Saudi Aramco’s President and CEO, Amin Nasser, sees the global oil market as starting to rebalance itself and said that the Saudi oil giant long-term strategy would be to investment in core oil and gas projects.
Speaking at the 2017 Columbia University’s School of International and Public Affairs (SIPA) Global Energy Summit, Nasser highlighted the importance of continued investment in the oil and gas industry, while cautioning against taking a short-term view of the energy market.
“While the short-term market points to a surplus of oil, the supplies required in the coming years are falling behind substantially and the investments we now see coming back are not going to be enough to get us there” Nasser commented.
Nasser said it would be imprudent to assume that major oil producers will simply make the massive investments needed to bridge all these gaps—particularly since most long-term projects continue to be on hold, even after the recent price recovery.
He said that the impending shortfall has a time lag, and its effect will be felt over a period of time whose duration is difficult to estimate.
“So in my view, the future market situation will be increasingly on firmer grounds, though volatility could continue until the rebalancing takes firmer hold and inventory withdrawals assume a more consistent trend,” he added.
Consistent with the company’s long-term view of energy investment and in line with Saudi Vision 2030 Nasser said, “We are continuing to invest and strengthen our core oil and gas business across the value chain.”
Nasser said this strategy includes doubling gas production over the next ten years to 23 billion standard cubic feet a day, which would position the Kingdom as having the highest share of gas in utilities in the G-20 group of industrialized nations; enhancing the company’s downstream business portfolio, which would increase global refining and marketing capacity to approximately 8-10 million bpd.
He also discussed the company’s accelerated journey in expanding its downstream with a wide range of joint ventures, acquisitions and asset re-rationalization involving a combination of major players and technology specialists such as Petronas, Motiva, Lanxess and Converge (a technology of Novomer).
“Downstream, we are continuing to build a world-class business portfolio to better balance our upstream oil business. Accordingly, Saudi Aramco’s global refining and marketing capacity will be increased to between 8 and 10 million barrels per day.