Aramco CEO warns of global oil crunch due to lack of investment

MOSCOW (MRC) -- The world is facing a major oil supply crunch as most companies are afraid to invest in the sector as they face green energy pressures, the head of Saudi Aramco told Reuters, adding it cannot expand production capacity any faster than promised, said Reuters.

Amin Nasser, head of the world's largest oil producer, said on Monday he was sticking to the target of expanding capacity to 13 MM barrels per day from the current 12 MM by 2027, despite calls to do it faster. "The world is running with less than 2% of spare capacity. Before COVID the aviation industry was consuming 2.5 MM bpd more than today. If the aviation industry picks up speed, you are going to have a major problem," Nasser told Reuters on the sidelines of the World Economic Forum in Davos.

"What happened in Russia-Ukraine masked what would have happened. We were going through an energy crisis because of a lack of investment. And it started to bite following the pandemic," he added. Nasser said COVID restrictions in China would not last long and global oil demand would therefore resume its growth.

Saudi Arabia is currently producing 10.5 MM bpd, or every tenth barrel in the world, and will likely raise output to 11 MM bpd later this year when a broader pact between OPEC and allies such as Russia expires. Riyadh has faced calls from the West to raise output more quickly and expand capacity faster to help combat the energy crisis.

"If we could do it (expand capacity) before 2027 we would have done it. This is what we tell policymakers. It takes time". Nasser also said dialogue between the oil industry and policymakers over the transition from fossil fuels to energy which does not result in carbon emissions has been problematic.

"I don't think there is a lot of constructive dialogue going on. In certain areas we are not brought to the table. We were not invited to COP in Glasgow," he said referring the last year's U.N. climate conference in Glasgow, Scotland.He also said last year's message from the International Energy Agency that world oil demand was set to fall and no new investment in fossil fuel was needed had a profound impact. "We need a more constructive dialogue. They say we don't need you by 2030, so why would you go and build a project that takes 6-7 years. Your shareholder will not allow you to do it".

The energy transition process was therefore often proving chaotic and disruptive, he said. "There is no good plan... When you don't have plan B ready, don't demonise plan A," he said. "The pressure and the rhetoric is -- don't invest, you will have stranded assets. It makes difficult for CEOs to make investments." So-called stranded asset theory is the notion that significant oil and gas reserves are left unused because they are longer required.

Nasser said missteps during the global energy transition would only encourage greater use of coal by many Asian countries. "For policymakers in those countries the priority is to put food on the table for their people. If coal can do it half the price they will do it with coal". He said Aramco, where Saudi Arabia is the main shareholder, was different as it was investing in both fossil fuel and energy transition.

As per MRC, Saudi Aramco posted a record first-quarter net profit of riyal (SR) 148bn (USD39.5bn), up by about 82% year on year, thanks for strong crude oil prices and sales volumes, as well as improved downstream margins.
The energy giant’s total hydrocarbon production in the first three months of the year stood at 13m boe/day (barrels of oil equivalent per day), Saudi Aramco said in a statement on 15 May. Capital expenditure in January-March 2022 was USD7.6bn, it said.

As per MRC, Aramco is exploring further collaboration with Thailand’s national oil company PTT, as it expands its downstream presence in Asia. The two companies signed a memorandum of understanding at a ceremony in Bangkok on May 11. The companies aim to strengthen cooperation across crude oil sourcing and the marketing of refining and petrochemical products and LNG. Other potential areas of activity include blue and green hydrogen and various clean energy initiatives.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco's value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
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MOSCOW (MRC) -- Abu Dhabi-headquartered petrochemicals firm Borouge said on Monday it secured seven cornerstone investors, including India's wealthy Adani family for its USD2 billion initial public offering (IPO), said Reuters.

Borouge, a joint venture between Abu Dhabi National Oil Company (Adnoc) and Austrian chemical producer Borealis, on Monday said it secured seven cornerstone investors, including India’s wealthy Adani family for its USD2 billion initial public offering (IPO).

The Abu Dhabi-headquartered petrochemicals firm, which set the offer price for its IPO at Dh2.45 (USD0.67) a share, said it secured a total commitment of about Dh2.1 billion ($570 million) from Abu Dhabi state holding firm ADQ, the Abu Dhabi Pension Fund, the Emirates Investment Authority, India’s Adani family and entities controlled by International Holding Company, Multiply Group and Alpha Dhabi. The investment from the cornerstone investors is subject to a minimum six month lock-up period.

