Page 13 - Downstream Monitor - MEA Week 24

DMEA
neWs in Brief
DMEA
PoliCy
Oil derivative taxes to remain frozen
Taxes on oil derivatives will remain frozen, according to comments made by Minister of Energy and Mineral Resources hala Zawati on Wednesday.
During a meeting with journalists on Wednesday, Zawati said that the tax is calculated based on the average price of Brent oil in the past 24 months, which averaged out to $66 per barrel.
During the meeting, attended by Minister of State for Media A airs Jumana Ghunaimat, Zawati said that keeping the fuel tax xed means it will not increase now, nor in the future, even if international prices climb.
Every month, international prices of gasoline were reviewed to administer changes to local prices, the minister said.
however, with a xed rate consumers will be protected from any tax increase when there is a hike in global fuel prices, and the government’s revenue from taxes on fuel derivatives will remain xed, Zawati said.
Revenue currently amounts to around JD2 billion annually, and is tied to the state budget as funds are completely poured into the Treasury.
In regards to the Risha gas eld, the minister said that investment would continue through the National Petroleum Company (NPC), and that the government would not bring foreign investors into the eld.
e Risha gas eld’s Well 48 recently showed it had a daily production capacity of 7 million cubic feet (mcf) of natural gas, pushing the eld’s production to 16mcf per day, or 5 per cent of the Kingdom’s daily gas needs, according to Zawati.
e minister added that the digging of Well 49 had begun, noting that Well 50 would
be dug before the end of 2019.
Jordan times
refininG
JICA provides loan for
rehabilitation of Basrah
refinery
On 16 June, 2019, the Japan International Cooperation Agency (JICA) and the Iraqi
Government signed a loan agreement
at Ministry of Finance in Baghdad. e
ODA (O cial Development Assistance)
loan amounting to JPy 110,000 million (approximately USD 1 billion) will be used
for Basrah Re nery Upgrading Project. e loan agreement was signed by h.E. Mr. Fuad Mohammed hussein, Minister of Finance and Masayuki hirosawa, Chief Representative of JICA Iraq O ce, in the presence of h.E. Mr. hamid younis Salih, Deputy Minister of Oil and h.E. Mr. Naofumi hashimoto, Japanese Ambassador to Iraq. is concessional ODA loan aims to support the Government of Iraq in its e orts to reconstruct the country and revitalize its economy.
e loan named “Basrah Re nery Upgrading Project (II)” is the second tranche loan for Basrah Re nery Upgrading Project, one of the mega projects known in the
region. For the same project, JICA previously concluded two loan agreements for (i) the engineering services loan in the amount of JPy 2,079 million and (ii) the rst tranche loan in the amount of JPy 42,435 million. e entire project aims to increase the quantity and quality of oil products including gasoline, diesel and kerosene, by installing a new re ning plant called Fluid Catalytic Cracking (FCC) Complex in Basrah Re nery, which
is one of the biggest oil re neries currently
operational in Iraq. It will be implemented by South Re neries Company, Ministry of Oil.
Iraq has the world’s h-largest proven oil reserves and is currently OPEC’s second- largest producer. Nevertheless, most of the existing re neries in the country have been shut down or decreased their production capacity, su ered from damages and deterioration in the previous decades of con icts. Many of the plans to construct new re neries have faced with challenges and delays and are yet to achieve substantial increase of the re ning capacity.
On the contrary, the ongoing reconstruction e orts in liberated areas and the revitalization of socio-economic activities across the country have prompted huge demand for fuels, such as gasoline and diesel. As a result, despite being one of the largest oil producers, Iraq has no choice but to import the signi cant amount of oil products from neighbouring countries so as to meet the demand for transport, power generation and industrial production.
Against this backdrop, the project to construct Iraq’s rst-ever FCC Complex will increase the volume of the high-value added oil products, promote the transfer of re ning technologies from Japan and help save valuable foreign currencies to import huge amount of fuels. e new plant will also reduce sulphur content in the products in accordance with the international environmental standards. Furthermore,
the project is expected to pave the way for energizing private sector involvement in the downstream of Iraq’s energy industry and provide economic opportunities for the people of Iraq, especially in Basrah.
e loan is very concessional with the low interest rate and long repayment period: the interest rate of 0.20% and the repayment period of 40 years including 10-year grace period.
JiCa
fUels
Aramco, Air Products
inaugurate Saudi’s first
hydrogen fuelling station
Saudi Aramco and Air Products (NySE:APD) today inaugurated the rst hydrogen fuelling station in Saudi Arabia at Air Products’ new Technology Center in the Dhahran Techno Valley Science Park. e pilot station will fuel an initial eet of six Toyota Mirai fuel cell electric vehicles with high-purity compressed
Week 24 19•June•2019
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