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Saudi Aramco boosting market share prior to IPO

May 27, 2016, 12:02 PM EDT
Riyadh, Saudi Arabia.
(Source: recycleharmony/flickr)

Saudi Aramco is boosting its market share prior to a much-hyped partial IPO.

Reuters reports:

Saudi oil giant Aramco is gaining market share and pushing for greater efficiency, chief executive Amin Nasser said in an interview, as it acts as a "bridge" to a future when the nation relies less on energy exports. Nasser also told Reuters that the state-owned group was pressing on with preparations for its partial privatization via a stock market listing, which he said lay at the heart of Riyadh's "Vision 2030", a long-term economic plan headed by Deputy Crown Prince Mohammed bin Salman. Riyadh has been the driving force behind OPEC's decision in November 2014 to refuse to cut supply to boost prices. Instead it opted to raise output and fight for market share against higher-cost rivals such as U.S. shale producers - as well as fellow OPEC member Iran which has ramped up its exports since the lifting of international sanctions. "We are preserving our market share which continues to increase year-on-year," he said in the interview, conducted on Wednesday. "This year, as last year, it is increasing. Our market share is picking up," he added, without giving figures. Aramco's crude oil exports averaged 7.1 million bpd, up from around 6.8 million bpd in 2014, it said in its 2015 annual review released late on Thursday. Asia accounted for 65 percent of its total oil exports; an increase from 62.3 percent a year earlier.

Bloomberg writes:

Saudi Arabian Oil Co., the world’s largest crude producer, increased output to an all-time high last year while keeping its reserves unchanged as the kingdom battles for market share. Saudi Aramco, as the state-owned company is known, produced 10.2 million barrels a day of crude in 2015, up from 9.5 million in 2014, according to an annual review posted on its website Thursday. Natural gas output rose to 11.6 billion standard cubic feet a day from 11.3 billion. The company discovered three oil deposits last year, the same as in 2014, while gas field discoveries declined to two from five. “Expanding oil and gas supplies to meet the needs of domestic and international markets is at the core of Saudi Aramco’s business, and in 2015 the company delivered on its commitments, reaching record levels of oil production and gas processing,” Chairman Khalid Al-Falih said in the review. Saudi Arabia’s rising production, along with increased output from shale plays in the U.S. last year, exacerbated a global supply glut that drove down benchmark prices by more than 30 percent in 2015.

The company said it expanded its geographical sales area and opened new markets last year in the Baltic. Aramco also “enhanced its role as a supplier" through increasing sales of spot cargoes to its customers in Asia and Europe last year from its storage facilities in Okinawa and Rotterdam, it said. The operation of new local refineries helped Saudi Aramco’s exports of petroleum products to increase by 38 percent.

 

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