Saudi Arabia’s oil minister said the country is looking at raising domestic energy prices. Ali al-Naimi made the announcement in a move which could help reduce a lavish system of subsidies which has been blamed for waste and surging fuel consumption.
Saudi Arabia is delaying payments to government contractors as the slump in oil prices pushes the country into a deficit for the first time since 2009, according to three people with knowledge of the matter. Companies working on infrastructure projects have been waiting six months or more for payments as the government seeks to preserve cash, the people said, asking not to be identified as the information is private. Delays have increased this year and the government has also been seeking to cut prices on contracts, the people said.
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More than 75,000 people have signed a petition urging the release of a British grandfather who reportedly faces 350 lashes after breaking the law in Saudi Arabia when he was caught with home-made wine.
A global oil supply glut will persist through 2016 as demand growth slows from a five-year high and key OPEC producers maintain near-record output, the International Energy Agency said on Tuesday, even as low prices curb supply outside OPEC.
The family of a British former oil worker sentenced to 350 lashes in Saudi Arabia has pleaded with authorities to let the “frail” man come home.
Saudi Arabia is ordering a series of cost- cutting measures as the slide in oil prices weighs on the kingdom’s budget, according to two people with knowledge of the matter.
Saudi Arabia has withdrawn as much as $70 billion from global asset managers as OPEC’s largest oil producer seeks to plug its budget deficit, according to financial services market intelligence company Insight Discovery. "Fund managers we’ve spoken to estimate SAMA has pulled out between $50 billion to $70 billion from global asset managers over the past six months," Nigel Sillitoe, chief executive officer of the Dubai-based firm, said by telephone Monday. "Saudi Arabia is withdrawing funds because it’s trying to cut its widening deficit and it’s financing the war in Yemen," he said, declining to name the fund managers. Saudi Arabia is seeking to halt the erosion of its finances after oil prices halved in the past year. The Saudi Arabian Monetary Authority’s reserves held in foreign securities have fallen about 10 percent from a peak of $737 billion in August 2014, to $661 billion in July, according to central bank data. The government is accelerating bond sales to help sustain spending.
A year is a long time in the oil and gas industry and that has been especially true for the Kingdom of Saudi Arabia (KSA), caught in a maelstrom of geo-political, economic and market factors. In August 2014, Saudi Aramco announced US$40 billion a year of spending for the next 10 years on capital programmes. The year ended with the Saudi government projecting a US$40 billion budget deficit in 2015 and then came last month’s announcement of US$27 billion of bond issues by the end of this year to bolster the national finances even after a string of project cancellations and postponements. Over this period, the country has been locked in a struggle to regain market supremacy over US shale production while dealing with the West’s improving relations with Iran, its regional challenger, a royal succession and a spate of terrorism attacks.
Saudi Arabia and its Gulf allies are at odds with Iran and other OPEC members over whether the organization should include oil-price forecasts in its long-term strategy report, according to three of the group’s delegates. The Gulf kingdom, which has led the Organization of Petroleum Exporting Countries in a battle against rival producers, is seeking to exclude price assumptions from the report, according to the delegates, who asked not to be identified because the document isn’t public. The disagreement reflects internal divisions over whether OPEC policy should focus on prices or the stability of the oil market, one of the delegates said.
The oil price was near its lowest in more than a decade, cash reserves were being depleted, emerging markets were in turmoil and Saudi Arabia was beginning to panic. “It was a very scary moment,” said Khalid Alsweilem, former head of investment at the Saudi Arabian Monetary Agency, the country’s central bank. “And luckily at that point, oil prices started going up. Not by design, by good luck.” That was 1998, and now Saudi Arabia’s fortunes threaten to turn again. This time, luck might not be enough as the government tries to protect the wealth of a nation whose economy has swelled by five times since then. The bastion of conservative Sunni Islam also is paying for an expanding role in regional conflicts in the face of a resurgent Iran and Islamic State extremists who have bombed Saudi mosques.
The Saudi stock market is showing its mettle in the face of the latest oil rout that drove Brent into a bear market in July. The kingdom’s Tadawul All Share Index has retreated 4.2 percent since the end of June, compared with declines of 15 percent in Brazil in dollar terms, 11 percent in Russia and almost 10 percent in Nigeria. Brent, the benchmark oil grade against which Saudi crude is priced, has tumbled 21 percent in that period. The resilience shows how the world’s biggest crude producer is riding out the slump thanks to the confidence of locals who account for almost all the $525 billion market’s investors and the government’s determination to press ahead with infrastructure spending.
David Cameron has paid tribute to Saudi Arabia’s Prince Saud al-Faisal, the world’s longest-serving foreign minister, for his “great wisdom” following his death aged 75. Prince Saud was in the post for four decades until his retirement in April. His tenure saw him navigate the oil-rich region through a number of crises, including Lebanon’s civil war in the 1970s and 1980s, the 9/11 terror attacks in the US and subsequent invasion of Iraq, and most recently the rise of Islamic State (IS). The Prime Minister echoed comments by US secretary of state John Kerry who previously hailed Prince Saud as being “among the wisest” foreign ministers. Mr Cameron said: “I am saddened to hear of the death of His Royal Highness Prince Saud al Faisal.
Russian and Saudi oil ministers plan to discuss a broad cooperation agreement on Thursday at an economic forum in Russia's second city of St Petersburg, two sources told Reuters.
Saudi Arabia is ready to increase its oil output in the coming months to a new record to meet a rise in global demand, despite increased domestic use, a senior state oil company official said on Thursday.
