Saudi’s Aramco cites halt in expansion of output capacity to energy transition

The Saudi energy minister confirmed that the decision was not taken hastily and resulted from a continuous review of market conditions.

Smruthi Nadig February 12 2024

Saudi Arabia's state-owned oil company Aramco has halted its expansion of output capacity due to the growing role of renewables in the energy transition, according to Energy Minister Prince Abdulaziz bin Salman.

In January 2024, the company announced its decision to halt its oil expansion plan and instead focus on achieving a maximum sustained oil production capacity of 12 million barrels per day (mbbl/d), as directed by the Saudi government.

On Monday 12 February, 2024, the Saudi energy minister confirmed that the decision was not taken hastily and resulted from a continuous review of market conditions.

At the International Petroleum Technology Conference (IPTC) in Dhahran, Prince Abdulaziz bin Salman said: “I think we postponed the investment simply because… we’re transitioning. And transitioning means that even our oil company, which used to be an oil company, became a hydrocarbon company. Now it’s becoming an energy company,” according to media reports

Abdulaziz stated that the kingdom had a large amount of spare oil capacity available in the event of major disruptions to global oil supplies caused by conflict or natural disasters.

Aramco's CEO, Amin Nasser, told reporters at ITPC that the state-owned oil company was still prepared to increase its capacity if necessary. “We have adequate spare capacity of about 3 million barrels," Nasser said, as reported by Reuters

According to the International Energy Agency (IEA), oil demand is expected to reach its maximum by the end of this decade. However, Nasser said he does not anticipate a peak in the upcoming years.

The IEA's most recent oil report said that global oil supply is expected to hit a new record of 103.5mbbl/d, with the US, Brazil, Guyana and Canada leading the production increase by 1.5mbbl/d.

Uncover your next opportunity with expert reports

Steer your business strategy with key data and insights from our latest market research reports and company profiles. Not ready to buy? Start small by downloading a sample report first.

Newsletters by sectors

close

Sign up to the newsletter: In Brief

Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Thank you for subscribing

View all newsletters from across the GlobalData Media network.

close