Analysis and market experts termed the IPO price very attractive for investors and said the IPO is bound to oversubscribed multiple times. They said the government may increase the IPO size and avail greenshoe option amid considering a very encouraging response from the market.

“Books for the initial public offering were covered in about an hour after opening,” a bookrunner on the deal said. The petrochemicals firm will list 10 per cent of its shares, or more than three billion ordinary shares, on the second biggest stock market of the region. The expected date of listing on the ADX is June 3, 2022.

Borouge, established in 1998, Borouge manufactures plastics used in everything from automobiles and food packaging to medicine vials and piping systems. The company’s main plant is in Abu Dhabi and it employs more than 3,000 people and serves customers across the Middle East, Africa and Asia.

We remind, Borealis (Vienna), a leading producer of polyolefins, has delayed the start-up of a new, world-scale propane dehydrogenation (PDH) plant at its existing production site at Kallo, Belgium, which is the company's biggest investment in Europe, until Q3 2023, citing Covid-19. The plant in Kallo in the port of Antwerp was previously targeted to begin operations by the end of next year.

Borealis is owned by OMV AG and Mubadala Investment Co., the Abu Dhabi state investment company. Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.

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MOSCOW (MRC) -- The Spanish oil and gas company Repsol sold shares in the Russian projects Evrotek-Yugra and ASB Geo to Gazprom Neft and its subsidiary Gazpromneft Service, follows from the data presented in Unified State Register of Legal Entities.

The sole shareholder of Evrotek-Yugra JSC was Gazprom Neft's subsidiary Gazpromneft-Service LLC, the shareholders of ASB Geo LLC were Gazprom Neft and Gazpromneft Service itself on a parity basis. The change occurred on January 21 and February 17, respectively.

The company's plans to leave the Russian Federation became known in December last year, when TASS sources reported that Repsol would sell these assets to Gazprom Neft for EUR30 million, which is 10 times less than invested in projects. Officially, the parties did not comment on this information.

Gazprom Neft said in January that it was working on various scenarios for the further development of assets, including with the involvement of another partner.

Evrotek-Yugra owns six licenses for geological exploration, exploration and production in the Khanty-Mansiysk Autonomous Okrug, including the development of two fields named after. Raul-Yuri Ervie and them. Belkin. ASB Geo owns a license for geological exploration of the Karabashsky-10 site in the Khanty-Mansiysk Autonomous Okrug, the company explained.

Repsol lifted the force majeure for the supply of butadiene in Tarragona (Tarragona, Spain), announced earlier in February. On February 10, the company stopped two lines for the production of butadiene with a total capacity of 130 tons per year in Tarragona. According to a company source, butadiene production was resumed on 23 March.

Earlier it was reported that against the backdrop of a change in global strategy, the Spanish Repsol, formerly a major investor in the Russian fuel and energy complex, announced its withdrawal from Russia in December last year. The company will sell its shares in the oil assets of Evrotek-Yugra and ASB Geo to a Russian partner, Gazprom Neft.

Repsol is the largest oil and gas company in Spain and Latin America, one of the ten largest oil and gas corporations in the world.
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MOSCOW (MRC) -- Topsoe, the global leader in decarbonization technologies, announces its intention to construct world’s largest and most advanced industrial scale electrolyzer production plant, said the company.

Topsoe’s ambition is to rapidly accelerate the adoption of green solutions in particular within Power-to-X. In this field, the company has the leading technology to decarbonize hard-to-abate sectors such as transport, chemicals, steel, and cement.

The new electrolyzer production plant, which will be constructed in Herning, Denmark, will be operational by 2024 and have an annual capacity of 500 MW with scalability up to 5 GW, making it one of the first industrial scale plants of its kind. Construction is scheduled to begin in the second half of this year, subject to Board and other regulatory approvals.

Roeland Baan, CEO at Topsoe, says: "We are willing and able to support society’s green ambitions and the need to accelerate the energy transition, and we have the technology to do it. With our new electrolyzer production plant, we lead the way in speeding up commercial-size Power-to-X solutions, and we do it with our highly innovative technology that outmatches technologies currently in the market."

Topsoe is already seeing considerable interest in our Power-to-X solutions and is in advanced discussion with a number of potential partners over future offtake agreements and commitments to reserve capacity from the electrolyzer plant.

