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Regional News

Brazil Petrobras Restarts Trade With Major Oil Traders

Petrobras is resuming oil trade with the world’s top commodity trading houses Vitol, Trafigura, and Glencore, after nearly two years of suspension amid a bribery investigation into the oil trading giants, Brazil’s state-held oil firm told Reuters late on Monday.

In December 2018, Brazilian authorities opened an investigation into Vitol, Trafigura, and Glencore over alleged bribery in which traders had allegedly paid bribes of at least US$31 million to Petrobras insiders, traders, and employees in exchange for oil deals.
Just after the investigation was announced, Petrobras said it was suspending oil and fuel trade with the three major commodity traders.
As part of the so-called Operation Car Wash probe, the major scandal that shook Petrobras over the past half a decade, Swiss authorities searched offices of Vitol and Trafigura in Geneva in November 2019, as part of the investigation which alleges that the top management of the oil traders were aware of the scheme.
The oil trading firms have always said that they have “zero tolerance” toward corruption and bribery and are cooperating with authorities.
Nearly two years after Petrobras suspended oil and fuel trade with three of the largest commodity traders in the world, the Brazilian company is now resuming deals with Vitol, Trafigura, and Glencore after boosting its compliance procedures, instituting ‘know-your-customer’ due diligence, and having integrity checks carried out on its traders, Petrobras told Reuters in a statement.
“After a temporary suspension period with the companies cited, the company re-initiated business after adopting and perfecting a series of specific measures meant to bring more security to the commercial relationship,” Petrobras said.
The temporary suspension of dealings with the oil traders was lifted some three months ago, a source with knowledge of the issue told Reuters.
The Operation Car Wash scandal was the biggest in Brazil’s history and led to the impeachment of President Dilma Rousseff and prison sentences for high-ranking business executives from various industries.
Source: Oil Price
UAE ADNOC to cut Nov crude oil term supplies by 25% for all grades

Abu Dhabi National Oil Company (ADNOC) will reduce crude oil supplies to term buyers by 25% in November as part of its commitment to the OPEC+ deal, a notice seen by Reuters showed and sources with knowledge of the matter said.

The 25% supply cut will apply to all four ADNOC crude grades - Murban, Umm Lulu, Das, and Upper Zakum, according to the notice from ADNOC, the main oil producer of United Arab Emirates (UAE).
An ADNOC spokesman confirmed the 25% reduction plan.
ADNOC deepened its export cuts to 30% for term buyers in October from cuts of 5% between July and September.
In August the UAE pumped 2.693 million barrels of oil per day, above its OPEC+ quota, sources told Reuters.
The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, jointly known as OPEC+, are cutting production by 7.7 million barrels per day to support prices, after cutting by 9.7 million bpd from May to July.
A OPEC+ ministerial panel known as the JMMC, which monitors compliance with the cuts, is due to meet on Thursday and the poor conformity with the cuts by the UAE, along with other OPEC+ members, and a compensation mechanism will be discussed during the meeting, OPEC+ sources told Reuters.
Source: Zawya
OPEC New Headache Is Its Third-Biggest Producer

The United Arab Emirates (UAE), currently OPEC’s third-largest producer, breached its OPEC+ oil production quota by a massive 520,000 barrels per day (bpd) in August, data from the International Energy Agency (IEA) showed on Tuesday, suggesting that one of Saudi Arabia’s allies in ‘leading by example’ in the deal could be the cartel’s new compliance headache.

According to IEA’s Oil Market Report, cited by Bloomberg, the UAE pumped 3.11 million bpd in August, up by 240,000 bpd from July and 520,000 bpd above its ceiling of 2.59 million bpd as per the OPEC+ deal.
Using tanker-tracking data, the IEA estimated that OPEC’s third-largest producer exported as much as 2.7 million bpd in August, stockpiled oil at a rate of 115,000 bpd, processed 370,000 bpd at refineries, and blended 100,000 bpd of condensate in its crude streams, Bloomberg reports.
Earlier this month, the UAE’s Energy Minister Suhail Al Mazrouei himself admitted that the UAE’s production increased to the above-quota 2.693 million bpd in August, but that “measures have been taken to compensate for this temporary increase due to peak summer electricity demand in the UAE, which required an increase in oil production and associated gas.”
Al Mazrouei also said that Abu Dhabi National Oil Company (ADNOC) had notified its term customers that a 30-percent nomination cut would be applied to all grades in October.
The UAE was already estimated last week to have exported a lot more crude oil in August as it produced more than its quota under the OPEC+ deal, undermining the oil market’s faith in the group’s unity in the cuts.
Unlike in previous OPEC+ pacts, non-compliance with the quotas this time requires the culprits to compensate for any above-quota production with more reductions in the following months.
Saudi Arabia, which has been publicly pressing non-compliant OPEC members Iraq and Nigeria to fall in line with their quotas, is likely to be more discreet in its pressure on the UAE, RBC Capital Markets told Bloomberg.
Source: Oil Price
Iran Boosts Oil Output At Oilfields Shared With Iraq

Iran has raised oil production from the oilfields in its southwest it shares with Iraq to 400,000 barrels per day (bpd) from 70,000 bpd in the past seven years, Shafaq News quoted Iranian Oil Minister Bijan Zangeneh as saying on Tuesday.

