Saudi Arabia is focusing on developing its conventional gas reserves and expanding its downstream refining and chemicals industries rather than investing in expanding oil production beyond the country's needs, Khalid Al-Falih, Saudi Aramco President and CEO, said here Monday. “Given the increased availability and distribution of oil reserves, I think there was pressure on the Kingdom to raise production beyond the country's needs. That pressure is now substantially reduced,” Falih said in a question and answer session at an energy event in Riyadh. “Our focus is to invest heavily in gas, in downstream, in refining and, something that is new to Aramco, in chemicals,” Falih said, adding that this would provide the state-owned company a global footprint. The scale of projects that Saudi Aramco is undertaking in China and South Korea as well as mega projects in the downstream at home “are equal to and sometimes eclipse what we are doing in the upstream,” he added. Saudi Arabia has total crude oil production capacity of 12.5 million b/d and has no further investments planned to expand that further although Oil Minister Ali Naimi has said previously that the Kingdom could raise capacity to 15 million b/d if dictated by future demand. However, Falih's remarks suggested that Saudi Aramco is not considering any immediate expansion in oil output capacity. Saudi Aramco is also planning to develop its shale gas resources in the future and plans to drill a number of wells this year to test the geology of the wells and conduct preliminary economic models, he said. “We will continue that in 2012 and we have pilots in various areas where economics are favorable and directed toward regional power generation and industry,” he added. Nuclear energy was also being considered by the Kingdom but that would take time to develop and will require the government's endorsement.
