Saudi Aramco will not continue to increase its production capacity, and will instead focus on natural gas and integrating its expanding downstream operations, says Khalid al-Falih, CEO of Saudi Aramco.
“The downstream [refining] is increasingly growing in scale to equal, and sometimes eclipse, the level of spending we are doing in upstream [oil production],” al-Falih told journalists gathered in Riyadh, according to a Reuters report. “In the short to medium term, our focus is on gas.”
Referring to Saudi’s requirements under OPEC, Falih said “Saudi Aramco has more spare capacity than the kingdom is obligated to or has committed to … so it wouldn’t make sense” to increase capacity by more than 12 million barrels per day.
Saudi Arabia had previously committed $100 billion for projects targeting increased oil production capacity, but will now halt this once the Kingdom has the capacity to pump 12 million barrels per day.
Saudi has long been watched because its ability to pump more crude in times of political or market stress has often reduced turbulence in oil markets.
The decision not to push the country’s production capacity to 15 million bpd comes despite continuing oil demand growth from emerging economies and supply disruptions in Libyan, Yemen and Syria.
Offsetting these disruptions have been the increase in oil sands, oil shale and shale gas production and the development of Iraq’s oil fields, which together have “substantially reduced” the need to increase capacity, said al-Falih.
Al-Falih spoke yesterday at the inauguration of the King Abdullah Petroleum and Research Center in Riyadh.
