Good morning, friends, and happy almost-Thursday. We hope the week is treating you well — and ask that you kindly fasten your seatbelts and strap in for a busy issue this morning.

THE BIG STORY AT HOME on this fine winter morning sees oil analysts the world over digesting news that Aramco will stop investing in expanded production capacity. State news agency SPA reported yesterday that the global oil giant is putting on hold its expansion plan and will target a “maximum sustained production capacity” of 12 mn barrels of oil per day. That’s about 1 mn bpd below the target of 13 mn bpd by 2027 that it had set back in 2020.

What’s a “maximum sustained production capacity,” anyway? It’s the ceiling to which Aramco can comfortably produce without further investment in exploration or production infrastructure.

Why does this matter? Industry analysts essentially view Aramco as the “central banker” of the oil market. Aramco currently has about 3.2 mn barrels of “spare capacity” today — 3.2 mn barrels it could quickly bring online if demand spikes thanks to war, cold weather in the northern hemisphere, or other factors. That’s about 63% of Opec’s total spare capacity, with the rest held by the UAE, Iraq, and Kuwait.

What’s the message to markets? Pundits are still figuring that out. Some believe it means Aramco sees no expansion of demand for oil in the medium term. And while a handful speculate that it means Aramco could save maybe USD 5 bn in capex spending this year, others believe it’s unlikely to curb spending. Instead, they see Aramco continuing to ramp up its investments in natural gas and renewable energy.

The story is driving the conversation on the Kingdom in the global press this morning: Bloomberg | Financial Times | Wall Street Journal.

Need to go deeper? The best coverage out there this morning is from Reuters, which has a long take with good analysis and a solid factbox.

MEANWHILE- Results season has started in earnest. We have 2023 figures for you today from Jarir and Bupa Arabia. Expect plenty more in the days ahead.

WATCH THIS SPACE- The Sports Ministry will issue “in a week or two” tenders for a new stadium and five upgrades across the Kingdom as part of a SAR 10.1 bn capital projects program, Meed reported yesterday, citing sources close to the matter. “The prequalification process has been completed and the tender for the stadiums is expected to be issued in a week or two,” they said. The initiative hopes to refurbish sports facilities in time for the Kingdom’s hosting of the 2027 AFC Asian Cup and the 2034 FIFA World Cup later after Australia said it would not be presenting a bid to host the tournament.

We knew this was in the works: The ministry has been accepting prequalification documents for the new construction contracts since July. The program’s main contractor is yet to be announced.

DATA POINT- Youts make up 44% of the total populationand account for 78% of the workforce, Argaam reported, citing statements by Human Resources and Social Development Minister Ahmed Al Rajhi.

SPORTS-

The Green Falcons lost 2-4 to South Korea in a penalty shootout yesterday in an Asian Cup Round of 16 knockout match, bidding farewell to the tournament. The game went into penalties after reaching 1-1 in extra time.

You win some, you lose some: “In football you can lose, you can win,” coach Roberto Mancini said. “We were playing against a very strong team and we played very well. We lost in a penalty shootout. Penalties are a lottery,” he added. It’s the first time the national team has lost to South Korea in four matches.

WEATHER- Expect some scattered clouds in Riyadh and Dammam today and a strong breeze in Jeddah.

  • Riyadh: 23°C daytime / 11°C overnight
  • Jeddah: 26°C daytime / 18°C overnight
  • Dammam: 24°C daytime / 17°C overnight

THE BIG STORY ABROAD-

It’s nearly as busy a morning for global business news as it is here at home. Among the headlines you’ll want to know about today:

CIRCLE YOUR CALENDAR-

The Kingdom has submitted a bid to host the World Water Forum in Riyadh in 2027. The event is the largest international gathering in the industry.

Filipino exporters are coming to town next month: A business-matching tour will kick off on Saturday, 10 February, where a group of Filipino exporters of food, beverage and personal care products will tour Riyadh, Jeddah, and Dammam to market their businesses, Arab News reports.

The PIF Private Sector Forum takes place in Riyadh on Tuesday, 6 February to Wednesday, 7 February, the PIF said on Linkedin. The event will bring together the fund, portfolio companies, private sector and others to help advance economic growth.

The Hail Toyota International Rally which will kick off on 8 February and wrap up on 10 February. You have until Saturday, 27 January to register.

The Saudi Capital Market Forum will open on Monday, 19 February and wrap up on Tuesday. Held under the theme “Powering Growth,” the event will bring together members of the global financial landscape for discussions on the capital markets and investment strategies.

Riyadh will host the International Conference on Sand and Dust Storms in the Arabian Peninsulafrom Monday, 4 March to Wednesday, 6 March. The conference will address regional challenges caused by sand and dust storms and discuss monitoring systems, mitigation strategies, economic and infrastructural impacts, and more.

Tickets are on sale for the 2024 Saudi Arabian Grand Prix, scheduled for Jeddah from 7-9 March.

Riyadh will host a World Economic Forum special meeting on 28-29 April.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

Leave a comment

Your email address will not be published. Required fields are marked *