Dammam- President and CEO of Saudi Arabian Oil Company Aramco Amin Nasser revealed intentions on increasing production at the Shaybah oil field. Production is expected to reach over a million barrels per day (bpd).
Shaybah is a major crude oil production site in Saudi Arabia.
Highlighting the gradually rising oil prices, the implemented increase in production would aim at diminishing the existing gap between supply and demand.
“Aramco had invested in expanding the production capacities of the Shaybah oil field from 750 thousand (bpd) to a million (bpd); in addition to the production of 270 thousand (bpd) of fluids and condensates,” said Nasser.
However, no clear cut revelations or numbers were given on the size of investments going into the Shaybah oil field.
He pointed out that Saudi Aramco produces oil at the lowest cost known worldwide.
Nonetheless, Nasser gave emphasis to the rates being exclusively led by supply and demand. Aramco also expects that the stable and gradual increase in price rates will extend till the end of 2016.
Speaking to Saudi press at the Aramco HQ in Dhahran, Nasser said that the supply and demand gap has been remarkably narrowed. “It is difficult to determine rates and their future fluxes, however, we do expect a gradual increase; given that the supply and demand gap is decreasing,” he added.
Over the past four years, shale gas production increased extensively. Simultaneously, price rates fell as a consequence to the substantial supply and demand gap created.
Nasser reassured that Saudi Aramco deals with highly trusted and distinguished markets, and that marketing does not represent an obstacle. He added that his company enjoys a diverse production, drawing attention to Aramco producing five different crude oil byproducts.
Nasser mentioned that Saudi Aramco will continuously increase production, noting that since start of 2016 crude oil production has increased over its previous rates in 2015.
He also stressed that decreasing oil rates can impact any given company; however, Saudi Aramco bases work plans on the long term scale. “Saudi Aramco had underwent plunging oil rates over the past few years, and we find in that an opportunity to carry on with our projects; because we find them functional,” Nasser said.
Aramco is currently considering the proposal on the mother company going public, through offering a percentage of its share at the stock market. The company will later on consider its off-shoots also going public.
Nevertheless, Nasser said that the company is looking into the legal threats posed in case company shares get introduced to the stock market. He also brought up that a few analysts warned that the company will be sued by foreign authorities in case it goes public. “Aramco had been already subjected to foreign lawsuits before going public, yet it is studying potent threats critically,” said Nasser.
On the other hand, Nasser mentioned that Aramco has an offshore oil platform located in the Red sea, and is looking forward to investing in the location for the future half a century.
Nasser added that Saudi Aramco will soon begin shale gas production at the Saudi northern region, so that the north industrial city is supplied with power.
As for the topic discussing Aramco funding bonds, Nasser told Asharq Al-Awsat newspaper that the company has bond agreements with local and foreign banks it has still not expended. “We have local and international understandings concerning bonds, however we have not resorted to them until now,” he said.
Nasser confirmed that the company self-sufficiently funds its own projects.