Saudi Aramco to invest $300bn in oil/gas production over next decade

State oil giant Saudi Aramco is planning to invest more than $300bn over the next decade to maintain spare oil production capacity and explore for natural gas, its president and CEO has said.

Amin Nasser was quoted by Bloomberg as saying the outlook for oil supplies globally was “increasingly worrying” due to about $1 trillion of investment lost during the current downturn.

However, he indicated 20 million barrels a day of new output was needed to meet rising oil demand

“There seems to be a growing belief that the world can prematurely disengage from proven and reliable energy sources like oil and gas, on the mistaken assumption that alternatives will be rapidly deployed,” the CEO said.

“Investments in smaller increments such as shale oil will just not cut it. Yet without those higher investment levels, the energy transition — and therefore energy security — may be fatally compromised.”

Nasser indicated the $300bn investment over the next 10 years was by far the biggest in OPEC and formed part of the company’s plan to double its gas production to 23 billion cubic feet a day.

He said the increase would raise the share of gas in the kingdom’s utilities to about 70 per cent, “the highest of any G20 nation”.

The official also highlighted Saudi Arabia’s efforts in the renewables market, indicating the country would become “nothing less than a solar powerhouse”.

Data released last week in the company’s annual review showed Aramco’s recoverable crude oil and condensate reserves fell to 260.8 billion barrels at the end of 2016 from 261.1 billion a year earlier

Its gas reserves rose to 298.7 trillion standard cubic feet from 297.6 trillion.

Read: Saudi Aramco’s oil reserves fall in 2016

The firm plans to press ahead with an initial public offering, expected to be the world’s largest, next year as part of Saudi Arabia’s diversification efforts.