OPEC+ production cuts have been extended to shore up the oil price. (Image source: Adobe Stock)

OPEC+ countries have extended their production cuts announced in April 2023 until the end of December 2025, in a bid to ensure the stability of the oil markets

Eight OPEC+ countries – Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria and Oman – will also extend their additional voluntary cuts of 2.2mn bpd announced in November 2023, to the end of September 2024, following which the cuts will be phased out on a monthly basis until the end of September 2025. This monthly increase can be paused or reversed according to market conditions, according to an OPEC statement.

OPEC+ also decided that quotas for 2025 will remain unchanged except for the UAE, which will get an additional 300,000 bpd allocation to 3.519mn bpd, on condition that it will only gradually raise its output over the first nine months of the year.

Bearish for oil markets

“While it was always the strategy of the eight OPEC+ members to gradually return the 2.2m bpd of extra voluntary cuts to markets (given elevated spare capacity), we view the detailed timeline for unwinding them over the subsequent 12 months (Q4 2024 to Q3 2025), as incrementally bearish for oil prices,” commented Ehsan Khoman and Soojin Kim from MUFG, in a statement.

“Looking ahead, notwithstanding what we read as an incrementally bearish outcome, we continue to hold conviction that effective OPEC+ market management will ensure Brent crude remains in a USD80-100/b range through to 2025.”

Much will depend on how much of growth in demand for oil is satisfied by increasing supply from non-OPEC+ oil producers such as the United States, Canada, Brazil, Guyana and newcomers such as Niger, comments S&P.

“Two years ago, at this time OPEC+ output was 2.2mn bpd higher than it is now. Total non-OPEC+ crude oil output is 3.1mn higher now, with more than half that growth coming from the United States alone. Put another way, OPEC+ has had to make room for the rising output of others or face downward pressure on prices,” said Bhushan Bahree, executive director, S&P Global Commodity Insights.

“An increase in quota does not automatically translate into more supply. The United Arab Emirates, for instance, is participating in additional voluntary cuts at this time. But the adjustment does change the share of the OPEC+ pie, giving the UAE a larger slice,” added Paul Tossetti, executive director, S&P Global Commodity Insights.

See also https://oilreviewmiddleeast.com/industry/opec-extends-production-cuts-to-shore-up-oil-market

https://oilreviewmiddleeast.com/industry/opec-production-cuts-can-continue-past-q1-2024-if-needed-saudi-energy-minister

The Trillium new integrated AHPB model API610 BB5-type. (Image source: Trillium)

Trillium Flow Technologies (Trillium), a global leader in flow control solutions, recently launched new lines of optimised pumps following the successful acquisition of Termomeccanica Pompe in 2022. Oil Review Middle East  interviewed Sam Eccles – pump product director at Trillium – to learn more about this development

Oil Review Middle East: Trillium Flow Technologies has been making headlines with its new launch. Can you tell us more about this recent development?

Sam Eccles: The launch of our new optimised pump lines is a strategic move that significantly advances our product offerings by combining the strengths of Gabbioneta Pumps and Termomeccanica Pompe brands.Our newly optimised product lines feature a comprehensive range of horizontal pumps with overhung and between-bearing designs, including OH2, OH3, OH5, BB1, BB2, BB3, BB4, and BB5 types. This product integration is a culmination of efforts from various stakeholders across our business, ensuring we maintain the legacy of two of the most recognised brands in the industry while optimising products based on critical customer metrics like weight and efficiency.

Oil Review Middle East Magazine: How do you see this integration impacting your New Product Development (NPD) and overall product coverage?

Sam Eccles: This pump integration sets a solid foundation for our upcoming NPD launches and extends our overall product coverage significantly. It not only enhances our capabilities but also underscores our dedication to innovation, quality, and excellence. We’re committed to meeting the evolving needs of our customers globally, and this integration is a great platform for 2024 and beyond. This is a thought I share with Edoardo Garibotti, Chairman of our Italian manufacturing base who reminded me we are not just merging product lines but blending centuries of engineering excellence to deliver superior, efficient, and innovative solutions to our customers.

