Category: Saudi Arabia

LONDON/NEW YORK (Reuters) – Saudi Arabia raised the official selling prices (OSPs) for its oil deliveries to Asia and the United States on Tuesday, in the latest signal OPEC’s largest exporter is seeing signs of stronger demand. The Kingdom raised all U.S.-bound crude prices by $1 a barrel and hiked extra-light crude oil to Asia by $1.40 a barrel, in a vote of confidence oil demand is growing in two of its biggest markets following the price crash since June. While the increase was largely anticipated by traders amid other signs of robust demand, it bolsters the impression Saudi Arabia is comfortable with the rebound in Brent crude to around $60 a barrel after hitting a six-year low of $45 in January. Saudi Arabia and other OPEC members sharply cut OSPs in 2014 as the group decided to fight fast-growing U.S. shale producers for market share, abandoning its policy […]

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RIYADH (Reuters) – Saudi Arabia’s subtle change of energy policymaker line-up since the accession of new King Salman in late January appears to give the monarch’s inner circle a firmer hand on the kingdom’s oil strategy than previous rulers have enjoyed.     The most notable change was the promotion of the king’s son Prince Abdulaziz bin Salman, long a member of the No. 1 crude exporter’s OPEC delegation, to the role of deputy oil minister from assistant oil minister, a post he had held for many years.     On the same day, King Salman formed a new body replacing the Supreme Petroleum Council and appointed another son, Prince Mohammed bin Salman, to head the new Supreme Council for Economic Development.     There are no indications that those moves will lead to changes in the fundamental way the kingdom makes its oil decisions or diminish the influence of veteran oil […]

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Sign up for our daily Energy Newsletter Saudi Aramco suspends rig contract with U.S. company Hercules Offshore. (UPI/Shutterstock/James Jones Jr.) HOUSTON, Feb. 26 (UPI) — U.S. rig company Hercules Offshore said Thursday one of its drilling contracts with the main oil company in Saudi Arabia was terminated. Saudi Aramco cancelled a contract to lease the Hercules 261 rig, effective March 27. The company said it’s been in talks with the Saudi oil company to reduce the day rates for two other rigs, Hercules 262 and Hercules 266. "The company has not received a notice of termination from Saudi Aramco with respect to these rigs," Hercules said in a statement. Hercules 261 is listed in the company’s fleet status update as having a day-rate around $135,000. Rigs 262 and 266 have a combined average day rate of around $118,000. There was no update on the status of rig contracts with […]

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ENLARGE A storage tank at the Jubail refinery in Saudi Arabia. The country plans to become the world’s second-largest exporter of refined oil products in 2017. Photo: Associated Press JAZAN—Saudi Arabia plans to become the world’s second-largest exporter of refined oil products in 2017 as part of its drive to diversify its economy and increase its share of the global crude and petroleum products markets, the kingdom’s oil minister Ali al-Naimi said Wednesday. “We are no longer limited to exporting crude oil,” Mr. al-Naimi told a conference in this port city in southwest Saudi Arabia. The kingdom’s two new refineries will add 800,000 barrels a day in refining capacity this year. A planned 400,000-barrel-per-day oil refinery in Jazan will bring Saudi Arabia’s refining capacity to more than 3 million barrels a day, Mr. al-Naimi said. “That will make the kingdom one of the five largest countries in the world […]

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Stage one of Saudi Arabia’s plan — or perhaps hope — to restructure the oil market is taking longer than expected. By refusing to rein in production while prices fell, the Saudis permitted a big surplus to grow and served notice on higher-cost rivals (Russia, Venezuela, American shale-oil producers) that they would not prop up other people’s profit margins at the expense of their own market share. That signal has been weakened by the growing amount of oil in storage, which is absorbing most of the glut. World oil stocks rose by about 265 million barrels last year and Société Générale, a French bank, reckons they will increase by a further 1.6 million – 1.8 million barrels a day (b/d) in the first six months of this year, adding roughly 300 million barrels to the total. Oil is being stored in the hope that demand and prices will pick up later. Such […]

