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 10.2mn bpd of crude in 2015, up from 9.5mn in 2014, according to an annual review posted on its website on Thursday. Natural gas output rose to 11.6bn standard cubic feet a day from 11.3bn. 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.
Opec, led by Saudi Arabia, chose in November 2014 to keep pumping crude to protect its share of the market rather than cutting output to boost prices. Last month, the Organisation of Petroleum Exporting Countries and other major producers including Russia failed to reach an agreement over a proposal to freeze output after Saudi Arabia insisted that it couldn’t sign up to a deal without the participation of Iran, which has pledged to boost its own oil production to pre-sanctions levels before considering a cap.
The Saudi company’s oil reserves were unchanged at 261.1bn barrels, while those of gas increased to 297.6tn standard cubic feet from 294tn. The company said it maintains an oil-production capacity of 12mn barrels a day.
Aramco is undergoing a major transformation that will include selling less than 5% of its shares to the public by the end of 2018. The company’s restructuring plan will be announced within six months, Deputy Crown Prince Mohammed bin Salman said in an interview in Riyadh on April 15. After the IPO, Aramco will become a holding company that is not involved in the daily management of its subsidiaries, he said.
The company exported 2.6bn barrels of crude in 2015, or 7.1mn bpd, up from 2.54bn in 2014.
Aramco’s exports to major Asian markets increased “substantially” last year from a year earlier, with shipments to India jumping 18%. Exports to China grew 4.5%. The company said it was able to maintain the same level of exports to US market at 1mn barrels a day “despite competition from shale oil.”
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%.
Saudi Aramco’s fully owned oil-refining capacity was 3.1mn bpd at the end of last year, the same as in 2014, according to the report. The company’s total refining capacity was 5.4mn bpd in 2015. Saudi Aramco is seeking to double its refining capacity to 8mn to 10mn bpd, chief executive officer Amin Nasser said in March.
Aramco said in the review that it’s expanding its Rabigh Refining & Petrochemical venture with Sumitomo Chemical Co. The second phase of the project will increase the production capacity of the ethane cracker, add a new world-scale aromatics complex and create 22 process plants. The project will start commissioning in mid-2016.
Last year, Aramco began exploring the development of a chemicals complex to be integrated with its SATORP joint venture with Total SA, it said.