Tag: Saudi Aramco

Welspun Corp wins ₹512 crore order in Saudi Arabia, days after Aramco order cancellation

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Welspun Corp Ltd.’s associate company, East Pipes Integrated Company for Industry (EPIC), has secured a significant order valued at ₹512 crore for the manufacturing and supply of steel pipes, as disclosed in an exchange filing.

The contract spans a duration of 30 months, and its financial impact will be realized from the first quarter of the financial year 2025 until the third quarter of the financial year 2027.

EPIC, a leading manufacturer of Helical Submerged Arc Welded (HSAW) pipes in Saudi Arabia, expressed confidence in its ability to secure additional projects in the water and Oil & Gas sectors.

This recent win follows closely on the heels of Welspun Corp’s notification to the exchanges regarding EPIC’s mutual agreement with Saudi Aramco to terminate a contract valued at ₹339 crore.

However, Welspun mentioned that this will not impact EPIC as the contract was not included in EPIC’s production schedules during the current fiscal year and the raw material for the contract is yet to be procured. “The cancellation does not affect the operating plans during the period scheduled for implementation,” Welspun Corp said.

Welspun also spoke about EPIC’s order backlog, mainly linked to ongoing gas and water transmission projects. The cancelled contract represents 6% of the total awards by Saudi Aramco, which are over ₹6,000 crore.

“We are quite optimistic about the prospects of our associate company EPIC, which are further supported by Aramco’s diversification of its energy mix, as well as the increasing demand for water transmission lines,” Welspun said in the exchange filing.

Welspun Corp had informed the exchanges on Friday that the company had won line pipe orders in India and the US worth over ₹2,039 crore from February 6 till March 22. These orders are most likely to be executed in the financial year 2025.

Shares of Welspun Corp ended 1.88% higher last Friday at ₹534. The stock has risen 180% over the last 12 months.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Saudi Aramco raises payout to $31 billion in boost for budget

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Saudi Aramco raised its dividend to investors and Saudi Arabia’s government despite a retreat in energy prices and lower production, a boon for the kingdom as it faces a widening budget deficit.

The total payout of $31.07 billion for the fourth quarter, including a special component, rose from the previous quarter’s level even as lower oil output pushed net income down 25% year-on-year.

The world’s biggest crude oil exporter provides much of the Saudi government’s income via generous dividends. The distribution is becoming ever more vital as Crown Prince Mohammed bin Salman pursues expensive projects such as the futuristic project of Neom, the purchase of high-profile footballers and stakes in sporting leagues, while looking to diversify the economy from oil.

The budget shortfall, however, is starting to bite. The Saudi government is predicting a deficit every year until 2026, pushing it to delay past 2030 some of the projects that it launched as part of its economic transformation plan. It also ordered Aramco last month to halt the expansion of its production capacity, helping free up spending for other areas.

Riyadh needs crude above $90 a barrel this year to fund spending plans, according to Fitch Ratings. Brent crude in London closed near $82 last week. Saudi Arabia’s oil export revenue sank to $248 billion last year, a decrease of nearly $80 billion that offered a reminder of its dependence on high energy prices.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Kalpataru Projects gets LoI from Saudi Aramco for three packages in Saudi Arabia

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Kalpataru Projects International Ltd. has received the Letter of Intent (LoI) from Saudi Aramco to carry out EPC work for three packages of the third expansion phase of the Master Gas System (MGS-3) network in Saudi Arabia.

The scope of the order covers laying of over 800 kilometers of lateral gas pipeline, it said in an exchange filing. Value of the contract will be confirmed once the execution is completed, the company said.

CNBC-TV18 had reported on February 23 citing reports from Middle East Business Intelligence that the company, along with L&T had emerged as the lowest bidder for the MGS project. Kalpataru, according to the report, was the lowest bidder for three packages.

The MGS-3 project aims to expand the existing gas network to provide gas supply to various industrial consumers in the region. This is to meet the growing energy demand in Saudi Arabia and replace liquid fuel burning.

“This is a sizeable EPC order, representing a significant milestone and reaffirmation of global acknowledgement of our capabilities,” said Manish Mohnot, the company’s MD & CEO. “Moreover, this large order will strengthen our order book profile and put our oil & gas business on a robust growth trajectory going forward,” he added.

As of December 31, Kalpataru Projects had an order book of ₹51,753 crore and had won orders worth ₹18,065 crore in financial year 2024 with L1 of another ₹6,000 crore. The company intends to focus on large size projects with sustainable margins and better cash conversion.

Shares of Kalpataru Projects have opened 2.6% higher on Tuesday at ₹1,027.

