OPEC+ shifts meeting online as officials anticipate extending oil production cuts

Scion Industrial news

OPEC+ will hold next month’s policy meeting online rather than in person, while several delegates said they expected the group to extend its current supply cuts into the second half of the year.

Saudi Arabia and its partners will gather on June 2 — a day later than initially planned — to review roughly 2 MMbpd of production curbs, introduced to stave off a surplus and shore up crude prices. Crude traders expect the cutbacks will be maintained, and several delegates who asked not to be identified predicted the same.

No exact reason was given for the shift to an online meeting, something OPEC and its partners have been weighing for several weeks. The poor health of Saudi King Salman Bin Abdulaziz and the death of Iran President Ebrahim Raisi may have contributed to the decision, some delegates said.

For many oil market watchers, the policy implications of the decision were clear.

The 22-nation alliance, led by the Saudis and Russia, has been withholding supplies to offset brimming U.S. production and a fragile economic outlook in China and elsewhere. Moving the meeting online is “the clearest indication of a rollover” of existing quotas, said Viktor Katona, head crude analyst at market intelligence firm Kpler Ltd.

The move marks another pivot away from physical meetings for the group, which convened virtually throughout the Covid pandemic and has only held two face-to-face gatherings at its Vienna headquarters since 2020.

It made a similar last-minute switch in November amid a dispute over production quotas for African members. This time, delegates gave no indication of controversy.

Previous extensions of the current round of production curbs, which are being implemented by just eight members, were announced in separate statements by the countries themselves rather than by OPEC+. Supply quotas for the other members have already been set for the rest of 2024.

The group’s intervention is having some success, propping up international crude prices above $80 a barrel in London. Riyadh needs prices close to $100 to cover ambitious spending plans, the International Monetary Fund estimates.

Alongside the decision on whether to extend its production cuts, OPEC+ is reviewing the production capacity of member nations. The results likely will influence their separate targets for 2025.

The process so far has involved tough talks with outside consultants appointed to assess the matter, according to people familiar with the talks who asked not to be identified because those discussions were private.

The United Arab Emirates has been notably public in its stance, with state giant Abu Dhabi National Oil Co. announcing a capacity of 4.85 MMbpd — considerably higher than OPEC’s last estimate.


ExxonMobil, SONATRACH partner to develop Algeria’s oil and gas resources

Scion Industrial Engineering Pvt. Ltd.

Algeria’s SONATRACH and ExxonMobil signed a Memorandum of Understanding to study existing opportunities to develop oil and gas resources in the Ahnet basin and the Gourara basin, with an emphasis on operational excellence, technological innovation , respect for the environment and best sustainability practices.

The Chairman and CEO of SONATRACH said, “We are delighted with this step taken in the collaboration with ExxonMobil, a pioneering company in the energy sector. The signing of this memorandum of understanding opens up new prospects for the development of the Algerian mining sector and demonstrates the mutual desire of the two companies to achieve responsible and sustainable exploitation of our country’s natural resources.

“This agreement is an important first step in the creation of a partnership which will contribute to further unlocking the development potential of Algeria’s resources,” declared in turn Mr. John ARDILL, Vice-President Exploration & New Opportunities of Algeria. ExxonMobil. “Algeria’s long history in hydrocarbon development, along with ExxonMobil’s cutting-edge capabilities and proven experience, position us for success.


UAE’s ADNOC to reach 5 MMbpd oil capacity goal early despite OPEC production quotas

Scion Industrial ENgineering

The United Arab Emirates is on course to achieve its full oil capacity target more than a year earlier than expected.

Abu Dhabi National Oil Co.(ADNOC) is likely to reach its 5 MMbpd goal by the end of next year or early 2026, ahead of the 2027 goal the company had set, according to people with knowledge of the operations. The higher capacity will be a potential source of tension as OPEC and its allies deliberates new production quotas later this year.

OPEC and its partners have been restricting production for years to shore up the market and raise prices. The UAE — which said this month that it had raised capacity from last year’s level — has been eager to use some of its spare volumes. The country has occasionally clashed with OPEC’s de-facto leader Saudi Arabia on the issue, risking a split among the group three years ago, before a compromise was found.

