The Wall Street Journal cited Saudi Aramco chief executive Amin Nasser as saying that the existing current crude market is challenging and the company is still looking at growth opportunities.
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Among other changes announced Saturday, a new ministry of trade and investment was created while other ministries were merged and the electricity and water ministry was scrapped.
Changes to Saudi Aramco lie at the heart of plans for a radical overhaul of the kingdom’s economy and energy sector to meet the challenge of expected lower oil prices that have already caused massive fiscal deficits in Riyadh.
According to the policy’s visionary, Deputy Crown Prince Muhammad, the strategy includes the National Transformation Plan and is aimed to get Saudi Arabia off the oil needle by 2020.
Saudi, the most powerful member of Opec, dramatically changed tack in late 2014 and instead of supporting oil prices by backing production cuts started defending market share.
Under his guidance, Saudi Arabia focused on protecting its market share and driving out less-competitive players, including the U.S. shale producers.
“Saudi Arabia more than anyone else has the capacity to wait out the market until this balancing takes place”, he said.
Any valuation would account for both oil price expectations and the size of Saudi Arabia’s proven oil reserves.
“We remain committed to maintaining our role in global energy markets and strengthening our position as the world’s most reliable supplier of energy”, said Falih who now heads an expanded energy, industry and mineral resources ministry.
At the producers meeting in Qatar last month, Naimi was reportedly willing to agree to freeze production without Iran going along, but Prince Salman disagreed, and no output cap was agreed on. He said Saudi Arabia was seeing demand increase from the US and India in particular.
On Sunday, the newly appointed minister, Khalid al-Falih pledged to continue diversifying the country’s sources of energy to reduce it’s reliance on revenues from crude oil.
Media reports said on Monday that Saudi Aramco is planning a three-way listing in London, Hong Kong, and NY.
But that doesn’t mean it’s not a curious decision when viewed in the context of current oil market dynamics.
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The company is continuing to build its oil production and refining capacity, and its Shaybah oilfield is expected to reach output capacity of 1 million barrels per day “in a couple of weeks”, Nasser added.
