State-owned Saudi Aramco is officially planning to increase output, despite the prevailing glut and depressed oil prices, citing an expected rise in demand this year.
The announcement, which is likely to result in another dip in oil prices as traders play on the negative news, though not unexpected, comes as Aramco talks about global expansion and moves towards a partial IPO.
Saudi Aramco is considering multiple joint ventures in various countries as it makes its expansion plans, which include the building up its oil refining and production capacity. The company is looking to increase its refining capacity to 8-10 million bbl/d, from 5.4 million bbl/d.
It's also seeking to increase the capacity of its Shavbah oilfield to 1 million barrels per day-a 250,000-barrel increase.
Related: Saudi Arabia To List Aramco Shares In New York, London, Hong Kong
JV partnerships are being considered in China, Vietnam, Indonesia, India and the United States.
Aramco CEO Amin Nasser told reporters that the company expected global demand to grow by 1.2 million barrels per day this year.
Overall, trying to out-do archrival Iran, Saudi Arabia is considering increasing output to more than 11 million barrels per day.
Related: A Glimpse Into What Saudi Arabia's New Oil Policy Will Look Like
If Aramco pushes its planned IPO through successfully, it will make this estimated $2-trillion company bigger than ExxonMobil, which has a market cap of US$365 billion.
At the same time, Kuwait is also seeking to increase its oil output by 50% over the next four years. In March, Kuwait was producing 2.77 million barrels per day, and the 50% planned hike would be bring Kuwait to its highest level of output in history.
By James Burgess of Oilprice.com
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