Abu Dhabi is currently producing at about two-thirds of its capability. Its economy is arguably among the most diversified in the Gulf and it faces less pressure to keep oil prices high, though crude remains key to the emirate. OPEC+ is scheduled to review members’ existing capacity levels later this year, and use that to set produciton baseline levels — the starting point from which cuts are calculated — for 2025.

“The UAE is not doing this to generate spare capacity, they’re investing to produce this stuff,” said Ben Cahill, a senior fellow in the Center for Strategic and International Studies. “There’s a tension that is emerging and will be with us for some time within OPEC+.”

ADNOC declined to comment on its capacity target.

Government-owned ADNOC and its partners are ramping up drilling new wells in oil fields and connecting production sites to existing processing stations to squeeze out more out of deposits, said the people who asked not to be named while discussing private, operational matters. ADNOC has outlined a $150 billion spending plan, including on accelerating oil capacity additions, and wants to ensure all of it doesn’t lie idle.


Subsea7 secures offshore contract for Belinda field’s Trion FPSO from Serica Energy for $150 million

Scion Industrial Engineering

Subsea7 S.A. won a “sizeable” contract from Serica Energy, for the offshore Belinda field development south-east of the Triton FPSO. According to an online statement, the contract is valued between $50 million and $150 million.

The Belinda field is operated by Serica Energy and located approximately 190 kilometers east of Aberdeen in the UK Central North Sea, with a water depth of 95 meters.

The contract scope includes project management, engineering, procurement, construction and installation (EPCI) of a 5-kilometre 8” production pipeline with a 3” piggy-backed gas lift line and an electro-hydraulic controls (EHC) umbilical.

Subsea7’s scope also includes associated subsea structures and tie-ins to the Triton Floating Production Storage & Offloading (FPSO) vessel operated by Dana Petroleum, via an existing production manifold near the Triton riser base and for controls at the Evelyn valve skid.

Project management and engineering work will commence immediately in Aberdeen. The offshore activities are scheduled for Q3 2025.

Steve Wisely, Senior Vice President of UK and Global Inspection, Repair and Maintenance, Subsea7, said: “We are pleased to have this opportunity to supply Serica Energy with EPCI knowledge and demonstrate the extensive North Sea expertise we have amassed over 50 years. We look forward to supporting the safe, efficient and timely execution of this project.”


CNOOC secures five exploration and production contracts offshore Mozambique

CNOOC Limited’s wholly-owned subsidiaries have entered into petroleum exploration and production concession contracts (EPCCs) with the Ministry of Mineral Resources and Energy of Mozambique (MIREME) and Empresa Nacional de Hidrocarbonetos (ENH) for five offshore blocks in Mozambique.

The contracts were signed for a total of five blocks, S6-A, S6-B, A6-D, A6-E and A6-G, all located offshore Mozambique. The total area is approximately 29,000 km2, with water depths from 500 to 2,500 m.

According to the terms of the contracts, the first stage of the exploration period of the blocks shall be four years. The five wholly-owned subsidiaries of CNOOC Limited shall act as the operators in the exploration and development phases and independently owns the operating interests in the five blocks (S6-A 70%, S6-B 77.5%, A6-D 77.5%, A6-E 80%, A6-G 79.5%). ENH owns the remaining non-operating interests (S6-A 30%, S6-B 22.5%, A6-D 22.5%, A6-E 20%, A6-G 20.5%).


ADNOC to increase local manufacturing target to $24.5 billion by 2030 to boost UAE’s economy

Scion Industrial ENgineering pvt. Ltd.

ADNOC announced at the ‘Make it in the Emirates’ forum an increase in its local manufacturing target for critical industrial products in its procurement pipeline to AED90 billion ($24.5 billion) by 2030 to propel UAE’s economic diversification, strengthen the industrial sector and expand local manufacturing capabilities.

