Saudi Aramco, the world’s largest oil-exporting company, is planning to raise its daily oil production capacity from 12 million to 13 million barrels per day (bpd) by 2027.
The increase in capacity was announced at the virtual Energy Intelligence Forum 2021 by Aramco President and CEO Mr. Amin Nasser. Aramco also aims to expand its oil trading business to 8 million bpd over the next 5 years from its current 5.5 million bpd, Mr. Nasser added.
The capacity hike is moving ahead at a time when major hydrocarbon producers are seeking to position themselves for a global energy system that is increasingly looking to decarbonize. Aramco is betting that its low-cost, low-carbon resources will give it a natural advantage even as global demand for fossil fuels will inevitably decline.
Amin Nasser CEO & President Saudi Aramco
“To achieve the 13 million bpd capacity we will focus on existing fields and new fields. There will be an emphasis on the offshore and this project is going to come in phases and the full capacity will come by 2027. Moreover, the surplus inventories are behind us right now, down more than 10 percent from the five-year average, so overall the demand is very healthy.”
As consumers switch from gas to crude, tighter global natural gas supplies helped boost oil demand by 500,000 bpd, especially in certain Asian markets. Aramco is currently working on the upgradation project’s front-end engineering and design, which will take about two years to complete and will be followed by construction.
In terms of future market balances, Mr. Nasser expressed concern about a lack of investment in the upstream sector, citing the current gas shortage in Europe as an example of how it leads to a mismatch between demand for affordable energy supply in the future.
According to the reports, Aramco was looking at the option of working with international investors following which the kingdom decided to open up its giant unconventional gas field Jafurah, on which it plans to spend around $110 billion. Jafurah was due to start production in 2025, a year behind the initial date announced, with initial output of around 200 million-300 million cubic feet per day.
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