Signaling that the world’s biggest oil exporter will continue to protect its market share, the Saudi Arabia state-run producer’s chief executive officer said that the country’s oil and natural gas production and drilling activities are unaffected by crude prices at current levels.
The sales of Saudi Arabian Oil Co., known as Saudi Aramco to buyers in East Asia are rising and it will keep investing in oil projects for the long term. This was said at a signing ceremony for a gas-processing plant near the eastern city of Jubail by Amin Nasser. He said that Aramco is studying whether to list shares on an overseas stock exchange as well as in Saudi Arabia and is still working on plans for an initial public offering.
“We are not worried — the number of our customers in Asia is growing, and different customers see big value in doing business with Saudi Aramco. Compared to the beginning of the year, oil prices are continuously improving,” Nasser said.
Amid an increase in global supply from high-cost producers including some U.S. shale drillers, Saudi Arabia has been pumping at near-record levels to defend sales in Asia, its biggest market. The efforts to benchmark Brent crude tumbled to a 12-year low in January and to abandon limits on output in December by the Organization of Petroleum Exporting Countries was led by the kingdom.
Supply disruptions in Libya, Nigeria and Canada and a slowdown in U.S. drilling has helped balance the market and since then Brent futures have risen more than 70 percent.
Iran, Saudi’s regional rival, has ramped up output since international sanctions were lifted in January and also targets Asian markets and the Saudi policy partly reflects the kingdom’s relations with Iran. After Deputy Crown Prince Mohammed bin Salman said there should be no deal without Iran’s participation, Saudi officials in April quashed an effort by major oil producers in Doha to freeze output. It has the right to reclaim the market share it lost under sanctions, Iran, a fellow OPEC member, says.
The move to start the sale of up to 5 percent of Aramco by 2018 is part of a plan to shake-up of the Saudi economy by Prince Mohammed, the 30-year-old son of King Salman. As the nation prepares what could be the world’s largest IPO, the prince has said he expects the value of the company to exceed $2 trillion.
A contract-signing ceremony for the Fadhili offshore gas plant was the occasion where Bottom of Form
Nasser made his remarks. The facility, which will process as much as 2.5 billion cubic feet per day after its completion by the end of 2019, would be constructed by India’s Larsen & Toubro Ltd, Aramco said in a statement. Nasser said, up from 12 billion last year, the total gas-processing capacity of Aramco will reach 18 billion cubic feet per day by 2020.
Contract for a power plant at Fadhili was awarded to Engie SA of France and Saudi Electricity Co. Nasser said that the entire Fadhili project will be constructed at the expense of more than 50 billion riyals ($13.3 billion).
(Adapted from Bloomberg.com)