Page 5 - MEOG Week 04 2021
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MEOG COMMENTARY MEOG
Saudi Aramco’s pipeline
network.
Source: IPO prospectus
Bid delays cancelled its tender for engineering, procure-
Given these challenging financial headwinds ment and construction (EPC) maintenance
facing Aramco and following Crown Prince work at Marjan with a separate contract for a
Mohammed bin Salman’s decision to cut output tie-in platform and two production deck mod-
by 1mn bpd during each of February and March, ules at the field also written off.
it should come as little surprise that the company Saudi oil production has been mandated at
is set to extend delays to highly-anticipated ten- just over 8mn bpd for the next two months, a
dering processes under the long-term agreement level that gives it a spare sustainable capacity of
(LTA) programme. 3mn bpd.
The bidding deadline for contract release With Aramco still smarting from the events
purchase orders (CRPOs) 62, 63, 64 and 65 is that caused it to cut its 2020 capital programme
understood to be set for a delay until April at the by around $12bn, there is little urgency in Dhah-
earliest while several contracts announced in ran to commit to more spending.
2020 are yet to be formalised. This hesitation will of course subside as the
As part of wide-ranging efforts to minimise company follows through on the Ministry of
the business impact of COVID-19, Aramco Energy’s directive to increase maximum sustain-
delayed by six months the Marjan and Berri able capacity (MSC) from 12mn bpd to 13mn
crude increment programmes during Q2 2020; bpd, though in the short-term, Aramco’s LTA
projects that are set to more than double oil pro- contract tenders, which have long provided shel-
duction capacity from the assets to a combined ter from oil price storms to those lucky enough
1.35mn bpd at a cost of around $18bn. These to be prequalified, are likely to focus on smaller
developments are also expected to result in the jobs rather than the multi-billion-dollar sort that
production of up to 2.5bcf (71mcm) per day of have grabbed so many headlines in the past.
associated gas, which will be piped to the Berri As Aramco focuses on maintenance and
gas plant. issues of urgent need, its major increment pro-
In August, Aramco is reported to have grammes will remain on the back burner.
Week 04 27•January•2021 www. NEWSBASE .com P5