Oil Review Middle East: For those interested in learning more about these new pump lines, where can they find more information?

Sam Eccles: Everyone interested in our new pump lines can listen to our dedicated podcast “A New Era in Pump Technology Innovation,” available at https://okt.to/bBTvJU. Additionally, more detailed information about our new overhung and between-bearings pumps can be found on our website, under the pumps section.

Oil Review Middle East: Thank you for sharing these exciting developments with us.

Sam Eccles: Thank you for the opportunity. It’s been a pleasure discussing our advancements and how we’re setting new standards in the flow technology space. I hope we get together again for the launch of our optimised vertical pump range later on this year.

The new facility will support TenarisGPC's ambitions to become a pipe export hub. (Image source: Tenaris GPC)

TenarisGPC has opened a Longitudinal Submerged Arc-Welding (LSAW) pipe mill in Jubail, Saudi Arabia, which will double the company’s production capacity in the country

The investment will provide more than 100 jobs for local community in the initial stage of the operation.

Strategic rebrand

The completion of this investment comes after a strategic rebrand earlier this year where Global Pipe Company rebranded to TenarisGPC, in furtherance of its ambitions to become a pipe export hub for complex projects worldwide. The new facility complements TenarisSSP's ERW production specialisation and Tenaris Saudi Arabia's premium OCTG threading capabilities.

Renwar Berzinji, chairman of TenarisGPC, and managing director and CEO of TenarisSSP commented, “This is a significant milestone in our ongoing efforts to deliver excellence across all aspects of the production and supply to complex line pipe projects across the Kingdom and beyond.

“The rebranding reinforces our commitment to synergising our operations with Tenaris to create unrivalled value for our customers. We have an unwavering commitment to position TenarisGPC to become a global leader in the supply of LSAW pipe.”

In the upcoming year, the new operation will deliver 15,000 manhours of training and will involve collaboration with top local universities, focusing on hiring Saudi talent, and offering practical training and experience for the next generation of engineers in the country.

The new target is part of ADNOC's expanding ICV programme. (Image source: ADNOC)

ADNOC has upped its local manufacturing target for critical industrial products in its procurement pipeline to AED90bn (US$24.5bn) by 2030, to strengthen the UAE’s industrial sector and boost local manufacturing capabilities

ADNOC’s previous 2027 target for local manufacturing of AED70bn (US$19bn) worth of products was delivered ahead of schedule following the award of two contracts for metal pipes and valves worth AED16.8bn (US$4.6bn) to local manufacturers.

Expanded ICV programme

The new target, announced at the ‘Make it in the Emirates’ forum, is part of ADNOC’s expanded In-Country Value (ICV) programme which aims to drive an additional AED178bn (US$49bn) back into the UAE economy by 2028.
His Excellency Dr. Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology, and ADNOC Managing Director and Group CEO, said, "Since the launch of ADNOC's In-Country Value programme in 2018, we have successfully collaborated with strategic partners to transform this initiative into an integrated national economic programme to boost the UAE’s economic development.

“This expanded initiative will support the UAE’s economic diversification, attract local and international investors, and provide high-skilled private sector jobs for UAE nationals. Additionally, it will stimulate entrepreneurial growth and drive sustainability in ADNOC’s supply chain. We invite local and international manufacturers to take advantage of our ICV programme and participate in the UAE’s industrial growth journey.”

ADNOC’s expanded ICV programme will provide an accelerator programme to enable small and medium sized Emirati companies to conduct business across ADNOC’s supply chain. The programme will also introduce incentives for the adoption of clean technologies and best-in-class environmental, social, and governance (ESG) practices, as well as accelerating the adoption of artificial intelligence (AI) in ADNOC’s supply chain.

Also announced at the ‘Make it in the Emirates’ forum was the award of a construction contract for TA’ZIZ’s 1 million tons per annum (mtpa) low-carbon ammonia production facility. The construction contract was awarded by Fertiglobe, a partner of TA’ZIZ, Mitsui & Co., Ltd. and GS Energy Corporation, to Tecnimont S.p.A (MAIRE Group). Construction is set to begin in the third quarter of 2024, with operations scheduled to commence in 2027.