28/03/2022 by Mark
The world’s top oil-producing company, Saudi Aramco, has said it will increase its spending on oil production this year to meet the world’s growing demand for crude oil.
Compared to its 2021 capital expenditure of $32 billion, the company said it intends to spend $40–50 billion this year because it expects the demand for crude oil to continue growing, prompting a need for substantial investment to meet this demand. The company also reported higher profits due to the renewed demand for fuel and other products like Mobil hydraulic oil driving crude prices higher.
Amin Nasser, the chief executive and president of Aramco, noted that miscellaneous macro-economic and geopolitical factors cast uncertainty on the future of oil demand, so the long-term investment roadmap of the company:
“aims to tap into rising long-term demand for reliable, affordable and ever more secure and sustainable energy.”
Nevertheless, he also mentioned the need for crude oil in the shorter term:
“We recognise that energy security is paramount for billions of people around the world, which is why we continue to make progress on increasing our crude oil production capacity, executing our gas expansion programme.”
The increased investment will help secure oil supplies in the medium term. In the short term, Saudi Arabia and the UAE have been asked to tap into their current spare production to help meet any shortfall resulting from the Ukraine crisis, but both countries are currently party to the OPEC+ production deal that only envisages a gradual increase in oil production.
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