His Excellency Sheikh Sultan bin Ahmed Al Qasimi, President of SNOC told the media, “The commencement of the first gas production from Mahani, less than a year after discovery, is a tremendous achievement for Sharjah, meeting our commitment to contribute to the efforts of making reliable gas supplies widely available for the local energy needs of Sharjah and the UAE.”

Both SNOC and Eni hold a 50 percent stake each in the Mahani gas field, according to the agreement signed in 2019 following the successful First Sharjah Licence Round. The two companies are also partners in the onshore Concession Areas A and C, where exploration is actively in progress, with Eni being the Operator.

The UAE is expecting oil demand to bounce back in 2021, however, it won’t be immediate. According to Energy Minister Suhail Al Mazrouei, rollout of coronavirus vaccines and improvement in ties between the US and China are likely to improve demand for oil.

Brent oil prices to pick up to $47 per barrel in 2021, significantly lower than 2019 levels, according to the Institute of International Finance (IIF). The institute said that higher global oil inventory levels and surplus crude oil production capacity in key oil producers will limit significant upward pressure on oil prices next year.

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Jaafar Altaie, managing director of Abu Dhabi-based consultant Manaar Group told the media, “This is Adnoc demonstrating that they aim to be self-sufficient. It’s a proactive step that foresees the potential for future supply shortages and that sees a need for low-cost production in the coming years.”

The announcement comes at a time when the Organisation of Petroleum Exporting Countries (OPEC) and other oil-producing nations such as Russia have sought to cut output among its members after the coronavirus pandemic caused a significant drop in demand for crude.

Earlier this year, Adnoc awarded contracts worth $245 million to upgrade two main oil lines and terminal crude receiving facilities in Abu Dhabi. The contracts were awarded to China Petroleum Pipeline Engineering Company Limited – Abu Dhabi and Abu Dhabi-based Target Engineering Construction.

The Engineering, Procurement, and Construction (EPC) contract awarded to China Petroleum Pipeline Engineering Company is valued at approximately $135 million, and once developed it will increase the capacity of the pipelines by over 30 percent. The contract is for a period of 30 months and will see over 45 percent of the award value flow back into the UAE’s economy under Adnoc’s ICV programme.

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Exxon owns a 32.7 percent stake in the Exxon oil field and it could be worth $500 million. However, it is currently uncertain whether a deal is in place or not. Also, geopolitical factors could lead to a no-deal situation in this regard. Previously, Exxon sold 25 percent of its stake in the oil field to PetroChina and 10 percent to Pertamina.

Iraq exported an average of 2.876 million barrels of oil per day (bpd) in October, up by more than 200,000 bpd from September, according to its oil ministry. This has helped the country to increase its oil revenue. Iraq’s economy heavily depends on oil revenue and the current oil crisis did take a toll on the country’s financial status.

Last month, it was reported that Iraq would be among one of three countries  that would oppose a proposal by the Kingdom of Saudi Arabia and Russia to roll over the 7.7-million barrels per day production cuts, instead of relaxing them by 2 million barrels per day from January, in light of the current oil price crisis.

Earlier this year, it was reported that China is planning to increase its production of oil and gas in 2020 by 1 percent, which equals to 3.85 million barrels per day. The country will also reduce the share of coal in its primary energy mix to 57.5 percent from 57.7 percent the previous year.

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During the same period, Oman exported 215.72 million barrels of crude oil, which is a 3 percent drop when compared to the 222.31 million barrels of oil Oman exported during the same period in 2019.

Most of Oman’s exports during the period went to China. The Asian superpower imported 190.53 million barrels of crude oil from Oman. Other top importers from Oman include India, South Korea and Japan.

Oil exporting country’s economies in the Arab region are expected to shrink by 4.7 percent this year due to the coronavirus pandemic, according to the 12th edition of the Arab Economic Outlook Report. The report says that the diversified economies in the region will shrink by 2 percent in 2020.

Most of the countries in the region are major oil exporters such as Saudi Arabia, UAE, Oman and their economies heavily rely on oil.

In recent years, the economies in the region have taken various steps to reduce their dependence on oil. The GDP of the gulf nations will contract sharply this year, however, they are set to recover in 2021, a poll carried out by Reuters revealed.

The economic contraction for the Gulf countries will be caused by the Covid-19 pandemic as well as the depleting oil prices.

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It is reported that the Kingdom exported 6.1 million bpd during the same period, up from 6.0 million barrels a day  it exported in August.

Earlier this year, OPEC and its partners decided to cut production to deal with the depleting oil prices and decreasing demand due to the coronavirus pandemic.

It is also reported that the Saudi finance ministry expects oil prices to stay around $50 a barrel for at least the next three years.

In this regard, Farouk Soussa, an analyst at Goldman told the media, “Using our own estimates for the breakdown of government revenues, we calculate that the numbers presented in the budget statement are based on an average oil price of around $50 a barrel between 2020 and 2023.”

Crude oil prices further fell by 6 percent last week to $39.27 a barrel due to the Covid-19 crisis. These are worrying signs for countries such as Saudi Arabia as their economy primarily depends on oil. However, the Kingdom has taken significant steps over a period of time to diversify its economy and reduce its dependency on oil.

Oil exported by the Kingdom of Saudi Arabia was down by 62 percent during the second quarter of this year, according to the Saudi General Authority for Statistics.

In an official statement, the state-owned body said that the Saudi oil exports amounted to $19.9 billion during the second quarter of 2020.

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The contracts were awarded by Adnoc to China Petroleum Pipeline Engineering Company Limited – Abu Dhabi and Abu Dhabi-based Target Engineering Construction.

