Saudi Aramco keeps up investment despite crude fall

 25 Jan 2016 - 12:53

Saudi Aramco keeps up investment despite crude fall
Khalid al-Falih, the chairman of Saudi state oil giant Aramco, addresses the 10th Global Competitiveness Forum on January 25, 2016, in the capital Riyadh. AFP

 

Riyadh: Saudi Aramco, the world's biggest oil exporter, is maintaining investments despite cutting costs in other ways in the face of plummeting crude prices, the company's chairman said on Monday.

"Fiscal discipline becomes number one" in such an environment, Aramco chairman Khalid al-Falih told a business forum in Riyadh.

He said the firm has been able to make a lot of cuts "by simply driving down costs," but investment has continued.

"Our investment in capacity, oil and gas, has not slowed down," Falih said.

Global crude prices have plunged from above $100 a barrel in early 2014 to below $33 a barrel on Monday.

The fall has led Saudi Arabia to impose unprecedented cuts in its 2016 budget, to push economic diversification and to consider a share listing of Aramco.

Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries (OPEC) have refused to cut crude production as they seek to drive less-competitive players, including US shale producers, out of the market.

But Falih told reporters on the sidelines of Monday's Global Competitiveness Forum that his country is not to blame for low prices.

Unlike others who store crude on ships while they look for buyers, "Saudi Aramco and therefore Saudi Arabia does not ship a single barrel without a customer... Our supply is tightly, tightly linked to end-user demand," he said.

Falih said there are two possible options for a stock market listing of Saudi Aramco, which sits on crude reserves of 261.1 billion barrels.

"One is to bundle together a significant downstream portfolio" such as its chemicals and marketing operations.

Another, being considered for the first time in Saudi Arabia, is to possibly list a percentage of "everything we do," Falih told the forum, organised by the Saudi Arabian General Investment Authority.

AFP