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Page added on February 15, 2019

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Saudi Aramco Is Coming Out to Play

Business

According to Khalid Al-Falih, Saudi Arabia’s energy and industry minister and chairman of Saudi Arabian Oil Co., “the world is going to be Saudi Aramco’s playground.” If it is, then that will be partly because some others have ceded ground.

In an interview with the Financial Times published this week, Al-Falih sketched out plans for Saudi Aramco to build an international exploration and production business for the first time. Traditionally, Aramco refrained from making direct investments in upstream projects elsewhere (as opposed to downstream projects such as refineries, where it remains quite active).

The timing is interesting, as Aramco plans to take flight just as many of the listed oil majors have had their wings clipped. Oil investors demand more in the way of payouts these days. That’s partly because returns on the mega-projects built during the oil boom have been poor. It also reflects creeping concern about whether large-scale projects now risk being stranded to some degree by political or economic effects related to climate change. Shorter-cycle assets, such as U.S. shale, are in vogue, and Exxon Mobil Corp.’s higher spending – predicated in part on developing a major new field offshore Guyana – now weighs on its valuation.

The drop in upstream spending by the majors has provoked warnings of a supply gap; although, with Saudi Arabia now entering year three of what was originally a six-month supply cut, this has yet to materialize. Still, if Aramco foresees that gap still emerging, then the oil world would effectively be on sale right now due to a lack of buyers.

Barring that, however, it is tough to see the upside from a strictly commercial perspective.

Any argument for the benefits of geographic diversification runs into the problem that Aramco sits on roughly 270 billion of what are regarded as among the lowest-cost barrels on the planet. Diversifying from that into higher-cost assets would (a) require an enormous outlay in order to be meaningful and (b) probably be dilutive.

As I wrote here, hopes for Aramco’s valuation –  assuming that is still a consideration – rest to a large degree on its prodigious free cash flow being priced with a relatively low risk premium. Big spending in foreign climes is likely to crimp the cash flow while doing nothing for that risk premium (Aramco will still be viewed as the Saudi Arabian national oil company, regardless).

Al-Falih says initial plans focus on building a global natural gas business. This has been a fairly mainstream strategy for the listed oil majors for years, but Saudi Arabia has lagged in this regard. Yet as the country seeks to build up its industrial base and stop burning valuable (and more polluting) oil for power generation, using more natural gas is a no-brainer.

Contracting for foreign natural-gas supply would seem a fairly straightforward (and less capital-intensive) way to address this. However, despite Riyadh’s reform plans, Aramco is, if anything, cementing its position still further at the heart of the economy. It is poised to absorb Saudi Basic Industries Corp., the country’s largest listed company. And despite Aramco’s relative lack of experience in foreign upstream ventures, Al-Falih says, “We can stand shoulder to shoulder with anyone and outdo them.” All in all, I’m guessing Aramco would prefer to produce and own natural gas rather than just buy it from someone else.

With the biggest nearby gas giants, Qatar and Iran, unlikely to partner with Aramco any time soon, Saudi Arabia has been considering involvement in projects in Russia and the U.S. – its chief OPEC+ partner and chief defense partner, respectively. Both have a vested interest in expanding their natural-gas export capabilities, and that may give Saudi Arabia a chance to deploy its checkbook in the national interest (funnily enough, you could say Qatar already did much the same thing).

Amid the long-running talk of that IPO, it is all too easy to forget that Aramco is far from being a strictly commercial venture.

bloomberg



44 Comments on "Saudi Aramco Is Coming Out to Play"

  1. Q on Fri, 15th Feb 2019 7:56 pm 

    “We must move as quickly as possible to a one-world government; a one-world religion; under a one world leader.”

    -Robert Mueller

  2. makati1 on Fri, 15th Feb 2019 8:15 pm 

    More American insanity, Q.

  3. makati1 on Fri, 15th Feb 2019 10:27 pm 

    “What has been ignored is the level of threat Saudi Arabia represents, a politically primitive nation with a massive defense budget and some very dark secrets, some of which will be revealed here….

    Saudi Arabia has a larger military budget than Russia, but Russia spends much of their budget on a huge standing army, a significant navy, dozens of nuclear submarines and a massive thermonuclear missile capability supported by an equally huge stockpile of nuclear weapons….

    Saudi Arabia bought its first nuclear weapon from China in the early 1980s….The next supplier was Israel. (Does the current chumminess between Israel and KSA make sense now?)…

    Saudi Arabia’s nuclear story, one only touched on here, is one story. There are many, Brazil, Japan, Canada, South Korea, Taiwan, so many more stories, so much fakery hidden behind the classified reports of agencies no one has heard of.

    Thus, when the princelings of the Saudi kingdom order killings, fund terrorism and threaten their neighbors, they do so with a nuclear capability, enabled by those who lie for them, those who armed them, those who keep their secrets.”

    https://journal-neo.org/2019/02/15/saudi-arabia-and-the-upcoming-secret-nuclear-war/

    Authored by: Gordon Duff is a Marine combat veteran of the Vietnam War that has worked on veterans and POW issues for decades and consulted with governments challenged by security issues. He’s a senior editor and chairman of the board of Veterans Today, especially for the online magazine “New Eastern Outlook.”

  4. I AM THE MOB on Sat, 16th Feb 2019 5:39 am 

    Sheriff warns ‘lock your doors, load your guns’ as he suspends services

    https://www.wsbtv.com/news/trending-now/sheriff-warns-lock-your-doors-load-your-guns-as-he-suspends-services/919684183?fbclid=IwAR1BjWOuYhlzy57jAzc8PcJ22g8CqUuU2pU4u-SE75DIXLIj-Hjy82EylMM

    Its Happening!

  5. Cloggie on Sat, 16th Feb 2019 6:07 am 

    “Its Happening!”

    You mean America going tribal? Lawlessness? CW2?

    Fortunately for European-America, their older brother from Europe is standing by to protect his cousins. Expect blankets, a snicker, warm words, a pat on the back and a 2nd hand pdf with Mein Jihad on it.

    That’s what brothers are for.

    But tell me, what happened to your narrative that “Europe is going to collapse first?”

  6. Cloggie on Sat, 16th Feb 2019 6:10 am 

    “their older brother from Europe is standing by to protect his cousins.”

    I may want to rephrase that line for increased consistency.

    Unfortunately this board has no post-post edit-functionality.

  7. Davy on Sat, 16th Feb 2019 6:14 am 

    “European Car Sales Fall For Fifth Month In A Row”
    https://tinyurl.com/y6emm9bd

    “In keeping with the global stagnation that has enveloped the auto industry, the latest EU/EFTA vehicle registration data paints an ominous picture to start 2019 in Europe, where passenger car registrations dropped 4.6% year over year and sales declined in all of largest markets in Germany, France, the U.K., Italy and Spain.”

    “Bloomberg Intelligence analyst Michael Dean put it clearly in a note: “The EU auto-demand cycle has peaked.” Spain saw the largest decline in registrations, down 8%. Italy followed, down 7.5%. Both Audi and Porsche saw double digit percentage declines, as VW Group sales were down 6.4%. Brexit continues to be a major point of volatility for many of these manufacturers. Renault and Ford have both warned that unless the U.K. leaves Europe with a deal, both companies could miss estimates and that the effects could be “catastrophic”. But the biggest risk for European car makers has yet to emerge: on Monday, the US Commerce Department is expected to issue a report outlining that car imports into the US pose a national security threat, and then suggest ways for US president Donald Trump to restrict these imports through high tariffs and quotas. From there, Trump has 90 days to make a decision. Trump has said in the past he would consider a 25% tariff on car imports. That’s the same figure levied on steel imports, which were also deemed a national security threat last year.”

    “Leading the global malaise in the auto market has been China, which is set to report January sales numbers this coming Monday. That report should give clarity as to whether or not China has turned the corner, or is continuing at the anemic pace with which it ended 2018. The automobile industry in China has been crippled, partly as a result of the trade war, partly due to the ongoing domestic economic slowdown in the mainland, and absent major subsidies – which don’t appear to be coming – the outlook for 2019 continues to not look promising.”

  8. Cloggie on Sat, 16th Feb 2019 6:37 am 

    “European Car Sales Fall For Fifth Month In A Row”

    We are all going to eat our children soon!

    Seriously. Much of the behavior can be explained by uncertainty in the car market and legislation. There is a war going on against the diesel car in Europe, so only a fool would buy a new diesel.

    But e-vehicles are not nature enough in the eyes of many, so the logical attitude is to postpone the purchase of a new car. You can postpone such a decision for years anyway.

  9. Davy on Sat, 16th Feb 2019 7:56 am 

    “Seriously. Much of the behavior can be explained by uncertainty in the car market and legislation.”

    Seriously? You need to learn about economics, finance, and business because you are very much lacking in those areas.

  10. I AM THE MOB on Sat, 16th Feb 2019 8:21 am 

    Clogg

    Your region will collapse when the oil shortage hits..Just like USSR did..And it will only take a couple of years..

