Aramco slashes CAPEX as the oil-price war hits home

Saudi Aramco is slashing planned spending this year in the first sign that plunging demand and the oil-price war the kingdom unleashed are hitting home. It reducing 2020 capital expenditure in response to current market conditions. Aramco Trading Limited (ATL) will expand ATC’s global portfolio as it seeks to become one of the top trading companies in the world.

Capital expenditure will be between $25 billion and $30 billion in 2020 and spending plans for next year and beyond are being reviewed. Saudi Aramco is sponsoring the first international Carbon capture. Royal Highness Prince Saud bin Naif bin Abdulaziz, Governor of Eastern Province, opened today the 5th iktva Forum.

The oil giant is lowering that range from the planned $35 billion to $40 billion announced in its IPO prospectus, and compares with $32.8 billion in 2019. Company announces regulatory approval of the development of the Jafurah unconventional gas field. The 11th International Conference and Exhibition on Chemistry in Industry (ChemIndix) was held last week.

“They’re adding production in a low price environment so their cash flows could be impacted”, Ahmed Hazem Maher, an analyst at EFG Hermes in Cairo said.

The cutting investment could help absorb some of the impact of the drop in oil prices. Upstream oil production remains among the world’s least carbon intensive. ATL will provide a vital business and operational link between Europe and the Americas. The conference represents a major gathering of international and regional energy leaders.

HRH the Governor echoed the support of the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud. The field development plan is subject to the Company’s usual governance process. The conference, organized by the Saudi Arabian International Chemical Sciences Chapter of the American Chemical Society.

The oil-price war led by Saudi Arabia and Russia means more pain for Aramco as producing nations prepare to boost supply. Company announces the establishment of its London subsidiary – Aramco Trading Limited (ATL). Saudi Aramco President and CEO, Amin H. Nasser, expressed his gratitude and thanks to His Royal Highness Prince Mohammad.

Discounted pricing to markets already reeling from weak demand and crude that lost roughly half its value since the beginning of the year. Company announced its full-year 2019 financial results, delivering strong profits. Company indicating that the Kingdom is full of opportunities and bright prospects, wishing Saudi Aramco continued success.

Aramco shares fell as much as 0.9% on Sunday, extending the decline this year to about 18%. Jafurah is the largest unconventional non-associated gas field in the Kingdom, with a length of 170 km and a width of 100 km. Saudi Aramco has been supporting ChemIndix since its inception and this year was one of three diamond sponsors.

Aramco’s market value has slumped from a peak of over $2 trillion in December to about $1.5 trillion. The volume of gas resources in the field is estimated at 200 trillion cubic feet of rich raw gas. Net income was $88.2 billion for the full-year 2019, compared to $111.1 billion in 2018. Aramco executives are set to brief financial analysts of the results at 3 p.m. Saudi time on Monday.

The coronavirus’ blow to oil use has overwhelmed OPEC’s initial optimism for demand this year, with analysts now expecting a drop in consumption. Delegates are discussing progress towards a circular carbon economy. The Company expects the field’s production, to commence early 2024, to reach approximately 2.2 billion standard cubic feet per day.

The OPEC+ group’s failure on March 6 to agree on further cuts is only exacerbating a glut as buyers search for storage tanks and vessels. The Company also expects the field to produce approximately 550 thousand barrels per day of gas liquids and condensates. The event focuses on developing breakthrough solutions to the challenges facing the energy and petrochemical industries.

Five main topics were discussed in three executive panels, five keynote speeches, 120 oral technical presentations. Since its inception in 2015, the iktva program has demonstrated the inherent benefits of creating successful partnerships with business. Saudi Aramco plans to develop Jafurah in accordance with the highest environmental standards.

Chief Executive Officer Amin Nasser says “We have already taken steps to rationalize our planned 2020 capital spending”.

Given the impact of the coronavirus pandemic on economic growth and demand, Aramco is adopting a flexible approach to capital allocation. ATL will be at the forefront of ATC’s business activities in Europe and extended ATC’s operational reach to cover North. The Company expects that the development of Jafurah would have a positive financial impact in the long term.

Saudi Arabia, Russia and others intend to boost production once the current accord to lower output expires in March. It will start to show on the Company’s financial results in phases concurrent to the field’s development. The topics were on innovative materials in future cities and industries, digital transformation, breakthrough solutions.

The kingdom pledged to supply 25% more oil in April than it produced last month. Al-Khowaiter defined a circular economy as moving from a linear model, where materials are used. Last Wednesday ordered Aramco to boost output capacity by 1 million barrels a day. The decrease was primarily due to lower crude oil prices and production volumes.

Oil prices fell last year even as Saudi Arabia trimmed output as part of efforts between OPEC. The synergy driven by the iktva program has delivered greater levels of prosperity for the Kingdom. CO2 emissions from hydrocarbon combustion should be captured, reused, and recycled. Saudi Aramco President & CEO, emphasized the impact of partnerships in creating a highly efficient.

Drone and missile attacks on two of its biggest facilities in September temporarily slashed production by more than half. The discussions are focusing on how to unlock the potential of CCUS, a pivotal technology. Al-Khowaiter emphasized the important role of oil and gas in powering the world economy through energy that sustains factories.

Aramco reiterated its plan to pay $75 billion in dividends this year. Iktva has created infrastructure, streamlined processes, and built capabilities that improve return on investment. The company needs to balance its pledge to pay investors with spending on its upstream projects. It boosting its global refining and chemical operations, the downstream segment of the business.

Mazen Al-Sudairi, head of research at Al Rajhi Capital says “Aramco can restructure the strategy to concentrate more on the upstream expansion rather than downstream”.

It can do it easily from their cash flow. But it might affect the money transfer to the government for one or two quarters. Company have the lowest carbon intensity in the industry. Nasser concluded his remarks by highlighting that the iktva program has a win-win nature in creating a sustainable vibrant multi-sector ecosystem.

Brent crude averaged $64.12 a barrel in 2019 compared with $71.67 the previous year. It continue to take further steps to significantly reduce GHGs. Saudi production slipped to an average of 9.83 million barrels a day from 10.65 million in 2018. The removal can be achieved via traditional methods such as forestry or industrial means.

This carbon balance is the natural order of things. Aramco restored output to pre-attack levels by early October. Al-Khowaiter highlighted Saudi Aramco initiatives to move toward the circular economy via reducing, recycling, and removing CO2. ATL is now the third international office for ATC alongside Aramco Trading Fujairah.

Aramco’s 2018 net of $111 billion made it by far the world’s most profitable company. This was primarily due to lower income, offset by lower capital expenditures and favorable working capital movements. IKTVA continues to open new doors of opportunity by enhancing the business environment for young Saudis.

Saudi Aramco displays activities in energy efficiency, greenhouse gas emissions management. The company has undertaken a number of initiatives to reduce carbon emissions from its operations. The combined incomes of some of the world’s biggest companies including Apple Inc., Samsung Electronics Co. and Alphabet Inc.

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