Saudi Aramco halts plan to raise production capacity: Statement

Saudi Arabia has ordered energy giant Aramco to maintain its oil production capacity at 12 million barrels per day, abandoning a planned increase, the firm said on Tuesday.

“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” instead of ramping it up to 13 million bpd, the firm said in a statement.

“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 jewel of the Gulf kingdom’s economy.

Aramco’s profits are expected to finance Crown Prince Mohammed bin Salman’s sweeping economic and social reform program known as Vision 2030, which aims to lay the groundwork for an eventual post-oil future.

Riyadh announced the planned production capacity increase in October 2021, the same month it pledged to achieve net zero carbon emissions by 2060 – drawing intense skepticism from environmental activists.

Aramco has pledged to achieve “operational net-zero” carbon emissions by 2050.

That applies to emissions that are produced directly by Aramco’s industrial sites, but not the CO2 produced when clients burn Saudi oil in their cars, power plants and furnaces.

In the lead-up to the COP28 climate change talks in Dubai last year, Saudi Arabia was among the loudest voices calling for more investment in fossil fuel production, saying it was necessary to fight energy poverty in regions such as Africa.

Tuesday’s announcement was not expected to have an immediate effect on production or exports.

After a series of oil supply cuts dating back to October 2022, Saudi Arabia’s daily output stands at approximately nine million bpd, far below its capacity of 12 million bpd.