No Letup Saudi Arabia to Increase Oil Production

“Welcome to Saudi Aramco” – that’s not a message you see very often as a foreign journalist but the normally secretive state owned oil company is on a charm offensive.

Sadly for other oil producers that does not extend to helping drive oil prices higher by cutting production.

In fact, chief executive Amin Nasser, told journalists that production would increase in 2016 ahead of a share sale that could value the company at over $2 trillion dollars – four times the value of Apple.

Vision 2030

The sale of up to 5% of the state giant is an eye-catching part of a plan to double the size of the Saudi economy by 2030 and reduce the Kingdom’s reliance on oil and gas.

But don’t be fooled. The planned diversification is not in place of fossil fuels, it’s in addition.

Saudi Arabia’s so called Vision 2030 will need its coffers full of oil money to spend on investment in other industries such as petrochemicals, mining, tourism and construction. It hopes to double the size of the economy and create six million Saudi jobs within 15 years.

It’s a very tall order for a country that currently derives 90% of its income from oil and gas.

If it succeeds, it won’t be because it reined in oil production, and that could spell more trouble for other producers like Venezuela, Nigeria and, indeed, the North Sea.