Energy
From The Report: Saudi Arabia 2018
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At a time of great change in Saudi Arabia and amidst debates about rapid economic diversification, it is perhaps easy to overlook the fact that even in the most optimistic forecasts of Saudi Vision 2030 – the national development strategy – the oil and gas sector will account for at least half of the country’s exports in the fourth decade of the 21st century. Similarly, while the revolution in shale oil and gas in the US has dominated headlines, the cost at which Saudi Arabia is able to pump crude oil and gas remains among the lowest in the world. The global oil supply and demand cycle may have resulted in lower prices since mid-2014, but the anticipated initial public offering of 5% of the state energy company Saudi Aramco, valued at up to $2trn, has heightened expectations that the Kingdom could soon be home to the most valuable listed company on the planet.

This chapter contains an interview with Mohammad Sanusi Barkindo, Secretary-General, Organisation of the Petroleum Exporting Countries; and Abdallah Al Subaiyyal, President and CEO, Yanbu Aramco Sinopec Refining Company.

Articles from this Chapter

Overview

A shift in priorities: Expanding refining capacity and branching out in renewable energy and international operations
OBG
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At a time of great change in Saudi Arabia and amidst debates about rapid economic diversification, it is perhaps easy to overlook the fact that even in the most optimistic forecasts of Saudi Vision 2030 – the national development strategy – the oil and gas sector will account for at least half of the country’s exports in the fourth decade of the 21st century. Similarly, while the revolution in shale oil and gas in the US has dominated headlines, the cost at which Saudi Arabia is able…

Interview

A hopeful climate: Mohammad Sanusi Barkindo, Secretary-General, Organisation of the Petroleum Exporting Countries (OPEC), on achieving stability in the global oil market
OBG
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Interview:Mohammad Sanusi Barkindo To what extent has OPEC’s decision to adjust production achieved its intended target? MOHAMMAD SANUSI BARKINDO: Thus far, the results are encouraging. From January 1, 2017 OPEC and a group of 11 leading non-OPEC oil producers began the implementation of production adjustments totalling 1.8m barrels per day (bpd). We have seen a steady rise in conformity. In January 2017 conformity levels were 86%, while in February this improved even further, rising to…

Analysis

Vital investment: Developing the natural gas industry in an effort to diversify the domestic energy mix
OBG
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Petro-dollars earned from oil exports comprise the majority of Saudi Arabia’s revenues, yet gas is seen as key to diversifying the economy. If the Kingdom is to make the most of the cost opportunity granted to it by oil, it must reduce the amount of oil used to generate power for factories and petrochemicals plants. The medium-term National Transformation Programme (NTP) calls for a 48% increase in dry gas production by 2020 – from 12bn standard cu feet per day (scfd) in 2016 to 17.8bn…

Interview

Refined talent: Abdallah Al Subaiyyal, President and CEO, Yanbu Aramco Sinopec Refining Company (YASREF), on working with international partners and facilitating Saudiisation
OBG
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Interview:Abdallah Al Subaiyyal How are refineries working to improve efficiency? ABDALLAH AL SUBAIYYAL: Major factors for improving efficiency and operational safety are to maximise operating unit utilisation and minimise losses. Equipment reliability is a critical, ongoing priority for our refinery. Mechanical underperformance can lead to decreased efficiencies, while system failures can result in unplanned downtime and safety risks, which lead to production loss and can be financially…

Analysis

Turning east: The Kingdom strengthens ties with export markets in Asia
OBG
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Saudi Arabia was re-affirming diplomatic relations with key allies in East Asia when King Salman bin Abdulaziz Al Saud embarked on a tour of the region in early 2016, but the itinerary also included talks to cement existing commercial ties while paving the way for new investments and joint ventures (JVs). The Kingdom was also staking out territory in some of its most valuable export markets: data from Saudi Aramco, the state-owned oil giant, shows that 66.7% of its crude oil exports and 32.5%…

Analysis

A historic listing: Preparations are being made for the initial public offering (IPO) of the state-owned oil company
OBG
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On January 4, 2016, with Brent crude valued at $30 per barrel, Crown Prince Mohammed bin Salman Al Saud first mentioned the possibility of selling off a small part of the state oil company, Saudi Aramco. Even with global oil prices in the doldrums, his mention of a possible IPO of the firm in a rare interview with The Economist sent investors into a frenzy of expectation and speculation. Could the closely guarded accounts of the world’s wealthiest government-owned oil company reveal the…