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3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

L&T, Kalpataru Projects lowest bidders for Aramco’s gas system project: Reports

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Larsen & Toubro Ltd. and Kalpataru Power have emerged as the lowest bidders for Saudi Aramco’s Master Gas System project, according to reports from the Middle East Business Intelligence.

The reports state that Saudi Aramco, the world’s largest oil company has selected contractors to execute EPC works.

L&T and Kalpataru Power are among the ten companies that have been selected for the $10 billion MGS-3 project.

While Kalpataru has emerged as the lowest bidder for three packages, L&T is the lowest for one of them, the report said.

L&T was in the news earlier this week after reports had suggested that Saudi Aramco has deferred the bidding process for orders worth over $10 billion in the Safaniyah Oilfield projects.

This news development impacted L&T as it was likely in the race to acquire a major EPC order with regards to the concerned oilfield.

L&T had earlier told CNBC-TV18 that the company had participated in tenders with regards to the Safaniyah Oilfield.

In response, L&T had mentioned that their bidding pipeline in West Asia remains strong and that there are many prospects which remain very active. The management also said that L&T Energy enjoys a healthy order book in the gulf with orders at an all-time high.

Shares of L&T are currently little changed, trading 0.2% higher at ₹3,369.55. However, shares of Kalpataru have jumped to the day’s high, currently trading 6.5% higher at ₹998.75.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

L&T shares fall on reports of Aramco deferring bids for Safaniyah oilfield projects

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Larsen & Toubro declined to the day’s low after news reports suggested that Saudi Aramco, the world’s largest oil company has deferred the bidding process for orders worth over $10 billion for the Safaniyah Oilfield projects.

The reports further indicate that at least 10 EPCI (Engineering, Procurement, Construction and Installation) deals for expansion of the company’s Safaniyah Oilfield has been deferred.

This news development impacts L&T as it was likely in the race to acquire a major EPC order with regards to the concerned oilfield.

L&T had earlier told CNBC-TV18 that the company had participated in tenders with regards to the Safaniyah Oilfield.

News reports are also suggesting that Safaniyah expansion is being deferred due to the Saudi directive to cap production.

The Safaniyah Oil field currently produces 1.3 million barrels per day of oil.

CNBC-TV18 has reached out to Larsen & Toubro and is awaiting a comment on the same.

Shares of L&T are trading 1.1% lower at ₹3,351. The stock has risen 50% over the last 12 months.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Saudi Arabia lines up Goldman Sachs, Citi for Aramco share sale

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Saudi Arabia is set to hire banks including Citigroup Inc., Goldman Sachs Group Inc. and HSBC Holdings Plc for a secondary share sale in Aramco, a deal that would raise about $20 billion and rank among the biggest offerings in recent years, people familiar with the matter said.

The world’s biggest oil exporter is also in talks with other banks as it pulls together a roster of advisers for the offer that may come in the next few weeks, the people said, asking not to be identified because the information is private.

The lineup of advisers may still change, the people said. There’s no final decision on the timing of the sale or the number of shares the government will sell, and the offering could yet be delayed, they said.

Aramco, Citigroup, Goldman and HSBC declined to comment.

Some of these Wall Street banks also worked on Aramco’s initial public offering in 2019, when they were paid minuscule fees by global standards. They’re now coming back to work on the follow-on offer, which may also help them get other business in the kingdom as Crown Prince Mohammed bin Salman pushes ahead with an ambitious plan to diversify the economy.

The challenge for any new Aramco share sale would be attracting new investors. Many international firms had balked at the Saudi government’s valuation expectations and Aramco’s low yield compared with industry peers during the IPO. That left the deal mostly relying on local retail investors and wealthy family offices.

Although the company, with a $2 trillion market value, has introduced a new mechanism to boost dividends in an attempt to attract more investors and improve liquidity, it still lags peers. Aramco’s price-to-earnings ratio tops that of Shell Plc, BP Plc and Exxon Mobil Corp., according to data compiled by Bloomberg.

Still, many of the world’s top asset managers have invested in Aramco, in part because of its weighting in the Saudi stock index.

Aramco raised about $30 billion in the world’s largest IPO, paying out just over $100 million in fees. In comparison, banks including Goldman and JPMorgan Chase & Co. split about $60 million from helping Peloton Interactive Inc. raise $1.2 billion in 2019. Chinese internet giant Alibaba Group Holding Ltd., which raised $25 billion in its 2014 IPO, paid about $300 million to its underwriters including performance fees.

Advisers working on Aramco’s latest offer will likely have to contend with similarly low fees that are common in the region.

