Saudi Arabian Oil Co. is pressing ahead with an expansion of the Khurais oil field despite lower crude prices and plans to double its production of natural gas over the next 10 years, the company's chief executive officer said.
The world's biggest oil exporter, known as Saudi Aramco, won't cancel any oil, gas or refining projects, Amin Nasser told reporters during a conference in Al-Ahsa in eastern Saudi Arabia. Aramco is also studying a possible expansion of the country's largest oil refinery, Ras Tanura, which has a capacity of 550,000 barrels a day, he said Wednesday.
"Until now all of our downstream and upstream projects are continuous," Nasser said. "No project in our programs got canceled."
Saudi Arabia led a 2014 decision by the Organization of Petroleum Exporting Countries to maintain output, not cut it, in order to defend market share and drive out higher-cost producers. Crude prices have tumbled almost 50 percent since the decision in November that year. Saudi Arabia plans to join a meeting next month of producers from within and outside OPEC in Doha, Qatar, adding its weight to QQa campaign by financially stricken crude exporters to freeze output and overcome the glut weighing on the market.
Khurais oil field's expansion is due to be complete in 2018, Nasser said. Aramco was seeking to add 300,000 barrels a day to the field's production to reach a capacity of 1.5 million barrels a day, the company's former CEO Khalid Al-Falih said in October 2013.
Ghawar oil field, the world's biggest, has been producing for 70 years and will keep pumping oil for "many years to come," Nasser said at the conference. Sixty percent of Saudi Arabia's crude oil output comes from Ghawar, Abdul Latif Al-Othman, governor of the Saudi Arabian General Investment Authority, said at the same event.
Aramco has made a "promising" shale gas discovery at the Jafurah field in the Al-Ahsa region and is assessing and appraising the area for future production, Nasser said. The company plans to double its gas production to 23 billion cubic feet a day over 10 years, he said. Aramco will also keep exploring for oil and gas in the Red Sea area, he said.
Proposals to sell a stake in some of Aramco's assets, announced by Deputy Crown Prince Mohammed bin Salman in early January, fanned speculation that the slump in oil prices had intensified Saudi Arabia's push to diversify its economy away from crude. Saudi Arabia's dependence on oil isn't sustainable, Nasser said.
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IMF - Output grew by 3.8 percent in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term.
IMF - Higher oil prices and short-term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging. Inflation declined to its lowest level in more than two years. Real GDP expanded by 2 percent in the first quarter of 2018 compared to the first quarter of last year. However, activity in the non-oil non-agricultural sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending.