{"id":3675,"date":"2023-02-14T15:08:33","date_gmt":"2023-02-14T15:08:33","guid":{"rendered":"http:\/\/roydadnaft.ir\/English\/?p=3675"},"modified":"2023-02-14T15:08:34","modified_gmt":"2023-02-14T15:08:34","slug":"middle-east-oil-gas-review-january-2023","status":"publish","type":"post","link":"https:\/\/roydadnaft.ir\/English\/3675\/","title":{"rendered":"Middle East Oil & Gas Review January 2023"},"content":{"rendered":"
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Saudi Arabia reduced in early January the price of its crude oil going to Asia and Europe in February, expecting still weak demand, but signs started to emerge later in January that oil consumption in China could be set to rebound in the coming months, OPEC and the Saudi state oil giant Aramco said.<\/p>\n\n\n\n

In addition, OPEC left its 2023 global oil demand forecast unchanged, but noted that now it expects better performance in China\u2019s economy after its reopening from COVID-19 restrictions and slightly better economic performance in the Eurozone and the United States.  <\/p>\n\n\n\n

OPEC More Upbeat on Global Economy and Oil Demand<\/h4>\n\n\n\n

OPEC sounded a more upbeat tone on the prospects of the global economy and oil demand growth this year, following better-than-expected data for the fourth quarter of 2022. The forecasts in OPEC\u2019s Monthly Oil Market Report (MOMR) published in the middle of January were for slightly higher economic growth in major economies. The forecast for global oil demand growth in 2023 was left unchanged from the previous month\u2019s assessment at 2.2 million barrels per day (bpd), with the OECD increasing by 300,000 bpd and non-OECD growth at 1.9 million bpd. Minor upward adjustments were made due to the expected better performance in China\u2019s economy on the back of its reopening from the \u2018zero COVID\u2019 policy, OPEC said.<\/p>\n\n\n\n

\u201cThe global momentum in 4Q22 appears stronger than previously expected, potentially providing a sound base for the year 2023, especially in the OECD economies. The 2022 growth in both Euro-zone and US has surpassed previous forecasts,\u201d the organization noted.<\/p>\n\n\n\n

China\u2019s latest efforts to reopen the economy and support the property sector have improved the prospects for a rebound in 2023 economic growth after the end of the \u2018zero COVID\u2019 policy, while India is likely to weather the current global economic issues relatively well in 2023, following strong growth in 2022, according to OPEC.    <\/p>\n\n\n\n

Moreover, additional impetus to the economy could come from the US Fed managing a soft landing for the American economy, the cartel said.<\/p>\n\n\n\n

\u201cUpside potential may come from the US Federal Reserve successfully managing a soft landing in the US. This is the most likely outcome, given the expected slowdown in inflation and the sufficient underlying demand dynamic. An even stronger-than-anticipated rebound in China is another possibility as well.\u201d<\/p>\n\n\n\n

Oil demand in China, the world\u2019s top crude oil importer and a major customer of OPEC\u2019s Middle Eastern heavyweights, \u201cis on course to rebound\u201d after the easing of the COVID restrictions, with the country\u2019s GDP projected to grow by 4.8 percent in 2023.<\/p>\n\n\n\n

\u201cIn addition, China\u2019s plans to expand fiscal spending to aid the economic recovery is likely to support oil demand in manufacturing, construction and mobility,\u201d OPEC said.<\/p>\n\n\n\n

\u201cThe manufacturing sector is expected to start recovering relatively quickly, and the aviation sector is expected to see significant increases in both local and international travel given pent-up demand. Furthermore, the performance of the resilient petrochemical sector is also projected to improve further.\u201d<\/p>\n\n\n\n

Manufacturing and construction activity are set to accelerate in the second quarter of the year, and requirements for the petrochemical industry are also expected to expand. This would boost demand and output for middle and light distillate products. Accordingly, China\u2019s oil demand is projected to accelerate further to reach year-on-year growth of 800,000 bpd, said OPEC.<\/p>\n\n\n\n

Chinese Reopening Could Be Major Boost To Oil Demand<\/h4>\n\n\n\n

OPEC Secretary General Haitham Al-Ghais also expressed cautious optimism about an economic and oil demand recovery in an interview with Bloomberg in mid-January.<\/p>\n\n\n\n

\u201cWe are optimistic, but we are cautiously optimistic,\u201d Al-Ghais said.  <\/p>\n\n\n\n

\u201cWe\u2019re seeing signs of green\u201d as China is easing the Covid measures, OPEC\u2019s Secretary General told Bloomberg.<\/p>\n\n\n\n

Saudi Aramco, the Saudi state oil giant and the biggest oil firm and exporter in the world, also expects the Chinese reopening to result in a rebound in global oil demand in 2023, Aramco\u2019s chief executive Amin Nasser told Bloomberg on the sidelines of the World Economic Forum in Davos.<\/p>\n\n\n\n

