{"id":83384,"date":"2024-02-13T00:00:00","date_gmt":"2024-02-13T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2024\/02\/13\/aramcos-lower-max-production-target-underlines-a-more-flexible-investment-policy-rising-appetite-for-renewables\/"},"modified":"2024-02-13T00:00:00","modified_gmt":"2024-02-13T00:00:00","slug":"aramcos-lower-max-production-target-underlines-a-more-flexible-investment-policy-rising-appetite-for-renewables","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2024\/02\/13\/aramcos-lower-max-production-target-underlines-a-more-flexible-investment-policy-rising-appetite-for-renewables\/","title":{"rendered":"Aramco\u2019s lower max production target underlines a more flexible investment policy, rising appetite for renewables"},"content":{"rendered":"

Good morning, friends. <\/strong>Energy policy and travel (thank you, Founding Day holiday) dominate the conversation on Saudi on what is otherwise a reasonably slow news day at home and an achingly slow one abroad. <\/p>\n

But slow \u2260 boring: <\/strong>What domestic news there is today is particularly meaty. Enterprise: All beef, no filler. <\/p>\n

<\/a> UP FIRST: Aramco\u2019s recent decision to shelve plans investment in new production <\/strong>capacity came on the back increasing emphasis on <\/strong>cleaner energy<\/strong>, Reuters<\/a> reported yesterday, citing statements by Energy Minister Prince Abdulaziz bin Salman during the International Petroleum Technology Conference in Dhahran. \u201cI think we postponed this investment simply because.. . we\u2019re transitioning,\u201d he said. The state oil giant is flexible when it comes to investing in growth and can comfortably shift emphasis between oil, natural gas, petrochemicals and renewables, he said.<\/p>\n

ICYMI- <\/strong>Aramco made a surprise announcement last month<\/a> that it was putting on hold its expansion plan and will target a \u201cmaximum sustained production capacity\u201d of 12 mn barrels of oil per day. That\u2019s about 1 mn bpd below the target of 13 mn bpd by 2027 that it had set back in 2020.<\/p>\n

Prince Abdulaziz\u2019s remarks are significant and underline a substantially more nuanced <\/strong>energy policy<\/strong> than the Kingdom was given credit for during the late 2023 COP28 climate conference in Dubai, where we were cast as the spoiler. Saudi will pump oil for so long as there is demand \u2014 while laying the groundwork for a diverse energy industry and an economy in which hydrocarbons are vastly less central. The latest case in point: See our lead news item on the sale of green power to Europe. <\/p>\n

Aramco remains ready to raise output if necessary<\/strong>, CEO Amin Nasser told reporters on the sidelines of the event. \u201cWe have adequate spare capacity of about 3 mn barrels,\u201d he said. \u201cAnd as a company \u2014 because this is a decision for the government \u2014 we remain ready whenever they want to increase [maximum sustained capacity]; we are always ready to expand,\u201d Nasser added.<\/p>\n

ALSO FROM NASSER-<\/strong><\/p>\n

<\/a> #1- Growth in global oil demand will be \u201crobust\u201d this year<\/strong>, Bloomberg<\/a> quotes him Nasser as saying. \u201cWe see 104 mn barrels of demand for this year, so a growth of about 1.5 mn barrels,\u201d he said \u201cSo it is robust.\u201d This will mark a second year of growth after OPEC figures showed global oil demand hitting a record<\/a> of over 102 mn bpd in 2023.<\/p>\n

#2- A secondary offering in Aramco would be a \u201cshareholder decision,\u201d<\/strong> Nasser said in statements picked up by Reuters. This is the first confirmation by an official on a floated plan<\/a> seeing the state-owned oil giant selling shares in a secondary offering.<\/p>\n

RENEWABLE ENERGY<\/p>\n

<\/a> WATCH THIS SPACE #1- <\/strong>Neom <\/strong>unit is accepting bids for 800 MW solar project:<\/strong>Enowa<\/a> is poised to receive bids engineering, procurement, and construction work on its 800 MW Shiqri solar power farm, MEED<\/a> reports. The deadline for the project, which is located in Tabuk, was originally slated for early February before being delayed to 3 March 2024. At least four companies have already been invited to bid. Enowa is a unit of Neom. <\/p>\n

WATCH THIS SPACE #2- The Energy Ministry<\/strong> is working on multi-GW solar tenders<\/strong>, Al<\/a>Eqtisadiah<\/a> reported yesterday, citing statements by Minister Prince Abdulaziz bin Salman during the IPTC in Dhahran. The ministry is working on launching 30 GW solar tenders, he said, without providing further details on the bidding process or a timeline for the tenders. <\/p>\n

REMEMBER-<\/strong> The Kingdom unveiled plans in December<\/a> to more than double its renewables target to 130 GW by 2030. It plans to add 20 GW in renewable energy annually to reach 130 GW by 2030, up from a previous target of 58.5 GW, according to earlier statements by the Energy Minister. The government is ready to export up to 150 GW of green hydrogen or electricity, he added.<\/p>\n

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TOURISM WATCH<\/p>\n

#1- Expect talk of travel and tourism to pick up in the days ahead as we look forward to <\/strong>the <\/strong>Founding Day long weekend<\/strong> on 22-24 February. Global business news essential Skift<\/a> is dissecting the recent news that we\u2019ve blown past the government\u2019s target of 100 mn tourist trips by 2030, taking note of rising spending, a fast-diversifying mix of experiences, and the challenge of counting domestic tourist trips. <\/p>\n

