Aramco sustains 12 million bpd of oil production following a ministry directive
On Tuesday, Saudi Aramco, the largest oil-producing company globally, announced that it has received directives from the Ministry of Energy to maintain its maximum sustainable capacity (MSC) at 12 million barrels per day (MMBD).
This directive marks a departure from previous plans to increase production to 13 MMBD.
According to the press release, the determination of MSC is a responsibility of the state under the Hydrocarbons Law, enacted by Royal Decree M/37 on December 20, 2017. This law serves as the framework for Saudi Arabia's oil production strategies and capacity decisions.
The decision to keep the MSC at 12 MMBD reflects the Saudi government's approach to oil production, considering various factors such as global market dynamics, geopolitical considerations, and the ongoing transition towards renewable energy sources. By adhering to the MSC, Saudi Arabia aims to strike a balance between meeting its economic interests as a major oil-producing nation and contributing to global efforts to address climate change.
In addition to maintaining the MSC, Saudi Aramco stated that it would provide an update on its capital spending guidance when revealing its full-year 2023 results in March. This update is eagerly awaited by investors and market analysts, as it will offer insights into the company's strategic planning and investment priorities. It will also shed light on how Saudi Aramco is adapting to the evolving market conditions, marked by fluctuations in oil prices, geopolitical developments, and the ongoing energy transition.
The decision to maintain the current capacity aligns with the broader global energy landscape, where many nations and corporations are reevaluating their energy strategies to incorporate cleaner and more sustainable alternatives. Saudi Arabia, being a key player in the oil industry, is likely navigating a path that considers both its significant role in the oil market and the increasing emphasis on reducing carbon emissions globally.
