Thursday 17 October 2019

Aramco 'buying oil to meet its foreign supply orders'

Crippled: Workers at the damaged Abqaiq oil facility in Saudi Arabia
Crippled: Workers at the damaged Abqaiq oil facility in Saudi Arabia

Rania El Gamal and Ron Bousso

Saudi Aramco is buying oil originating in neighbouring countries to meet its supply obligations to foreign refineries, sources familiar with the matter have said, after crippling attacks on the company's installations 10 days ago.

The state firm's trading arm is arranging for crude from the United Arab Emirates and Kuwait to cover its commitments to refineries in neighbouring Bahrain as well as in Malaysia and South Korea, the sources said.

Please log in or register with Independent.ie for free access to this article.

Log In

Aramco Trading Corp (ATC) did not immediately respond to a request for comment.

Drone and missile attacks on two facilities in Abqaiq and Khurais that process mainly light crude knocked down about 5.7 million barrels per day, more than half of the production of the world's top oil exporter.

Though the kingdom said it would restore full oil output by next week, it is seeking help from fellow Gulf Arab producers to keep its customers supplied and plug any gaps due to the temporary shortage, the sources said.

Even before the attacks, ATC used to buy and trade third-party crude from the market and swap it for oil products, but the sources said the kingdom's reduced oil output had increased ATC's demand for non-Saudi crude.

ATC was said to be arranging modest shipments of Emirati crude to Bahrain's refinery and other plants from Abu Dhabi's state oil company.

"Abu Dhabi National Oil (ADNOC) will send 2-3 million [barrels] of Murban into Bahrain," a source said, citing one of the UAE's main grades of light crude.

"We also saw Murban going to Saudi Malaysia," another source said, referring to Pengerang Refining and Petrochemical, a joint venture between Malaysian national oil company Petronas and Aramco.

A spokesperson for ADNOC declined to comment.

ATC is also buying crude from the market to feed South Korea's third-largest refinery, S-Oil, with which Aramco is partnered in a joint venture.

Emirati and Kuwaiti oil is being provided to S-Oil via trading houses including BP, the sources added. BP declined a request for comment.

ATC also bought Omani crude, according to one market source, while others reported that the company is looking to import condensate from the market.

Saudi Arabia will not import crude to meet its domestic needs, one source said.

Saudi oil exports were proceeding, the source added, "exactly like they were [before]to meet the market's needs".

Reuters

Irish Independent

Also in Business