National oil giant Saudi Aramco is continuing to invest in oil and gas production capacity despite cost-cutting due to low oil prices, its chairman Khalid al-Falih said on Monday.
Aramco’s plans starkly contrast with governments and oil firms outside the Gulf, which have been reducing capital spending sharply in response to financial pressures as crude prices drop to 12-year lows.
Saudi Arabia, the world’s top oil exporter, is determined to protect or expand its market share when the balance between supply and demand eventually improves and prices recover.
“Our investments in capacity of oil and gas have not slowed down – we have been able to do a lot of cuts in spending by simply driving down costs,” Aramco chairman Khalid al-Falih told a panel discussion at a business conference.”
“Saudi Arabia is well documented to be the clear lowest cost producer,” he told reporters later. “We have scale, capability, technologies that have allowed us to maintain our low cost.”
He said global oil supply and demand would balance at a “moderate” price soon.
“Demand will grow, as it has already started in 2015, and there will be a period not far into the future (when) demand will catch up with supply,” he said.
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