Tom Kirkman

Aramco Crude Production Restored To Pre-Attack Levels, Official Says

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I'm not buying this news.  

But, this article is the musings of The Tylers on ZeroHedge, and The Tylers are generally well informed about the global oil industry, so I normally pay attention to their opinions.  In this case, I disagree with them.  But, since they are first class cynical bastards with normally razor sharp minds and wit, I still recommend reading their thoughts on oil & gas.  Just curious why The Tylers aren't cynically disbelieving the Saudi officials like I am.  Seems odd.

 

Aramco Crude Production Restored To Pre-Attack Levels, Official Says

Despite the worst attack on its infrastructure in the oil giant's 80-year-plus history, Saudi state-owned oil giant Aramco has succeeded in making all of its shipments in the month of September, says Ibrahim Al-Buainain, the CEO of Aramco's trading arm.

Moreover, the oil giant has also managed to restore its oil-production capacity to pre-attack levels, meeting an accelerated two-week timeline announced by the firm earlier this month.

Saudi oil output was cut in half by an attack on Aramco facilities, an attack that was allegedly orchestrated by Saudi Arabia's arch-rival Iran (though Yemen's Iran-backed Houthi rebels initially took credit for it).

In the wake of the attack, oil prices soared, as the kingdom warned that the equivalent of 5.5% of global production had been temporarily taken offline.

Screen%20Shot%202019-09-30%20at%2012.34.

Initially, Aramco warned that the damage could take months to repair. However, the Saudis adjusted that prediction just days after the attacks as repairs reportedly progressed much more quickly than Aramco had initially anticipated, according to a senior executive.  ...

 

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(edited)

11 hours ago, Tom Kirkman said:

I'm not buying this news.  

But, this article is the musings of The Tylers on ZeroHedge, and The Tylers are generally well informed about the global oil industry, so I normally pay attention to their opinions.  In this case, I disagree with them.  

 

Maybe the damage was not extensive.

Worse attack on Saudi oil facilities ?

Loss of 5.5% world supply ?

Really ?  

ZeroHedge has been more wrong then right on oil over last year. They're not alone.  Most of the "experts" have been more wrong then right.  

 

At Abqaiq most of the damage was on the Spherical tanks. Missiles and drones precisely hit 10 of the 11 Spherical separation tanks .  Just two of the fractionation/separation towers hit. Only one of the towers totally destroyed ( photo op) . Other was more cosmetic.

THE SPHERICAL TANKS ARE 60 YEAR OLD TECHNOLOGY.  THEY DONT USE THEM ANYMORE.

The spheres were installed in the 60's. They are antiques that are very time consuming , inefficient , expensive and lose up to 10% + of crude yield.  

Can't believe how "lucky" Saudi Aramco is that their enemy targeted useless tanks. Whew, dodged a bullet.  

Read OP Irina's article $300 oil , if knocked out production ! 

Note, If Iran knocked out Saudi production Iran would see the Mother of All bombing campaigns on every Republican Guard facility, every Military location, every missile sight, every radar installation, every nuclear development location over the following 48 hours , and the Iranians know this .  Only then you will get $300 oil. Some in United states say Iran will continue kinetic strikes.  Maybe true, but their is line they will not cross unless they have a death wish.

We're supposed to listen to Saudi Crown Prince Mohammed "bone saw" Salman when he "warns" the world about Iran.  Good try Bone Saw, your oil price didn't go up.  Continues to drop.  Sorry. 

Israel has a new nuke. It's small, designed for less radiation exposure and most importantly does not detonate over a target area.  It penetrates the ground first, then explodes causing massive damage mostly underground.  Perfect for anyone trying to hide nuke facilities inside an underground or under mountain facility. Can't hide anymore.

Tom you are 100% correct. The IPO is a farce.  

Saudis don't think before they act. They wanted to get 3 months, then 8 months of higher oil prices to prop up their Aramco IPO.  Then realized claiming 8 month outage was detrimental to their IPO.

Saudi Arabia is trying to get the same deal as China.  China was allowed to list Chinese Companies stocks on the New York Stock Exchange but do not have meet SEC requirements for audited financial statements based on generally accepted accounting practices.

Think about that.  Aramco will be able to put anything in their earning reports and not be accountable. 

Edited by Jabbar
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12 minutes ago, Jabbar said:

Maybe the damage was not extensive.

Or maybe the entire situation stinks, and damage control for the forever-upcoming Aramco IPO ripoff was considered more important than facts.

I have poked fun at the Aramco IPO for Quite some time, and it just seems to get more Alice & Wonderland absurd as time passes.

