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[SKEP + 229]

 

 

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Edited September 3, 2019 by SKEP

[James Regan + 1,776]

1 hour ago, SKEP said:

King Salman takes away two key industry  oversight  ministries from Khalid,  Only oil minister for now.  I wonder how long that lasts. 

It may be due to his failed "do whatever it takes" strategy.

Aramco's production quota was set at 10.3b mm bbls/day.  More "smoke and Mirrors"  shell game by OPEC/Sauidi  leadership.  OPEC took the peak production month (10.6 mm bbls/day) of ARMACO October 2018 to set the quota.  ARAMCO avg production in 2018 was 10 mm bbls/day and 10mm bbls/day first half of 2019.

SO WHEN KHALID al-FAHLIH SAYS THEY REDUCED PRODUCTION MORE THAN THEY REQUIRED TO . . . . .  DON"T BELIEVE IT.  IT IS JUST A GAME. 

ARAMCO didn't reduce their ex[ports first half of year.  When inventory started to get low in the spring SAUDIS said they increased production due to summer air conditioning demand.  

ON ARAMCO CONFERENCE CALL THEY CONFIRMED>

* First half 2019 production 10 mm bbls/day 

* They met ALL their customers request for oil.

* They produced same as last year and 12% reduction in profits was attributed to lower price per bbl. 

* They said demand was strong in all regions (No Tight Supply)

* They are moving ahead with IPO (Do u think an Investment Bank oil analyst his going to risk getting cut out of any Aramco Bond or Stock offering by discussing oversupply or how the oil industry  is transitioning ?)

THE BIGGEST SHOCK CAME WHEN LAST WEEK THE MARKET REALIZED THE U.S. 10 mm bbl weekly inventory decline was attributed to 1.7 mm bbls/day decfrease in imports and 200K increase in exports.  

1.7 + .2 = 1.9 X 7days = 13.3 change decrease in U.S. Inventory.  THATS 13.3 MILLION BARRELS THAT DIDNT (but did before) COME OFF WORLD INVENTORY.  

Orbital Insight has said seasonal  20 mm bbls has dropped of World inventory over summer HOWEVER THAT IS NORMAL DROP RESULTING FROM NORTHERN HEMISPHERE PEAK DEMAND SEASON. 

At an energy summit in Aspen a couple weeks ago everyone agreed their is increased supply that will continue.  They were not in agreement on demand.  The 60 dollar question is moderate demand due to "transitional" or "structural" reasons.

 

 

At an energy summit in Aspen a couple weeks ago everyone agreed their is increased supply that will continue.  They were not in agreement on demand.  The 60 dollar question is moderate demand due to "transitional" or "structural" reasons... 🤔🧐🙄🙄🙄🙄🙄

Hope your well Skippy you have been quiet.

👍🏻👍🏻

[John Foote + 1,135]

HE Khalid Al Falih would not be taken down a notch for minor production numbers games. MBS might be getting a bit frustrated at the fact the IPO is still long away, and the well run, IPO ready machine Khalid was running, well, maybe not quite what was expected. Prior to Vision 2030 there was 2020, championed by Khalid al Falih, boosted by silly amount of consultant suck-up for silly amounts of money by the same consultant firm. Smoke and mirrors really. The efficiency levels went down, and graft went up, on Al Falih's watch running Aramco. He treats Aramco's aviation department as a personal airline for his extended family too. The aviation department is graft machine on the acquisition side. That did roll a few heads. Khalid has probably made many promises he would have made to get where he is with MBS, and delivering many won't happen. But the real graft is ARAMCO outsources so much, and the contracts, so follow the money. And an army of forensic accountants would struggle to follow the money. It wasn't that hard for me to figure out how much Aramco spent, but who they spent it with, and for what, that is darn near impossible. Their strangely modified version of SAP, the most expensive implementation in the world, ensures a lack of accountability, and it's another reason that can't go public. Nobody really wants the IPO, except the bankers seeing a payoff, and MBS perhaps, though I doubt MBS can comprehend the notion of accountability. And the Kingdom is running in the red. Large reserves, but it's unsustainable. They need real reform.  HE Khalid Al Falih is a very smart, capable person, but he's no reformist. Unless you like your wolf in sheep's clothing.

[Dmitry Bedin + 25]

SKEP! Thank you for your posts! Seems the most interesting posts here! GL!

[James Regan + 1,776]

4 hours ago, John Foote said:

HE Khalid Al Falih would not be taken down a notch for minor production numbers games. MBS might be getting a bit frustrated at the fact the IPO is still long away, and the well run, IPO ready machine Khalid was running, well, maybe not quite what was expected. Prior to Vision 2030 there was 2020, championed by Khalid al Falih, boosted by silly amount of consultant suck-up for silly amounts of money by the same consultant firm. Smoke and mirrors really. The efficiency levels went down, and graft went up, on Al Falih's watch running Aramco. He treats Aramco's aviation department as a personal airline for his extended family too. The aviation department is graft machine on the acquisition side. That did roll a few heads. Khalid has probably made many promises he would have made to get where he is with MBS, and delivering many won't happen. But the real graft is ARAMCO outsources so much, and the contracts, so follow the money. And an army of forensic accountants would struggle to follow the money. It wasn't that hard for me to figure out how much Aramco spent, but who they spent it with, and for what, that is darn near impossible. Their strangely modified version of SAP, the most expensive implementation in the world, ensures a lack of accountability, and it's another reason that can't go public. Nobody really wants the IPO, except the bankers seeing a payoff, and MBS perhaps, though I doubt MBS can comprehend the notion of accountability. And the Kingdom is running in the red. Large reserves, but it's unsustainable. They need real reform.  HE Khalid Al Falih is a very smart, capable person, but he's no reformist. Unless you like your wolf in sheep's clothing.

