Saudi Aramco prepared to meet all customer delivery commitments, CEO says

The state producer wants to regain market share and bring an additional 2.6m bpd to the market in April

FILE PHOTO: The logo of Aramco is seen as security personnel stand before the start of a press conference by Aramco at the Plaza Conference Center in Dhahran, Saudi Arabia November 3, 2019. REUTERS/Hamad I Mohammed/File Photo

Saudi Aramco, the world’s largest oil-exporting company, said it was prepared to meet commitments towards customers, even as countries close borders to contain the coronavirus pandemic.

“We have developed emergency and prevention plans in all areas of our business to ensure the ongoing [continuity] of our business, so that we can meet the needs of our customers around the world" for energy products, Saudi Aramco chief executive and president, Amin Nasser, said in a statement carried by the Saudi Press Agency.

Saudi Arabia, the world's third-largest producer of crude, stopped all international flights into and out of the kingdom and suspended the Ummrah pilgrimage to contain the spread of the coronavirus, which has infected more than 307,000 people and killed 13,049, according to Johns Hopkins University, which is tracking the outbreak. More than 92,300 people have recovered.

Next month, the state producer will bring an additional 2.6 million barrels of oil per day, raising output to 12.3m bpd as it looks to claw back  market share, following the failure of the Opec+ earlier this month to extend their production restriction pact.

Aramco is also planning to increase its production capacity, currently at 12m bpd to 13m bpd by an unspecified timeline.

The company has trimmed its capital expenditure for 2020 in light of the slump in oil prices, which has lost about 60 per cent of its value since January and is below $30.

Aramco, which had earlier planned to spend $40 billion (Dh147bn) for 2020, cut spending to between $25bn and $30bn for this year. Capital expenditure for 2021 and beyond is “currently under review”, the company said during the disclosure of its full-year results last week.

Aramco’s net profit for 2019 dropped to $88.2bn from the previous year, while cash flow fell to $78.3bn from $85.8bn in 2018.

Lower crude prices, output volumes, decline in refining and chemical margins, as well as a $1.6bn impairment charge relating to the Sadara Chemical Company, affected earnings, the company said.

In a tweet on Sunday, Kuwait Oil Company said it took measures to ensure the continuity of operations and to preserve the country's commitment to local and international markets.

"KOC has put in place the necessary emergency plans to overcome this difficult stage and any circumstances that may arise from the exacerbation of the crisis," the company said.

Also in a tweet, the UAE’s energy ministry said it implemented a remote work system for all its services to contain the spread of the virus outbreak.