Page 7 - LatAmOil Week 29 2020

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Elsewhere in Africa, the Nigeria LNG (NLNG) industry amounted to $11.89bn, which was
consortium has denied allegations of corruption. less than half of a full-year forecast of $32.09bn
According to an investigation conducted and prompted SKK Migas to lower the target to
by the country’s House of Representatives, the $19.91bn.
group may have made $1.05bn worth of illegal The country was already struggling to attract
transfers to an account that can be accessed by investment to its upstream, owing to political
NLNG’s managing director and the head of uncertainty and a history of bureaucracy, before
Nigerian National Petroleum Corp. (NNPC). the pandemic, which will only make that task
The consortium has denied the allegations. harder. With yet another hurdle in Jakarta’s
path, the government’s goal of boosting national
If you’d like to read more about the key events shaping oil production to 1mn bpd by 2030 is once more
Africa’s oil and gas sector then please click here for in doubt.
NewsBase’s AfrOil Monitor.
If you’d like to read more about the key events shaping
Asia: Indonesia’s production woes Asia’s oil and gas sector then please click here for
Indonesia’s oil and gas production has fallen in NewsBase’s AsianOil Monitor.
the first half of the year, driven both by weaker
domestic energy demand and natural declines Downstream MEA: Aramco restructuring
at mature fields. Saudi Aramco has unveiled plans to restructure
The country had produced 713,300 bpd its downstream business by the end of this year,
of crude oil in the first six months of the year, weeks after closing its $69bn takeover of petro-
upstream regulator SKK Migas said on July 17, chemicals giant SABIC.
noting that this was down from the 755,000 bpd The move is aimed at improving efficiency,
that was lifted in January-June 2019. Natural gas as the Saudi oil giant prepares to expand its fuel
production, meanwhile, tumbled from 6.67bn and petrochemicals operations internationally. Aramco is
cubic feet (188.89mn cubic metres) per day to It intends to split the business into four units
5.61 bcf (158.88 mcm) per day. responsible for fuels, chemicals, power and pipe- eager to build
“The upstream oil and gas sector nationally lines. Three corporate functions – manufactur- out its
and internationally is going through extraordi- ing, strategy and marketing, and affiliates affairs
nary pressures due to lower prices,” SKK Migas – will support these units. downstream
chairman Dwi Soetjipto said. “This is then Aramco is eager to build out its downstream
followed by the COVID-19 pandemic, which division to add value to its resources and reduce division
impacted consumption and demand. With its reliance on crude oil sales. The restructur-
these pressures, we are having problems achiev- ing move is also a response to Riyadh’s new tax
ing targets.” regime. If it does not restructure the business, it
Upstream investors across the world have will have to pay a much higher rate of corporate
begun rationalising their spending in order to tax. SABIC and several other Aramco subsidiar-
survive the industry downturn, a development ies retain separate listings, however, which could
that the agency has acknowledged by lowering complicate the process.
its full-year upstream investment target from In other news from the kingdom, petrochem-
$13.83bn to $11.6bn. icals producer Advanced Petrochemical has
Royal Dutch Shell has already notified SKK secured a SAR1.5bn ($400mn) credit facility, in
Migas of its desire to exit the giant Masela gas order to finance its expansion projects in Jubail.
block, which will underpin the Abadi liquefied The company is preparing to expand its polypro-
natural gas (LNG) terminal development. While pylene (PP) output by 750,000 tpy starting in late
the regulator told the media Shell, alongside 2024, at a cost of $1.8bn.
partner Inpex, would have to continue develop- Despite difficult market conditions,
ing the project, it acknowledged that the project Advanced has a firm outlook, Al Rajhi Capital
would likely need to be recalculated and that it said in a research note last week, pointing to an
had become “a wait-and-see situation”. expected recovery in PP prices, rising dividends
Government revenue from the oil and gas and its organic growth path.

Week 29 23•July•2020 www. NEWSBASE .com P7