Saudi Aramco CEO Amin Nasser delivered a robustly comprehensive defence of his company’s claim to foreign investment and capacity to maintain production despite the September oil asset attacks at the Oil & Money conference in London this morning.
But investors remain cautious about whether and how much they might invest in Saudi Aramco’s planned IPO.
“Nasser said everything he had to say today and his story is impressive and complete,” said a conference delegate. “But there are still questions about why the attack was effective and how repetitions can be avoided.”
“Make no mistake, these attacks not only targeted Saudi Aramco and Saudi Arabia, these attacks targeted the global economy and the global community”, Nasser said.
He said “there’s no doubt” that the attacks on facilities at Khurais and Abqaiq and previous ones on the kingdom’s east-west pipeline in July and the Shaybah oil field complex in August were instigated by Iran.
Nasser said the attacks on Abqaiq and Khurais production facilities, which happened at 330am on 14 September, immediately knocked out 5.7m b/d of crude oil production and 40-50 per cent of Saudi Aramco’s natural gas liquid (NGL) production.
“It took us 24 hours to restart Khurais at a lower production and 40 hours to restart Abqaiq production,” Nasser said. “It took us 10 days to bring all the facilities at a production level of around 11.3m b/d which was much higher than the level during the attack. We will bring it (maximum sustainable capacity) back to 12m b/d by the end of November.”
“None of the shipments for international customers was affected,” Nasser said. “We could have called force majeure, but not a single shipment to our international customers was interrupted.”
Nasser said that the attacks have also not affected plans for Saudi Aramco’s planned share offering.
“There is no impact on the IPO whatsoever,” Nasser said.
Nasser said he is relaxed about forecasts that world oil demand could start falling after 2030. He said the kingdom is the world’s lowest-cost producer of crude oil.
“A lot of marginal barrels will go out of the market before we do,” he said. “We are also the cleanest oil producer.”
Nasser said that Saudi Aramco forecasts that Saudi Aramco is well-placed to find new reserves to meet demand beyond 2030.
“The Ghawar field has 48bn barrels of reserves and is only producing 3.8m b/d today,” Nasser said. “We have extensive reserves, we keep adding to them and we replace every barrel that we produce. Even in existing fields, if you want to expand capacity you can do it big time.”