The oilfields in Karoun that Iran shares with Iraq include five major fields—North Azadegan, South Azadegan, North Yaran, South Yaran, and Yadavaran.
Iran plans to significantly boost production and exports from the West Karoun cluster of oilfields, estimated to contain at least 67 billion barrels of oil in place, Oilprice reported last month.
Iran officially launched in August the first phase of the oil-transfer chain of the West Karoun oilfields - with a daily delivery capacity of 460,000 bpd of heavy crude oil and 254,000 bpd of light crude oil to export terminals. After developing Phase 2 of the project, which is currently underway, Iran will have the capacity to transfer more than one million barrels of crude oil from the West Karoun oilfields cluster to export terminals.
Also in August, Iran signed a total of 13 oil contracts with 14 domestic firms, which will raise the Islamic Republic’s oil production capacity by 185,000 bpd. The 13 deals are worth a total of US$1.78 billion (1.527 billion euro) and were awarded by the Iranian Offshore Oil Company (IOOC) and the National Iranian South Oil Company (NISOC) to 14 Iranian companies as contractors.
According to Reza Dehghan, Deputy Director for Development and Engineering Affairs at National Iranian Oil Company (NIOC), the new contracts will enhance and maintain oil production in Iran, which is exempted from the ongoing OPEC+ production cut agreement because of the U.S. sanctions on its oil industry.
In July, Iran signed a US$1.3-billion deal with domestic companies to double the production capacity at the massive Azadegan oilfield, expecting the rise in production to boost its oil revenues by US$1 trillion, Iranian officials said at the signing ceremony. In the Iranian field, production capacity is expected to more than double in 30 months, to 320,000 bpd from 140,000 bpd currently, and from just 45,000 bpd back in 2013.
Source: Oil Price
ADNOC Distribution to provide nuclear quality products for Barakah Nuclear Energy Plant

The Emirates Nuclear Energy Corporation, ENEC, and its subsidiary responsible for the operation and maintenance of the Barakah Nuclear Energy Plant, Nawah Energy Company, Nawah, have marked a key milestone in their joint efforts to develop the UAE’s nuclear energy supply chain with the qualification of ADNOC Distribution as the first local supplier of petroleum products.

ADNOC Distribution joins 73 local companies that ENEC’s Business and Industrial Development Team and the Nawah Quality Assurance team have qualified to supply high-quality products for the Barakah plant. These products include lubricating oil, engine coolant and anti-rust, grease, and fuels, which will be used across a range of applications including the lubrication and fuelling of engines and various industrial equipment.
ADNOC Distribution is the first company in the UAE to supply petroleum products for the Barakah Plant, after being qualified on the NASL within the highest safety-related category ‘Q Class’. The qualification requires the ability to adhere to the ‘nuclear grade’ NQA-1 standard, developed and maintained by the American Society of Mechanical Engineers, ASME.
These recent achievements are the result of Nawah and ENEC’s ongoing efforts to support the development and growth of a local supply chain that can meet operational service, spare parts and consumable requirements for the safe, secure and efficient operation and maintenance of the Barakah Nuclear Energy Plant for at least the next 60 years.
Source: Zawya
India Nayara Energy sees diesel recovery to pre-COVID-19 level by end-2021

India's diesel demand growth is likely to return to pre-COVID-19 levels by the end of 2021 or early 2022, Ashutosh Deshpande, vice president of private Indian oil refiner Nayara Energy, said at the Platts APPEC 2020 virtual conference.

Deshpande said a recovery in economic activity, good monsoon rains and the festival season in Indian would augur well for the diesel demand.
India's diesel demand has already recovered from April's lows, when the nation was under complete lockdown to prevent spread of COVID-19.
But refinery runs will remain subdued and there could even be further cuts in the short term, Deshpande said.
"It remains to be seen who will cut the runs further."
Deshpande said an emerging trend in the coming years would be for complex refiners to look to get into the petrochemical or retail spheres.
This week, Indian Oil Corp (IOC), said it will expand its petrochemicals capacity and integrate it with its textile business to help offset the impact of low refining margins.
Source: Zawya India's diesel demand growth is likely to return to pre-COVID-19 levels by the end of 2021 or early 2022, Ashutosh Deshpande, vice president of private Indian oil refiner Nayara Energy, said at the Platts APPEC 2020 virtual conference.
Deshpande said a recovery in economic activity, good monsoon rains and the festival season in Indian would augur well for the diesel demand.
India's diesel demand has already recovered from April's lows, when the nation was under complete lockdown to prevent spread of COVID-19.
But refinery runs will remain subdued and there could even be further cuts in the short term, Deshpande said.
"It remains to be seen who will cut the runs further."
Deshpande said an emerging trend in the coming years would be for complex refiners to look to get into the petrochemical or retail spheres.
This week, Indian Oil Corp (IOC), said it will expand its petrochemicals capacity and integrate it with its textile business to help offset the impact of low refining margins.
Source: Zawya
Trading arm of Abu Dhabi ADNOC hires new global crude lead

The trading arm of Abu Dhabi's oil firm ADNOC has hired Jason Phing as global book lead for crude oil, sources familiar with the matter said.

Phing, who has nearly 20 years of experience as an oil trader, is due to start at the end of this month. He left BB Energy last week after eight years, during which time he built up the crude team in London. Prior to that, Phing was at trading subsidiaries of Royal Dutch Shell for 11 years in London and Singapore.
Source: Zawya
Dubai-based GP Global tanker seized in India over loan dispute

An Indian court has ordered the seizure of a tanker belonging to Dubai-based oil trading firm GP Global after a petition from UAE lender National Bank of FujairahNBF.AD over a loan default, a court document showed.

