Wednesday, 16 January, 2019

Saudi Arabia revises upward proven oil & gas reserves

Saudi Arabia announces rise in oil, gas reserves Saudi to slash oil exports after price slide: Energy minister
Ginger Lawrence | 12 January, 2019, 02:40

Saudi state oil giant Saudi Aramco plans to issue its first worldwide bonds in the second quarter of 2019, the country's energy minister Khalid Al-Falih said Wednesday, Kallanish Energy reports.

Khalid al-Falih said the kingdom, the world's top crude supplier, would cut its output to 7.2 million barrels per day in January, from 8.0 million bpd in November, with a further 100,000 bpd cut in February. OPEC and its allies decided last month to cut their overall output by 1.2 million bpd starting in January, to boost prices hit by a supply glut and fears demand could plummet.

"Oil has had a good rally as Saudi Arabia's willingness to move forward with cutting output was clearly delivered to the market", said Hong Sungki, a commodities trader at NH Investment & Securities Co.in Seoul.

Saudi-led OPEC and Russian Federation agreed on December 7 to curb their total crude oil production by 1.2 mbpd beginning on January 1 for six months, but the plan so far has had little impact on crude prices.

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The Saudi Arabia-based oil and gas giants, Saudi Aramco, is planning to delve into the debt market during the second quarter in order to fund the purchase of petrochemical company, Sabic, in what is set to be its first ever worldwide bond, according to Bloomberg. "We are serious about restoring balance to the market", Falih said at a press conference in Riyadh. "The results point out that the Kingdom's reserves of oil and gas are bigger than what we have been announcing", Falih asserted. "We have seen peaks and drops in prices (that are) completely unjustified by the fundamentals".

Leading consultants DeGolyer and MacNaughton (D&M) conducted the independent certification.

In addition to Saudi Aramco concession area reserves, the Kingdom also owns half of the oil reserves in the Partitioned Zone jointly owned by Saudi Arabia and the State of Kuwait.

"We are pursuing a total shift in paradigm in the gas station perception among the public, from what people think of gas stations now as a divergence from a main route to get convenience service to a destination of services on major highways, to work, or simply on the way back home", Al-Gahtani said. Meanwhile, promises of patience in raising interest rates from Fed Chairman Jerome Powell soothed anxiety about growth in the USA, the biggest oil consumer. But demand was high, at US$27 billion, according to HSBC.