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(edited)

1 hour ago, Tom Kirkman said:

says Ibrahim Al-Buainain, the CEO of Aramco's trading arm.

1 hour ago, Tom Kirkman said:

much more quickly than Aramco had initially anticipated, according to a senior executive.  ...

Isn't this whole article just based on Aramco's words though? ''Official says'' 

Tylers not jabbing in their normal BS calling is odd though I agree. 

 

Edited by DayTrader
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Hmmm... another possibility is that the lying Saudis conspired the whole thing, knowing that they could 'fix it' quicker than anyone thought and it would make their kingdom look less vulnerable to attack?

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(edited)

2 hours ago, DayTrader said:

Isn't this whole article just based on Aramco's words though? ''Official says'' 

Tylers not jabbing in their normal BS calling is odd though I agree. 

 

The Saudis are known for their transparency and truthfulness.  LOL 

MBS never ordered the murder of Khashoggi. Right ?

It's funny watching the biggest banks in the world tripping over each other to get on the selling group for the Aramco IPO.  Let's see how many of these banks actually sign off on the valuation .  Fiduciary responsibility anyone ?  I can see the lawsuits coming already .

Edited by Jabbar
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(edited)

Exactly, I never believe a word they say. It's funny this guy has an interview and we are all supposed to listen?

''We need to stand up to Iran! But I don't want war... If USA does then I do though''

(We just need to work out how to use all this stuff)

*what's this bone saw doing here?

Edited by DayTrader
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Tyler Durden has been very cosy with Golman Sachs boys in the past. You really can't trust anyone. His news service has, since inception in 2009 always been extremely well funded. Even back in the early days it would rip off 20 or 30 articles a day. Hard to do that without massive funding. On several things over the years, they have been the first to announce some wild stuff, making them look very well connected. So, on the ultra important point, perhaps the best money making move we will ever see, they pull out some B.S. to mislead the masses.

https://en.wikipedia.org/wiki/Daniel_Ivandjiiski

 

 

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Some cheery news but unconfirmed. Saudi has launched some kind of large scale operation in Yemen again so we could be in for more explody action.

OPECs production was at 10 year low for September according to an article, US shale oil production may have peaked for now. Yet oil prices refuse to move...

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LOL explody action is cheery news.

#shooty shooty the bad man

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(edited)

22 hours ago, DayTrader said:

Isn't this whole article just based on Aramco's words though? ''Official says'' 

Tylers not jabbing in their normal BS calling is odd though I agree. 

 

Bloomberg interviewed Aramco CEO yesterday . Two items to note :

1.  CEO was asked if their production is now above the 9.8illion barrels they said they would cut to. CEO sheepishly  answered , "a little" . So pumping and exporting more oil to get their income statement up for IPO. When asked how much he would not answer.  

2.  CEO was then asked how much production going forward. CEO then said , "The government sets production. We produce what the government sets as production."   

JUST THINK ABOUT THAT STATEMENT.  Aramco wants to be a public transparent company listed on the world exchanges and the CEO states the monarchy really runs Aramco. 

YOU COULD NOT GET AWAY WITH THAT ON THE LONDON EXCHANGE OR NEW YORK EXCHANGE.  

There STILL is no boundary between (1) Saudi Government, (2) Sovereign Wealth Fund, (3) Aramco.

Two Trillion dollar valuation .  A joke.

No transparency.  

If you invest in IPO you are investing in Kingdom of Saud, not in an oil company and will be at the mercy of their whims .  I believe if  things get tight, to hell with the shareholders, the 18,000 princes need their stipend increase.

Isn't that what they really want.  They want the world to be invested in their survival.  

 

Edited by Jabbar
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12 minutes ago, Jabbar said:

Bloomberg interviewed Aramco CEO yesterday . Two items to note :

1.  CEO was asked if their production is now above the 9.8illion barrels they said they would cut to. CEO sheepishly  answered , "a little" . So pumping and exporting more oil to get their income statement up for IPO. When asked how much he would not answer.  

2.  CEO was then asked how much production going forward. CEO then said , "The government sets production. We do what the government sets production at."   

JUST THINK ABOUT THAT STATEMENT.  Aramco wants to go as a public transparent company. YOU COULD NOT GET AWAY WITH THAT ON THE LONDON EXCHANGE OR NEW YORK EXCHANGE.  

There STILL is no boundary between (1) Saudi Government, (2) Sovereign Wealth Fund, (3) Aramco.

Two Trillion dollar valuation .  A joke.

No transparency.  

If you invest in IPO you are investing in Kingdom of Saud, not in an oil company.  

 

agree.

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2 hours ago, El Nikko said:

Some cheery news but unconfirmed. Saudi has launched some kind of large scale operation in Yemen again so we could be in for more explody action.