The Gujarat High Court directed the authorities of Pipavav Port on Sept. 9 to seize the company's bunkering tanker, GP B3, and detain it until a further court order or until the outstanding loan amount of just over $2 million is paid, a court document seen by Reuters shows. The next hearing is on Sept. 17.
GP Global said last month it had appointed restructuring experts after failing to reach a deal with its lenders over debt restructuring. It said in July an internal investigation had uncovered fraud within the company and led to criminal complaints against some of its employees.
In the legal challenge in India, lawyers for National Bank of Fujairah (NBF) told the court the company had borrowed $11.05 million from the bank in 2015 and mortgaged the seized vessel as well as two other tankers, the GP B2 and GP Asphalt III. Those vessels were last tracked to be offshore UAE, according to ship-tracking data from Refinitiv Eikon.
NBF received repayments for the loan, but defaults occurred last month breaching the conditions of the loan. The UAE lender is now demanding GP Global pay back all respective loans of the facilities with accrued interest, amounting to over $2 million.
GP Global, a supplier of marine fuels worldwide with offices in Europe, Asia and America, told Reuters in an email it will not be able to comment "since the matter is subjudice".
National Bank of Fujairah said it working closely with the group and its key officials to address and resolve the issues.
"We are part of the syndicated lenders to GP Global group and have also provided bilateral facilities. The group has appointed an Advisor and a Chief Restructuring Officer to restructure its debts," it said in an email.
Source: Zawya
Abu Dhabi Ports Announces Expansion of Khalifa Port is on Track

Abu Dhabi Ports announced that Khalifa Port’s expansion is on pace for completion.

The Khalifa Port expansion, announced in December 2019, aims to attract new business and significantly boost capacity in line with evolving customer expectations, and has progressed significantly since its inception despite the challenging economic conditions presented by the global pandemic. Upon completion, the project is expected to substantially increase handling volumes by providing additional deep-water access and enhanced infrastructure.
To date, 200 metres of quay wall and almost 175,000 sqm of land within Khalifa Port Logistics (KPL) have been handed over ahead of the project’s full phase one completion in Q1 2021.
At the same time, considerable progress has also been made on the first phase of Khalifa Port’s South Quay development that is slated for completion by Q4 2020. With 80 percent of construction already complete, a total of 650 metres of quay wall, containing two berths alongside 37,000 sqm terminal yard is now available in advance of receiving its first shipment.
Progress has also been made on Abu Dhabi Terminals’ (ADT) expansion plans with the delivery of five new ship-to-shore cranes. With each unit boasting a lifting capacity of 90 tonnes, the new cranes have boosted capacity at the terminal significantly and have put Khalifa Port Container Terminal on track to meet its target of 5 million TEUs by the end of the current year.
The addition of land plots with adjacent quay wall and deep-water access at Khalifa Port provides a host of new customer opportunities, particularly for industrial producers requiring prime land plots in proximity to Khalifa Port Industrial Zone (KIZAD) and cargo owners that wish to import, export and trans-ship with global markets via Khalifa Port’s multimodal touchpoints.
One example lies with Arabian Chemical Terminals (ACT) which recently signed a 50-year agreement to establish the first commercial bulk liquid and gas storage terminal at Khalifa Port that will be located on a plot with 16-metre direct deep-water quay access within the newly developed KPL. This project is well underway with the Front-End Engineering Design (FEED) having been awarded in May 2020.
Khalifa Port’s assets and future growth plans were discussed during an exclusive Khalifa Port trade and investment webinar headlined by H.E. Abdulla Al Saleh Undersecretary of the UAE Ministry of Economy.
H.E. Abdulla Al Saleh was joined by Abu Dhabi Ports’ Saif Al Mazrouei, Head of Ports Cluster; Mohamed Al Menhali, Port Director of Khalifa Port; Kim Larsen, VP of Commercial & BD, Ports Unit; and Paul Vrijhof, Strategy and Business Development, Ports Cluster.
Also participating in the webinar was Salmeen Al Ameri, CEO of Al Dahra Agriculture, and Kasper Castricum, GM of Arabian Chemical Terminals Abu Dhabi, who shared their insights on how establishing themselves at Khalifa Port had accelerated their strategic goals and opened up new opportunities for them to target the wider global market.
In addition to highlighting progress on the expansion project at Khalifa Port, the session also provided an overview on ongoing trade and economic recovery efforts in the UAE, the port’s role as part of these recovery efforts and its ongoing mission to facilitate global trade and logistics, as well as the latest developments with Abu Dhabi Ports’ portfolio of global partnerships.
Source: Hellenic Shipping
Uganda, Tanzania sign agreement for construction of crude oil pipeline

Tanzania and Uganda signed an agreement on Sunday paving the way for the construction of a crude oil pipeline running from Ugandan oilfields to the Tanzanian port of Tanga, a Tanzanian government spokesman said.

Uganda discovered oil reserves in 2006 and needs the planned 1,445-km (900-mile) East African Crude Oil Pipeline to be in place to start commercial production. The pipeline is estimated to cost $3.5 billion, according to the two governments.
Hassan Abassi, Tanzania government spokesman, said on Twitter that 80% of the pipeline will run through Tanzania.
Tanzania will earn 7.5 trillion shillings ($3.24 billion) and create more than 18,000 jobs over the next 25 years, or more, that the project is in place, Abassi said after the signing ceremony attended by Tanzania's President John Magufuli and Ugandan President Yoweri Museveni in Chato, northwestern Tanzania.
Uganda has not given a date for when construction of the pipeline will begin but said last year that once construction begins, it would take 2-1/2 to three years to complete.
The agreement on the pipeline construction comes days after French oil company Total said it had reached an agreement with Uganda protecting its rights and obligations in the pipeline's construction and operation - known as the host government agreement.
Total is the major shareholder in Uganda's oilfields after agreeing in April to buy Tullow Oil's entire stake in the jointly held onshore fields in Uganda for $575 million.
Tullow said last week it was confident of finalising the sale in the fourth quarter of this year.
Source: Zawya
Kuwait scraps $400mln oil project

Kuwait has scrapped an awarded oil project with a value of around 120 million Kuwaiti dinars ($400 million) due to weak crude prices and the spread of Coronavirus, a newspaper in the OPEC member reported on Sunday.

The project involves the development of heavy crude oil facilities in the North and it was awarded to an international firm this year but the contract was not formally signed, the Arabic language daily Alrai said.
The state-owned Kuwait Oil Company (KOC) cancelled the contract in line with instructions by oil authorities to slash spending on projects due to weak crude prices and the spread of Coronavirus, the paper said, quoting KOC sources.
"KOC's Board of Directors has decided to cancel the heavy crude project that involves 11 oil wells although it has been awarded recently," the report said without naming the company that had won that contract.
It said KOC and other local oil firms intend to freeze more projects in line with instructions by the Kuwait Petroleum Corporation to slash capital expenditure after the Gulf emirate trimmed crude output by nearly one million bpd within an agreement by OPEC and its partners to cut supplies to prop up oil prices.
Source: Zawya
Sinopec holds first virtual open day event in Saudi Arabia

China Petroleum & Chemical Corporation (Sinopec) held its first virtual, as well as debut international Open Day in Saudi Arabia.

A leading energy and chemical company in China, Sinopec said the "Better Energy, Better Life" event explored its comprehensive, multi-faceted approach to sustainability.
This online Sinopec Open Day event highlighted the Chinese firm's milestones since its entry into Saudi Arabia in 2000 and provided updates while inviting questions from the global audience.
For over two decades, Sinopec has consistently provided high-quality engineering, technology, and refining services for the Saudi petroleum and petrochemical industry, as well as supplied petroleum and petrochemical equipment, products, and services.
Sinopec, along with local partners, launched a world-class joint venture and cooperation refinery plant.
In 2000, the company established its first drilling rig in the country; now, it oversees nearly 70 rigs. With its safe, efficient construction, Sinopec has established a positive reputation in Saudi Arabia.
To propel the development of drilling technology, it set up Sinopec Tech Middle East in Saudi Arabia's Dhahran Techno Valley in 2017, the first Chinese R&D centre in the country.
This reflected Sinopec's commitment to becoming the world's leading clean energy chemical company through greater cooperation with local communities and the government.
Source: Zawya
OPEC Third-Largest Producer Fails To Comply With Output Cuts

The United Arab Emirates (UAE), currently OPEC’s third-largest producer, is estimated to have exported a lot more crude oil in August as it produced more than its quota under the OPEC+ deal, undermining the oil market’s faith in the group’s unity in the cuts.

According to tanker tracking data Bloomberg has compiled from several oil flow tracking firms, the UAE shipped more oil in August than it produced, and its production itself breached the limit set in the OPEC+ deal.
The UAE, which has so far followed Saudi Arabia’s lead to ‘lead by example’ and stick to the cuts, increased its oil production in August to above its quota as per the OPEC+ deal.
Crude oil production in the UAE averaged 2.693 million barrels per day (bpd) in August. This is some 100,000 bpd above the country’s production ceiling under the OPEC+ pact—2.59 million bpd. The key reason for the increased production in the UAE in August was said to be the high electricity demand in the hottest months in the Middle East, which this year was further boosted by more people staying and vacationing at home because of COVID-19-related travel restrictions.
Unlike in previous OPEC+ pacts, non-compliance with the quotas this time requires the culprits to compensate for any above-quota production with more reductions in the following months.
The UAE’s Energy Minister Suhail Al Mazrouei himself admitted that the UAE’s production increased to 2.693 million bpd in August, but that “measures have been taken to compensate for this temporary increase due to peak summer electricity demand in the UAE, which required an increase in oil production and associated gas.”
Source: Oil Price
Kuwait cuts October crude official selling prices for Asia

Kuwait has cut the official selling prices (OSPs) for crude grades sold to Asian refiners in October, a pricing document showed on Thursday.

The OPEC producer set the October Kuwait Export Crude (KEC) price at 50 cents per barrel below the average of DME Oman and Platts Dubai quotes, down $1.20 from the previous month.
It set the October Kuwait Super Light Crude (KSLC) OSP at 70 cents a barrel below Oman/Dubai, down $1.40 cents from the previous month.
It set the October OSP for Khafji crude at 30 cents a barrel below Oman/Dubai, down 90 cents from the previous month.
Source: Zawya
Qatar QP cuts October crude formula prices

Qatar's state-owned QP has lowered the formula prices for its October-loading crude exports to their lowest level in four months, in line with deep price cuts made by other Mideast Gulf producers with concerns about the demand outlook.

