Aramco charges Nigeria, other OPEC members to turn on the taps

Saudi Aramco has charged other oil producers to ramp up production to offset $1 trillion investment loss since the market downturn began address declining production in matured fields.

In the organisation’s latest report, Saudi Aramco Annual Review, Khalid Al-Falih, chairman of Aramco’s board said mature oil fields are seeing an increase in declining production rates, and this must be offset by continued investments in the industry if the world is to meet what is thought to be an 1-1.5 million barrel per day annual demand growth rate in coming years.

“To respond to this situation, significant new investments are required in additional capacity and expanded and upgraded infrastructure, as well as the development of pioneering technology to make petroleum energy more sustainable and accessible,” Al-Falih said in his opening message to the 42-page report published on Friday.

Aramco’s annual report cites the International Energy Agency’s World Energy Outlook 2017 New Policies Scenario estimates that call for a 30 percent increase in global energy needs between now and 2040.

Saudi Aramco, for now the world’s top oil producer, is doing its part to meet this future demand, according to the report.

“Saudi Aramco is committed to playing its unique part in meeting the world’s energy needs today and tomorrow by continuing to invest wisely throughout the cycle and across the value chain, reinforcing our preeminent leadership position in the industry,” Al-Falih added.

Aramco referenced its new discoveries in the Sakab and Zumul oil fields, as well as its gas reservoir find in Sahba field. Other projects in 2017 that Aramco has invested include Khurais field (300,000 bpd by 2018), Fazran field (75,000 bpd by 2020), Dammam field (25,000 bpd by 2021; 75,000 by 2026). Fadhili Gas Plant (start up 2019, 2.5 billion scfd), Hawiyah Gas Plant (1.1 billion scfd).

However for OPEC producers in Africa especially Nigeria and Libya, this will be a tough call considering the internal crises in these countries. Libya has to check activities of different groups fighting for political and economic power.

The challenge for Nigeria is to raise production by attracting new investments. But in order to do this, it must embark on deep reforms in a sector that is beset by challenges.

Isaac Anyaogu