Yaser Saeed Almazrouei, Executive Director of ADNOC’s Upstream Directorate told the media, “The EPC contracts awarded by ADNOC Onshore will increase the capacity of the two main oil lines and upgrade the Jebel Dhanna Terminal to enable it to receive Upper Zakum and Non-System crude for delivery to the Ruwais Refinery West project. The awards follow a very competitive tender process and highlight how ADNOC is making smart investments to optimize performance and unlock greater value from our assets.”

“Crucially, a significant portion of the awards will flow back into the UAE’s economy under ADNOC’s ICV program, reinforcing our commitment to maximize value for the nation as we create a more profitable upstream business and deliver our 2030 strategy.”

The Engineering, Procurement, and Construction (EPC) contract awarded to China Petroleum Pipeline Engineering Company is valued at approximately $135 million, and once developed it will increase the capacity of the pipelines by over 30 percent.

The contract is for a period of 30 months and will see over 45 percent of the award value flow back into the UAE’s economy under ADNOC’s ICV program.

Last month, Adnoc said that its project to upgrade the Ruwais refinery is on track and will be completed by 2022.

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Prince Abdulaziz bin Salman said the new oil field discovered by Aramco in Abraq al-Toloul produces nearly 3,189 barrels per day (bpd) of crude oil, along with 1.1 million cubic feet of natural gas.

Aramco’s chief executive officer Amin Nasser revealed earlier this month that the oil behemoth will go ahead with its plan to boost its output capacity by 1 million barrel of oil per day (bpd) to 13 million barrel of oil per day, according to its

He revealed that the Aramco will go ahead with its plan to boost output capacity despite a significant cut in its capital expenditure for 2020 and 2021.

Reportedly, during a conference call with its investors, Amin Nasser said, “We are proceeding with increasing our MSC (maximum sustainable capacity) from 12 to 13 million barrels … it should not have a major impact on capital in 2021.”

Aramco has revealed that its capital expenditure for 2020 will be at the lower end of a $25 billion to $30 billion range.

Earlier this year, Aramco announced that it will reorganise its downstream business to support its global growth strategy.

Aramco pumps around 8.5 million barrels per day (bpd) of crude, of which it exports about 6 million bpd.

Aramco said that its downstream model will be divided into four units which are fuels including refining, trading, retail and lubes; chemicals; power; and pipelines, distribution, and terminals.

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The project to upgrade the Ruwais refinery is expected to cost Adnoc around $3.5 billion. It will help Adnoc  process up to 420,000 barrels per stream day.

Dr Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and Adnoc Group chief executive officer told the media, “We continue to focus on stretching the margin of every barrel of oil we produce to maximize the value of our resources, while also making responsible investments in the current market environment. This investment is another step in our progress to develop Ruwais into a dynamic, global hub for downstream activity, further strengthening Adnoc’s role as a key driver of the UAE’s long-term industrial growth and economic diversification.”

Last month, Adnoc and state-owned holding company ADQ entered into a joint venture to invest in chemical projects in the planned Ruwais Derivatives Park.

While Adnoc will hold a 60 percent stake in the joint venture, ADQ will own the remaining 40 percent.

The JV will evaluate and invest in anchor chemical projects in the Ruwais park in Abu Dhabi.

Reportedly, both parties will conduct a comprehensive feasibility study of projects for Ruwais.

The results of the comprehensive feasibility study are due before the end of 2020 and will include opportunities for prospective investors.

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While Adnoc will hold a 60 percent stake in the joint venture, ADQ will own the remaining 40 percent.

The JV will evaluate and invest in anchor chemical projects in the Ruwais park in Abu Dhabi.

Reportedly, both parties will conduct a comprehensive feasibility study of projects for Ruwais.

The results of the comprehensive feasibility study are due before the end of 2020 and will include opportunities for prospective investors.

The joint venture will be incorporated in the Abu Dhabi Global Market free zone. Both parties are awaiting regulatory approvals and the company will be operated by management from both Adnoc and ADQ.

Earlier this year, Adnoc awarded two Engineering, Procurement, and Construction (EPC) contracts worth $1.65 billion for the Dalma Gas Development Project.

Adnoc has awarded the contracts to Petrofac and a joint venture between Petrofac and Sapura Energy.

The Dalma Gas Development Project located 190 kilometre northwest of Abu Dhabi is a key part of the Ghasha ultra-sour gas concession which is central to Adnoc’s strategic objective of enabling gas self-sufficiency for the UAE.

Adnoc also revealed that it will continue with its investment plans to deliver on its 2030 targets, despite the global slowdown caused by the coronavirus pandemic and the escalating price war.

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Aramco, which is one of the largest oil producing company, will expand its downstream business globally. It pumps around 8.5 million barrels per day (bpd) of crude, of which it exports about 6 million bpd.

Aramco said that its downstream model will be divided into four units which are fuels including refining, trading, retail and lubes; chemicals; power; and pipelines, distribution, and terminals.

In a statement, the oil producer said, “This reorganisation is designed to enhance the effectiveness and efficiency of Aramco’s existing downstream assets, but does not represent a fundamental change in the overall business structure.”

Aramco, which is the world’s most profitable company, is also planning to increase its refining capacity in Saudi Arabia from around 5 million bpd to 8 to 10 million bpd, according to media reports.

Last month, Aramco started laying off employees in response to the coronavirus pandemic, which has severely impacted the demand for oil.

Reportedly, around 500 employees lost their jobs in Aramco, most of them were non-Saudis. Aramco has around 70,000 employees.

Last month, Saudi Aramco completed the purchase of its 70 percent stake in the kingdom’s petrochemical giant Sabic from the Saudi Public Investment Fund in a deal worth $69.1 billion. Reportedly, it is one of the largest ever deals in the global chemicals industry.

The acquisition is in line with Aramco’s decision to expand its downstream, or refining and marketing, business globally.

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