand and reces- producing nations have come under increasing
sion in the West have seen crude prices fall by scrutiny. Prince Abdulaziz said that the group
around $25 per barrel in recent weeks, down by would begin working on a new deal “beyond
more than a third since the early year highs of 2022 which will build on our previous experi-
the mid $140s. ences, achievements and successes”, seeking to
The minister said: “This is detrimental prevent market volatility. ™

Bulgaria starts Russian gas talks

BULGARIA BULGARIA’S caretaker government led by Prime deliveries at the end of April. Bulgaria’s contract with
Minister Gulub Donev will start talks with Russian the Russian company expires at the end of this year.
The caretaker Gazprom with the aim of restarting imports of nat- Hristov also accused the previous govern-
government wants to ural gas, caretaker Energy Minister Rossen Hristov ment of “doing everything possible [to make]
reverse the previous said at a press conference on August 22. the negotiations to be almost impossible”.
decision to end Russian The move comes after the government “We have strained relations with Russia to
gas supply. refused to buy six tankers of liquified natural gas the limit. There has never been such thing [in
from the US and after a statement made by the the relations between the two states]. We have
Russian ambassador to Bulgaria, Eleonora Mit- expelled all the diplomats. We have stopped all
rofanova, that should Bulgaria want to resume communication, there has been outrageous writ-
imports, this can be done. ten communication,” Hristov said.
The government said earlier in August it Petkov’s government expelled 70 Russian
would turn down the offer for the cheap tank- diplomats at the end of June. The former prime
ers of LNG as there were no available slots for minister said at the time that most of them had
unloading them. been working for foreign intelligence services
“It is now inevitable not to negotiate with and against Bulgaria’s interests.
Gazprom for resumption of gas supplies under Hristov also said that the caretaker govern-
this contract. But one should have no illusions ment will start negotiations with Azerbaijan to
that we only need to send an email to our con- increase the import of gas from there. Petkov
tractors and the supplies will start immediately,” negotiated the opportunity of doubling the
Hristov said at a press conference live broad- imports from Azerbaijan shortly before the end
casted by Dnevnik news outlet. of his term.
Mitrofanova said that the Russian gas can only Meanwhile, the government has replaced
be paid for in roubles – which the previous govern- the management of Bulgargaz, accusing its for-
ment under Kiril Petkov refused to do, as it would mer managers of also being responsible for the
have violated the EU sanctions against Russia stopping of supplies from Russia. The new man-
and would not be beneficial for Bulgaria in finan- agement is expected to be willing to negotiate a
cial terms. As a consequence, Gazprom stopped resumption of supplies with Gazprom. ™

Week 34 26•August•2022 www. NEWSBASE .com P11