Kuwait faces imminent oil capacity constraints

2021 ◽  
Keyword(s):  
Market Share ◽  
Capacity Constraints ◽  
Project Delivery ◽  
Content Type ◽  
The Past ◽  
Administrative Efficiency ◽  
Oil Sector ◽  
Oil Company

Significance Capacity has fallen by around 15% over the past four years and is below the country’s official OPEC baseline. COVID-19 and difficult executive-legislative relations in 2020-21 have interfered with oil sector project delivery. Impacts As projects flounder, Kuwait will lose market share to regional rivals. Restructuring the Kuwait Petroleum Corporation from eight operating companies to three may boost administrative efficiency. Upstream operations are unlikely to be much affected by restructuring, given the dominance of Kuwait Oil Company.

International dry bulk freight will stay oversupplied

2015 ◽  
Keyword(s):  
Market Share ◽  
Iron Ore ◽  
Limited Effect ◽  
Content Type ◽  
The Past ◽  
Self Sufficiency ◽  
The Pacific ◽  
Bulk Carriers ◽  
Urea Production ◽  
Trade Financing

Significance The market remains oversupplied, with daily rates for Capesize vessels (the largest dry-cargo ships) falling by 97% since 2008, from over 200,000 dollars to around 11,000. This is underpinned by record expansion in the global fleet over the past five years. Impacts In the Pacific, daily rates will rise on the back of Indonesia's exports of bauxite and nickel ore. India's self-sufficiency target in urea production by 2019 will have limited effect on dry bulk vessels, given high inland logistics costs. Dollar strength will limit the attractiveness of US bulk exports, with only potash and petcoke likely to keep market share. Recent sales by Vale of several VLOCs (the largest bulk carriers) to China have iron-ore freight arrangements spanning until 2040. Banks' withdrawal from traditional trade financing will trigger moves to fill the gap, including e-shipping and cloud financing platforms.

Angola's new president will pursue further reforms

2017 ◽  
Keyword(s):  
South Africa ◽  
Regional Integration ◽  
The State ◽  
Media Freedom ◽  
Content Type ◽  
Oil Sector ◽  
Oil Company

Significance The announcement is the latest in a string of reforming measures undertaken by Lourenco since assuming power in September; last month he dismissed Isabel dos Santos, daughter of former President Jose Eduardo dos Santos, as the CEO of state-owned oil company Sonangol. Lourenco's overhaul of Sonangol’s leadership indicates a willingness to pursue seriously much-needed reforms in the oil sector, in addition to broader efforts to diversify the economy. Impacts Isabel’s departure from Sonangol could see a resumption of delayed licensing and project approvals. New editors at the state-run Jornal de Angola and TPA1 could prompt a partial increase in media freedom and a more critical press. The recent implementation of visa-free travel between South Africa and Angola should promote greater regional integration.

Angolan oil sector reform will require innovation

2018 ◽  
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Oil Price ◽  
Structural Reforms ◽  
Medium Term ◽  
Short Term ◽  
Sector Reform ◽  
Content Type ◽  
Oil Sector ◽  
Oil Company

Subject Sonangol priorities. Significance Early structural reforms by new President Joao Lourenco and more positive economic projections for 2018 suggest a potential uptick in Angola’s fiscal fortunes. Since assuming power in September, Lourenco has overhauled the leadership of state-owned oil company Sonangol and dismissed several prominent officials associated with his predecessor Jose Eduardo dos Santos. Separately, Lourenco has moved to tackle the overvalued kwanza. While this will raise debt-servicing costs, this will be partly ameliorated by the recent oil price of over 60 dollars per barrel. Impacts Scrapping the dollar currency peg will help ease the foreign exchange crisis and end payment constraints in the aviation and oil sectors. A more realistic exchange rate will fuel inflation in the short term but will likely improve medium-term economic prospects. Urban support for the People's Movement for the Liberation of Angola (MPLA) could decline further if reforms remain elite-focused.

Lasso oil plans will stoke tensions in Ecuador

2021 ◽  
Keyword(s):  
Foreign Debt ◽  
Oil Production ◽  
International Investment ◽  
Balance Of Payments ◽  
Content Type ◽  
Foreign State ◽  
Oil Sector ◽  
International Investors ◽  
Oil Company

Significance He aims to increase incentives for private firms and foreign state-owned enterprises to operate in Ecuador, while reducing the role of national oil company Petroecuador. The reforms, if implemented, may have their intended effect on oil production but they will stoke political tensions and will be challenged by indigenous and environmental movements. Impacts Plans to boost oil production will reassure international investors about the government’s ability to service foreign debt obligations. Global campaigns against funding oil investment might limit international investment in the oil sector to some degree. Increased oil production and exports will alleviate balance of payments constraints on economic growth.

Iran oil sector faces slow recovery from sanctions

2015 ◽  
Keyword(s):  
Saudi Arabia ◽  
Market Share ◽  
Foreign Investment ◽  
Oil Production ◽  
Oil Industry ◽  
Slow Recovery ◽  
Content Type ◽  
Oil Exports ◽  
Oil Sector ◽  
Final Agreement

Significance Iran has agreed to restrict its nuclear programme in return for the lifting of sanctions, including on its oil and financial sectors. However, prices recovered slightly after the realisation that sanctions would take time to be lifted following the conclusion of a final agreement expected by June 30. Impacts Iranian oil production and export will increase by some 0.8 million b/d over a 6-9 month period from the start of the deal's implementation. Sanctions on Iran's repatriation of oil earnings would be lifted or suspended by US presidential waiver. Iran would seek foreign investment into its oil industry to sustain and increase production in the longer term. Increased oil exports could raise an additional 9.2 billion dollars in revenues in 2016. Saudi Arabia would avoid making production cuts in a bid to retain market share.

