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Aramco chief sees signs of oil recovery

Beijing, November 13, 2009

A senior Saudi Aramco official said on Friday that the company saw signs of oil demand recovery led by China, although overall demand was still lower than last year, according to a report by the official news agency Xinhua.

"There are signs of recovery in oil demand in developing and emerging economies led by the Chinese economy," Saudi Aramco chief executive Khalid Al-Falih told Xinhua in a trip to Beijing.

To meet growing Chinese demand, Aramco decided to greatly increase its crude oil exports to China.

Aramco planned to supply China with 1 million barrels per day of crude, Al-Falih said on Tuesday in Fujian, where the company launched a joint venture refinery with China.

The 1 million bpd figure would be nearly 30 percent more than actual exports from the Kingdom seen in the first nine months of this year as recorded by Chinese customs. Chinese state oil company Sinopec said the supply would begin next year.

The official did not give Xinhua a direct answer about the progress of a plan to launch another joint venture refinery in Qingdao.

"For any project we build, there is a period to create enough profit. Then we can consider further expansion and investment," he said, according to Xinhua.

The talks, which began well before the start-up of the Qingdao plant in May 2008, failed to progress partly because of Saudi Aramco's concerns over China's fuel price controls.

But Al-Falih said he now felt "very satisfied" about China's new oil pricing mechanism, which was put in place at the begining of 2009.

He also told Xinhua that the company would increase its oil output to 9.5 million to 10 million barrels per day late this year or next year, up from 8 million barrels per day.-Reuters




Tags: aramco | oil recovery |

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