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.


EU split over budget as Germans push for curbs

Updated 17 September 2019

EU split over budget as Germans push for curbs

  • Divisions over the next 2021-2027 financial framework run deeper than usual

BERLIN: The EU may need to scale back its plans to boost growth and counter climate change if it fails to quickly agree on a long-term budget, European officials said on Monday, as Germany and other northern states push to restrict spending.

The EU administration is funded with a seven-year budget. The size and targets are often subject to prolonged haggling among its member states.

But divisions over the next 2021-2027 financial framework run deeper than usual at a time when the bloc faces risks of a new economic recession and uncertainty over the outcome of the Brexit process — which is expected to lead Britain, one of the largest contributors to the EU coffers, out of the union.

“My big concern is that Europe will be in a difficult economic and geopolitical situation if there is no budget by the first of January,” the EU commissioner in charge of the talks, Guenther Oettinger, told an EU ministers’ meeting in Brussels.

He said the urgency to strike a deal was heightened by the bloc’s weakening economy, with Germany and other EU states stagnating. He said it would take years to find a compromise at the current pace of negotiation.

The long-term financial framework needs to be adopted well in advance of its starting date because it has to be translated into yearly spending programs which also usually require long negotiations.

The EU’s executive commission proposed last year a seven-year budget of roughly €1.1 trillion ($1.22 trillion) which would represent 1.11 percent of the bloc’s Gross National Income (GNI), a measure of domestic output. The estimate does not include funding from Britain, which is planning to leave the EU at the end of October.

But Germany, the EU’s largest economy and the main contributor to the budget, has made it known that it wants to limit spending to 1 percent of economic output, according to a document seen by Reuters. Sweden and the Netherlands openly support Berlin’s more cautious spending plans.

The budget for the current seven-year period also amounts to 1 percent of GNI, but Brussels said it has to go up because of planned higher spending on research, digital economy, border control and defense.

Berlin said the proposed cap would represent a net increase in spending by EU states, as the bloc would have to do without contributions from Britain. It also urged more spending to counter climate change.

The European Parliament, backed by southern and eastern European states who are net receivers of EU funds, wants a bigger budget, set at 1.3 percent of the bloc’s GNI.

Lawmakers also urged further funding for new projects on climate change and for unemployment benefits as mentioned by the commission’s president-designate Ursula von der Leynen in her inaugural speech after appointment in July. Spain’s state secretary for EU affairs, Marco Aguiriano Nalda, said differences between the proposals made it almost impossible to find a compromise before the end of the year.

“I have to express strong worries and reservations on the state of play of the financial framework,” he told his counterparts at a televised session of the ministerial meeting.

Poland’s State Secretary for European Affairs, Konrad Szymanski, told the same meeting that reduced spending caps would inevitably translate into lower ambitions.

A compromise is made more difficult also by plans to make EU funding conditional on upholding the bloc’s values, including the rule of law. Germany called for this “conditionality” in its confidential document reviewed by Reuters.