BACKGROUND- <\/strong>The Tourism Ministry\u2019s new target is to see 150 mn tourism trips (80 mn by domestic travelers, 70 mn by international travelers) by 2030, as we noted last week<\/a>.<\/p>\n

<\/a> #2- <\/strong>Thinking of traveling for Founding Day? Odds are good you\u2019re looking at a break in <\/strong>Egypt<\/strong>, followed by India, Turkey, the UAE, and the United Kingdom, according to data released yesterday by Skyscanner<\/a>. Rounding out the top 10 searches by Saudi travelers: Morocco, Thailand, Italy, France, and Indonesia.<\/p>\n

#3- IMF boss \u2764\ufe0f AlUla:<\/strong> IMF chief Kristalina Georgieva said she was impressed by the quality of her experience in AlUla during a recent vision.<\/p>\n

She also likes our economic policy: <\/strong>The Kingdom\u2019s economy has become more dynamic as it seeks to reduce its reliance on oil exports, Georgieva told Al Arabiya (watch, runtime: 0:49<\/a>) on the sidelines of the World Government Summit in Dubai.<\/p>\n

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WATCH THIS SPACE-<\/p>\n

<\/a> #1- Today is your <\/strong>last chance<\/a><\/strong> to apply to cycle three of the <\/strong>Flat6Labs Riyadh Seed<\/a><\/strong>Program<\/a><\/strong>. <\/strong>The program offers early stage startups some SAR 500k in cash funding, up to SAR 2.4m in follow-on funding, access to investors, legal support, and exclusive business networking events. And you get to work with the folks at Flat6, who are as smart as they are good humans. You can apply <\/strong>here<\/a><\/strong>.<\/strong><\/p>\n

#2- Arizona State University\u2019s mascot Sparky the Sun Devil could be taking up residence <\/strong>in Riyadh: <\/strong>Education Minister Yousef Al Benyan discussed with US officials opening a branch for Arizona State University in the Kingdom during a visit to Washington last week, state news agency SPA<\/a> reported yesterday. His statements came during a forum focused on education investments in the Kingdom attended by over 150 US investors and representatives.<\/p>\n

#3- SDAIA launched the<\/strong>National Occupational Standards Framework for Data and<\/a><\/strong>AI<\/a><\/strong>aimed at setting guidelines to \u201cstandardize and improve occupational practices and applications\u201d in the industry, according to a post on X<\/a>. The framework outlines the necessary expertise and skills required for those in the industry. It also separately launched<\/a> the \u201cSaudi Standards for Smart Cities\u201d to develop a framework for operations in smart cities.<\/p>\n

DATA POINT- <\/strong>The number of documented commercial lease contracts rose 15% y-o-y in January to <\/strong>reach a record<\/strong> 59.5k for the month, the government\u2019s rental e-services platform Ejar said yesterday on<\/a>X<\/a>.<\/p>\n

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SPORTS-<\/p>\n

#1- <\/strong>Al-Thuqbah clinched the top spot in archery at the 2024 Arab <\/strong>Women's Sports <\/strong>Tournament<\/strong> with a commanding 6-0 victory in the final showdown against Emirati host Sharjah, Arriyadiyah<\/a> reports. Women\u2019s clubs Capital, Al-Ittihad, Al-Khaleej also participated in the event, which wrapped up yesterday. Some 63 teams from 15 Arab countries participated.<\/p>\n

#2- Getting ready for the AFC Champions League: <\/strong>A delegation from the Asian Football Confederation is in town to assess how ready Riyadh\u2019s Kingdom Arena stadium is to host the remainder of Al Hilal\u2019s games in the AFC Champions League, Al Riyadiah<\/a> reported yesterday, citing two sources close to the matter. Reps from the Saudi Arabian Football Federation and Al Hilal will also be evaluating the stadium as a host of the club\u2019s games in the Roshn Saudi League. <\/p>\n

The stadium is already a Guinness World Record holder: <\/strong>The Kingdom Arena, which can accommodate more than 40k fans, was built in a<\/a>record<\/a>two months<\/a>. It was inaugurated in late January where Al Hilal beat Lionel Messi\u2019s Inter Miami 4-3 in the Riyadh Season Cup. The second game at the stadium saw Al Hilal crowned champions after they beat rivals Al Nassr 2-0. It recently received<\/a> two Guinness World Records certifications as the largest indoor football stadium with the largest seating capacity.<\/p>\n

#3- Riyadh Season said it will host the Egyptian Cup final between Al Ahly and Zamalek <\/strong>on Friday, 8 March at Al Awwal Park stadium, according to a statement<\/a>.<\/p>\n

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THE BIG STORY ABROAD- <\/p>\n

It would not be inaccurate to say that it\u2019s an achingly slow news morning globally <\/strong>\u2014 and what news there is out there is a dog\u2019s breakfast. <\/p>\n

Overall: Gaza peace talks in Cairo lead the front page of the <\/strong>Financial Times<\/a><\/strong>, while Bloomberg<\/a> \u2019s lead piece adds that US President Joe Biden is pushing for a six-week break from fighting<\/strong>. The Wall Street Journal<\/a> is obsessing over whether the US Supreme Court will hear Donald Trump\u2019s challenge to a lower court ruling<\/strong> that denies him blanket immunity for crimes he may have committed as president. <\/p>\n

We do, however, have a couple of nice SIGN OF THE TIMES pieces for your <\/strong>consideration:<\/strong><\/p>\n