The new target is part of ADNOC’s expanded In-Country Value (ICV) program which aims to drive an additional AED178 billion ($49 billion) back into the UAE economy by 2028. ADNOC’s previous 2027 target for local manufacturing of AED70 billion ($19 billion) worth of products was delivered ahead of schedule following the award of two contracts for metal pipes and valves worth AED16.8 billion ($4.6 billion) to local manufacturers.

His Excellency Dr. Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology, and ADNOC Managing Director and Group CEO, said, “In line with the wise directives of the UAE leadership, ADNOC continues to play a pivotal role in enabling economic, social, and industrial growth in the UAE. Since the launch of ADNOC’s In-Country Value program in 2018, we have successfully collaborated with strategic partners to transform this initiative into an integrated national economic program to boost the UAE’s economic development.

“Having successfully delivered on our target to create AED70 billion in local manufacturing opportunities ahead of schedule, ADNOC is now boosting its local manufacturing target to AED90 billion to strengthen the UAE’s industrial sector. This expanded initiative will support the UAE’s economic diversification, attract local and international investors, and provide high-skilled private sector jobs for UAE Nationals. Additionally, it will stimulate entrepreneurial growth and drive sustainability in ADNOC’s supply chain. We invite local and international manufacturers to take advantage of our ICV program and participate in the UAE’s industrial growth journey.”

The contracts include AED8.8 billion ($2.4 billion) for metal pipes to PM Piping Petroleum Equipment, Ajmal Steel, and the Emirati-owned Al Gharbia Pipe Company; and AED8 billion ($2.2 billion) for mechanical valves to Samamat, Camtech Manufacturing, Tisco Valves Manufacturing, PTPA, MT Valves and Industries.

ADNOC’s expanded ICV program will provide a dedicated micro, small and medium enterprises (MSMEs) accelerator program to enable Emirati businesses and local mSMEs to conduct business across ADNOC’s supply chain.

The program will also introduce incentives to embed sustainability in local supply chains by encouraging investors to adopt clean technologies and best-in-class environmental, social, and governance (ESG) practices.

It will accelerate the adoption of artificial intelligence (AI) in ADNOC’s supply chain and enable micro, small and medium enterprises (MSMEs) to participate in strengthening the resilience of the UAE’s industrial base.

Since the launch of ‘Make it in the Emirates’ in 2021, ADNOC has more than tripled its direct spend with local manufacturers for industrial products within its procurement pipeline.

The company has driven AED187 billion ($51 billion) back into the UAE economy since 2018, through its ICV program. ADNOC’s ICV program has also created 11,500 job opportunities for Emirati talents in the private sector in collaboration with strategic partners such as the NAFIS program.

Through the program, contracts worth AED22.4 billion ($6.1 billion) were awarded to Emirati-owned small and medium enterprises (SMEs), across 600 companies.


Saudi Arabia takes bold strides toward greener future and carbon neutrality


Saudi Arabia has emerged as a key player when it comes to environmental responsibility, setting ambitious targets to mitigate greenhouse gas emissions via carbon credit offsets.

At the forefront of Saudi Arabia’s environmental initiatives is the dynamic approach to carbon neutrality. The Kingdom is determined to not only reduce its carbon footprint but also actively contribute to offsetting emissions through a comprehensive carbon credit program.

In an interview with Arab News, Louis Corapi, chief financial officer at Gulf Cryo, a Dubai-based gas firm, shed light on the significance of this initiative, following the company’s launch of a carbon capture and utilization facility in Rabigh.

“Through Vision 2030 and the 2060 commitment to carbon neutrality, Saudi Arabia set clear sustainability goals. Carbon credits are an important component of this strategy. Having an exchange is itself a signal to companies that this commitment is about action and requires broad participation,” Corapi said.

He added: “Secondly, credits will need to be independently verified to be counted. This field is still developing, but we’re confident that it will help to stratify the most and least effective projects.”

Corapi further added that the assignment of dollar values to carbon credits represents a transformative shift in incentivizing sustainability initiatives for companies. By attaching a monetary value to these credits, businesses gain a financial mechanism to support projects that might face challenges in traditional boardroom approvals.

“We also recognize that there are industries that are both hard to abate and vital to global economies,” he added.

