Al Falih ... no output cut
Saudi Aramco chairman Falih says no plans to cut oil production
LONDON, November 9, 2015
State-owned oil company Saudi Aramco's chairman Khalid Al Falih said that the company has no plans to cut oil production and he foresees the oil market rebalancing in 2016, the Financial Times reported.
"The only thing to do now is to let the market do its job. There have been no conversations here that say we should cut production now that we've seen the pain," Falih said in an interview to the Financial Times.
Last month, Saudi Arabia's oil minister Ali Al Naimi echoed similar sentiments when he said he saw signs of global oil demand improving despite the economic slowdown in China and that the market's supply/demand balance would shortly move more into line.
Saudi Aramco's chairman called oil at $100 a free of charge insurance policy provided by Saudi Arabia that allowed shale and deep-sea oil producers to flourish, as "$100 oil was perceived as a guarantee of no risk for investment," he told the FT.
However, the free of charge insurance policy "does not exist any more," Falih said to the paper.
Referring to the slump in oil prices, Falih said officials in Riyadh knew it would be painful, but the extent of the pain went beyond their expectations.
"The market has overreacted as it typically does in such down-cycles. Now everyone is running to the exit and projects are being canceled. That's necessary, but what will happen five to 10 years from now? Investment is needed. Hopefully, however, there will be enough investment to meet the needs beyond 2017," Falih said to the paper. -- Reuters