Aramco, in which the Saudi government owns a 90% stake, last month surprised the market by abandoning plans to boost its oil production capacity. It was a dramatic U-turn that will raise questions about the company’s views on demand for its oil but also free up billions of dollars of spending that can be used elsewhere.

MBS, as the crown prince in known, had said in January 2021 that the government would look to sell more shares in Aramco, with proceeds transferred to the kingdom’s sovereign wealth fund. Those plans had been gaining momentum last year, Bloomberg reported in May.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

US compels Saudi Fund to exit AI chip startup backed by Sam Altman

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Biden administration has forced a Saudi Aramco venture capital firm to sell its shares in a Silicon Valley AI chip startup backed by OpenAI co-founder Sam Altman, an exit that could have broader implications for the Middle Eastern country’s growing investments in US technology.

Prosperity7, a lead investor in a funding round that raised $25 million for Rain AI in 2022, sold its shares in the startup after a review by the Committee on Foreign Investment in the United States, people familiar with the matter said. The agency, the primary US watchdog for deals with national security implications, instructed the Saudi fund to unwind that deal sometime over the past year, the people said, asking to remain unidentified because the information is private.

The US is heightening scrutiny over the activity of Middle Eastern wealth funds, part of a growing resistance toward entities regarded as having close ties with China. CFIUS is reviewing several multibillion-dollar deals this year on concerns they could pose national security risks, Bloomberg News has reported.

Rain AI, partly financed by Altman, is a startup that designs AI chips inspired by the way the brain works. Prosperity7 sold its stake in the firm to Silicon Valley investment firm Grep VC, according to data firm PitchBook. Altman, Rain, Prosperity7 and Grep VC did not reply to requests for comment. CFIUS said in an emailed statement it couldn’t comment on transactions it’s reviewing but that it’s “committed to taking all necessary actions within its authority to safeguard US national security.”

Beijing has sought to strengthen ties with the Middle East while tensions escalated with the US and Europe. In November, China and Saudi Arabia signed a local currency swap agreement worth around $7 billion. Saudi Aramco, which controls Prosperity7, has invested billions of dollars in China’s energy sector even as the kingdom tries to attract Chinese tech companies.

The selloff by Prosperity7 — a $1 billion venture capital fund owned by Aramco Ventures — is notable because of the White House’s campaign to contain China’s technological ascendancy. That endeavour is focused in particular on the semiconductors that will drive future innovations including artificial intelligence.

Still, Altman is working to raise billions of dollars for a new AI chip venture to compete with Nvidia Corp. and had travelled to the Middle East to fundraise for a project codenamed Tigris, Bloomberg News reported this month. It wasn’t clear whether Rain AI is connected to that effort and its technology is still at an early stage of development.

While the market for AI chips is dominated by Nvidia, Rain AI and Altman join dozens of startups from Asia to Europe looking to design chips that could prove cheaper and more energy efficient. The US has banned the sales to China of the highest-performance chips required to develop the next generation of AI services, hamstringing China’s ambitions to compete in the burgeoning sphere.

With the advent of OpenAI’s ChatGPT, there has been concern about how data centres creating large AI models are overly power-hungry. Rain AI and other so-called in-memory chip startups aim to reconfigure how data is processed so as to reduce the need for transfers and cut power consumption.

While Altman is an early investor in Rain AI, it’s not clear whether he remains active in the company or how he views the technology today.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Saudi Aramco plans on selling $50 billion in shares

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Saudi Aramco is considering selling a stake worth as much as $50 billion through a secondary share offering on the Riyadh bourse after consultations with advisers, the Wall Street Journal reported on Friday.

The sale could happen before the end of the year, the report said, adding that Aramco has been “sounding out” potential investors, such as other multinational oil companies and sovereign-wealth funds, about participating in the deal.

The Kingdom has decided to host any new Aramco offering on the Riyadh exchange to avoid legal risks associated with an international listing, the report said, citing Saudi officials and other people familiar with the plan.

Saudi Aramco declined to comment when contacted by Reuters on Friday.

Saudi Aramco is the world’s biggest oil company, with a market value of $2.25 trillion. Its shares have risen 19.6 percent this year.

The company completed the world’s largest initial public offering in late 2019, raising $25.6 billion and later selling more shares to raise the total to $29.4 billion.

Saudi Arabia had planned in addition to sell Aramco shares worth up to $50 billion last year, but decided market conditions were unfavourable, the Journal said.

Saudi Arabia’s Crown Prince Mohammed bin Salman, the kingdom’s de facto ruler, in January 2021 said that Saudi Aramco would sell more shares, with proceeds used bolster the country’s main sovereign wealth fund.

“There will be Aramco share offerings coming in the coming years, and this cash will be transferred to the Public Investment Fund,” said Prince Mohammed, speaking at the kingdom’s Future Investment Initiative conference.