    I hope you like eating out of a trash can..And I hope you aren’t on any government befits..

    LOL

  11. Cloggie on Sat, 16th Feb 2019 8:46 am 

    “Seriously? You need to learn about economics, finance, and business because you are very much lacking in those areas.”

    The usual chest stumping and then “forgetting” to shine with arguments. You ain’t got any.

    “Your region will collapse when the oil shortage hits.”

    That’s what juveniles like you and empire dave hope will happen. The signs are that the US is facing an enormous political crisis, rooted in shifting demographics. The darkies are lusting after a major transfer of wealth from white to dark, aided by the Dems gaining the electoral upper hand for ever.

    Predictable response: whitey will attempt to escape and will receive overwhelming Eurasian support for the endeavour, where the Eurasians, with a vile Natzi grin from ear to ear, realize they can get rid of the ZOG geopolitical competitor on the cheap, while letting American whitey do the fighting, just like in 1776. At best Eurasia troops will step in at the last moment, just like the French did, and provide a Cartaginian peace to the imperial city, where according to new Eurasian legislation no building higher than10 cm will be tolerated, forcing post-ZOG America to build a new capital.

  12. I AM THE MOB on Sat, 16th Feb 2019 9:32 am 

    Clogg

    There is no way to get around it..When oil shortage hits your economy is going to collapse..End of story..

    America has plenty of oil..And will will pick the scraps of Europe..Just like we did after WW2..

    lol

  13. Cloggie on Sat, 16th Feb 2019 9:47 am 

    America has plenty of oil..And will will pick the scraps of Europe..Just like we did after WW2..

    lol

    So much for “liberation”, right?

    Yeah, yeah, the world famous ugly american showing his true intentions. That’s the real motivation behind the US attempts to sabotage Nord-Stream. So far didn’t work. But we need to stay on guard. Europeans have only one true enemy and that is ZOG. Thank God Russia and China exist and they are getting stronger every day.lol:

    https://documents1940.wordpress.com/2019/02/09/germans-prefer-eurasia-over-america/

    https://documents1940.wordpress.com/2019/02/10/them-again-plotting-for-war-in-europe/

    The demise of white America offers our escape route.

    Next time, we’ll pick up the pieces.

  14. I AM THE MOB on Sat, 16th Feb 2019 9:51 am 

    CLogg

    Russia is outnumbered by 2-1 on their border..And they are peaking soon..And china has got their ass kicked by tiny japan twice..And they are going to collapse when the shortage hits as well..And they have the worlds largest debt bubble..

    If you were smart you would get the hell out of your country..But you can’t handle the truth..So you will go down with the ship..

    The EU looks like the Soviet Union in 1991 – on the verge of collapse -Soros
    https://www.theguardian.com/commentisfree/2019/feb/12/eu-soviet-union-european-elections-george-soros

  15. Cloggie on Sat, 16th Feb 2019 9:56 am 

    Oops, Europe hitting back at that ugly freak Pence:

    https://www.rt.com/news/451627-mike-pence-munich-speech/

    “Munich brawl: Pence clashes with Merkel and Mogherini over Iran deal, Russian pipeline”

    (Russians and Chinese love it)

    Germany, France and even Britain are sabotaging insane US attempt to declare the Obama Iran deal null and void.

    Hit em hard, Europe! Time for revenge is now. Death to the West!

    https://www.zerohedge.com/news/2019-02-13/germany-pulls-rank-macron-shrugs-american-energy-blackmail

    https://www.zerohedge.com/news/2019-02-08/france-vote-against-nord-stream-2-pipeline-possibly-killing-project

  16. I AM THE MOB on Sat, 16th Feb 2019 10:01 am 

    Keep em coming Soros..I am a sucker for facts..

    LOL

  17. Cloggie on Sat, 16th Feb 2019 10:03 am 

    “Russia is outnumbered by 2-1 on their border.”

    You seriously think you can sick us Europeans against Russia?

    “And china has got their ass kicked by tiny japan twice.”

    There is zero chance for a confrontation China-Japan. The US btw got its ass kicked against North-Vietnam, Iraq, Afghanistan and Syria individually. Everybody took notice:

    https://www.dailymail.co.uk/news/article-6545475/Admiral-warns-U-S-Chinas-navy-sink-two-aircraft-carriers-kill-10-000-sailors.html

    Now the majority of your GIs are negroes and other coloreds, not directly known for great competence in anything, apart from raping. Good luck with that!

    https://documents1940.wordpress.com/2018/05/21/european-america-is-over/

  18. I AM THE MOB on Sat, 16th Feb 2019 10:03 am 

    Clogg

    I see sanctions coming your way soon..

