Economy

Saudi Aramco Set To Disclose Accounts, Oil Reserves In Planned Bond Sale

Saudi Aramco Set To Disclose Accounts, Oil Reserves In Planned Bond Sale

Khalid al-Falih, energy minister for the Saudis, is credited for bolstering traders, by stating on Wednesday that his kingdom will meet its goal of reducing output to 10.2 million barrels per day (bpd) this month, down about 900,000 bpd from the country's record November output; the Saudis will also export 7.2 million bpd this month and 7.1 million bpd in February.

Saudi Arabia had a target to lower output to 10.311 million bpd as of January 1, when the supply cut accord took effect.

"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", Mr Al-Falih said.

The most recent market rumors have had it that Aramco could fund the entire US$70-billion price tag for buying 70 percent in Sabic with the upcoming bond issue.

As for the Saudi Arabia cuts, Martin Essex, analyst at Daily FX, said in a report sent to UPI that the market was optimistic that it could help reduce supply.

But on Wednesday, Brent crude for March delivery hit US$60, up 20 per cent on the figure two weeks ago, prior to a deal between Opec members and other major producers to cut output from Jan 1.

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The energy ministry said proven oil reserves stood at 263.2 billion barrels at the end of previous year, up from the figure of 261 billion barrels that has been used for nearly three decades. In DeGolyer's view, these contained 213.1 billion barrels of proved oil reserves, compared to 210.9 billion as estimated internally by Aramco.

Natural gas reserves were also revised upwards from 302.3 trillion cubic feet (8.56 trillion cubic metres) to 324.4 trillion cubic feet, the ministry said.

Saudi Arabia's reserves of easily recoverable oil have always been the world's largest but few details were public.

Falih said Saudi oil remains among the cheapest in the world to extract, at only US$4 a barrel. They said that the central bank will be especially cautious about pushing ahead with interest-rate increases after raising them four times past year.

A trade agreement could mitigate the global economic slowdown and keep global oil demand high; however, failure to reach a deal would worsen economic growth prospects and keep a downward pressure on oil demand and prices, according to experts.