QP cut the October formula price for light sour Qatar Land by $1.40¢/bl against the previous month, setting it at a 90¢/bl discount to the monthly average of front-month Oman-Dubai assessments. Qatar Marine's October price was reduced by $1.35/bl month-on-month, setting it at a 75¢/bl discount to Oman-Dubai. This was the first time that both grades were priced at a discount to the benchmarks since their June formula prices.
Qatar Marine was set at an unusual premium to Qatar Land for the third straight month, possibly reflecting the tighter supplies of heavier grades from sustained Opec+ production cuts.
QP's price reductions largely matched those made by rival producers for competing grades. Saudi Arabia's state-controlled Saudi Aramco had cut the October formula prices for supplies of its comparable light sour Arab Extra Light and medium sour Arab Light grades headed to customers in Asia-Pacific by $1.50/bl and $1.40/bl respectively.
Abu Dhabi's state-owned Adnoc had lowered the October prices for its light sour Murban and medium sour Upper Zakum crude exports by $1.35/bl each from the previous month.
Source: Argus
Tanker fixed to load crude from Libya’s Es Sider port despite force majeure amid ceasefire

Hess may seek to load a cargo of stored crude from Libya’s Es Sider port this week, in what could be a major test for a recent ceasefire between warring factions who have brought the country’s oil production to a near standstill, sources told S&P Global Platts.

The company has chartered the Greek-flagged Minerva Eleonara to take on 600,000 barrels of crude from the terminal, according to a shipping report seen by Platts, and sources said it may arrive at the port as soon as Sept. 10, though its arrival has yet to be confirmed by port officials.
Libya’s National Oil Company has maintained a force majeure on Es Sider and other key ports, with the rebel Libyan National Army imposing an oil blockade as it vies for control of the country against the UN-backed Government of National Accord.
But a ceasefire after UN-mediated talks in Geneva in August could pave the way for crude exports to resume.
The Petroleum Facilities Guard militia, aligned with the LNA, has said it may reopen key oil ports to allow exports of some barrels from storage tanks that have been filled to capacity, shutting in oil and gas production.
Hess, which could not immediately be reached for comment, could be the first company to lift oil from Es Sider in nine months, except for a brief window in July, when the Vitol-fixed Kristi Bastion was allowed to export a 600,000 barrel cargo, according to Platts shipping tracking program cFlow.
Hess holds an 8.16% interest in Libya’s Waha concession, which has 13 producing fields in the Sirte Basin linked to Es Sider.
“They are unsure if it will go ahead,” a source familiar with the matter said of Hess on condition of anonymity. “They are worried the PFG won’t allow it. There is no deal on lifting the FM yet.”
NOC, which has welcomed the ceasefire while also decrying the presence of armed groups around oil terminals, was not immediately available for comment.
On Aug. 24, NOC said OMV lifted a 30,000 mt condensate cargo from the Brega terminal to free up storage capacity in a sign of deescalating tensions, though sources said a crude export from the larger Es Sider would be a much bigger breakthrough.
Crude storage full
Crude production in Libya, which holds Africa’s largest crude reserves, has been slashed from more than 1.1 million b/d before the blockade to around 70,000-110,000 b/d in the past few months due to the oil blockade.
What exports remain are loaded directly from Libya’s offshore fields in the Mediterranean.
The Minerva Eleonara was positioned near Kaloi Limenes port in Crete, Greece, as of 1613 GMT, according to cFlow.
It was reported fixed for Es Sider at w60 on the cross-Mediterranean run, with options for UK Continent and US Gulf discharge. Market participants said Libyan loadings were priced at a premium from normal cross-Mediterranean loadings given geopolitical uncertainty and the risk of any single stakeholder failing the ship.
“We have been told that the ports are open, but before NOC can lift the FM they are doing maintenance at the fields and the ports and training new workers,” a broker said.
“Companies with equity in Libya as in Hess, Vitol, Unipec, etc., will have the opportunity to ship the oil from the ports without any problems due to [the fact] that oil storages are full at the moment and they need to be shipped away in small and big parcels.”
On Sept. 8, another Aframax tanker, the Drepanos, was reported on subjects with Total on a Farwah-to-Turkey run set to load Sept. 16.
Source: Hellenic Shipping
Fujairah oil products stockpile drop to 4-month low as gasoline exports surge

Stockpiles of oil products at the UAE’s East Coast Port of Fujairah declined this week to a four-month low, led by the biggest drop in gasoline and other light distillates this year.

Inventories stood at 23.316 million barrels on 7th September, down 7.2 percent from a week earlier and the biggest drop since 24th March, according to data from the Fujairah Oil Industry Zone, FOIZ, today. The total was the lowest since 20th April. Light distillates tumbled 18 percent, the biggest drop since 31st December, 2019, to 6.169 million barrels, also the lowest since 20th April.
Light distillates stockpiles have been falling at Fujairah, along with Singapore, where commercial onshore light distillate stocks plunged to a 6-month low of 13.643 million barrels as of 26th August, according to Enterprise Singapore data.
In August, Fujairah exported 6.17 million barrels of gasoline, the most for that month in at least three years and the third-highest ever, Kpler data revealed, adding that Singapore was the biggest gasoline buyer for the month at 1.14 million barrels, with other major shipments to Pakistan, Iraq, Tanzania and Saudi Arabia.
Source: Zawya
Middle East Crude-Benchmarks edge up; IOC, Pertamina seek crude

Middle East crude benchmarks Oman and Dubai slightly recovered on Wednesday after dropping for two straight sessions, while market participants continued to await the release of new official selling prices from Kuwait, Iraq and Qatar.


India's IOC is seeking west African crude loading over Nov. 1-10 in a tender closing and valid on Thursday.

Indonesia's Pertamina is seeking crude for delivery over November 16-30 and December 5-10 in a tender closing on Wednesday.

Source: Zawya
UAE awards contracts to upgrade Jebel Dhanna terminal

Abu Dhabi has awarded two key engineering and construction contracts to upgrade the Jebel Dhanna export terminal as part of ongoing plans to change the way it refines and exports its flagship crudes.


