No additional capital is required to continue producing 12 million barrels

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Amin Al-Nasser: expected closure of SABIC deal in the first half of 2020

Source: Arabic.net

Saudi Aramco CEO Amin Al-Nasser said he will take care to maintain operations and strong financial conditions despite the impact of the Corona virus.

Al-Nasser stressed that there is no need for additional capital to continue producing 12 million barrels per day, saying: “We will produce oil with maximum production capacity.”

Al-Nasser stressed that the company can continue in the context of extremely low oil prices and long-term.

He said, “Our selling prices are based on market conditions.”

And while Al-Nasser indicated that Aramco is studying whether it can continue producing oil with maximum capacity after April, he said: “Reaching the maximum sustainable production capacity does not require additional capital spending for 12 months.”

The Saudi Aramco CEO expressed doubts that oil production in May will differ from its level in April.

Withdraw 300 thousand barrels per day from stocks

On the other hand, Al-Nasser noted that the increase in oil production capacity to 13 million barrels per day is currently being evaluated.

And Nasser said: “We will withdraw 300 thousand barrels per day from oil stocks to reach a record level of supplies in April.”

Huge borrowing ability

In a related context, Aramco confirmed that it has a huge ability to borrow and does not see the need for additional debt.

Capital spending will rise

On the other hand, Saudi Aramco CEO said that capital spending will increase, but not significantly as the company increases oil and gas production.

He added, “We will benefit from additional production despite the low oil prices.”

SABIC deal closed in the first half

On the other hand, Al-Nasser expected the closing of the SABIC deal in the first half of this year.

Aramco reached an agreement last November with the Saudi Public Investment Fund to make an amendment to the terms of payment for the purchase of the 70% stake in the Public Investment Fund in the Saudi Basic Industries Corporation (SABIC), which is worth $ 69.1 billion.

She noted that on October 6, according to the amendment, 36% of the purchase price will be paid in cash, with the remainder of the value of the deal to be paid in the form of a loan.

“This loan from the seller will be secured by four separate order warrants issued by Saudi Aramco in favor of the Public Investment Fund.”

The company stated that it will pay a loan return to the fund on the date of completion, which is expected in the first half of 2020, in the form of a cash payment equal to $ 500 million, and the issuance of 5 bonds for an additional order with a total value of $ 2.5 billion.







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