RIYADH, (Reuters) – State oil giant Saudi Aramco said on Wednesday it may renegotiate the terms of projects that have yet to be granted as the world’s top oil exporter grapples with falling global demand for energy resources.
Turmoil in world credit markets and tumbling crude oil prices have prompted energy companies around the world to reconsider more expensive projects or cut back on spending to preserve liquidity.
Aramco is examining “more flexible, innovative new strategies to reduce financial risk in projects management”, it said in a statement issued after a meeting with representatives of Saudi and foreign contractors.
The meeting, it said, aimed “at shedding the light on the company’s plans towards recalculating the costs of prospective projects after the decline in prices of material and costs”.
Aramco plans 144 projects until 2014, including eight “giant projects”, it said without fixing a timetable for the execution of projects.
Finance Minister Ibrahim al-Assaf told Reuters in November the kingdom planned to invest $100 billion in the oil sector until 2014.
ConocoPhillips and Aramco said in November they halted bidding on the construction of the 400,000 barrel per day joint-venture Yanbu refinery in Saudi Arabia, citing uncertainties in the financial and contracting markets.
Global refining margins have been falling on weaker demand due to a slowing economy and increased supply from new export refinery capacity.