A report this week from The Times stated that the Kingdom of Saudi Arabia will be shuffling export demand for oil resources to other countries, such as Libya, while focusing their efforts on the exploration and production of natural gas.
Khalid Al-Falih, chief executive of the state-owned Saudi Aramco, told the Times that they were shifting spending priorities from oil production into natural gas, refining and the chemicals business. “The downstream is increasingly growing in scale to equal, and sometimes eclipse, the level of spending we are doing in upstream [oil production],” he said.
Including the oil fields in the neutral zone between Saudi Arabia and Kuwait, the capital city of Riyadh alone can produce up to 12.5 million barrels a day.Riyadh boosted its oil output to 10 million barrels a day earlier this year, the highest in 30 years, to compensate for the loss of production in Libya.
“There was pressure on the Kingdom and Saudi Aramco to raise production [capacity]. That pressure, I think, has been substantially reduced,” Al-Falih said further.
Citing estimates by the International Energy Agency, the Times said Iraq is coming out as the biggest contributor to the global oil supply growth between 2010 and 2035, adding more than 5 million barrels a day.
Saudi Arabia has proven natural gas reserves estimated at 258 trillion ft3. This makes the country the fourth largest in the world behind Russia, Iran and Qatar, according to the Oil and Gas Journal. Natural gas resources are perceived as critical for the growth of the petrochemical sector.
Good for Saudi Aramco! Natural gas exploration has been historically slower to catch on internationally, with no real reason to back it. It’s good news for everyone to see that Saudi is moving forward.