Saudi Aramco IPO price set at SAR 32 ($8.53)

Finally, finally, finally - the Saudi Aramco IPO price has been set - at SAR32 ($8.53) per share. That means the company would raise ~$29.4 billion. Here's the final communique from the company that's just landed in the Oilholic's mailbox (click to enlarge image). 

That means the company will raise $29.4 billion, and get a valuation of $1.7 trillion. It's well shy of the $2 trillion valuation craved by Crown Prince Mohammed Bin Salman. However, its still now the world's largest IPO in history and this blogger heard it while sitting in the OPEC media briefing room at 8pm in Vienna!! Bring in the noise.

On OPEC discipline & deepening cuts

The Oilholic is back in Vienna, Austria for the 177th OPEC Ministers' meeting and their (now) regular haggling with 10 Russian led non-OPEC producers who've signed up to a collective cut of 1.2 million barrels per day (bpd).

With the cuts set to expire in March and the oil price nowhere near $70 per barrel using Brent as a benchmark, there is chatter here of deepening the cuts.

Ironically, these are being flogged to the media and analysts by Iraq; the one OPEC member that has hardly complied with its share of the cuts. However something is definitely afoot at Helferstorferstrasse 17. The reasons being a paucity of leaks, few unscheduled remarks, Iranians keeping mum despite being tetchy, and the media / analysts not being allowed "access to ministers" before their opening remarks to the conference, i.e. no "gang bang", only a "speech listening" at more than an arm's length. 

Most unusual level of discipline being shown by #OPEC ministers, sources, no leaks, 2 of my oldest sources keeping mum. Additionally, media/analysts will not have "direct access" to ministers at opening session. Is a deeper #oil production cut coming? #OOTT #oilandgas pic.twitter.com/zSrG3moK3E

— Gaurav Sharma (@The_Oilholic) December 5, 2019

From that has emerged the "deepening of cuts" figure of 500,000 bpd. Of course, no details have been provided, especially on the level of Russian compliance. Apparently the likes of Nigeria and Iraq would be squeezed to fall in line too, according to the rumour mill.

What's more is this 500,000 bpd cut a "paper adjustment" with compliance current over 140% or is the cut being upped to 1.7 million bpd? Not too sure, not convinced as convincing answers are not forthcoming.

And will that even work? The Oilholic seriously doubts it; simply because 2-2.5 million bpd of non-OPEC supply growth is expected next year, and there are deep rooted concerns over demand, as noted on Forbes. Still the OPEC show goes on, and we'll probably have some finality after the OPEC+ meeting concludes tomorrow (Dec 6). 

That's all for the moment from Vienna folks, but there's more to follow. Keep reading, keep it 'crude'!

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To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2019. Photo: Media briefing room at OPEC's 177th Ministers' Meeting in Vienna, Austria on December 5, 2019 © Gaurav Sharma, 2019

Oil market in wait & see mode ahead of OPEC

The next OPEC+ ministers' meeting on December 5-6 is upon us, and the Oilholic's reading of the past few weeks does seem to suggest the oil market is in a holding pattern. More so as there has been little by way of resolution of the ongoing US-China trade spat. 

For many intents and purposes, trade concerns remain the key market driver, perhaps making OPEC a bit of a non-event. A rollover of the OPEC+ agreement - that has kept 1.2 million barrels per day of production - out of the market has already been priced in. So the only surprise to the upside would be if the producers' group introduces even deeper cuts; a scenario that on paper appears to be highly unlikely. 

Meanwhile, excluding a short-lived spike in the wake of the drone attack on Saudi Aramco, oil prices, using Brent as a benchmark, have largely remained range-bound at lower $60 per barrel levels oscillating between $58-$65 (see chart above left, click to enlarge). . OPEC's basket of 14 crude oils meanwhile is averaging just shy of $64 at the time of writing (see chart left, click to enlarge). 

While the OPEC meeting would be interesting from the standpoint of soundbites, this blogger is not holding his breath out for any substantial price movement. Continuing with the markets theme, yours truly also made several observations from the recently concluded ADIPEC in Abu Dhabi, for various publications, including OPEC's ongoing dilemma for Forbes. There's also the issue of oil demand, and while attention has been focussed on how the US-China trade spat is impacting it, here's the Oilholic's take on whether, and by how much, the proliferation of electric vehicles could stunt demand growth. 

