Saudi Aramco plans to invest $40bn a year

Published August 26, 2014
The world’s biggest oil producer, plans to invest $40 billion a year over the next decade to keep oil production capacity steady.— AFP file photo
The world’s biggest oil producer, plans to invest $40 billion a year over the next decade to keep oil production capacity steady.— AFP file photo

STAVANGER: Saudi Aramco, the world’s biggest oil producer, plans to invest $40 billion a year over the next decade to keep oil production capacity steady and double gas production, Chief Executive Khalid Al-Falih said on Monday.

State-owned Aramco sees more capital going into offshore projects and expects rising costs across the oil sector to underpin oil prices, Al-Falih told a conference.

Oil prices fell to a 14-month low of $101.07 last week as global demand growth weakens, even as production ramp ups in several places create a glut of oil.

“To meet forecast demand growth and offset (global output) decline, our industry will need to add close to 40 million barrels per day of new capacity in the next two decades,” Al-Falih said.

“Although our investments will span the value chain, the bulk will be in upstream, and increasingly from offshore, with the aim of maintaining our maximum sustained oil production capacity at 12m barrels per day, while also doubling our gas production.”

Al-Falih said that the Organisation of the Petroleum Exporting Countries or the International Energy Agency should not try to control oil prices but fundamental problems within the industry, like rising costs, increasing technical challenges and the falling size of finds would support the price.

Published in Dawn, August 26th, 2014

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