Riyad January 30 2024: Saudi Arabian Oil Company (Saudi Aramco) announces that it has received a directive from the Ministry of Energy to maintain its maximum sustainable capacity (MSC) at 12 million barrels per day, and not to continue increasing its MSC to 13 million barrels per day, according to notification issued at Tadawul.
“It is to be noted that MSC is determined by the State pursuant to the Hydrocarbons Law, enacted by Royal Decree M/37, dated 12/20/2017” states the notification.
“This implies that they won’t increase the production volume but will maintain the current capacity of 12mmbbl/d and continue with their expansion in the natural gas extraction segment. Moreover, we believe this is independent of the OPEC agreement of production cut wherein the Kingdom produce 9mmbpd” says Al-Sudairi, CFA Head of Sell Side Research at Al-Rajhi Captial Mazen.
“However, this move might potentially reduce the capex for Saudi Aramco, the effect of which cannot be quantified until the company sheds more light on the capital expenditure outlay” he added.
The Company will update its capital spending guidance when its full-year 2023 results are announced in March.
