Saudi Arabia, Kuwait Looking To Ramp Up Oil Output

BLACKEAGLE

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Saudi Arabia, Kuwait Looking To Ramp Up Oil Output





State-owned Saudi Aramco is officially planning to increase output, despite the prevailing glut and depressed oil prices, citing an expected rise in demand this year.

The announcement, which is likely to result in another dip in oil prices as traders play on the negative news, though not unexpected, comes as Aramco talks about global expansion and moves towards a partial IPO.

Saudi Aramco is considering multiple joint ventures in various countries as it makes its expansion plans, which include the building up its oil refining and production capacity. The company is looking to increase its refining capacity to 8-10 million bbl/d, from 5.4 million bbl/d.

It’s also seeking to increase the capacity of its Shavbah oilfield to 1 million barrels per day—a 250,000-barrel increase.

JV partnerships are being considered in China, Vietnam, Indonesia, India and the United States.

Aramco CEO Amin Nasser told reporters that the company expected global demand to grow by 1.2 million barrels per day this year.

Overall, trying to out-do archrival Iran, Saudi Arabia is considering increasing output to more than 11 million barrels per day.

If Aramco pushes its planned IPO through successfully, it will make this estimated $2-trillion company bigger than ExxonMobil, which has a market cap of US$365 billion.

At the same time, Kuwait is also seeking to increase its oil output by 50% over the next four years. In March, Kuwait was producing 2.77 million barrels per day, and the 50% planned hike would be bring Kuwait to its highest level of output in history.

By James Burgess of Oilprice.com
Saudi Arabia, Kuwait Looking To Ramp Up Oil Output | OilPrice.com
 

TungstenCube

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This is great news for consumers since it will continue to provide artificially low prices at the pump. Furthermore, it will discourage investment in alternative energies since the present value of the investments aren't as high as they would be with high prices. The Saudis are buying back market share from alternate energy investments while the nation creates alternate forms of GDP, such as tech.
 
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