    Don’t make us George Bush this button, over nothing..

    LOL

  19. I AM THE MOB on Sat, 16th Feb 2019 10:07 am 

    Clogg

    we don’t have to fight you..Peak oil is going to destroy you and Asia..All we have to do is sit back and eat popcorn.

    lol

  20. I AM THE MOB on Sat, 16th Feb 2019 10:09 am 

    The fact that you censor any comments on your blog..Proves that it doesn’t stand up to scrutiny..

  21. Cloggie on Sat, 16th Feb 2019 10:23 am 

    You don’t even have a blog, you low iq idiot, because no brains and hence no ideas. Raping and killing white people is all you care about.

    The fact that you censor any comments on your blog..Proves that it doesn’t stand up to scrutiny..

    You can discuss me here as much as you want. It is just that I’m not going to clean up the vomit of a stray dog like you from my blog carpet.

  22. Cloggie on Sat, 16th Feb 2019 10:24 am 

    we don’t have to fight you..Peak oil is going to destroy you and Asia..All we have to do is sit back and eat popcorn.

    You do that, just work on further increasing your world famous BMI-index.

    By the time peak oil supply kicks in, we have out renewable energy base.

  23. I AM THE MOB on Sat, 16th Feb 2019 10:27 am 

    Angela Merkel warns of global political disintegration at Munich Security Conference

    https://www.dw.com/en/angela-merkel-warns-of-global-political-disintegration-at-munich-security-conference/a-47546255

    German woman are so ugly..They look like bull dykes!

    LOL

  24. I AM THE MOB on Sat, 16th Feb 2019 10:30 am 

    Clogg

    Your right I don’t have a blog where I censor it..Because my arguments and evidence speak for themselves..And I don’t make up lies like you.

    And renewable’s can replace oil they are used for different things..This is like the one millionth time I have had to correct you about this..

  25. I AM THE MOB on Sat, 16th Feb 2019 10:41 am 

    Clogg

    I see another “Dutch hunger winter” in your future..This time it will be self imposed..

    LOL

  26. Cloggie on Sat, 16th Feb 2019 10:51 am 

    “I see another “Dutch hunger winter” in your future..This time it will be self imposed..”

    Wishful thinking, we are the 2nd largest agricultural exporter in the world. And we control all the food coming into Europe via Rotterdam. We will be the last to starve.

    You should worry about the item you brought up yourself this afternoon, namely sheriffs closing shop because of lack of funds. Exit law and order.

  27. Cloggie on Sat, 16th Feb 2019 10:59 am 

    French white insurrection, act 14:

    https://www.youtube.com/watch?v=vLdi5A2JqeU

    #YellowVests

  28. Robert Inget on Sat, 16th Feb 2019 11:44 am 

    Do Mexico, Venezuela need refinancing?

    All the Saudis need to survive is access to Venezuela’s heavy oil. If only Trump’s military
    could arrange a friendly ‘intervention’.

  29. I AM THE MOB on Sat, 16th Feb 2019 11:58 am 

    Clogg

    Your country is running out of gas soon..And they wont’ have enough oil..You need oil for everything in agriculture…

    I see another Dutch hunger event coming soon..

    Its a certainty

  30. I AM THE MOB on Sat, 16th Feb 2019 12:09 pm 

    China’s economic downturn leads to increased worker protests and strikes across the country
    https://www.abc.net.au/news/2019-02-16/workers-protests-on-the-rise-as-chinas-economy-slows/10793204

    Rise up my brothers! Only thing you have to lose are your chains!

  31. Cloggie on Sat, 16th Feb 2019 1:40 pm 

    “Your country is running out of gas soon..And they wont’ have enough oil.”

    https://deepresource.wordpress.com/2018/12/27/1484-mw-borssele-to-become-the-largest-windfarm-in-the-world/

  32. I AM THE MOB on Sat, 16th Feb 2019 2:54 pm 

    The right has been providing great material recently

    https://i.redd.it/ymcuuef53yg21.jpg

  33. I AM THE MOB on Sat, 16th Feb 2019 8:02 pm 

    One blue wave was not enough: Democrats need another in 2020

    https://www.salon.com/2019/02/16/one-blue-wave-was-not-enough-democrats-need-another-in-2020/

  34. I AM THE MOB on Sat, 16th Feb 2019 8:45 pm 

    CNN, MSNBC To Air New Version Of Anti-Nazi Ad Fox News Rejected

    https://www.huffingtonpost.com/entry/fox-news-nazi-documentary-ad_us_5c682bdfe4b05c889d1fc15d

