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Aramco rolls out the barrels
Despite signs of weaker demand for its oil, caused by shortage of suitable refining capacity, Saudi Arabia is driving forwards with an integrated upstream and downstream expansion programme that will maintain its status as the mainstay of world oil supply. James Gavin reports
IN JUNE, Saudi Arabia's oil minister, Ali al-Naimi, sprang a surprise on the oil markets. He admitted the world's oil superpower – which has cranked up output capacity to 9.6m barrels a day (b/d) in response to rampant global demand – was failing to sell significant volumes of its crude because of a lack of buying interest from refiners. Between 300,000 and 400,000 b/d of its crude was going unsold. Saudi output in April and May averaged just 9.1m b/d – the lowest level since January 2005 – as the kingdom reduced production accordingly. In an unusually frank admission, al-Naimi told the Wall Street Journal that the Saudis were having difficulty selling all grades of crude, not just heavy ones. Only the previous month, al-Naimi announced the kingdom's biggest ever oil-expansion programme, involving an increase in output capacity from 11.0m b/d to 12.5m b/d by 2009. Given the Saudi belief in ...Click here to continue reading Aramco rolls out the barrels
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