Saudi Arabia is pursuing carbon neutrality with a multi-pronged approach that touches on everything from transportation to energy.

The Kingdom realizes how critical it is to actively pursue offsetting measures in addition to actively reducing its own emissions.

“What’s less discussed is that there are also many industries that require carbon dioxide as a key component to their manufacturing process. That started to change in 2014 when Gulf Cryo, together with our partner Equate, started a carbon capture plant in Kuwait,” Corapi explained.

He added: “We just commissioned a new CO2 capture plant in Petro Rabigh and are constructing the plant at Ma’aden. Together these plants will capture over 1,000 metric tonnes of CO2 per day which means 1,000 tonnes per day of fossil fuel burning is permanently stopped.”

For many years, carbon dioxide emissions have been removed and stored using carbon capture utilization and storage methods, which also enhance the quality of natural gas.

In addition to ensuring fossil fuels satisfy the world’s pressing energy demands, carbon capture simultaneously lowers emission levels and provides a means of assisting in the achievement of net-zero emissions by 2050.

Saudi Arabia declared a target of 44 million tonnes of carbon capture year by 2035, setting a high standard for emission reduction.

By 2027, Aramco and the Kingdom’s Ministry of Energy hope to build a hub in Jubail with a 9 million tonne annual storage capacity.

“Today, projects are only viable when there is a clear end user for the CO2. As long as businesses continue to evaluate investments with classical financial models, decisions are delayed, and emissions continue unabated,” Corapi said.

Furthermore, when asked for his opinion on what could be done better to implement carbon credit offset strategies, Corapi noted that “there is so much more to do, and that we don’t have time to waste,” adding: “We’ve demonstrated that effective technologies exist, but equipment is expensive to install.”

He went on to say: “Today, projects are only viable when there is a clear end user for the CO2. As long as businesses continue to evaluate investments with classical financial models, decisions are delayed, and emissions continue unabated.”


WTO’s Abu Dhabi Declaration to empower least developed nations


The least developed countries are set to benefit from the Abu Dhabi Declaration at the 13th WTO Ministerial Conference, improving global supply chain access.

Trade deals, aimed at fostering new agreements, will extend international trading system benefits to more nations, following intensive negotiations, as reported by the UAE’s official news agency, WAM.

Members have agreed to implement Special and Preferential Treatment for Sanitary and Phytosanitary Measures and Technical Barriers to Trade. This effort supports producers in the least developed countries, facilitating their global supply chain access, the WAM report stated.

It added that the current measures of SPS constitute a staggering 90 percent of non-tariff trade barriers, posing a significant obstacle for smaller nations and being viewed as discriminatory.

In a significant development for developing countries, ministers approved a decision responding to a 23-year-old mandate. The aim is to revamp special and differential treatment provisions for improved precision, effectiveness, and operational functionality.


Regional startup activity continues to rise ahead of LEAP24

Startup momentum in the Middle East and North Africa region is on the rise, with the eagerly awaited technology event LEAP24 just around the corner.

Regional venture capitals have replenished their funds and burgeoning enterprises have secured financing – preparing Riyadh’s ecosystem for a significant entrepreneurial uplift from March 4 to 7.

US-based fintech MoneyHash sealed $4.5 million in a seed funding round to further expand its presence in the Saudi and regional markets.

The round was co-led by the UAE’s COTU Ventures and Saudi Arabia’s Sukna Ventures, with additional investments from RZM Investment, Dubai Future District Fund, VentureFriends, and several angel investors.

Founded in late 2020 by Nader Abdelrazik, Mustafa Eid, and Anisha Sekar, MoneyHash is in the field of payment orchestration, offering a comprehensive payment operating system as a service designed to tackle the diverse technological and product challenges encountered by enterprise merchants.

“COVID certainly boosted the adoption of digital payments in the region, but the infrastructure remains significantly underdeveloped,” Abdelrazik said.

“In MEA, payment failure rates are three times the global average, and fraud rates and cart abandonment are over 20 percent higher than in all other regions. This places merchants in a challenging position, viewing payments as a cost and risk center rather than a strategic enabler,” he added.