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It is popular these days to speculate about why Saudi Arabia cajoled its OPEC allies into maintaining oil production in the face of flagging world demand. As the price the world pays for oil and oil products has plummeted, the price OPEC members are paying in terms of lower revenues is high, even unbearable for those who didn’t save up for just such a rainy day. Was the real reason for the decision to maintain production the desire to undermine rising U.S. tight oil production–which has now proven embarrassingly vulnerable to low prices after years of triumphalist talk from the industry about America’s "energy renaissance"? Were the Saudis also thinking of crippling Canada’s high-cost tar sands production? Was it Sunni Saudi Arabia’s wish to undermine its chief adversary in the region, Shiite Iran? Was the Saudi kingdom doing Washington’s bidding by weakening Russia, a country that relies so heavily […]

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ENLARGE ‘Like everyone else, we’re using the downturn as an opportunity to sharpen our fiscal discipline,’ Aramco CEO Khalid Al Falih said during the World Economic Forum in Davos in January. Photo: Bloomberg News Saudi Arabia’s refusal late last year to rein in oil production helped trigger the price crash that has hurt oil-producing countries and publicly listed energy companies alike. And now even the kingdom’s own oil company is feeling the pain. As a result, state-owned Saudi Aramco is looking for ways to cut costs everywhere, from pushing contractors for better deals on oil-well services to negotiating discounts on its phone and power bills, according to people familiar with the matter. The company—the world’s largest oil producer—is also considering slashing its future spending on production and exploration by as much as 25%, much like private oil companies, industry sources said. “Like everyone else, we’re using the downturn as […]

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RIYADH, Saudi Arabia — European leaders are still battling over austerity. The United States Congress is gearing up for another fight over the budget. But in Saudi Arabia , there are no such troubles when you are king — and you just dole out billions and billions of dollars to ordinary Saudis by royal decree. Not surprisingly, Saudis are very happy with their new monarch, King Salman. “It is party time for Saudi Arabia right now,” said John Sfakianakis, the Riyadh-based Middle East director of the Ashmore Group , an investment company, who estimates that the king’s post-coronation giveaway will ultimately cost more than $32 billion. That is a lot of cash, more, for example, than the entire annual budget for Nigeria, which has Africa’s largest economy. Since King Salman ascended the throne of this wealthy Arab kingdom last month, he has swiftly taken charge, abolishing government bodies and […]

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(Reuters) – Production from Saudi Arabia is rising, and demand has pushed it up to about 10 million barrels per day (bpd), according to energy consultancy PIRA. The estimate suggested the country is hewing tightly to the strategy of protecting market share rather than cutting production to try to inflate prices. Saudi production averaged about 9.7 million bpd since last June, according to the consultancy. "Additional demand has pushed output to just under, if not above, 10 MMB/D," PIRA said in a weekly note. The country’s rising production boosted OPEC’s oil supply in January, according to a Reuters survey earlier this month, a sign that key members are standing firm in refusing to prop up prices. Oil prices fell by 60 percent between June and January, and have remained low as oversupply trumped concerns about supply disruptions. Output in top OPEC exporter Saudi Arabia has been flat to slightly […]

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A worker stands at a pipeline, watching a flare stack at the Saudi Aramco oil field complex facilities at Shaybah, in Saudi Arabia. Saudi Aramco, as it’s known, is in talks with international and local banks to replace an undrawn $4 billion loan, the people said, asking not to be identified as negotiations are private. Photographer:Reza/Getty Images (Bloomberg) — Saudi Arabian Oil Co., the world’s largest oil exporter, is in talks with banks to raise a $10 billion loan that could be used to fund acquisitions and other investments, according to four people with knowledge of the matter. Saudi Aramco, as it’s known, is negotiating with international and local banks to replace an undrawn $4 billion loan, the people said, asking not to be identified as the plans are private. Saudi Aramco told banks that it expects to make withdrawals under the new facility, two of the people said. […]

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