Page 13 - DMEA Week 39.pdf

DMEA
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DMEA
our strategically placed production assets and distribution network. Working alongside our partner OCI, we look forward to significantlygrowingournewlycombined fertilizer businesses, accessing new markets and bringing significant benefits to all our customers. The close of this transaction is
yet another example of the further progress that ADNOC is making in delivering on its 2030 strategy and specifically its ambitions to expand its Downstream portfolio.”
Nassef Sawiris, CEO of OCI N.V. and
CEO of the new joint venture commented: “I am very pleased that we have completed this landmark transaction in such a short time frame, which brings together two like-minded partners. It underscores our commitment to create value in the fertilizer industry, at the same time helping develop a more efficient market place for our customers. This platform has a solid financial profile and has significant potential for future growth and value creation, with the support and under the guidance of its two key shareholders”.
This transaction will place the companies EBIC, EFC, Sorfert, and Fertil (formerly ADNOC Fertilizers) under the ownership of the joint venture Fertiglobe, an ADNOC-OCI company.
aDnoC
P i P e l i n e s
Expanded East-West
Pipelinewillprovidelimited
protection for Saudi
Expanding the East-West Pipeline’s crude
oil capacity to 6.5 mmbbl per day will provide Saudi Arabia with an infrastructural improvement, but it will not help the country to completely stave off risks associated with the Strait of Hormuz’s closure or limited accessibility, according to data and analytics firm GlobalData.
Alessandro Bacci, Oil and gas analyst at GlobalData, said, “A capacity expansion to the East-West Pipeline will provide more flexibility in exporting oil for Saudi Arabia but is not a risk-free solution, for example,
in scenarios where the Strait of Hormuz is closed or partially blocked.” “Increased Saudi oil exports from the Red Sea would come at a higher cost for the country, as most of its oil production occurs on the Persian Gulf and
is exported to Asia. In addition, oil tankers would have to pass the Bab El Mandeb Strait – another politically dangerous point,” he added.
Iran, Kuwait, qatar, and Bahrain export all of their output through the Strait of Hormuz. Apart from Saudi Arabia, only the UAE and
Iraq have the infrastructure, albeit limited, capable of bypassing the strait, the firm stated. Moreover, as a result of the geopolitical events ofthelastthreedecades,Iraq,OPEC’ssecond- largest oil producer, has fewer exporting routes than it had in the past.
“Unless Persian Gulf exporting countries build many export pipelines capable of bypassing the strait, there is little prospect of full protection against the Strait of Hormuz’s risks. This is true also for liquefied natural gas (LNG) as more than a quarter of the world’s LNG transits through the strait. In the end, options to remedy the closure of or limited accessibility to the Strait of Hormuz are minimal for both oil and LNG trading activity,” he added.
“However, as limiting or closing the Strait of Hormuz’s accessibility would not provide benefits to any of the involved countries, Iran’s threats are a brinkmanship exercise intended to obtain a wider negotiating leverage. As Iran relies on the strait to export its oil (although its oil exports are now heavily restricted by the sanctions) and as the country would not be able to militarily close the strait on a long- term basis, it appears that Iran’s behaviour in relation to the Strait of Hormuz is a way to gain leverage in future negotiations aimed to remove or at least reduce the US sanctions,” Bacci concluded.
oil reVieW
Week 39 03•October•2019
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