Plenty of words were penned on the Aramco IPO too, but here's a piece - via Rigzone - on how Brit oil majors Shell and BP are attempting to add long-term value for shareholders. Additionally, here are the Oilholic's recent Forbes reports on ADNOC upping its digital drive and India's wooing of global energy investors as its energy demand continues to rise. 

Finally, here is the Oilholic's missive on another piece of industry process efficiency and optimisation kit that has just been successfully tested by ABB in waters off Vaasa, Finland. The global software industrial giant claims to have found the "holy grail" of offshore subsea power solutions via its joint industry project with Chevron, Equinor and Total.

Its latest power distribution and conversion technology system for energy companies will be able to provide a reliable supply of up to 100MW of power, over distances up to 600km out at sea and down to a whopping 3,000m water depth. 

ABB claims the system will need "little or no maintenance for up to 30 years following deployment" making oil and gas production feasible in far out and deep ocean environments. It'll be interesting to see the take up of the kit, and company sources have promised to update the market on a regular basis. 

And on that note, its time to end this blog post leaving you with a view of the waters of the Gulf of Bothnia, from Kalle's Inn, Finland (above right, click to enlarge);  a popular spot near Vaasa that the Oilholic visited before heading back home. From here you can catch the Northern Lights, maybe even rent one of the waterfront cabins for the night. That's all for the moment folks! Keep reading, keep it 'crude'!

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To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2019. Graph I: Brent futures 3-month movement © BBC. Graph II: Average price tracker of OPEC crude oils basket. Photos: View of Gulf of Bothnia from Kalle's Inn, Finland © Gaurav Sharma 2019.

ADIPEC Day IV: Final notes from Abu Dhabi

The Oilholic has just rounded off day four, or the final day of ADIPEC 2019, here in Abu Dhabi concluding nearly a week of engaging industry dialogues.

Under the 'Oil and Gas 4.0' discussion umbrella, talking points ranged from upstream challenges to downstream efficiencies, digitisation to robotics, natural gas to hydrogen-powered mobility, oil demand [or perhaps lack of] to the changing nature of demand itself, and well pretty much all else in between. 

Summing up the last four days, Omar Suwaina Al Suwaidi, ADIPEC Conference Chairman, and Director, Executive Office Directorate at ADNOC, opined: "Through Oil and Gas 4.0, ADIPEC is unlocking the opportunities created by the Fourth Industrial Era. 

"To continue to thrive, it is critical that we better harness our data, utilise big data value-adding technology and innovation, capture digital insights to our business, and understand how all aspects of our operations and activities are interconnected to unlock greater value in the evolving energy landscape."

Amen to that sentiment, and the human resource and ingenuity at the heart of that progressive drive! Speaking of which, the crucial subject of gender diversity was under the microscope today. ADIPEC also received a presidential visit when Egypt's Abdel Fattah El Sisi, who is on an official visit to the UAE, came calling. 

This blogger also took some time out to leave the conference venue and pay a visit to the Abu Dhabi National Oil Company's (ADNOC) Panorama Command Centre at its headquarters (pictured above left) and meet the company's digital team that handles its operation. 

During the site visit, the Oilholic got a glimpse of how ADNOC is deploying advanced analytics and digital solutions to monitor throughput in real-time and learn lessons in order to improve efficiencies across its value chain. 

When we are talking of a company producing 3 million barrels per day of crude oil and 9.8 billion cubic feet of gas per day; that's quite a sizeable operation as the readers would acknowledge. A special thanks to Abdul Nasser Al Mughairbi, SVP of Digital at ADNOC, who spared his time to take The Oilholic around, answer questions and host yours truly to spectacular views from an office floor home to equally spectacular technological solutions. 

Away from the ADNOC HQ, one also got a first-hand feel of a 'drive thru fuel station' launched in UAE by ADNOC Distribution. The fuel service is called 'On The Go', which will allow motorists to purchase fuel products from the comfort of their car.