The project involves increasing pipeline capacity and upgrading the export facility to allow a new range of crudes to be delivered to the 817,000 b/d Ruwais refining complex for the first time.

Adnoc Onshore, a subsidiary of state-owned Adnoc, has awarded a $315mn contract to China Petroleum Pipeline Engineering to replace the two main oil pipelines that transport UAE flagship crude Murban to the terminal. Slated for completion in early 2023, the project will increase pipeline capacity by 30pc.

Adnoc Onshore can currently produce as much as 1.8mn b/d of light sour Murban, mainly from its onshore Bab, Bu Hasa and North East Bab fields. Murban is exported from two terminals — Jebel Dhanna on the Mideast Gulf coast, and Fujairah which is located outside the strait of Hormuz in the Gulf of Oman.

A second contract, to upgrade the crude receiving facilities at Jebel Dhanna, has been awarded to Abu Dhabi-based Target Engineering Construction for $110mn.

Built in the 1960s, Jebel Dhanna has only operated as a Murban export facility. When the upgrades are complete in May 2022, the terminal will be able to receive Adnoc's Upper Zakum crude, as well as other grades produced outside of Abu Dhabi. These will then be transported to the Ruwais refinery, 12km to the east of Jebel Dhanna.

"This ability to import other grades of crude at Jebel Dhanna following the completion of the project will provide Adnoc greater flexibility, highlighting how the company is extracting value from every barrel of crude it produces," the company said.

The latest contracts complement Adnoc's $3.5bn crude flexibility project at Ruwais, which is expected to be concluded in the middle of 2022. Adnoc says Ruwais will be capable of processing up to 420,000 b/d of the heavy, sulphur-rich Upper Zakum grade and more than 50 other crude grades.

Source: Argus

Refiners stay calm despite deep Adnoc crude export cuts
Lower refinery runs in Asia-Pacific because of weaker margins, along with expectations of adequate alternative supplies, have offset the bullish impact of a planned 30pc cut in Abu Dhabi state-owned Adnoc's October term crude exports.

Adnoc told customers at the end of August that it will implement 30pc nomination cuts to all its crude export grades for October loading, deeper than the 5pc cuts it imposed for September exports. This 30pc cut will the deepest nomination reduction that Adnoc has applied since it first trimmed its allocations earlier this year for May-loading crude. The announcement of the October cuts took a few northeast Asian refiners by surprise, prompting them to consider replacement cargoes.

Some refiners will likely try and get more supplies of Saudi Arab Extra Light and Arab Light crudes, as these will be comparable in quality to Abu Dhabi's light sour Murban and Das and medium sour Upper Zakum. The attractive October official formula prices for these Saudi crudes will make them first choices for Asian refiners looking to fill the supply gap in their Adnoc crude imports. State-controlled Saudi Aramco slashed October Arab Light and Arab Extra Light prices by $1.40-1.50/bl from the previous month, setting prices at their lowest level in four months. The lower Saudi prices could signal more willingness by Aramco to give its term buyers increased October volumes if needed, following easing of the Opec+ output restraint, traders said. Aramco had cut monthly crude allocations to Asia-Pacific in recent months as it complied with its Opec+ output quota.

Other refiners, particularly in South Korea, were looking at light sour Caspian CPC Blend crude to replace Abu Dhabi light sour Murban. The narrow Brent-Dubai exchange-of-futures-for-swaps, or the premium of Ice Brent to Mideast Gulf benchmark Dubai, may have made Dated-linked CPC Blend attractive.

But some refiners are not specifically seeking volumes to replace the loss in Adnoc crude or are only looking to replace part of the losses, as depressed refining margins have led to run cuts and curbed their crude requirements. The softer crude market is evident in the structure of Dubai crude, which remains in a contango, with prompt prices below prices in the forward contracts. Dubai spreads flipped into a contango at the end of July. Front-month November Dubai yesterday was at a discount of 67¢/bl to third-month January Dubai from a 35¢/bl discount on 1 September.

A slow recovery in oil products' demand has weighed on refining margins. Jet fuel crack spreads in Asia-Pacific, or the spread of jet fuel to Dubai crude, remain negative after falling to a discount on 18 August. Gasoil margins in Asia-Pacific have also eased and are currently around three-month lows. Refining margins for Singapore 0.5pc marine fuel contracted to two-month lows in September on the prospect of a regional rise in supplies because of refinery issues in Asia-Pacific.

It is uncertain if weaker margins will lead to further refinery run cuts in Asia-Pacific, but what is clear is that the deep Adnoc October term crude export cuts have not led to panic buying among refiners. Many seem to be taking the news in their stride, indicating that they are not anticipating a crude market that will be short of supplies.

Source: Argus
Total Egypt, OLA to partner in Alexandria Petroleum Products Terminal construction

Total Egypt and OLA Energy Egypt have signed a joint venture agreement to jointly own, build, and operate a new petroleum products terminal in Alexandria.


The Alexandria Petroleum Products Terminal (APPT) will be built at the Mex Petroleum Zone on a 23,000 square metre plot of land and will have an initial storage capacity of 10,000 cubic metres. The APPT will serve as the main supply point to both companies’ customers and service stations in Alexandria, as well as in the North Coast and North Delta regions.

Located in close proximity to the main refineries in Alexandria and the petroleum products jetty, the terminal will also have close access to the National Petroleum Pipeline Grid.