Following a $3 million pre-seed round in 2022, the newly acquired funds are earmarked for expanding the business team, enhancing growth capabilities, and sustaining technological advancement.

Saudi investment firm acquires startup platform VeFund

The Saudi startup ecosystem is set to expand further with investment fund CoreVision acquiring VeFund, infusing artificial intelligence technologies for enhanced venture evaluation, innovation, and strategic growth.

The acquisition of VeFund, a regional platform for venture evaluation and investor connections, represents a significant step in CoreVision’s strategic growth, enhancing its portfolio with advanced AI-driven technologies.

The Saudi investment firm plans to use VeFund’s AI technology to support startups in navigating competitive environments.

Following the acquisition, CoreVision CEO Faisal Al-Abdulsalam will lead VeFund as its chief executive.

Al-Abdulsalam’s extensive experience and portfolio of over 80 investments in various sectors are set to bring a new strategy of leadership and vision to VeFund, the company said.

“We at CoreVision are not just investors, we see ourselves as ecosystem builders. As such, our vision is to transform VeFund into a secondary market for startups, offering a platform for investors to trade safe notes, which is essential in contributing to the vibrancy of the startup community here in Saudi Arabia,” said Al-Abdulsalam.

Launched in 2023 by Mohamed Gaber, an AI specialist and serial entrepreneur, along with co-founder Ahmed Magdy, VeFund’s intelligent evaluator provides a suite of tools, including an AI Survivability Index, valuation calculators, and extensive portfolio management solutions.

“I am excited about the future of VeFund and believe strongly that this transition will drive VeFund’s mission forward, fostering an environment of innovation and success for startups across the Middle East,” Gaber said.

VeFund currently has over 1,400 startups registered on its platform and has a database of more than 400 angel investors and investments funds spanning across Saudi Arabia, the UAE, Egypt, and Pakistan.

Saudi Arabia’s Tawaref inks MoU with Plus VC

Saudi Arabia’s Tawaref, recognized for financing regional startups and providing entrepreneurial services, has inked an agreement with Kuwait-based venture capital firm Plus VC.

The memorandum of understanding will see both firms collaborate to facilitate accelerated Saudi expansion for Plus VC’s startup portfolio companies through Tawaref’s Saudi Landing program.

This partnership underscores Plus VC’s recognition of the crucial role that Tawaref plays in minimizing the time to market for tech startups and assisting them in navigating the complexities of securing approvals from various government departments for establishing operations in Saudi Arabia.

The Saudi Landing program by Tawaref serves as a comprehensive solution, liaising with over 10 entities within the Kingdom.

It offers startups advice on market entry strategies, understanding regulatory requirements, and adapting to local business practices, thus streamlining the process for startups to establish and expand their presence in the Kingdom efficiently.

UAE’s COTU Ventures unveiled $54m fund

The UAE-based early-stage venture capital firm COTU Ventures has unveiled a $54 million inaugural fund dedicated to nurturing startups across the Middle East from pre-seed to seed stages.

Established in 2020 by Amir Farha, COTU Ventures boasts a dynamic portfolio of Mena startups, such as Huspy and MoneyHash.

This fund is set to provide robust support to startups from their inception to post-production launch, offering up to $2 million in investment, and earmarking additional capital for follow-on investments.

UAE’s Hayi raises seed round

The UAE-based social networking app Hayi has successfully raised an undisclosed amount in a seed funding round led by Plus VC, with additional backing from regional angel investors.

Launched in 2020 by founders Chris Darnell and Rene Morgan, Hayi is designed as a community-centric platform, facilitating connections among residents within the same neighborhood for the exchange of news and services.

This infusion of capital is earmarked for scaling Hayi’s operations, enhancing its marketing efforts, and broadening its presence both within the UAE and internationally.

This follows a pre-seed investment of $325,000 in 2021 from Sarya Holdings and Falak Startups, marking a continued trajectory of growth and expansion for the company.


Saudi non-oil exports to GCC nations surge by 42% to hit $5.55bn

Scion Industrial Engineering

Saudi Arabia’s non-oil exports to Gulf Cooperation Council countries saw a 42 percent annual increase in the final three months of 2023, according to official data.