John using the lates article posted on OP it may be that the IPO may be heading East First, fears of Hard Brexit and growing Tensions with Trump coupled with logistics and  the Chinese appetite for crude may be real game changer for the IPO doubters?

We would be a little one sided as we lean to the right on a populist or protectionist slant, and then down the Saudis for doing the same, interesting turn of affairs, my belief is the Saudis will realise the dream one way or the other.

Western investors, government officials and stock exchanges still don’t seem to understand that there is an immense appetite worldwide for the Aramco IPO, with Asia as the main focus at present. The Kingdom’s advisors have made it clear to the Aramco entourage that a listing on NYSE and LSE at present is going to be very risky. Since the election of Boris Johnson as the UK’s PM, showing a detrimental focus on a No-Deal Brexit on October 31 2019, the position of LSE has gotten shaky. 

Without a Brexit-deal, the UK’s overall position within the global economy and financial world is in shatters. The negative effects of a No-Deal are already visible, as flocks of UK based companies are relocating to the European mainland, while others are afraid of a meltdown of the British financial system or even worse. It’s this type of instability in the UK that keeps the Saudis from listing Aramco in London. For the British government this is a major slap in the face. After years of intense lobbying by London’s financial guru’s, in close cooperation with the UK government, London seems to be put on ice. The costs are expected to run in the billions, as not only LSE will be taking a hit, but the attractiveness of London as a global financial center is at stake.

[SKEP + 229]

On 9/2/2019 at 3:23 AM, James Regan said:

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Edited September 3, 2019 by SKEP

[James Regan + 1,776]

20 minutes ago, SKEP said:

The IPO will never happen.  Does not meet requirements of New York Exchange or London Exchange.  Investment Banks will play along as their is still other billions in Investment Banking fees to be garnered by other Saudi Wealth Fund and ARAMCO. 

Everyone including ARAMCO understand the IPO is a "red herring".

SKEP- Did you read the article? There are other options than the USA or London- Seems logical to float it in Asia.

https://oilprice.com/Geopolitics/International/The-Saudi-Pivot-To-The-East-Is-Real.html

Try not to make this an anti KSA or pro USA issue, its business, what would you do if you were the "CEO" (loose term) of ARAMCO?

[SKEP + 229]

On 9/2/2019 at 4:45 AM, James Regan said:

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Edited September 3, 2019 by SKEP

[NickW + 2,714]

Heard from an Aramco pal. Shaybah got hit in a drone strike. Took them 18 hours to get the fires under control so they obviously hit something substantial. From the Pic I saw it looks like the nearby GOSP.

[SKEP + 229]

On 9/2/2019 at 11:18 AM, NickW said:

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Edited September 3, 2019 by SKEP

[NickW + 2,714]

2 hours ago, SKEP said:

What's your bud say about all the new Ministers and ARAMCO CEO ?

Keeps stum. 

Like many Aramco's he grins and banks it. Expats getting the boot all the time. He is a smart guy and used his Aramco salary to buy 8 houses in Scotland. 

[John Foote + 1,135]

11 hours ago, James Regan said:

John using the lates article posted on OP it may be that the IPO may be heading East First,

Why not Hong Kong, it's doing well.

Aramco has tried to get China to buy already. In some ways it makes sense, neither side wants transparency. Quite a few Chinese contractors IK already. The Saudis already know who always comes out ahead with that math. Aramco's problem is how invested MBS is into an IPO. 

Because MBS is talking about only selling 5%, it doesn't meet minimum LSE limits, not even close. Bankers love the deal, but opening to liabilities in the west is also problem. The fundamental problem is the value of Aramco when you factor in the regional issues. The 2 trillion number just isn't going to happen. Now if they owned these reserves in the USA, of course it would be worth it. McKinsey is very skilled at telling MBS what he wants to hear. McKinsey also know quite well how Aramco is run. They wrote 2020. They stated they had never encountered such a lack of accountability. Being ISO and GAP would fix that. Aramco should do those two first. Once they can run under public rules, then go public.

[SKEP + 229]

On 9/2/2019 at 4:45 AM, James Regan said:

SKEP- Did you read the article? There are other options than the USA or London- Seems logical to float it in Asia.

https://oilprice.com/Geopolitics/International/The-Saudi-Pivot-To-The-East-Is-Real.html

Try not to make this an anti KSA or pro USA issue, its business, what would you do if you were the "CEO" (loose term) of ARAMCO?

JR

Part of the plan (at least originally) was to get western (U.S. and Europe) as stakeholders, give them a vested interest. This would give the impression that KSA is "normal" safe business environment and more important have the backing of large Investment Institutions that have influence at the highest level of western governments.

NY Stock Exchange like London has a minimum float requirement. MBS's 5% isn't even close.  

The U.S.  Investment Banks tried to get NYSE to rewrite the rules or make an exception just for ARAMCO.  The Banks don't care. They're all whores, anything for the fees.

I believe the "threat" to go to Asia might be a ploy to force the West hand.  Then again, Saudi Arabia like Iran might forsake the West for China. 

China's markets are more important to ARAMCO going forward than the West.

But can't imagine Saudi / China IPO deal. Who do you trust, who do you believe.  Saudi doesn't want an exclusive China only IPO.

Edited September 3, 2019 by SKEP