- Last month, the Saudi government ordered state oil company Aramco to halt its oil expansion plan.
- Prince Abdulaziz bin Salman said in Dharan that they are postponing this investment simply because they are transitioning.
Saudi Arabia’s energy minister has stated that the U-turn on its oil capacity expansion plans was because of the energy transition, adding that the kingdom has plenty of spare capacity to cushion the oil market.
The Saudi government last month ordered state oil company Aramco to halt its oil expansion plan and target maximum sustained production capacity of 12 million barrels per day (bpd), 1 million bpd below a target announced in 2020 and set to be reached in 2027.
Prince Abdulaziz bin Salman said at the IPTC petroleum technology conference in Dharan, that they are postponing this investment simply because they are transitioning, adding that Aramco has other investments to make in areas including oil, gas, petrochemicals and renewables.
Saudi Arabia has said it aims to reach net zero emissions by 2060, with Aramco targeting net zero emissions from its own operations by 2050.
Aramco Chief Executive Amin Nasser told reporters on the sidelines of the same conference that the state oil giant remained ready to raise capacity when there is a need for it.
Undercuts agreed by the Organization of the Petroleum Exporting Countries and allies led by Russia, together known as OPEC+, Saudi oil production is about 3 million bpd below its 12 million bpd maximum sustainable capacity, making it the world’s biggest holder of spare capacity.
Prince Abdulaziz said they are ready to tweak upward or downward, whatever the market necessity dictates.
The Saudi state remains overwhelmingly Aramco’s biggest shareholder and heavily relies on its dividend payouts. The government directly holds 90.19%, the kingdom’s Public Investment Fund (PIF) 4%, and PIF subsidiary Sanabil 4%, LSEG data shows.