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Saudi Aramco’s Chief Sees Oil Rebounding In H1 2017

Offshore rig

Crude oil prices will rise in the first half of next year as the commodity’s fundamentals return to balance, Aramco’s chief executive, Amin Nasser, said. Without providing details about what he was basing this optimistic prediction on, the executive added that after this rebound, demand for the commodity will remain stable.

Saudi Arabia’s state oil giant, which is preparing for a partial privatization in 2018, will play a leading role in the country’s transformation into a greener economy, Nasser also said, adding that Saudi Arabia will turn increasingly to gas by doubling its daily output to 23 billion standard cu ft. The goal is for gas to account for 70 percent of power generation fuels in Saudi Arabia.

The company will also help the government achieve its goal of producing 9.5 GW of electricity from renewable energy sources by 2030, under the Vision 2030 plan.

Despite this upbeat attitude towards renewable energy and clean gas, Nasser did not forget to note that investments in oil and gas should continue, as the transition to renewables will be a long one.

Last week Aramco sealed a 50/50 joint venture deal with U.S. drilling services provider Nabors for the ownership, operation and management of onshore rigs in Saudi Arabia. The two companies said the move was part of the kingdom’s economic diversification efforts.

Nasser also said that the prep work for Aramco’s IPO is going according to plan, and that the oil giant will start reporting quarterly results sometime next year. This would be certainly good news for potential investors, who have balked at Aramco’s lack of transparency. With zero information about the company’s actual financial status and prospects, any investment would be risky business.

Aramco will be listed on the local stock exchange, Tadawul, as well as on one or more foreign venues, which are currently being reviewed. After a legislative change approved in August, foreign investors would be able to directly take part in the share sale. Riyadh is planning to sell 5 percent of the company, for which they hope to get around US$100 billion.

By Irina Slav for Oilprice.com

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