Developing a strong Power-to-X industry in Europe will also enforce EU’s ambitions of being independent of energy imports from other regions. The milestone in ensuring large-scale availability of electrolyzers for Power-to-X solutions takes place at the same time as Ursula von der Leyen, President of the European Commission, and state leaders from Denmark, Germany, The Netherlands, and Belgium signed an agreement, in which the parties agree to invest in a ten-fold capacity increase of offshore wind by 2050. The political agreement ensures significant availability of the renewable power needed to supply future Power-to-X facilities in the EU.

As MRC reported earlier, in February 2021, Haldor Topsoe and Acron Group signed a MoU with the purpose of jointly working within green technologies area. The MoU includes initiatives within joint development of technologies aimed to reduce GHG emissions (СО2 and N2O) at the existing production sites of Acron Group and development of promising projects for new products with minimum environmental impact. Acron Engineering, a Russian engineering research center, which is a part of Acron Group, will be engaged in the work.

We remind that in October 2021, Dow (Midland, Michigan), the world's petrochemical major, and Haldor Topsoe partnered to promote the circular economy. About 300 million tons of plastic waste is produced every year on a global scale. The partnership between Dow and Topsoe marks a new initiative to efficiently convert waste plastics to circular plastics, keeping them out of the environment and responsibly reclaiming their value.

Founded in 1940, Topsoe is a global leader in developing solutions for a decarbonized world, supplying technology, catalysts, and services for worldwide energy transition.
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MOSCOW (MRC) -- Kuraray Co Ltd has released its consolidated financial results for the 1Q FY 2022 of the fiscal year ending 31 Dec 2022 (1 Jan-31 Mar 2022), said the company.

In the 1Q FY 2022 (1 Jan-31 Mar 2022), the world economy continued to recover as restrictions on economic activities were eased and more vaccinations were administered in countries around the world despite resurgences of COVID-19.

However, the economic outlook grew unclear due to a global semiconductor shortage and continued logistics disruptions as well as Russia-Ukraine crisis and accelerating inflation. Amid these circumstances, the company further focused on reducing costs and worked to revise sales prices.

Consequently, consolidated operating results for the 1Q FY 2022 are as follows: net sales were Yen 167,558 M (Yen 144,398 M in the 1Q FY 2021); operating income was Yen 22,145 M (Yen 16,786 M in the previous year); ordinary income was Yen 22,295 M (Yen 16,268 M in the previous year); and net income attributable to owners of the parent was Yen 12,701 M (Yen 5282 M in the previous year).

Furthermore, in the 1Q FY 2022, Kuraray recorded an extraordinary loss of Yen 2805 M as costs related to the suspension of operations due mainly to the suspension of some production facilities at a US subsidiary. Total assets increased Yen 39,033 M from the end of the previous fiscal year to Yen 1,130,047 M mainly because of a Yen 19,224 M increase in inventories, a Yen 13,808 M increase in construction in progress, and a Yen 6043 M increase in notes and accounts receivable-trade, and contract assets (notes and accounts receivable-trade in the previous year) despite a Yen 14,586 M decrease in cash and deposits.

Total liabilities increased Yen 11,121 M to Yen 522,533 M due to factors that included a Yen 6029 M increase in notes and accounts payable-trade and a Yen 3507 M increase in long-term borrowings despite a Yen 6392 M decrease in income taxes payable. Net assets rose Yen 27,911 M to Yen 607,514 M. Equity attributable to owners of the parent amounted to Yen 587,509 M, for an equity ratio of 52.0%.

As per MRC, Kuraray Co., Ltd. (Tokyo, Japan) has announced its decision to divest operations related to UV-based water treatment and ballast water treatment run by Calgon Carbon Corporation, a Group subsidiary based in the United States. The divested operations will be transferred to De Nora Water Technologies LLC in Italy. The business transfer is scheduled for the end of June.

As MRC informed before, Kuraray America, a subsidiary of the Kuraray Group and one of the leading international companies in the production of specialty chemicals, fibers, resins and elastomers, has resumed operations at its vinyl acetate monomer (VAM) plant in La Porte, Texas, USA. This plant with the capacity of 335,000 mt/year was shut in mid-February because of the unprecedently low temperatures in the region and restarted on 2 April, 2021.

iKuraray America is one of the world's largest specialty chemicals, fibers, resins and elastomers companies. The company's manufacturing facilities are located in Houston, Texas.
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