  35. I AM THE MOB on Sat, 16th Feb 2019 9:03 pm 

    Democrats are going after the wealthy and ‘I am fearful,’ says former Rep. Hensarling

    https://www.cnbc.com/2019/01/29/ex-rep-jeb-hensarling-says-i-am-fearful-about-democrat-wealth-taxes.html?__source=facebook%7Cmain&fbclid=IwAR1l7AyK7auNr2YtY8a_h13PfQMwoKbX2eQjTOdrcgGml5vPn9Kt8BuJAZU

  36. makati1 on Sat, 16th Feb 2019 9:51 pm 

    Go Dems! No one should be worth a billion dollars. No one. It was all scammed from the people who work for a living. The sooner ‘for profit” capitalism dies the better. Bring out the pitchforks and the guillotines! (Or reelect the “Bull-in-the-China Shop” Trump.) LOL

  37. Cloggie on Sun, 17th Feb 2019 4:25 am 

    “CNN, MSNBC To Air New Version Of Anti-Nazi Ad Fox News Rejected”

    Yep, Fox is now post-NWO and pro-white.

    “Democrats are going after the wealthy and ‘I am fearful,’ says former Rep. Hensarling”

    You should be, as soon as Trump will have left the WH, one way or the other, the Dems will tear down that wall and bring in sufficient non-whites to ram American whitey into minority status once and for all. And then payday for whitey will have arrived. Still love America whitey? Still “proud to be an American”, you white fool?

    This video is now blocked in the Netherlands, perhaps not in the US:

    https://www.youtube.com/watch?v=LBOTk00eMT4

    Meet the real deplorables, the losers of the US multicult system. Interesting is the monologue between [3:47] and [12:39]… “I want to see this country split up in hundreds of pieces”. From a European perspective that would be a little too much to handle, but yes it is true, we love America so much that we want to see at least three of them.

  38. I AM THE MOB on Sun, 17th Feb 2019 5:14 am 

    Clogg

    Illegal border crossing’s peaked back in 2000..And have declined 80 percent since..And the last two years were at 50 year lows..The great recession ended the border crisis..

    But I would hate for facts to interfere with your paranoia and mental illness..

    There is no border crisis..Its all fake meant to scare low IQ conservatives..Jesus freaks are easily scared for no reason..

  39. Free Speech Message Board on Sun, 17th Feb 2019 11:20 am 

    Maybe the debt will be paid off by illegal immigrants, technology, a zero percent tax rate, or magic fairy dust, but the reality is that the US debt is increasing constantly, no one cares, and spending more money to reduce the debt will only lead to disaster.

    Debt didn’t work out too well for Rome, Germany, Japan, Greece, or Zimbabwe.

    Those who fail to learn from history are doomed to repeat it.

  40. I AM THE MOB on Sun, 17th Feb 2019 1:50 pm 

    Behold the great white race!

    https://imgur.com/EpW8NTD

    But peckerwoods are the superior race with the high IQ’s rite?

    LOL

  41. I AM THE MOB on Sun, 17th Feb 2019 6:18 pm 

    Trump-era US Europe rift wide open at Munich security talks

    https://www.france24.com/en/20190216-trump-era-us-europe-rift-wide-open-munich-security-talks

    The Donald is turning his back on Europe because he knows they will soon collapse..And we will pick up the scraps..

    LOL

  42. Cloggie on Sun, 17th Feb 2019 6:46 pm 

    “The Donald is turning his back on Europe because he knows they will soon collapse..And we will pick up the scraps..”

    Trump is withdrawing from empire, he recognizes a trainwreck when he sees one. He insists that Europe increases defence spending… so Europe has the means to intervene in North-America when all hell will break loose there.

    https://mobile.twitter.com/realDonaldTrump/status/1084650944846012417

    Border is eventually going to be militarized and defended or the United States, as we have known it, is going to cease to exist…And Americans will not go gentle into that good night.

    Trump knows what is coming.

  43. I AM THE MOB on Sun, 17th Feb 2019 7:29 pm 

    Clogg

    Pure BS..And your argument is pure wishful thinking..And NO FACTS..

    The border is just a scare mongering racket to scare low IQ conservatives..They are easily scared of everything..You know how pussy church people are..

    Enjoy the collapse..Soon you will look back at the days you spent squealing about migrants as the glory years..

    LOL

  44. I AM THE MOB on Sun, 17th Feb 2019 8:32 pm 

    the REAL reason why there is no life on Mars

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