Published: Sat, January 12, 2019
Business | By Eloise Houston

Saudi's Oil and Gas Reserves Are Bigger Than Previously Reported

Saudi's Oil and Gas Reserves Are Bigger Than Previously Reported

The minister said that Saudi Arabia would cut oil exports next month as it seeks to prevent a glut that could depress prices further.

The government of Saudi Arabia said in a statement Wednesday that U.S. energy consultancy DeGolyer & MacNaughton had concluded that its oil reserves total 268.5 billion barrels. Khalid al-Falih said the kingdom, the world's top crude supplier, would cut its exports to 7.2 million barrels per day in January, down from 8.0 million bpd in November.

He also announced a further 100,000 bpd cut in February.

Industry experts say it can cost between $30 to $50 to produce a barrel of USA shale oil.

It had hoped to launch an initial public offering for state-owned oil company Aramco in 2018, but plans for the listing stalled.

Entering the debt market is a move aimed at helping the company to finance its planned acquisition of a 70% stake in petrochemical firm SABIC from the kingdom's Public Investment Fund (PIF).

For nearly 30 years - despite rising production, large swings in oil prices and improved technology - Riyadh has annually reported the same number for reserves at around 261 billion barrels, according to a statistical review by BP BP.L .

Its crude reserves totaled 268.5 billion barrels (Bbbls) at year-end 2017, up from the previous estimat of 266.3 Bbbls.

"We will work with our advisers and find the right time to go to market and part of that would be a prospectus that would have appropriate financial statements and disclosures", al-Falih said, commenting on the plans for the bond sale. "We have seen peaks and drops in prices completely unjustified by the fundamentals".

Saudi Arabia said the new figures have been backed by an independent third-party certification by leading consultants DeGolyer and MacNaughton (D&M).

The funding program "will be sustained over time as Saudi Aramco grows and undertakes its capital program", al-Falih said. But demand was high, at $27 billion, according to HSBC.

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