In its initial phase, the APPT will include four gasoline, two gas-oil tanks, and a truck-loading gantry, and is expected to be operational by the last quarter of 2022. The terminal expansion will occur over two phases, and has been carefully planned to allow for maximum flexibility to meet potential changes in market conditions.

“Total Egypt is proud to expand its logistics resources with a new Petroleum Products Terminal in Alexandria, a main entry point of supply on the Mediterranean,” said Peyami Oven, Managing Director of Total Egypt, “The APPT will complete our supply set up with existing terminals in Mostorod and Suez.”

Oven added that the terminal will enable Total Egypt to secure its growth plans across all strategic locations, reflecting the company’s vision to fulfil its customers’ needs and to deliver the best quality services.

He also said, “This project is a new milestone of the company’s ambition to grow and its commitment to develop the petroleum supply chain and increase its market share.”

The Petroleum Products Terminal in Alexandria is a strategic investment that secures a reliable supply hub for OLA Energy Egypt, enabling it to serve the company’s network of retail stations across Alexandria, the North Coast and the North Delta.

“The project reflects the OLA Energy Group’s guiding vision to be one of the major downstream marketers in Egypt, and in Africa as a whole,” said Ahmed Elgembri, General Manager of OLA Energy Egypt.

Source: Zawya
Sri Lanka says has ; better control over new fire in oil tanker

Sri Lanka has "better control" over a fresh fire on a loaded supertanker off the island nation and is looking for any signs of potential oil leaks from the ship.


A fire first broke out last Thursday in the engine room of the very large crude carrier New Diamond and spread to the bridge of the vessel, which was chartered by Indian Oil Corp for importing 2 million barrels of oil from Kuwait. That blaze was doused on Sunday.

However, new flames erupted on Monday. The re-ignition of the fire occurred on the "right side of the vessel near the funnel at the rear," and is not near the tanks carrying crude oil, Navy spokesman Captain Indika de Silva said.

De Silva said that the fire was still burning but the fire fighting team has better control of the blaze.

"All members of the salvage team have arrived at the scene as more boundary cooling efforts are being done," he said, adding "additional assets, salvage personnel and fire fighting equipment is on the way."

Sri Lanka has deployed scientists and experts from its Marine Environment Protection Authority (MEPA) to assess the environmental damage caused by the fire.

One team will examine the ocean area where the burning ship is located and another is examining the coastal areas in the island’s eastern seaboard for signs of pollution, said Jagath Gunesekara, deputy General Manager of MEPA. The New Diamond is about 30 nautical miles, or about 56 km (35 miles), east of Sangaman point, Sri Lanka's easternmost point.

Gunesekara said the experts will assess if the oil leaked from vessel into the sea or damage the beaches and marine life.

Source: Zawya

Kuwait Petroleum seeks LNG cargo for October delivery

Kuwait Petroleum Corp (KPC) is seeking a liquefied natural gas (LNG) cargo for delivery in October, two industry sources said on Tuesday.


It is seeking the cargo for delivery in the middle of the month and the tender closes on Sept. 10, they added.

Source: Zawya
India IOC unlikely to seek replacement crude after oil tanker fire doused

Indian Oil Corp., or IOC, is unlikely to seek any replacement crude oil cargo in the regional spot market after all out efforts had been made to successfully douse a fire that broke out at a VLCC tanker carrying 260,000 mt of Middle Eastern crude chartered by the state-run Indian refiner, a company trading source with knowledge of the matter said Sept. 7.


The fire incident in the fully laden IOC-chartered super tanker was doused over the weekend on Sept. 6, and there’s a good chance crude oil in the tanker could be fully salvaged, a feedstock and fuel trading manager at IOC — who declined to be identified because the matter is sensitive — told S&P Global Platts.
IOC has declined to issue any official statement on the matter.

The New Diamond — a 20-year old VLCC controlled by New Shipping — was carrying around 260,000 mt of Kuwaiti crude from Mina al Ahmadi to Paradip when it caught fire in the engine room Sept. 2, close to 38 nautical miles off Sri Lanka’s coast.

The Indian coast guard had joined the fire fighting operations along with Sri Lankan authorities.

The coast guard has deployed 3-4 ships for the fire fighting job. These ships have been carrying fire dousing materials produced at IOC’s subsidiary refinery on the southern coast — Chennai Petroleum Corp. Ltd.

At least one aircraft was involved in the dousing operation where one person has been killed due to the fire.

Platts reported earlier that around 19 crew members abandoned the ship but one was missing and at least one badly injured.

Two ships belonging to the Sri Lankan Navy have been marshaled to undertake the rescue operations, said a source with a private shipping agency.

Feedstock for Paradip refinery
The tanker was scheduled to reach Paradip on the east coast where IOC runs its biggest refinery with 300,000 b/d capacity.

When asked about the expected delay time of the Kuwaiti crude oil delivery and final discharge, the IOC trading source declined to comment.

At Paradip, the run rate stood at 80% in July on re-introduction of the coronavirus lockdown compared with 99.5% run in due to the unlocking of Asia’s third-largest economy from the lockdown.

The refinery run rate stood at 75% in May, 67% in April, and 95% in March.

The refinery ran at full capacity in 2019-20 (April-March) Paradip refinery was commission in 2016 with a 10.7 Nelson Index.

The refinery caters to retail fuel demand and downstream industries demand in the eastern region.

Paradip mainly processes high sulfur Middle Eastern crude grades to produce products such as LPG, propylene, Euro VI-compliant gasoline, diesel, kerosene, aviation fuel, sulfur, and petroleum coke.

