Oil giant Saudi Aramco has spare capacity of 2 million barrels per day (bpd) and can meet additional oil demand in case of any interruption in supplies, the company head said on Monday, days after OPEC agreed a modest increase in oil output from July.
Aramco, the world’s third-largest crude oil producer, is producing about 10 million bpd and has the capacity to produce 12 million bpd, Amin Nasser, the company’s chief executive, said on the sidelines of a conference in New Delhi.
OPEC and non-OPEC producers including Russia agreed over the last few days on a modest increase in oil production from July, following calls from major consumers to curb rising fuel costs.
“We have a healthy spare capacity ... that will be availed to meet additional demand and any interruptions in supply if it happens,” Nasser said.
Nasser expects OPEC’s decision to be implemented “very soon,” although he did not comment on Aramco’s likely output for the July-August period.
“Whatever is concluded as part of this agreement, we will fulfil,” he said.
OPEC and it’s non-OPEC allies met last week to review a pact to cut their combined output by 1.8 million bpd that was put into place at the beginning of 2017.
Saudi Energy Minister Khalid Al-Falih said at the weekend OPEC and non-OPEC combined would pump roughly an extra 1 million bpd in coming months, equal to 1 percent of global supply.
Global consumers have grown increasingly worried over the past few months about oil supplies, with the United States vowing to renew sanctions against Iran, and Venezuela seeing a big drop in its output due to US sanctions and an economic crisis.
Nasser was in Delhi to sign a deal allowing the UAE’s’ Abu Dhabi National Oil Company to acquire a stake in a planned $44 billion refinery and petrochemical project on India’s west coast.
Nasser said the company’s is “almost there” in finalizing the stake to be given to ADNOC.
Saudi Aramco is looking at “all options” to enter fuel retailing in India through partnerships with Indian oil companies and ADNOC, Nasser said.
Aramco wants to be present in the entire value chain of India’s energy sector, he said.
India has seen mass local protests against the proposal to set up the refinery in the Ratnagiri region of the western state of Maharashtra, but Nasser said he expects India to resolve the land acquisition issues.
“We are assured by our Indian partners ... that this is being worked out,” he said.
India is emerging as a key demand center for refined fuels. To meet its growing demand, the South Asian nation aims to raise its refining capacity by 77 percent to 8.8 million bpd by 2030.
Nasser also said the oil markets are healthy and demand forecasts look healthy for 2019.
Reacting to media reports that China’s Sinopec has reduced oil purchases from the Kingdom, Nasser said: “Sinopec is our major customer, sometimes they buy less, sometimes they request for more. We have some Chinese refiners approaching us directly for oil purchases, and that’s kept our sales to China at a healthy level.”