OPECs production was at 10 year low for September according to an article, US shale oil production may have peaked for now. Yet oil prices refuse to move...

Oil prices are moving.  Just not in the direction I want/need  them to be.  I'd be happy even if oil prices were at 60-65 dollars/barrel for WTI.  For me it would be nice if WCS were at $60+ a barrel as well.

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6 hours ago, Jabbar said:

We're supposed to listen to Saudi Crown Prince Mohammed "bone saw" Salman when he "warns" the world about Iran.  Good try Bone Saw, your oil price didn't go up.  Continues to drop.  Sorry. 

"Bone saw" bin Salman. Comedy gold

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5 hours ago, Jabbar said:

Bloomberg interviewed Aramco CEO yesterday . Two items to note :

1.  CEO was asked if their production is now above the 9.8illion barrels they said they would cut to. CEO sheepishly  answered , "a little" . So pumping and exporting more oil to get their income statement up for IPO. When asked how much he would not answer.  

2.  CEO was then asked how much production going forward. CEO then said , "The government sets production. We do what the government sets as production at."   

JUST THINK ABOUT THAT STATEMENT.  Aramco wants to go as a public transparent company. YOU COULD NOT GET AWAY WITH THAT ON THE LONDON EXCHANGE OR NEW YORK EXCHANGE.  

There STILL is no boundary between (1) Saudi Government, (2) Sovereign Wealth Fund, (3) Aramco.

Two Trillion dollar valuation .  A joke.

No transparency.  

If you invest in IPO you are investing in Kingdom of Saud, not in an oil company and will be at the mercy of their whims .  I believe if  things get tight, to hell with the shareholders, the 18,000 princes need their stipend increase.

 

Nailed it.

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(edited)

Zerohedge are gold cheerleaders and oil haters, always have been.  They hate shale with a passion.  I have been following them since they started back in 2009 or 8.  One of the original commentators posts on a private investing board I have been at for 20 years.  He is rarely anything but sarcastic and hyperbolic in his postings.  I take what they say with a big grain of salt.

BTW, they were a volunteer organization to begin with.  I think the guy that is on the investing board was paid some small amount and left angry because the owner is the one who ended up raking in the dough when it became successful.

Back on topic, they shut the flares down by the 27th I think and so that means they figured out how to get that oil processed and moved elsewhere.  That oil is NOT going to Abqaiq and it's all sour, heavy.  They are basically a big Venezueala until they have that Abqaiq plant fixed. They also lost a good percentage of Khurais and what they are putting out there is not as good as what it was before they lost two stabilizer towers.

They will not be able to meet their future delivery requirements and the market isn't going to want that much heavy sour oil.  Let's see what the story is by December.

Edited by wrs
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1 hour ago, wrs said:

 

Back on topic, they shut the flares down by the 27th I think and so that means they figured out how to get that oil processed and moved elsewhere.  That oil is NOT going to Abqaiq and it's all sour, heavy. 

also lost a good percentage of Khurais and what they are putting out there is not as good as what it was before they lost two stabilizer towers.

They will not be able to meet their future delivery requirements and the market isn't going to want that much heavy sour oil.  Let's see what the story is by December.

wrs , I believe your assessment. How can they list IPO on Saudi Exchange and lie about production.  

Do they say Abqaiq is still down ? 

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5 minutes ago, Jabbar said:

wrs , I believe your assessment. How can they list IPO on Saudi Exchange and lie about production.  

Do they say Abqaiq is still down ? 

Well I guess it depends on who wants to believe them.  As far as Abqaiq goes, they have weasel worded all of their public pronouncements to where it's hard to say if Abqaiq is running or not.  Seems very difficult to run one part of the plant while you are fixing equipment in the same area.  I am sure the piping can allow for some mixing and matching but how much is the key.  I don't think they have more than 2-3mmbbl/day running through Abqaiq.

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There are some reports that say ARAMCO have bought oil from Kuwait to make up their shortfall.

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23 hours ago, Jabbar said:

Saudi Crown Prince Mohammed "bone saw" Salman

I see a future career in Ultimate Fighting Championship

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On 10/1/2019 at 6:02 AM, Tom Kirkman said:

I'm not buying this news.  

But, this article is the musings of The Tylers on ZeroHedge, and The Tylers are generally well informed about the global oil industry, so I normally pay attention to their opinions.  In this case, I disagree with them.  But, since they are first class cynical bastards with normally razor sharp minds and wit, I still recommend reading their thoughts on oil & gas.  Just curious why The Tylers aren't cynically disbelieving the Saudi officials like I am.  Seems odd.

