Saudi Aramco Plans to Invest Over $300bn in Next Decade

Saudi Aramco. which plans what could be the world’s biggest initial public offering. will invest more than $300 billion over the next decade to maintain its spare oil-production capacity and explore for more natural gas. President and Chief Executive Officer Amin Nasser said.
The outlook for oil supplies is “increasingly worrying.“ with about $1 trillion in investments lost during the current industry downturn and fewer new deposits being discovered. Nasser said at a conference in Istanbul. Some estimates suggest that at least 20 million barrels a day of new output is needed over the next five years to offset rising oil demand and the natural decline of developed fields. he said.
“There seems to be a growing belief that the world can prematurely disengage from proven and reliable energy sources like oil and gas. on the mistaken assumption that alternatives will be rapidly deployed.“ Nasser said. The petroleum industry will be at the heart of global energy for years. and the transition to use of alternatives will be “long and complex.’ he said.
The state-run company known formally as Saudi Arabian Oil Co.. the world’s biggest oil exporter. boosted production to an annual record last year before the kingdom led the Organization of Petroleum Exporting Countries and other global producers to curb output to counter a global glut. Aramco is also at the heart of the nation’s long-term strategy to wean its economy off oil. The government plans to sell about 5 percent of the company in 2018 in what could be a record IPO.
“Financial investors are shying away from making much needed large investments in oil exploration. long-term development. and the related infrastructure.“ Nasser said. putting part of the blame on what he said were “misleading arguments about peak oil demand and stranded resources.“
The volume of conventional oil discovered around the world over the past four years. for example. is down more than 50 percent from the previous four years. he said.
“Investments in smaller increments such as shale oil will just not cut it. Yet without those higher investment levels. the energy transition – and therefore energy security – may be fatally compromised.“
Aramco plans to spend $300 billion on projects over the next 10 years to maintain its spare oil production capacity. the biggest by far in OPEC. and boost exploration and production of conventional and unconventional gas. Nasser said.
“Three hundred billion dollars over 10 years is a strong statement for Saudi Aramco. especially against the backdrop of the current oil environment which has strained the Saudi budget.“ said Will Hares. an energy analyst at Bloomberg Intelligence in London. “This may form a response to its concerns of a long-term supply deficit resulting from under-investment in the industry since 2014.“
Aramco plans to double its production of gas resources to 23 billion cubic feet a day over the coming decade. Nasser said. The forecast increase will raise the share of gas in the kingdom’s utilities to about 70 percent. the “highest of any G20 nation.“ he said.
Saudi Arabia is also committed to developing solar energy and other renewable sources. and the economic restructuring strategy foresees the nation’s becoming “nothing less than a solar powerhouse.“ he said.

About core

Check Also

One of World’s Largest Semi-Sub Rigs Comes Back to UK Port ahead of Resuming Drilling Gig with BP

A giant semi-submersible rig, which is considered to be one of the largest ones ever …

Leave a Reply

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