Aramco to invest $400bn in next decade
Jeddah, August 26, 2014
Saudi Aramco, the world’s biggest oil producer, plans to invest $40 billion per annum over the next 10 years to keep oil output capacity steady while doubling gas production, a report said.
Aramco forecasts more capital going into offshore projects and expects rising costs across the oil sector to underpin oil prices, the company’s president and CEO Khalid Al-Falih was quoted as saying in the Arab News report.
As global demand growth weakens, oil prices fell to a 14-month low of $101.07 last week, the report said.
“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 12 million barrels per day, while also doubling our gas production.”
Al-Falih said that Opec or the International Energy Agency should not try to control oil prices. He pointed out that fundamental problems within the industry, like rising costs, increasing technical challenges and the falling size of finds would support the price.
“I share ... the belief that this is a market driven business, it’s not Opec, the IEA, and consumers that should be in the business of trying to control the market,” Al-Falih was quoted in the report. “Opec will take the price as it comes.”
“To tap these increasingly expensive oil resources, oil prices will need to be healthy enough to attract needed investments ... (and) long-term prices will be underpinned by more expensive marginal barrels,” he added.
Al-Falih was speaking at the Offshore Northern Seas Conference in Stavanger, Norway. He said the industry was experiencing scarcity in human resources.
“Finding and attracting competent engineers, rig personnel and geoscientists to run ever more complex and expensive operations has become an acute challenge,” he said.