The Public Investment Fund, which sometimes receives government injections of cash, spent 120 billion riyals ($32.00 billion) domestically last year as it sought to implement an ambitious economic agenda to wean the economy off oil by building new industries.

The fund, which manages about $700 billion in assets, made a total comprehensive loss of 58.545 billion riyals ($15.61 billion) last year, according to its annual report published last month.

Also last month, Aramco announced an additional dividend of nearly $10 billion, most of which will go to the government, in the first of several extra payouts on top of its expected $153 billion base dividend for 2022 and 2023.

It reported a 38 percent decline in second quarter profit to 112.81 billion riyals from the year earlier period.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Crude reality: Saudi Aramco’s second quarter profit fall almost 40% due to plunge in oil prices

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Oil giant Saudi Aramco on Monday reported its earnings for the second quarter and the first half of financial year 2024. Aramco reported a profit of $30.1 billion for the quarter under review, a 38 percent year-on-year decline.

According to the state-owned oil firm, the profits were impacted by lower crude oil prices and weakening refining and chemicals margin. The crude oil prices were sharply higher in the year-ago period as an aftermath of Russia’s invasion of Ukraine.

The profits came at $62 billion in the first half.  The company had reported a decline of 19.25 percent in the profits in the preceding quarter.

President & CEO Amin H. Nasser said, “We are maintaining the largest capital spending program in our history, with the aim of increasing our oil and gas production capacity and expanding our Downstream business — with petrochemicals projects, such as our $11 billion expansion of the SATORP refinery with TotalEnergies, essential to meet future demand.”

Nasser added that the company is optimistic about the potential for new technologies to reduce our operational emissions. “Our recent blue ammonia shipments to Asia highlight the growing market interest in the potential of alternative, lower-carbon energy solutions.”

The company’s free cash flow came at $23.2 billion for the quarter under review, down 33.1 percent from the corresponding quarter in the previous year.

Aramco’s gearing ratio came down at -10.5 percent as balance sheet continues to strengthen. A Q1 2023 base dividend of $19.5 billion was paid in the second quarter, up four percent year-on-year, and Q2 2023 dividend of $19.5 billion will be paid in the third quarter.

The company intends to distribute performance-linked dividends over six quarters from third quarter of the previous fiscal. The company said in the exchange filing that upstream oil and gas developments are on track, including the Marjan, Berri, Dammam, and Zuluf crude oil increments, as part of broader capacity expansions.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

World’s largest oil producer is set to cut output in July — Will it lead to price rally again?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Saudi Arabia shall undertake further voluntary output cuts from July following which its output will decline to 9 million barrels per day from about 10 million barrels in May, Saudi’s energy ministry has said in a statement.

In the previous meeting of the Organization of the Petroleum Exporting Countries (OPEC) on June 4, no changes were made to the planned oil production cuts for the rest of the year. However, the world’s top oil exporter, Saudi Arabia has announced further output cuts which will be implemented from July.

Following the OPEC+ announcement to extend crude oil production cuts through 2024, US Energy Information Administration (EIA) forecast global oil inventories to fall slightly in each of the next five quarters. It expects that these draws will put some upward pressure on crude oil prices, notably in late-2023 and early-2024. Brent crude oil spot price is projected at $79 per barrel for the second half of 2023 and $84/b in 2024.

OPEC+ pumps approximately 40 percent of the world’s crude and policy decisions significantly impact the commodity’s prices.

The global liquids fuels consumption is expected to rise by 1.6 million barrels per day in 2023 from an average of 99.4 million barrels per day last year. EIA expects consumption to grow by an additional 1.7 million barrels per day in 2024. Most of this growth is expected to come from non-OECD countries.

Saudi Aramco believes market fundamentals remain “sound” for the second half of 2023, as demand from emerging markets led by China and India will offset recession risk in developed markets. “Overall, we believe that oil market fundamentals remain generally sound for the rest of the year,” said Amin Nasser, CEO at Saudi Aramco. He added that although China faces economic headwinds, the transport and petrochemical sectors are still showing signs of demand growth.

Oil prices declined towards $74 a barrel on June 30 and were on course for a fourth consecutive quarter of losses amid concerns over sluggish global economic activity and fuel demand. Inflationary pressure, rising interest rates in key economies and a slower than expected recovery in Chinese manufacturing and consumption have weighed on markets in recent months.

But signs of strengthening US economic activity and sharp declines in US oil inventories last week, offered support. Saudi Arabia’s plans to cut output by a further 1 million barrels per day in July in addition to a broader OPEC+ deal to limit supply into 2024 offers further support.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow