Saudi Arabia announces rise in oil, gas reserves

Oil Surges Above $52 on Saudi Assurances China Trade OptimismMore

Oil Surges Above $52 on Saudi Assurances China Trade OptimismMore

Saudi Arabia is expected to announce a slight rise in its crude oil and gas reserves on Wednesday after being independently audited, according to a source familiar with the matter.

Khalid al-Falih said the kingdom, the world's top crude supplier, would cut its output to 7.2 million barrels per day in January, from 8.0 million bpd in November, with a further 100,000 bpd cut in February.

Opec and its allies decided last month to cut their overall output by 1.2 million bpd starting in January, to boost prices hit by a supply glut and fears demand could plummet.

The kingdom's total oil reserves, including those in a zone shared with Kuwait, are up 0.8 per cent to 268.5 billion barrels for the figures recorded at the end of December 2017, Saudi Aramco said in a statement on Wednesday.

The uptick in Saudi Aramco's reserves bodes well for plans to sell a 5 per cent stake in the world's biggest oil producing company, which was delayed this year to allow the firm to grow its petrochemicals portfolio and get ready for a public flotation.

The country said oil reserves witnessed an increase from 2.2 billion barrels to 263.2 billion barrels while gas reserves increased from 17 trillion cubic feet to 319.5 trillion cubic feet.

Falih said Saudi production had fallen to 10.2 million bpd, down from the roughly 11 million bpd it was pumping when oil producers chose to end a production cut deal in May.

That the carbon intensity of Saudi Arabia's oil and corresponding gas flaring are among the very lowest in the world, and he called on the industry to use this metric alongside profitability.

The Kingdom's share of the Partitioned Zone oil reserves (onshore and offshore combined) is 2.9 billion barrels and the corresponding gas reserves is 4.9 Tcf (Trillion cubic feet).

That figure is "more than sufficient to bring balance to the market", said Falih, adding that the production cut would trim excess supply.

The operation was not fully concluded, so the interest rates have not yet been calculated.

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