Information released by the Kingdom’s General Authority of Statistics showed the total value of these transactions reached SR20.8 billion ($5.55 billion), primarily due to an increase in re-exports, which rose by 106 percent to hit SR11.34 billion.

Re-exports – goods imported into a country and then exported to another without significant processing or alteration – accounted for 55 percent of total non-oil shipments to Bahrain, Kuwait, and Oman, as well as Qatar, and the UAE.

Among these GCC nations, the UAE emerged as the top destination, receiving 67 percent of the non-oil shipments from Saudi Arabia, totaling SR14 billion. Of these transactions, approximately 61 percent were re-exports, representing a 97 percent growth during this period.

Factors contributing to this surge in re-exports could include the solid economic bonds among GCC nations, fostering a unified market that facilitates the free flow of goods and services.

Saudi Arabia’s strategic position as a central hub within the GCC region could also minimize transportation expenses and transit durations due to its proximity.

Moreover, the Kingdom’s modern and well-developed infrastructure, encompassing ports, airports, and road networks, further streamlines the movement of goods, potentially influencing this uptick in re-exports.

Additionally, the GCC region’s strategic location on major trade routes allows for efficient redistribution of goods and services. Taking advantage of this, the countries are developing logistics hubs to facilitate the movement of both domestic and transit goods.

Saudi Arabia also aims to revolutionize its container-shipping sector, mirroring its efforts in non-oil industries like electric cars and renewable energy.

With plans to expand inland logistics hubs and improve rail connections, the country seeks to increase annual container throughput to 40 million twenty-foot equivalent units by 2030.

This ambition aligns with the grand scale of projects such as the $500 billion NEOM scheme, featuring a 170-km. city and a container port with a 9 million TEU capacity.

The giga-project will also include the Oxagon port, slated to become the largest floating structure globally, situated at the nexus of three continents.

The robust economic ties between the UAE and Saudi Arabia are further demonstrated through their mutual investments.

By the end of 2022, the UAE had amassed a significant foreign direct investment stock of SR104 billion in Saudi Arabia, as reported by the General Authority of Statistics. This substantial investment
plays a pivotal role in bolstering their economic partnership, fostering growth, and has paved the way for the expansion of non-oil trade activities between the two nations.

Transport equipment accounted for 31 percent of non-oil exports to the UAE from the Kingdom in the final quarter of 2023, reaching a value of SR4.39 billion in what is a 145 percent increase.

Machinery and electrical parts constituted another 27 percent, totaling SR3.75 billion with a 67 percent rise.

Additionally, chemical industry products accounted for 10 percent, reaching SR1.44 billion – a 17 percent increase during this period.

Among the GCC countries, trade with Qatar experienced the most substantial growth, with non-oil exports to the country soaring by 439 percent. Of these exports, 61 percent comprised transport equipment amounting to SR888 million, while 18 percent were chemical industry products totaling SR255 million.

Saudi Arabia and Qatar are actively working to enhance their economic, military, sports, and cultural ties. This push comes after the meeting of the Saudi-Qatari Coordination Council, attended by Crown Prince Mohammed bin Salman and Qatar’s Emir, Sheikh Tamim bin Hamad, in December.

The leaders consider the council vital for communication and coordination, underlining the importance of expanding cooperation to drive sustainable growth and prosperity for both nations and their citizens.

The trade balance with the GCC saw a substantial 90 percent annual increase in the fourth quarter of 2023, although imports still exceeded non-oil exports by SR489 million.

Around 68 percent of Saudi Arabia’s imports from the GCC countries originated from the UAE, which saw a 22 percent rise to SR14.37 billion.

In contrast, imports from other nations in the economic bloc decreased, with Kuwait experiencing the most significant decline of 49 percent to SR351 million.

Mineral products account for the largest share of imports from the UAE at 33 percent, amounting to SR4.8 billion, followed by pearls and other jewelry at 19 percent, totaling SR2.7 billion.

Industrial equipment, chemicals, and plastics made up 16 percent at SR2.3 billion.