Mexico agribusiness looks set for healthy growth

2016 ◽  
Keyword(s):  
Economic Activity ◽  
Agricultural Sector ◽  
Foreign Currency ◽  
Central American ◽  
Tax Revenue ◽  
Content Type ◽  
Livestock Sector ◽  
Oil Sector ◽  
Healthy Growth ◽  
Oil Company

Subject Agribusiness outlook. Significance The importance of the agricultural sector to Mexico has been underscored by the broad decline in the price of oil since mid-2014. While the oil sector accounts for a relatively small percentage of economic activity, revenue from state-owned oil company PEMEX remains a major source of government income. As such, the agricultural sector -- which includes the world's seventh-largest livestock sector -- has assumed more importance due to its position as a source of foreign currency and tax revenue. Impacts Tighter regulations in Mexico could force Central American exporters to improve production standards. Government initiatives and the weak peso will see both exports and foreign investment in Mexican agriculture increase. Climate change will present worsening challenges for the sector with droughts and flooding becoming more common.

Russian oil advances in Venezuela carry mutual risks

2017 ◽  
Keyword(s):  
Oil Industry ◽  
Content Type ◽  
Financial Position ◽  
Oil Sector ◽  
Oil Company

Subject Rosneft and the Venezuelan oil sector. Significance In providing a significant amount of urgently needed financing, Russia and Rosneft, its state-controlled oil company, are utilising Venezuela’s severely weakened economic and financial position to strengthen participation in Venezuela’s struggling oil industry. Venezuela’s ability to avoid financial default remains a major uncertainty, and President Nicolas Maduro is running out of financing options. Impacts Venezuela’s low financial reserves and diminishing volume of oil will make forthcoming debt payments doubtful. China and Russia are keeping Venezuela afloat, with Venezuela recently asking Russia to restructure 6 billion dollars’ worth of debt. If the Maduro regime collapses, Russia’s gains could prove fleeting if a successor regime repudiates them.

Brazil's reliance on foreign oil investment will rise

2019 ◽  
Keyword(s):  
Price Volatility ◽  
International Markets ◽  
Political Resistance ◽  
Content Type ◽  
Oil Price Volatility ◽  
Salt Layer ◽  
Oil Sector ◽  
New Policies ◽  
Oil Company ◽  
Domestic Fuel

Subject Brazilian oil sector outlook. Significance The difficult challenges faced by state-controlled oil company Petrobras in recent years have opened up space for new policies towards foreign investors. Key global producers have benefited from recent pre-salt layer auctions and oil concessions. These policies are likely to continue under the administration of new President Jair Bolsonaro. Impacts Political resistance and the priority assigned to other reforms will make a Petrobras privatisation unlikely. Revenues from pre-salt auctions and foreign participation are set to increase. Oil price volatility in international markets will generate unstable domestic fuel pricing for final consumers.

Iraq could increasingly depend on Chinese oil firms

2020 ◽  
Keyword(s):  
Capacity Constraints ◽  
Infrastructure Projects ◽  
Chinese Firms ◽  
Content Type ◽  
Chinese Companies ◽  
Production Growth ◽  
Strong Position ◽  
Oil Sector ◽  
The Government

Significance Chinese firms have established a strong position in Iraq’s oil sector, strengthened further in the most recent bid round. At the same time, some Western companies are implementing or considering a reduction in their holdings, given poor fiscal terms, capacity constraints and strategic shifts. Impacts With few resources beyond oil, the government will seek to target further production growth once OPEC+ constraints ease. Gas is likely to be an increasingly important focus area, given Baghdad’s need to expand power provision. Upcoming major infrastructure projects create opportunities for Chinese companies as both investors and contractors.

Plans for Mexico’s Pemex look increasingly unrealistic

2020 ◽  
Keyword(s):  
Economic Policy ◽  
Oil Prices ◽  
Oil Production ◽  
Private Investment ◽  
Compound A ◽  
Content Type ◽  
Oil Sector ◽  
Oil Company

Subject Pemex problems. Significance State-owned oil firm Pemex announced losses of 562.1 billion pesos (23.6 billion dollars) in the first quarter of 2020. The results compound a 34.9-billion-dollar loss recorded in 2019. Pemex is already the world’s most indebted oil company and with global oil prices at some of their lowest-ever levels, any potential recovery looks a distant prospect. President Andres Manuel Lopez Obrador (AMLO) has nevertheless reaffirmed his government’s determination to boost oil production and refining in an effort to return the company to its former glory. Impacts Mexican hopes of boosting oil output will raise tensions with the OPEC+ group, which agreed to limit production in April. AMLO’s aversion to private investment in the oil sector is unlikely to change but low prices will weigh on investor interest anyway. Oil hedges will compensate for the price fall to some degree, but not entirely. Low oil prices and an inadequate economic policy will keep the peso undervalued.

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