Aramco Keeps Building Oil Rigs Even as Saudis Agree to Pump Less
EghtesadOnline: Saudi Arabian Oil Co. signed contracts with U.S. companies to build dozens of oil rigs over 10 years as the kingdom builds for the long-term future of its most prized industry even while coordinating with other producers to cut output for six months to stabilize crude.
The Saudi state producer known as Saudi Aramco signed a contract with Nabors Industries Ltd. to form an equally shared joint venture to build 50 onshore rigs over a decade, its Chief Executive Officer Amin Nasser said at an energy event in the eastern city of Dhahran. Saudi Aramco also signed a deal for a similar venture with Rowan Cos.to construct 20 offshore rigs over 10 years, he said.
Saudi Arabia was the main driver behind the agreement it reached with fellow OPEC members and with other producers including Russia to reduce oil production for six months from January 1 to eliminate a global glut and shore up prices. The world’s biggest oil exporter agreed to trim its output by 486,000 barrels a day to a level of 10.058 million barrels a day. Saudi Energy Minister Khalid al-Falih indicated Saturday that the country was willing to cut further and pump less than a symbolically important 10 million barrels a day, Bloomberg reported.
Saudi Aramco pumps all of Saudi Arabia’s crude oil. The government plans to transform Aramco from an oil and gas company into an industrial conglomerate as part of efforts to prepare the kingdom’s economy for a post-oil era, Deputy Crown Prince Mohammed bin Salman told Bloomberg in March. The plan includes selling a stake in the company and transforming its ownership to the nation’s sovereign wealth fund.