Source: Hellenic Shipping
Oil falls after Saudi cuts prices, China slows imports
Oil prices fell on Monday as Saudi Arabia made the deepest monthly price cuts for supply to Asia in five months and uncertainty over China's oil demand cloud oil markets' recovery.

Brent crude was at $42.04 a barrel, down 62 cents or 1.4% by 0859 GMT, after earlier sliding to $41.51, the lowest since July 30.

U.S. West Texas Intermediate crude skidded 63 cents, or 1.6%, to $39.14 a barrel after earlier dropping to $38.55, the lowest since July 10.

The world's top oil exporter Saudi Arabia cut the October official selling price for Arab Light crude it sells to Asia by the most since May, indicating demand remains weak. Asia is Saudi Arabia's largest market by region.

"The mood has turned somewhat pessimistic in the second half of last week and the immediate risk is skewed to the downside," said oil broker PVM's Tamas Varga.

China, the world's biggest oil importer which has been supporting prices with record purchases, slowed its intake in August and increased its products exports, according to customs data on Monday.

"There are so many uncertainties with regard to the Chinese economy and their relationship with key industrialized countries, with the U.S. and these days, even Europe," Keisuke Sadamori, director for energy markets and security at the International Energy Agency, told Reuters.

"It's not such an optimistic situation - that casts some shadow over the growth outlook."

The Labour Day holiday on Monday marks the traditional end of the peak summer demand season in the United States and that renewed investors' focus on the current lacklustre fuel demand in the world's biggest oil user.

Oil is also under pressure as U.S. companies increased their drilling for new supply after the recent recovery in oil prices.

U.S. energy firms last week added oil and natural gas rigs for the second time in the past three weeks, according to a weekly report by Baker Hughes Co BKR.N on Friday.

However, hopes for potential COVID-19 vaccines lend support to prices after Australian officials said they expected to receive their first batches of the vaccines in January, and said the vaccines could offer "multi-year protection".

Source: Zawya
Libya Experiences More Blackouts As Oil Ports Remain Blocked
Libya's central and southern regions experienced a major power outage on Thursday, the state General Electricity Company of Libya (GECOL) said on Friday, while Libya's oil terminals remain blocked for exports.  

The most recent blackout comes after a series of power outages in Libya this summer, Libya Herald reports.  

Last month, Libya's National Oil Corporation (NOC) said that the closure of oil ports in the Gulf of Sirte was the main reason for the power outages in eastern Libya.

"By closing the ports in the Gulf of Sirte, the condensate reservoirs at the export ports will be filled within days, and thus the production of the gas associated with the condensate, which feeds Zueitina power stations and north of Benghazi, will come to a halt," NOC chairman Mustafa Sanalla said, as carried by The Libya Observer.

Sanalla had warned earlier that oil tanks full to the brink at Libya's oil export terminals are posing a risk to local communities and the facilities themselves.  

Meanwhile, Libya's oil terminals remain out of service, and the country is not exporting oil.

Currently, oil production in Libya is just 100,000 bpd—down from 1.2 million bpd at the start of the year, just before paramilitary formations affiliated with the Libyan National Army (LNA) of eastern Libyan strongman General Khalifa Haftar occupied Libya's oil export terminals and oilfields.  

Source: Oil Price
Kuwait to issue 87 oil services tenders
Kuwait intends to issue 87 tenders in the current fiscal year for providing services to its oil facilities, press reports said on Monday.

The government-owned Kuwaiti Integrated Petroleum Industries Company (KIPIC) will issue the tenders through the rest of the 2020-2021 fiscal year, which started on April 1, the Arabic language daily Alanba said, quoting KIPIC sources.

Most of the services in those tenders are concentrated in the planned multi-billion dollar petrochemical complex near the $15 billion Al-Zour oil refinery in South Kuwait and offshore oil export facilities that will service the refinery and the complex, it said.

The export terminals project also comprises three quays and 2.5-km subsea pipelines, the report added.

Source: Zawya
Iraq To Boost Refinery Capacity

Iraq plans to increase the processing capacity of its Qayara refinery in the northern part of the country to 90,000 bpd, Argus Media reported. Currently, the capacity of the Qayara facility is just 20,000 bpd.


The report follows another one from a week ago, which said Baghdad had plans to boost the capacity of the Baiji refinery, also in the north, to 280,000 bpd in response to the slump in oil prices, oil minister Ihsan Abdul Jabbar said. Currently running at a capacity of 75,000 bpd, the refinery would be brought up to 140,000 bpd over the next few months and then to 280,000 bpd.

"In the light of the decline in oil prices and the difficulties facing the Iraqi economy, the ministry is relying on refining, gas, and petrochemical industries, which are considered an economic pillar to sustain and enhance national development," the minister said in a new statement, as quoted by Shafaq news agency.

Baiji is Iraq's largest refinery, processing a third of the oil output that stays on the domestic market for local consumption. Before the Islamic State insurgence, the facility had a nameplate capacity of 310,000 bpd, but the war that followed the insurgence reduced this significantly as it became the target of attacks. Since then, most of the capacity has been brought back online, but Iraq still cannot satisfy all domestic demand for fuels with its local refining capacity.

Qayara is another large processing facility, but Iraq has had plans to boost its domestic refining capacity to 1.5 million bpd by 2022 from less than 900,000 bpd now. It has sought investors for whole new refinery projects but has had no success with these. According to the Argus report, there is just one new refinery project under development currently, and this is the Kerbala refinery, with a capacity of 140,000 bpd. It is being fully financed from the state budget.

Source: Oil Price
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