 

Aramco Crude Production Restored To Pre-Attack Levels, Official Says

Despite the worst attack on its infrastructure in the oil giant's 80-year-plus history, Saudi state-owned oil giant Aramco has succeeded in making all of its shipments in the month of September, says Ibrahim Al-Buainain, the CEO of Aramco's trading arm.

Moreover, the oil giant has also managed to restore its oil-production capacity to pre-attack levels, meeting an accelerated two-week timeline announced by the firm earlier this month.

Saudi oil output was cut in half by an attack on Aramco facilities, an attack that was allegedly orchestrated by Saudi Arabia's arch-rival Iran (though Yemen's Iran-backed Houthi rebels initially took credit for it).

In the wake of the attack, oil prices soared, as the kingdom warned that the equivalent of 5.5% of global production had been temporarily taken offline.

Screen%20Shot%202019-09-30%20at%2012.34.

Initially, Aramco warned that the damage could take months to repair. However, the Saudis adjusted that prediction just days after the attacks as repairs reportedly progressed much more quickly than Aramco had initially anticipated, according to a senior executive.  ...

 

Tom, I am going to do you a favor. I am going to enlighten you with facts. Not only is the full Saudi production real, it was also predictable if one kept his head on straight. Of course, that is what I try to do. 

Here is a note that I sent out the night of the attack. "This may be a different take from that you get from your professional cohorts, but I thought I would let you know what is actually going to happen as a result of the attack on the Saudi production facilities. The Saudis have so much spare capacity that they will not lose any production. No customers will be turned away. They may even get a little bit of additional outlet if the speculators put oil in storage in order to capitalize on a hoped-for price boost. But the Saudi‘s will reap higher prices for their own oil as long as the turmoil keeps prices boosted. So the attackers have probably done the opposite of what they want. They have actually helped the Saudis get more income for their production."

Is that clear? No production loss. The loss of capacity was less than the spare capacity that was not being used. My further comment sent on September 20 elaborates further.

"Saudi Arabia should send a big “Thank you” note to Iran. The ill-advised attack on the Aramco production facilities was both a financial and a strategic gift to the Saudis. While the news media and the renowned consultants of the world proclaimed a “5.7 MMB/D loss of production", actual Aramco production figures will show almost no loss of production in September as a result of the bombing. The only real impact was a 5-10% increase in the price that Aramco received for its sales after the event. This is the financial gift from Iran.

The strategic gift is the possibility that Aramco will now realize that their historical policy of maintaining 20% spare capacity “for the good of the global supply community” is no longer an appropriate stance. Oil traders and futures speculators now set the price of oil. Accordingly, abrupt price changes are now almost always in the upward direction as a knee-jerk reaction to news, which is usually in the sensational category of “loss of supply”, and is a price spike, not a price drop. The availability of spare producing capacity works against the price benefit of these sensational reports, so Aramco would be better served to benefit from the higher price jump that “no spare” would create. And in reality, Saudi Arabia receives no benefit from their “good citizen” stance, since the talk usually centers around production cuts by the Saudis, not supply assurance.

Aramco has maintained about 20% spare capacity for at least fifty years. During that time only a minuscule quantity of that spare has ever been utilized. Thus that policy has definitely been a cost item, not a profit generator. And there is little evidence that any “good will” has been generated by that Saudi largesse. Now is the time for a reconsideration of that policy. Aramco can then operate with the opportunistic thrust that the rest of the industry currently enjoys.

In the meantime, the rest of the global producing industry can benefit, as well, from the Iranian action."

After actual September production figures were published yesterday, I added this comment. "You are probably already all over this, Anna. But in case a reminder is appropriate, it seems that someone should call the industry on all of the sensationalized and inaccurate reporting on the Saudi production loss from the Iranian attack. Are you the one to fulfill this need?

A loss of 5.7 MMB/D is the common wisdom for the production loss, and the number erroneously reported by most publications. We now have the actual number for September, as you reported in yesterday’s Daily Wrap. The actual loss is 9.8 (August production by Saudi Arabia) minus September’s 9.1 MMB/D, or 0.7 MMB/D, not 5.7 MMB/D. The industry commentators should be ashamed of a 5 MMB/D overstatement.

Now let us see if any of the big boys admit their mistake."

You should be up to speed now, Tom. Real numbers are quite illuminating, both before and after the fact.

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12 minutes ago, William Edwards said:

You should be up to speed now, Tom. Real numbers are quite illuminating, both before and after the fact.

Many thanks for weighing in, William.  As always, your insight is both useful and appreciated.  Great to see you are keeping a level head, as usual.

The dearth of actual, hard facts in the media is aggravating as hell.   So. Much. Spin.

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