The shake-up saw the creation of a new Energy, Industry and Natural Resources Ministry to be headed up by Khaled al-Falih, chairman of state oil company Aramco.
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While Nasser did not specify if increased capacity would translate into a corresponding increase in crude output, he said Aramco would meet the heightened domestic demand as electricity consumption in the country surges during the summer months.
The government reshuffle in Saudi Arabia announced over the weekend is unlikely to herald a major shift in economic policy, although it may strengthen the Kingdom’s commitment to its oil market strategy, Jason Tuvey, Middle East Economist at British economic research and consulting company Capital Economics believes.
April saw crude oil prices move up 25 percent as analysts said the supply-side pressures that pushed oil lower were starting to fade.
Saudi Aramco upstream operations senior vice-president Mohammed al-Qahtani said that the company is expected to operate between 211 and 214 oil and gas drilling rigs in 2016. The Telegraph newspaper said on Monday that the state-run oil company was hoping to lure ExxonMobil, China’s Sinopec and BP into buying into the company.
Saudi is the most powerful member of Opec.
Production at Shaybah oilfield is increasing, he said. But under the new king, Salman, deputy crown prince Mohammad bin-Salman has grown into prominence. Perhaps the imperative for higher prices will return if the Saudi public starts to push back against the proposed austerity measures, but for now, MBS seems ready to sit back and let market forces or political instability in other producer countries produce an eventual recovery.
The change in leadership marks an even sharper change in the country’s crude oil policy.
When the price of oil crashed to $26 a barrel this past February, it eviscerated the American fracking boom and created headaches for Saudi Arabia, the largest oil producer in the world.
Aramco pumps more than 10 million barrels of oil per day.
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Aramco also announced Tuesday that it expects a huge ship fix and shipbuilding complex that it is developing at Ras al-Khair on the kingdom’s east coast to be fully operational by 2021, chief executive Amin Nasser said on Tuesday.
