Page 5 - GLNG Week 29 2020

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conducted by the country’s House of Repre- storage space and the construction of a 180,000
sentatives, the group may have made $1.05bn barrel per day (bpd) refinery.
worth of illegal transfers to an account that Fujairah is a popular hub for storage given
can be accessed by NLNG’s managing director its strategic location outside the Strait of Hor-
and the head of Nigerian National Petroleum muz. With storage in high demand following
Corp. (NNPC). The consortium has denied the the COVID-19 pandemic, Brooge has a strong
allegations. case for pushing ahead with its plans. But first it
wants to fully contract out the extra storage on a
If you’d like to read more about the key events shaping store-or-pay basis.
Africa’s oil and gas sector then please click here for
NewsBase’s AfrOil Monitor. If you’d like to read more about the key events shaping
the downstream sector of Africa and the Middle East,
Downstream MEA: Aramco restructuring then please click here for NewsBase’s DMEA Monitor.
Saudi Aramco has unveiled plans to restructure
its downstream business by the end of this year, Asia: Indonesia’s production woes
weeks after closing its $69bn takeover of petro- Indonesia’s oil and gas production has fallen in
chemicals giant SABIC. the first half of the year, driven both by weaker
The move is aimed at improving efficiency, domestic energy demand and natural declines
as the Saudi oil giant prepares to expand its fuel at mature fields.
and petrochemicals operations internationally. The country had produced 713,300 bpd
It intends to split the business into four units of crude oil in the first six months of the year,
responsible for fuels, chemicals, power and pipe- upstream regulator SKK Migas said on July 17,
lines. Three corporate functions – manufactur- noting that this was down from the 755,000 bpd
ing, strategy and marketing, and affiliates affairs that was lifted in January-June 2019. Natural gas
– will support these units. production, meanwhile, tumbled from 6.67bn
Aramco is eager to build out its downstream cubic feet (188.89mn cubic metres) per day to
division to add value to its resources and reduce 5.61 bcf (158.88 mcm) per day.
its reliance on crude oil sales. The restructur- “The upstream oil and gas sector nationally
ing move is also a response to Riyadh’s new tax and internationally is going through extraordi-
regime. If it does not restructure the business, it nary pressures due to lower prices,” SKK Migas
will have to pay a much higher rate of corporate chairman Dwi Soetjipto said. “This is then
tax. SABIC and several other Aramco subsidiar- followed by the COVID-19 pandemic, which
ies retain separate listings, however, which could impacted consumption and demand. With
complicate the process. these pressures, we are having problems achiev-
In other news from the kingdom, petrochem- ing targets.”
icals producer Advanced Petrochemical has Upstream investors across the world have
secured a SAR1.5bn ($400mn) credit facility, in begun rationalising their spending in order to
order to finance its expansion projects in Jubail. survive the industry downturn, a development
The company is preparing to expand its polypro- that the agency has acknowledged by lowering
pylene (PP) output by 750,000 tpy starting in late its full-year upstream investment target from
2024, at a cost of $1.8bn. $13.83bn to $11.6bn.
Despite difficult market conditions, Royal Dutch Shell has already notified SKK
Advanced has a firm outlook, Al Rajhi Capital Migas of its desire to exit the giant Masela gas
said in a research note last week, pointing to an block, which will underpin the Abadi liquefied
expected recovery in PP prices, rising dividends natural gas (LNG) terminal development. While
and its organic growth path. the regulator told the media Shell, alongside
Moving to the UAE, Fujairah-based storage partner Inpex, would have to continue develop-
operator Brooge Energy said on July 15 it was ing the project, it acknowledged that the project
near to completing early technical studies for a would likely need to be recalculated and that it
phase-three expansion of its facilities. The pro- had become “a wait-and-see situation”.
ject involves adding an extra 22mn barrels of oil Government revenue from the oil and gas

Week 29 24•July•2020 www. NEWSBASE .com P5