Besides the Aramco IPO, Baker, revered among some Gulf Arabs for his role in orchestrating an alliance against Iraq’s Saddam Hussein in the early 1990s, did not specify policies that could bring beneficial change to Saudi Arabia.
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According to analyst Douglas-Westwood (DW), the Saudis ordered the project to be shut in in October 2014 due to environmental regulation breaches.
Saudia Arabia’s veteran oil minister Ali Al-Naimi was dismissed over the weekend and replaced by Khalid Al-Falih, the chairman of state-owned Saudi Armco and a close ally of deputy crown prince and effective ruler Mohammad bin Salman.
Speaking on Tuesday, the president of Saudi Aramco, or to give it its full name, the Saudi Arabian Oil Company, said that despite the current oil market environment remaining “challenging”, the company is still looking for growth opportunities and joint ventures.
April saw crude oil prices move up 25 percent as analysts said the supply-side pressures that pushed oil lower were starting to fade.
Oil prices jumped on Monday as a huge wildfire in Canada’s oil sand region knocked out over a million barrels in daily production capacity, contributing to a significant tightening of markets over the past weeks. Any increase in 2016 could supplant high-cost output in other parts of the world, which has started to decline after nearly two years of falling prices.
Matt Smith, director of commodity research at ClipperData, says that timing is the most surprising aspect of al-Naimi’s replacement.
Saudi Aramco also plans to raise its refining capacity to 8 million-10 million barrels a day from its current capacity of around 5.4 million barrels a day.
Under his guidance, Saudi Arabia focused on protecting its market share and driving out less-competitive players, including the U.S. shale producers. Will it facilitate a seamless execution of Saudi Arabia’s strategy? Yes. Some officials at the Organization of the Petroleum Exporting Countries said that could mean a deeper politicization of oil-production strategy as the kingdom looks to neutralize its rival Iran, which is trying to come back from years of Western sanctions with a surge of output.
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Last month, Saudi Arabia announced an ambitious reform program that aims to drastically reduce the country’s longstanding dependence on oil by the year 2030. This has further reduced the likelihood of an oil-freeze deal with other large non-OPEC producers like Russian Federation.
