Page 5 - MEOG Week 41

MEOG COMMENTARY MEOG

public profile, it cannot afford to be seen miss- develop the country’s gas reserves.
ing any payments, even to the government. The company’s raw gas output is seen as
Amid the strain of weak demand and depressed expanding to 13.5bn standard cubic feet (382mn
prices, Aramco is unsurprisingly considering its cubic metres) per day, with sales gas making up
options to increase revenues. 8.5-9.0 bcf (241-255 mcm) per day from total
In addition, while Aramco reeled in its proven gas reserves of 324 trillion cubic feet
spending plans for the full year, first-half capi- (9.17 trillion cubic metres).
tal expenditure amounted to $13.6bn. MEOG In his interview, Nasser said: “Our portfolio
understands that the full-year capital pro- in gas will expand significantly in kingdom and
gramme has been reduced by $10-15bn in reac- out of kingdom, including LNG in the future.”
tion to the crisis. Domestically, the focus will be on unconven-
With reduced spending, the company’s tionals. In February, Aramco announced plans
expansion appears likely to focus on picking up to develop Jafurah, which holds an estimated 200
bargains, which in the current market is likely to tcf (5.66 tcm), with liquids making up more than
prove far less challenging than developing green- 50% of the resource.
field refineries. The development plan involves a spend of
At the core of this strategy is the aim of guar- $110bn, with production estimated to begin in
anteeing crude placement in overseas markets. 2024, growing to 2.2 bcf (62.3 mcm) per day of
sales gas by 2036. Considering the pressure on
Gas capital expenditure, this project is likely to be
With Saudi Arabian gas consumption rising heavily scrutinised, but MEOG’s sources suggest
quickly as Riyadh seeks to reduce crude burn to that it has been effectively ring-fenced and will
increase export revenues, Aramco is working to proceed largely as planned.™

Week 41 14•October•2020 www. NEWSBASE .com P5