Saudi Arabia announces reduction in oil exports by 10% in January

Cornelia Mascio
Gennaio 12, 2019

Its energy minister Khalid al-Falih said on Wednesday that the oil producer would cut its output to 7.2 million barrels per day (bpd) in January, down from 8 million bpd in November.

Crude oil prices appeared headed lower Thursday after a US report showed a lower-than-expected inventory draw, and also as trade talks earlier this week between China and the United States did not show a clear direction.

The Kingdom previously announced that oil and gas reserves were 264 billion barrels of oil and 307.2 trillion standard cubic feet of gas respectively as of December 31, 2017.

"This reflects the continued direction and support provided to the Saudi petroleum industry by Custodian of the Two Holy Mosques King Salman and Crown Prince Muhammad Bin Salman, deputy premier and minister of defense", Al-Falih said.

The plans for the bond, first reported by Bloomberg past year, come as the Saudi government reactivates its plan to sell shares in the company. The external audit was started as part of preparations for the initial public offering of state oil company Saudi Aramco. The kingdom had initially targeted 2018.

It answers a key question for potential investors in the planned share sale of Saudi Aramco, the state-owned company that manages the Kingdom's vast oil wealth. "But the trade negotiations between the US and China still add some uncertainty to global financial and oil markets, possibly leading to corrections in prices in the shorter term". Anheuser-Busch InBev NV took out US$46 billion in 2016 to finance the takeover of SABMiller Plc. "We are concerned about volatility in the oil market".

"It's not going to be anywhere near the number that's been rumored", he said.

Aramco has lots of room to borrow money as it's virtually free of net debt, according to accounts obtained by Bloomberg for the first half of 2017.

Aramco has so far largely avoided bond markets, relying nearly exclusively on its own cash or bank loans. The prospectus for the 2017 offering didn't include any financial information, according to a copy of the document reviewed by Bloomberg.

"This certification underscores why every barrel we produce is the most profitable in the world and why we believe Saudi Aramco is the world's most valuable company", Falih said in the statement.

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