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| Saudi Aramco plans to invest $120 billion in 5 years |
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Posted on 1 Feb 2010 |
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State-owned Saudi Aramco will invest more than SR450 billion ($120 billion) in oil and petrochemical projects over the next five to six years, Khalid Al-Falih, the company’s chief executive, told Al Arabiya news channel.
Saudi Aramco, the world’s largest oil exporter, has already completed a number of refinery expansions and is now working on meeting the country’s gas demands in addition to moving downstream into petrochemical production.
Al-Falih said Saudi Aramco would spend SR225 billion ($60 billion) on the oil sector during the next five years, while the remaining investment would be for the development of petrochemical projects and foreign investments.
“Over the coming five to six years the total investment for Saudi Aramco will be around $120 billon,” he told the satellite channel. Aramco’s direct annual investment ranges between $10 billion and $16 billion during the last and coming five-year plans.
“Funding investments for our other projects comes from joint ventures, loans and individual Saudi investors,” Al-Falih said. Investments in refinery and petrochemical projects in Jubail, Yanbu, Rabigh and Ras Tanura amounted to $60 billion. Saudi Arabia completed a huge expansion plan to boost crude output capacity last year. Aramco concluded the expansion while world oil demand fell with the global recession, leaving the Kingdom with a larger-than-expected buffer to meet any future demand increase or surprise outage in global supply.
Global oil demand is “fluctuating” and incremental demand growth will come from China, India and the Middle East, Al-Falih said. Saudi Arabia is the only oil producer in the world with significant spare capacity that can be quickly deployed. The Kingdom’s oil output capacity stood at 12.5 million barrels per day (bpd), the Aramco chief said. “No other company or country has such a huge oil production capacity. We have an excess capacity of over four million bpd.”
Al-Falih said he expected the demand for oil would increase annually by one million bpd until 2030, adding that the demand would come mostly from Asian and Middle Eastern countries.
“We don’t expect that the industrialized and developed OECD countries would lead growth in the oil sector,” he said.
Al-Falih estimated the daily global production at about 85 million bpd. “We hope it will reach 105 million during the next 20 years.”
The Saudi government recently commissioned Aramco to build a $10 billion refinery in the southern province of Jazan. The new refinery, located in the Jazan Economic City, will have a capacity of 250,000 to 400,000 barrels per day.
Arab News
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