Aramco to push ahead with expansion

Damam : Saudi Aramco, the world’s largest oil producer, aims to regain its lost market share after the OPEC-led supply-cut pact ends and plans to push ahead with a downstream expansion strategy to be on par with Big Oil, its chief executive said on Wednesday.

Amin Nasser, the CEO of the state oil giant, which is preparing for an IPO next year, said Aramco is moving ahead with its refining and petrochemicals expansion strategy and is in discussions with several potential partners in Asia, Europe and the United States.

“We had to cut our allocations to certain markets based on the (OPEC) agreement ... hopefully we will regain these markets as soon as this deal ends,” he said in an exclusive interview.

“We have a very reliable customer base. I don’t see (any)sort of problems in terms of gaining market share beyond the OPEC agreement,” Nasser said, adding the company will continue to abide with the OPEC production targets.

Nasser said his company has held talks with Russian firms including Kremlin-controlled Rosneft on possible joint investments.

Saudi Arabia and Russia say they will remain in partnership long after the current output reduction deal expires.

“We are engaging ... with the Russian companies to identify opportunities whether in Russia or globally in terms of joint investments in areas of interest to both sides,” Nasser said.

“We have discussions with Rosneft in different areas, in terms of creating JVs. Essar is one area that we were interested in. And still the discussions (with other partners) are on going.”

The Saudi government plans to sell up to 5 percent in Aramco next year in what could be the world’s largest initial public offering.

The company plans to raise its total refining capacity - both inside the kingdom and abroad - to 8 million-10 million bpd from around 5.4 million bpd now.

“If you look at our peers, their refining capacity is either equal or much higher than their production capacities. So we are looking at our refining capacity to be in that range,” Nasser said.

Aramco’s focus to expand and regain its market share will remain on Asia, Nasser said, adding that the United States and Europe are also two important markets for the company.

“The U.S. is an important market and we are looking at expanding after having taken the full ownership of Motiva. We are looking at expanding our footprint in the U.S. for sure,” he said.

China, the world’s second biggest oil consumer, is one of the main markets where Aramco wants to expand its foothold, Nasser said.