Saudi Aramco will not cut its upstream investment despite the collapse in oil price, according to Ahmed Al-Sa'adi, Saudi Aramco's senior vice president for technical services.
In a presentation made at the GE Oil & Gas Annual Meeting, which is taking place Feb. 1 and 2 in Florence, Italy, Rigzone heard Al-Sa’adi confirm that Saudi Aramco will avoid reducing its upstream spend for the next few years at least. The firm's chairman, Khalid Al Falih, was reported making a similar statement at a conference in Riyadh on January 25.
"Saudi Aramco is really staying the course. We are continuing with our investments. Our board just approved our business plan and our level of expenditure is going to continue for the next three years at the normal level that we had for the last few years," Al-Sa'adi said.
The energy firm's latest statement follows a spate of upstream expenditure cuts in the oil and gas industry, with BP plc, Royal Dutch Shell and Statoil ASA all announcing steep spending reductions recently.
Commenting on the lower oil price environment, which saw numerous companies slash their operational costs in 2015, Al-Sa'adi was cautiously optimistic when looking to the future and suggested the industry’s volatile climate would stabilize before too long.
"For crude prices, we believe that's going to probably go up and down for a while and then hopefully by year end it's going to stabilize at a reasonable level, which is suitable for both producers and consumers," said Al-Sa'adi.
With the global population set to rise considerably over the next few years, Saudi Aramco expects a significant increase in energy demand will follow. In his presentation at the GE conference, Al-Sa'adi stated that the industry will need to add new capacity "that is equivalent of approximately 43 times Norway’s current oil production", in order to meet the forecast growth in energy demand.
Saudi Aramco's 'corporate strategic intent' is to be the world's leading integrated energy and chemicals company in 2020.
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