Page 10 - LatAmOil Week 44 2020

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OMV already has a 36% interest in Borealis, but spared in the third quarter from the pain they
a controlling share will provide it with greater endured in the previous three months, when the
say over the Ruwais complex in the UAE, poised coronavirus (COVID-19) crisis was at its height.
to become the world’s largest integrated refin- But their numbers were still dramatically lower
ing and petrochemicals hub. The move also fits than in the same period last year, and the market
with OMV’s strategy of growing its gas and pet- outlook remains bearish.
rochemicals business while moving away from Demand and prices for oil and fuels has
crude oil sales. recovered in recent months following the eas-
Borealis is partnered at Ruwais with the ing of COVID-19 lockdowns over the summer
UAE’s state-owned ADNOC. The pair want to and continued supply cuts by OPEC+. Gas
double the project’s production capacity to over prices have taken longer to bottom out and then
9mn tonnes per year (tpy) by 2030. rebound, however, partly because of oil indexa-
Global demand for petrochemicals is begin- tion in some contracts. But an end to the market
ning to pick up again from lows experienced turmoil is still not in sight.
earlier this year. Saudi Arabian producer SABIC The world is now in the grip of a second wave
managed to return to profit in the third quarter, of COVID-19, with Europe, the US and many
following three quarterly losses in a row. other nations again seeing record daily infection Certain Asian
SABIC, which was recently bought by Saudi rates. Some major oil consumers such as Italy,
Aramco, attributed the latest results to the rever- Germany and France are again going into lock- LNG projects
sal of impairments, higher prices and increased down mode. It is telling that OPEC+, which is
production. While conditions have improved, among the most bullish forecasters, reportedly have suffered
the market is still oversupplied, though, and now sees a risk of an oil supply surplus re-emerg-
this has prompted some operators to scale ing in 2021. setbacks over
back investment plans. Aramco and SABIC After months of low prices, though, Europe’s the past week
announced earlier this month they were consid- majors have largely exhausted their financial
ering downsizing a $20bn oil-to-chemicals plant defences, having already made drastic cuts to
in Yanbu. operational and capital spending. This gives
In other news, Iran has been plagued by a them little room to manoeuvre if there is another
number of fires and explosions in recent months full-blown slump in fuel demand, and puts them
at mostly energy and military facilities. The latest at the mercy of OPEC+ decision-makers.
blast occurred at a petrochemicals plant in the At the same time, Europe’s oil leaders are also
country’s south-west, owned by Bandar Imam pursuing aggressive strategies to move away
Petrochemical. from fossil fuels and expand in cleaner energies.
These incidents are understood to be linked But implementing these plans will not be cheap.
to the deterioration of Iranian infrastructure,
although there are suspicions that some are If you’d like to read more about the key events shaping
security-related. Europe’s oil and gas sector then please click here for
NewsBase’s EurOil Monitor.
If you’d like to read more about the key events shaping
the downstream sector of Africa and the Middle East, FSU: Novatek bullish on LNG
then please click here for NewsBase’s DMEA Monitor. Russia’s biggest independent gas producer
Novatek remains bullish on long-term prospects
Europe: Tough quarter for majors Europe’s for gas, despite prices falling to unprecedented
largest oil and gas producers were lows this year in the wake of the pandemic.

P10 www. NEWSBASE .com Week 44 05•November•2020