Saudi Arabian Oil Co. is pumping at high levels as it sees demand growing, and the state-run company may open a possible share offering to international investors.
Saudi Aramco, as the world’s largest oil business is known, is still considering “all options” in any future public offering, including the sale of shares internationally, Chairman Khalid Al-Falihsaid in an interview on Al Arabiya television. The company isn’t considering selling its oil reserves, he said.
“What will be offered is the economic value of Saudi Aramco and not its oil reserves,” Al-Falih said in the interview in Davos, Switzerland. “The oil reserves belong to the state. Therefore, we will offer the ability of the company to produce from those reserves.”
Saudi Aramco has announced it was studying options for a share sale. While one route is a full initial public offering, another is to list some of its subsidiaries, the company said in a statement earlier this month. Aramco pumps all of Saudi Arabia’s crude oil, with production at 10.25 million barrels a day in December.
Oil Recovery
Saudi Arabia sees oil prices recovering this year even if inventories remain high, Al-Falih said. Oil demand grew last year almost twice as fast as in 2014 and will keep rising at a rate of at least 1.2 million barrels a day this year, he said.
The kingdom isn’t targeting higher-cost shale oil producers by keeping output high, and it wants to see a market in which supply matches demand, he said.
“We are not targeting shale oil producers at all,” Al-Falih said in the interview. “We want low-cost oil producers like Saudi Arabia to produce to a balanced market.”
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