Monday, Nov 21, 2011
RIYADH (Dow Jones)--State-giant Saudi Arabian Oil Co., known as Saudi Aramco, is focusing on investing heavily in gas more than increasing its oil production, its chief executive Khalid al-Falih said Monday.
The kingdom was previously facing a pressure to increase its oil output, but that pressure is "substantially reduced," he told a conference in Riyadh.
"Our focus is to invest heavily in gas, in downstream, in refining and--something that is new to Aramco--in chemicals," he said.
Last month, al-Falih told Dow Jones that Saudi Arabia is unlikely to proceed with plans to raise its oil output capacity to 15 million barrels a day, as expansion plans in other producing countries such as Iraq and Brazil should be enough to satisfy world markets.
"There is no reason for Saudi Aramco to pursue 15 million barrels [of capacity]," he said. "It is difficult to see [an increase in capacity] because there are too many variables happening...market demand is addressed by others."
In 2008, when oil prices surged to a record $147 a barrel, Saudi oil minister Ali al-Naimi said the kingdom was examining plans to raise its production capacity to 15 million barrels a day in an attempt to reassure markets concerned about long-term security of supply.
Aramco is currently producing about 9 million barrels of oil a day, having raised output sharply earlier this year to make up for lost output from Libya. Its current output capacity is 12 million barrels a day, though the kingdom as a whole could produce 12.5 million barrels a day if output from the so-called Neutral Zone, shared with Kuwait, is taken into account.
-By Summer Said, Dow Jones Newswires; +966-546-842373; summer.said@dowjones.com
(END) Dow Jones Newswires
21-11-11 1358GMT
