Page 14 - MEOG Week 25 2021

MEOG NEWS IN BRIEF MEOG

POLICY or introduce taxes. leaseback agreement for Aramco’s stabilized
Saudi Arabia, the region’s largest economy, crude oil pipelines network. Aramco Oil
Gulf states will take at tripled a value-added tax last year to 15% on Pipelines Company will receive a tariff payable
the back of the pandemic and lower demand
by Aramco for stabilized crude oil flows,
least 10 years to end oil for oil. In April Crown Prince Mohammed bin backed by minimum volume commitments.
Aramco continues to hold a 51% majority
Salman said VAT would be reduced, and ruled
dependence - Moody’s out introducing personal income taxes. stake in Aramco Oil Pipelines Company and
retains full ownership and operational control
Moody’s said non-oil growth in the region
Countries in the oil-exporting Gulf will is effectively subsidised through zero or very of its stabilized crude oil pipeline network.
remain heavily dependent on hydrocarbon low direct taxes. The transaction does not impose any
production for at least the next ten years as Broad income-based taxes - needed to restrictions on Aramco’s actual crude oil
efforts to diversify economies have made durably reduce dependence on oil - are likely production volumes, which are subject to
limited progress since the 2014-2015 oil price to be implemented only in the longer term, it production decisions made by the Kingdom.
shock, Moody’s said. said. Aramco President & CEO, Amin H.
Reliance on the energy sector will be the REUTERS Nasser, said: “We are pleased to conclude this
“key credit constraint” for the six countries transaction with the global consortium. The
forming the Gulf Cooperation Council interest we have received from investors shows
(GCC), the ratings agency said in a report on COMPANIES strong confidence in our operations and the
Monday. long-term outlook for our business. It is a
“If oil prices average $55/barrel ... we Aramco closes $12.4 billion significant milestone that reflects the value of
expect hydrocarbon production to remain the our assets and paves the way forward for our
single largest contributor to GCC sovereigns’ infrastructure deal portfolio optimization strategy. We plan to
GDP, the main source of government revenue continue to explore opportunities to capitalize
and, therefore, the key driver of fiscal strength Aramco and an international investor on our industry-leading capabilities and
over at least the next decade,” it said. consortium, including EIG and Mubadala, attract the right type of investment to Saudi
Oil and gas accounts for over 20% of gross today announced the successful closing of the Arabia.”
domestic product and at least 50% of state share sale and purchase agreement, in which Abdulaziz M. Al Gudaimi, Aramco Senior
revenues for most Gulf countries. the consortium has acquired a 49% stake in Vice President of Corporate Development,
Meanwhile, plans to launch new Aramco Oil Pipelines Company, a subsidiary said: “The interest we received for this deal
economic sectors have often overlapped, of Aramco, for $12.4 billion. is evidence of continued confidence in our
creating competition among GCC states and The consortium consists of a broad cross- Company from institutional investors and
constraining room for growth. section of investors from North America, Asia sets a new benchmark for infrastructure
“While we expect the diversification and the Middle East. transactions globally. This transaction utilizes
momentum to pick up, it will be dampened This long-term investment by the our world-class pipeline infrastructure to
by reduced availability of resources to fund consortium underscores the compelling create additional value for our shareholders,
diversification projects in a lower oil price investment opportunity presented by reinforcing our Company’s resilience and
environment and by intra-GCC competition,” Aramco’s globally-significant pipeline assets, ability to adapt in a rapidly changing business
Moody’s said. the Company’s robust long-term outlook and environment.”
Part of the problem is that the social the attractiveness of the Kingdom of Saudi R. Blair Thomas, EIG’s Chairman &
contract between GCC states and citizens – Arabia to institutional investors. CEO, said: “We believe this is the marquee
employment, free education and healthcare As part of the transaction, first announced infrastructure transaction globally and we
for life in exchange for political acquiescence in April 2021, Aramco Oil Pipelines Company are pleased to see that so many leading
- limits the ability to implement spending cuts and Aramco entered into a 25-year lease and international investors agree with us.”
ARAMCO
EOG eyes exploration

drilling in Oman

Big US upstream independent EOG Resources
is gearing up for some uncharacteristic
exploration drilling in Oman, the company’s
president and next CEO said June 22, after
making it’s first entry into the Middle East in
late 2020.
Houston-based EOG plans to drill an
onshore unconventional prospect later this
year in the Rub Al-Khali Basin sited in Oman’s
southwest region.
The project came about as EOG, a large
US shale player that in Q1 2021 derived
more than 99% of its roughly 431,000 b/d of

P14 www. NEWSBASE .com Week 25 23•June•2021