The service will be "complementary, and at no additional fees" motorists can shop at an ADNOC convenience store while their vehicle is getting filled, receive their shopping items in the vehicle and pay for it using a new Wi-Fi payment method! Now that's convenient. 

And concluding a hectic afternoon of walkabouts, before bidding goodbye to ADIPEC, the Oilholic also visited offshore support vessel QMS Bani Yas, a new jack up barge docked close to the event venue, right in time for sunset. Among other things, it was great to get to the vessel's helipad as well as understand operating procedures of a support ship of its size. 

Alas, that's all from ADIPEC 2019 folks. Its time to say goodbye and head for the flight home. Keep reading, keep it ‘crude’!

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To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2019. Photo I: ADNOC Panorama Command Centre, Abu Dhabi, UAE. Photo II: View of Abu Dhabi, UAE from ADNOC Panorama Command Centre. Photo III: Concept mock-up of ADNOC Distribution's drive thru fuel station 'On The Go' at ADIPEC 2019. Photos III, IV and V: Offshore support vessel QMS Bani Yas docked off ADIPEC 2019 venue, Abu Dhabi, UAE © Gaurav Sharma, November 2019. 

ADIPEC Day III: Oil demand, AI and robots

Day three of ADIPEC 2019 has just concluded here in Abu Dhabi, UAE and much was said about oil demand concerns. Morning discourse was coloured by the International Energy Agency's take that demand is set to plateau by 2030 due to a pick up in the use of electric vehicles around the world.

In its latest market projections, the IEA said overall demand for energy is set to increase by 1% every year until 2040, however headline demand will plateau ten years earlier than it had previously forecast.

Elsewhere in its World Energy Outlook report, the IEA said US shale output, which has made the country the world's biggest oil producer, is likely to stay higher for longer than previously projected, with the country accounting for 85% of the increase in global oil production by 2030, and for 30% of the increase in natural gas.

Meanwhile, switching tack to the coming 12 months, OPEC Secretary General Mohammed Barkindo said an uptick in demand for 2020 may be on the cards should the US-China trade stand-off end.

"We are confident that there will be a deal and the deal will be positive for the world economy and will remove the dark cloud that has engulfed the global economy because of the size of the countries," Barkindo said on the sidelines of ADIPEC.

Among the VIPs in town today was Sheikh Mohammed bin Rashid Al Maktoum, Prime Minister and Ruler of neighboring Dubai. Alongside his visit, came that of nearly 900 local school kids to learn more about the industry, its processes, careers and well to marvel – perhaps like the rest of us – at some of the innovative robots and kits on display here.

And then there's the launch of a new branch of local government focused on research and development as well as an artificial intelligence (AI) joint venture inked by the Abu Dhabi National Oil Company (ADNOC) to take in.

The new Abu Dhabi Research and Development Authority will be tasked with inventions that tackle Earth's most pressing challenges. Under auspices of the emirate's Department of Education and Knowledge (ADEK), five virtual research institutes will focus on biotechnology, food security, sustainability, artificial intelligence and high-performance computing, and advanced materials. The announcement came in step with ADNOC's agreement at ADIPEC with UAE-based AI company, Group 42, on a joint venture to develop AI products for the energy sector.

In sync with this hot topic, the Oilholic also participated in ADIPEC Middle East Petroleum Club's Leadership dialogue on Human and machine collaboration and the impact this has on current business transformation.

IIoT, big data, augmented reality and virtual reality premised solutions, and the changing nature of the workforce were all under a lively 90-minute discussion with Greg Cross, Co-founder of Soul Machines and AI pioneer (third from left) leading the talk. 

Finally, here is one's analysis for Rigzone on why BP and Shell's low carbon overtures and portfolio tweaking hold both oil majors in good stead despite a dire set of numbers. That's all for the moment folks, more from here on the final day at ADIPEC tomorrow. Keep reading, keep it ‘crude’!

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2019. Photo I: Day three of exhibition at ADIPEC 2019. Photo II: Industry robot at Total's stand. Photo III: AI pioneer Greg Cross speaks at ADIPEC Middle East Petroleum Club, Abu Dhabi, November 2019 © Gaurav Sharma 2019.