Saudi Arabia Reduces Oil Production

Saudi Arabia is working to ensure energy security in response to the announcement that it will cut oil production.

Share:

Saudi Arabia is working to ensure energy security in response to the announcement that it will cut oil production. This reduction will take place from November 2022, at a rate of two million barrels per day.

A Saudi-Sino cooperation

Saudi Arabia and China recognize the importance of reliable oil supplies in a context of geopolitical tensions. Opec+ wants to reassure after the announcement of its production cut. The Saudi kingdom provides China with the bulk of its crude oil, which is specially processed in its refineries.

Saudi Arabia delivered 1.76 million barrels per day between January and August. The goal was to increase the market share to 1.77% from 16.8% the previous year. Nevertheless, the number of barrels has fallen by 0.3% annually according to Chinese statistical data.

Saudi Energy Minister Prince Abdulaziz bin Salman and China’s energy policy administrator Zhang Jianhua say:

“The Kingdom continues to be China’s most reliable partner and crude supplier. We are committed to working together to ensure the stability of the international oil market. We will continue to develop enhanced communication and cooperation to address emerging risks and new challenges.”

Saudi and Chinese energy counterparts are also continuing discussions on the development of petrochemical units and refineries. In addition, they plan to collaborate on the peaceful use of nuclear power and the development of renewable energy.

Aramco’s investments in China

Aramco is showing interest in the downstream oil sector in China. The group is seeking to secure the supply of its crude to the vast Asian market. The director of the firm, Amin Nasser announces that Aramco is studying some opportunities with the Chinese oil group Sinopec.

Aramco is pursuing its 300,000 barrels per day production project in northeast China. The company announces its decision to invest in a liquid conversion plant for the chemical industry. The joint venture will bring together North Huajin Chemical Industries Group Corp and Panjin Xincheng Industrial Group.

The plant, located in Panjin, will combine a refinery with a capacity of 300 barrels of oil per day and an ethylene cracker. Thus, Aramco will be able to supply 210,000 barrels of crude per day. In addition, Sinopec plans to add a petrochemical plant to its 28 refinery. 000 barrels per day from Fujian.

A contested OPEC+ decision

Saudi Arabia is facing a tense oil market. It is the subject of criticism from the United States and the major producers when it announces the reduction of its production. Indeed, the White House accuses the Saudi kingdom in particular of making this reduction for political purposes.

The International Energy Agency, supported by the United States, says Saudi Arabia’s strategy will worsen the global energy crisis. The IEA also states that this decision limits oil stockpiling for the first half of 2023. The agency estimates that global oil demand will reach 100.58 million barrels per day in the fourth quarter.

In the third quarter, demand was 99.6 million barrels per day. The IEA estimates in a report that OPEC+ plans will disrupt the oil supply growth curve. On the other hand, higher market prices increase fluctuations and energy security problems.

Petro-Victory Energy announces the completion of drilling operations for the AND-5 well in the Andorinha field, Brazil, with positive reservoir results and next steps for production.
The Colombian prosecutor’s office has seized two offices belonging to the oil company Perenco in Bogotá. The company is accused of financing the United Self-Defense Forces of Colombia (AUC) in exchange for security services between 1997 and 2005.
Indonesia has signed a memorandum of understanding with the United States to increase its energy imports. This deal, involving Pertamina, aims to diversify the country's energy supply sources.
VAALCO Energy continues to operate the Baobab field by renovating its floating platform, despite modest production. This strategy aims to maintain stable profitability at low cost.
An empty reservoir exploded at a Lukoil-Perm oil facility in Russia, causing no injuries according to initial assessments pointing to a chemical reaction with oxygen as the cause of the accident.
The British Lindsey refinery has resumed fuel deliveries after reaching a temporary agreement to continue operations, while the future of this strategic site remains under insolvency proceedings.
BP and Shell intensify their commitments in Libya with new agreements aimed at revitalizing major oil field production, amid persistent instability but rising output in recent months.
The private OCP pipeline has resumed operations in Ecuador following an interruption caused by heavy rains, while the main SOTE pipeline remains shut down, continuing to impact oil exports from the South American country.
McDermott secures contract worth up to $50 million with BRAVA Energia to install subsea equipment on the Papa-Terra and Atlanta oil fields off the Brazilian coast.
Saudi Aramco increases its oil prices for Asia beyond initial expectations, reflecting strategic adjustments related to OPEC+ production and regional geopolitical uncertainties, with potential implications for Asian markets.
A bulk carrier operated by a Greek company sailing under a Liberian flag suffered a coordinated attack involving small arms and explosive drones, prompting an Israeli military response against Yemen's Houthis.
The Canadian government is now awaiting a concrete private-sector proposal to develop a new oil pipeline connecting Alberta to the Pacific coast, following recent legislation intended to expedite energy projects.
Petrobras is exploring various strategies for its Polo Bahia oil hub, including potentially selling it, as current profitability is challenged by oil prices around $65 per barrel.
Brazilian producer Azevedo & Travassos will issue new shares to buy Petro-Victory and its forty-nine concessions, consolidating its onshore presence while taking on net debt of about USD39.5mn.
Major oil producers accelerate their return to the market, raising their August quotas more sharply than initially expected, prompting questions about future market balances.
Lindsey refinery could halt operations within three weeks due to limited crude oil reserves, according to a recent analysis by energy consultancy Wood Mackenzie, highlighting an immediate slowdown in production.
The flow of crude between the Hamada field and the Zawiya refinery has resumed after emergency repairs, illustrating the mounting pressure on Libya’s ageing pipeline network that threatens the stability of domestic supply.
Libreville is intensifying the promotion of deep-water blocks, still seventy-two % unexplored, to offset the two hundred thousand barrels-per-day production drop recorded last year, according to GlobalData.
The African Export-Import Bank extends the Nigerian oil company’s facility, providing room to accelerate drilling and modernisation by 2029 as international lenders scale back hydrocarbon exposure.
Petronas begins a three-well exploratory drilling campaign offshore Suriname, deploying a Noble rig after securing an environmental permit and closely collaborating with state-owned company Staatsolie.