McDermott International has been awarded a large brownfield contract by Saudi Aramco for the engineering, procurement, construction and installation of 12 jackets for offshore oil and gas fields in Saudi Arabian waters. The work is scheduled for completion by the end of the first quarter of 2016. The award is the second for the company from Saudi Aramco this year, and represents a work scope bud under an existing long-term agreement.
Saudi Arabia needs to take significant measures to curb public spending and reduce its reliance on oil revenue as it reacts to the last year’s slump in crude prices, according to the International Monetary Fund. “There will be a need for significant fiscal consolidation to be able to bring spending and revenues more in line with each other,” Masood Ahmed, director of the Middle East and Central Asia department at the IMF, said in an interview in Dubai on Tuesday. The world’s leading oil exporter must “ensure that there is an equitable sharing of oil wealth across future generations,” he said.
Saudi Arabian stocks traded near a six-month high as investors awaited an announcement by the country’s regulator on rules opening up the market to foreigners for the first time. The Tadawul All Share Index rose and fell as much as 0.3 percent before trading 0.2 percent lower at 12:18 p.m. in Riyadh. Al Rajhi Bank, the lender with the biggest weighting on index, added 0.2 percent. The Riyadh-based Capital Market Authority will publish the final regulations today to allow foreigners direct access to its stock market starting June 15. The rules will be enacted June 1. “There is nervous anticipation in the market,” Mohammed Al-Suwayed, a Riyadh-based financial analyst and partner at SPT Investors LLC, a market-analytics company, said by phone. “Investors are not very sure what sort of changes there will be, hence the fluctuation.” OPEC’s biggest oil exporter is removing barriers to one of the world’s most-restricted major stock markets as it pursues a $130 billion spending plan to boost non-energy industries. Investors from outside the six-nation Gulf Cooperation Council currently access shares listed on the country’s $572 billion market through equity swaps and exchange-traded funds. The CMA may allow institutional investors with a minimum of 18.75 billion riyals ($5 billion) under management to invest directly in the stock market, according to the draft rules published in August.
A 10-member supreme council for state-run oil company Saudi Aramco has been created by Saudi Arabia. The company, which is headed by the country's deputy crown prince, revealed the changes in a statement. It also provided details of the company's annual meeting in Seoul, South Korea, last week.
Saudi Arabia’s King Salman named Khalid A. Al-Falih as chairman of Saudi Arabian Oil Co., the world’s biggest crude exporter, replacing Oil Minister Ali Al-Naimi, according to state television. Al-Falih, born in 1959, was also named health minister in a royal court statement published by the official Saudi Press Agency on Wednesday. He had been president and chief executive officer of Aramco. No replacement for that job was announced. “Having Al-Falih as a full cabinet member now does not preclude him from other ministerial positions including petroleum in the future,” Mohammed al-Ramady, professor of economics at King Fahd University of Petroleum and Minerals in Dhahran, Saudi Arabia, said by phone on Wednesday.
Saudi Arabia said it will keep pumping oil to meet any demand for its supplies as the world’s biggest crude exporter seeks to defend its share of the market. The oil market is in “excellent” condition, Prince Abdulaziz bin Salman, Saudi Arabia’s deputy oil minister, told reporters on Monday in the eastern city of Khobar, without elaborating. The kingdom seeks to keep customers happy and maintain stability of prices, demand and supply, he said. Saudi Arabia is affirming its strategy to refrain from reducing output amid a global glut after Oil Minister Ali al-Naimi stressed earlier this month that his country won’t yield market share to higher-cost producers. The biggest OPEC producer pumped at close to a record pace in March, the International Energy Agency reported on April 15. That’s adding to an abundance of supplies fed partly by a US shale boom.
Security forces have been put on alert in Saudi Arabia for a possible attack on a shopping mall or energy installation. The country’s Interior Ministry spokesman Mansour Turki said information had been passed on which included the possibility of an attack on an Aramco installation. In 2006, four Al Qaeda militants breached the gates of a Saudi Aramco plant but were killed in a shootout with security guards before managing to cause any damage.
Oil prices jumped 5% yesterday, rallying for a second straight day after air strikes in Yemen by Saudi Arabia and its Gulf Arab allies sparked fears of a bigger Middle East battle that could disrupt world crude supplies. The military operation against Houthi rebels, who have driven the president from Yemen's capital Sanaa, has not affected the oil facilities of major Gulf producers. But fears the conflict could spread has stoked concerns about Middle East oil shipments.
Workers fired from US shale fields after the collapse in oil prices could soon have a new boss: the nation some blame for driving that decline. The state-owned Saudi Arabian Oil Co., also known as Saudi Aramco, is posting new job ads online aiming to snap up experts in extracting oil from shale as the country seeks to become a leader in that rapidly expanding effort. Tens of thousands of US workers have been fired since November as oil prices plunged because of oversupplies, driven in part by an OPEC decision supported by Saudi Arabia. That’s now giving Saudi Aramco a better chance to lure experienced workers to its own shale formations. Difficult living conditions had previously made the country a hard sell, said Tobias Read, chief executive officer of Swift Worldwide Resources, a recruiting firm.
Global crude consumption is strengthening, and prices will stiffen as demand matches supply, a senior adviser to Saudi Arabia’s oil minister said. Prices have stopped falling at about $60 a barrel as expanding demand helps contain the global glut, Ibrahim Al-Muhanna said at a conference in Doha, Qatar. It’s too early to say if the Organization of Petroleum Exporting Countries, which kept output unchanged in November, will alter policy when it gathers again on June 5, he said. “I am confident that demand is and will be stronger,” said Al-Muhanna, adviser to Saudi Oil Minister Ali Al-Naimi. “Supply will remain healthy, and the price will firm up.”