Saudi Arabia plans to reduce its crude oil production further, to 9.8 million bpd in March, Energy Minister Khalid al-Falih said in an interview for the Financial Times. This compares with more than 11 million bpd produced in November.
Exports, Al-Falih said, will also fall substantially over this month and next, to an average of 6.9 million bpd from 8.2 million bpd in November. This does not bode well for Washington’s hopes that the Kingdom would step in and fill the gap left by Venezuelan heavy crude after the U.S. imposed a new round of sanctions against the government in Caracas.
The news also confirms once again that Saudi Arabia is determined to push pries up significantly higher than the news of yet another round of OPEC+-wide production cuts did in December.
Over the longer term, however, Saudi Arabia plans to expand its international presence in oil and gas, the oil minister also said.
“We are no longer going to be inward-looking and focused only on monetising the kingdom’s resources. Going forward the world is going to be Saudi Aramco’s playground,” Al-Falih told the FT’s Anjli Raval and David Sheppard. He added the international expansion of Aramco will begin with inroads into natural gas.
The expansion drive is boosting Aramco’s international standing in relation to other large oil and gas companies. These are increasingly turning to gas, and while Aramco has plans to boost domestic gas production, an international expansion would also make sense in improving the company’s competitiveness.
But there is another reason behind the expansion drive, and this has to do with the potential listing of the Saudi oil giant.
“If I have investors from New York or London or Tokyo that are investing in Saudi Aramco they want Saudi Aramco to be competing with the world’s best international oil companies,” the minister told the FT. Al-Falih also reiterated plans to list Aramco in the not too distant future in spite of insider reports that suggest the IPO of the world’s largest oil company in terms of reserves had been put off indefinitely.
By Irina Slav for Oilprice.com
