Saudi Arabia reveals rise in oil reserves and commits to Aramco listing

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Saudi Energy Minister Khalid Al-Falih said the Aramco IPO would take place in 2021. (Reuters)
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Saudi Arabia's oil reserves as of Dec. 31 2017 were 264 billion barrels. (Reuters file photo)
Updated 09 January 2019

Saudi Arabia reveals rise in oil reserves and commits to Aramco listing

  • Saudi’s proven oil reserves at 268.5bn barrels at end 2017
  • Minister pledges to cut oil shipments next month

LONDON: Saudi Arabia has revealed a rise in crude oil reserves following an independent audit, lifting the lid on deposits that have been the subject of intense speculation since the Kingdom revealed plans to sell shares in its national oil company.

The Kingdom’s proven oil and gas reserves stood at around 268.5 billion barrels of oil and 325.1 trillion standard cubic feet of gas as of the end of 2017, the Saudi Energy Ministry said in a statement carried by the SPA state news agency.

It answers a key question for potential investors in the planned share sale of Saudi Aramco, the state-owned company that manages the Kingdom’s vast oil wealth.

“The results point out that the Kingdom’s reserves of oil and gas are bigger than what we have been announcing,” Saudi Energy Minister Khalid Al-Falih told reporters in Riyadh.

Dallas-based consultants DeGolyer and MacNaughton carried out the audit of the Kingdom’s oil reserves.

The minister also pledged to go ahead with the delayed IPO of Aramco despite speculation that it had been shelved.

He said that Aramco would also issue bonds in the second-quarter of the year and that company financial details would be published as part of that process.

The IPO would follow in 2021, he revealed.

The minister  said that Saudi Arabia would cut oil exports next month as it seeks to prevent a glut that could depress prices further.

“We are serious about restoring balance to the market,” he told a press conference in Riyadh “We are concerned about volatility in the oil market. We have seen peaks and drops in prices (that are) completely unjustified by the fundamentals.”

The Kingdom plans to ship about 7.1 million barrels per day (bpd) in February, down from 7.2 million bpd in January.

Turning to Saudi Arabia’s plans to develop nuclear energy, Al-Falih said that the US was a key provider of nuclear technology and that he wanted the US to be “part and parcel” of its nuclear power program.


Struggling WeWork mulls bailout deals with SoftBank, JP Morgan

Updated 54 min 35 sec ago

Struggling WeWork mulls bailout deals with SoftBank, JP Morgan

TOKYO: Under-pressure start-up WeWork is considering two huge bailout plans including a cash injection that could see Japanese investment titan SoftBank take control of the firm, according to reports.
The office-sharing giant had been on course for a massive initial public offering until last month when questions began to be asked over its governance and profit outlook.
The firm’s valuation plunged from $47 billion in January to less than $20 billion in September and the listing plans have been dropped, while co-founder Adam Neumann stepped down as chief executive.
With New York-based parent company We Co. not expected to push for the IPO this year, the cash-strapped firm is looking for a financial lifeline.
The Wall Street Journal, New York Times and Bloomberg News cited unnamed sources close to the talks as saying SoftBank — the US firm’s biggest shareholder — had drawn up a proposal that gives it full control of WeWork.
The move would dilute the voting power of Neumann, who remains as chairman of the company he started in 2010 and also currently maintains control a majority of voting shares.
They also reported that WeWork is looking at a deal with Wall Street giant JP Morgan to raise $5 billion in debt, with the Times saying directors of We would be meeting as soon as Monday afternoon to discuss that.
“WeWork has retained a major Wall Street financial institution to arrange financing,” the Journal reported a company spokesman as saying.
“Approximately 60 financing sources have signed confidentiality agreements and are meeting with the company’s management and its bankers over the course of this past week and this coming week.”
The New York-based startup that launched in 2010 has touted itself as revolutionizing commercial real estate by offering shared, flexible workspace arrangements, and has operations in 111 cities in 29 countries.
However, the company, which lost $1.9 billion last year, has faced skepticism over its ability to make money, especially if the global economy slows significantly.