\u201cWe are very optimistic in terms of demand coming back to the market,\u201d Nasser said, adding \u2013 referring to China \u2013 \u201cHopefully, in the next couple of months, we\u2019ll see more of a pickup in the economy there.\u201d<\/p>\n\n\n\n

Deals & Investments<\/h4>\n\n\n\n

While the Middle Eastern firms prepare for a rebound in Chinese oil demand this year, they have also recently signed major deals for investments, including in low-carbon solutions.  <\/p>\n\n\n\n

In the United Arab Emirates (UAE), Abu Dhabi National Oil Company (ADNOC) and Mubadala Investment Company announced at the end of December a transaction involving Austria-based energy and chemicals group OMV AG. Under the agreement, ADNOC will acquire a 24.9-percent shareholding in OMV from Mubadala. Financial details of the transaction were not disclosed.<\/p>\n\n\n\n

ADNOC also allocated $15 billion to advance low-carbon projects across its diversified value chain by 2030. The projects will include investments in clean power, carbon capture and storage (CCS), further electrification of ADNOC\u2019s operations, energy efficiency, and new measures to build on ADNOC\u2019s policy of zero routine gas flaring. The announcement follows the guidance by ADNOC\u2019s Board of Directors in November 2022 to accelerate delivery of its low-carbon growth strategy and the approval of its Net Zero by 2050 ambition.  <\/p>\n\n\n\n

\u201cNow, more than ever, the world needs a practical and responsible approach to the energy transition that is both pro-growth and pro-climate, and ADNOC is delivering tangible actions in support of both these goals,\u201d said Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Managing Director and Group CEO.<\/p>\n\n\n\n

ADNOC announced the setting-up of ADNOC Gas, effective 1 January 2023, its new world-scale gas processing, operations and marketing company. The company combines the operations, maintenance, and marketing of the ADNOC Gas Processing and ADNOC LNG businesses into one global consolidated business.  <\/p>\n\n\n\n

ADNOC has also entered into a partnership with the Fujairah Natural Resources Corporation (FNRC), Abu Dhabi Future Energy Company (Masdar), and 44.01 to pilot technology that permanently mineralizes carbon dioxide (CO2) within rock formations found in the Emirate of Fujairah. The project, beginning in January 2023, will use 44.01\u2019s Earthshot prize-winning Carbon Capture and Mineralization (CCM) technology to eliminate CO2 from the atmosphere. It will be the first CCM project by an energy company in the Middle East.  <\/p>\n\n\n\n

Abu Dhabi Chemicals Derivatives Company RSC Ltd (TAZIZ) signed a shareholder agreement with Fertiglobe, GS Energy Corporation, and Mitsui & Co., Ltd., to develop an anticipated 1 million tonnes per annum low-carbon ammonia production facility at the TA\u2019ZIZ Industrial Chemicals Zone. This is a further step in the project\u2019s journey towards a final investment decision (FID).<\/p>\n\n\n\n

Finally, ADNOC started in January work on the world\u2019s first fully sequestered CO2 injection well in a carbonate saline aquifer. The project, expected to begin injecting CO2 in Q2 2023, marks another step in ADNOC\u2019s commitment to decarbonize its operations, reduce its carbon intensity by 25 percent by 2030, and deliver on its Net Zero by 2050 ambition.<\/p>\n\n\n\n

In Kuwait, Paris-listed Technip Energies has been awarded a large contract for Project Management Consultancy (PMC) by Kuwait Oil Company (KOC). A \u201clarge\u201d award for Technip Energies is a contract award representing between \u20ac250 million and \u20ac500 million of revenue.  <\/p>\n\n\n\n

The five-year framework agreement contract covers front-end engineering design (FEED), project management, and associated services for KOC\u2019s major projects. This contract represents a renewal of the first five-year framework agreement that was awarded to Technip Energies by KOC in 2014.<\/p>\n\n\n\n

Qatar\u2019s state firm QatarEnergy announced in early January the Final Investment Decision (FID) with Chevron Phillips Chemical Company LLC (CPChem) to build the Ras Laffan Petrochemicals complex – a $6 billion integrated olefins and polyethylene facility at Ras Laffan Industrial City.  <\/p>\n\n\n\n

The Ras Laffan Petrochemicals complex, expected to begin production in 2026, consists of an ethane cracker with a capacity of 2.1 million tons of ethylene per annum, making it the largest in the Middle East and one of the largest in the world.  <\/p>\n\n\n\n

\u201cThis marks QatarEnergy\u2019s largest investment ever in Qatar\u2019s petrochemicals sector and the first direct investment in 12 years,\u201d said Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs and President and CEO of QatarEnergy.<\/p>\n

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