Energy giant Aramco has received the order by Saudi Arabia to halt plans to increase production capacity. Aramco is asked to maintain its oil production capacity at 12 million barrels per day, the firm stated on Tuesday.
The statement reads, “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”.
“The company will update its capital spending guidance when its full-year 2023 results are announced in March.”
Saudi Arabia is the world’s largest crude exporter and Aramco is the oil giant of its economy, as its profits is expected finance Crown Prince Mohammed bin Salman’s sweeping economic and social reform programme known as Vision 2030, which aims to lay the groundwork for an eventual post-oil future.
The announcement is expected not to have an immediate effect on production or exports. Following several production cuts since 2022, the country’s daily production stands at approximately nine million bpd, far below its capacity of 12 million bpd.
Aramco, which plans to achieve production capacity of 13 million bpd by 2027, has pledged to achieve “operational net-zero” carbon emissions by 2050.
The oil giant, reported record profits in 2022 after Russia’s invasion of Ukraine sent oil prices soaring, allowing Saudi Arabia to record its first budget surplus in nearly a decade.
Subsequently, lower prices resulted in year-on-year profit drops of 23 percent in the third quarter, 38 percent in the second quarter and 19.25 percent in the first quarter of last year, with fourth quarter earnings yet to be announced.
