Home Forums Hunting & Shooting Hunter's Campfire For the Oil Haters - The Saudi Strategy

http://www.ogj.com/articles/2016/09...302016&eid=288699943&bid=1544481

WASHINGTON, DC, Sept. 30
09/30/2016
By Nick Snow
OGJ Washington Editor

Saudi Arabia’s national oil company appears more intent on continuing to secure refining and petrochemical assets worldwide for its crude oil than on cutting production to stabilize or increase oil prices, observed Jean-Francois Seznec, a Middle East studies adjunct professor at Johns Hopkins University’s School of Advanced International Studies (SAIS).

“There’s a strategy here to make sure it has a base of users for the crude it produces,” he said during a Sept. 28 discussion at SAIS after citing Saudi Aramco’s recent and pending downstream acquisitions and new projects in the US, Yemen, Japan, South Korea, and elsewhere. “It looks as if 60-70% of its production will go to itself so it can depend less on crude markets and [the Organization of Petroleum Exporting Countries].”

Seznec spoke soon after OPEC ministers at a special meeting in Algiers agreed to consider trimming member countries’ aggregate production by as much as 740,000 b/d in response to global crude prices falling by more than half in the last two years (OGJ Online, Sept. 29, 2016).

“As usual with OPEC production agreements, the devil will be in the details,” Seznec said. “It’s not clear if Russia—as the world’s largest producer at 11.4 million b/d—had a role.” Saudi Arabia has increased its production by 400,000 b/d since January to 10.6 million b/d, “which made a lot of people unhappy,” he said.

The kingdom’s new energy minister, Khalid Al-Falih, wields more influence than his predecessor because he also controls the electricity and other ministries, Seznec said. He noted that a Saudi prince now controls an oversight committee at Aramco, but added, “Not one Saudi Aramco board member or senior manager is a royal family member. The engineers who control the oil there also are starting to control the general economy.”

He said he expects Aramco to have only limited success in going public because the country’s reserves and inventories are so opaque. “In terms of day-to-day operations, it probably is more transparent than ExxonMobil. It’s less so when it comes to ownership and who has access to the money,” Seznec said. “Other state oil companies have to turn their revenue over to finance ministries and then ask for some of it back for their operations. Saudi Aramco keeps its money and has complete access.”

I dont like the sound of that.

Wonder if they can get it all done before they go broke?

Maybe they will have to go to war with Iran.

They're not gonna go broke. Right now they're just making a chit load of money instead of a really, really ridiculously obscene chit load of money.

They're just doing what wal-mart has done, undercut everybody to drive them out of business then buying up the remnants. They'll eventually start bringing the price of oil back up, but it won't get back to the point where the US gets back into an oil boom, they've learned their lesson from that. It's our own fault for dealing with those Godless heathens & electing a president that's in bed with them.

Oh, they are going broke pretty fast. They make a lot of money, but they have an insane level of domestic spending. Essentially, the whole friggen country is on the government teat. The income is good, but the outgo is stunning.

They fundamentally miscalculated this "maintain market share at all cost" strategy by underestimating the US producers ability to cut costs and maintain production.

Keep pumping boys! I like the cheap gas!

They could have maintained market share by keeping the US out of oil production in the first place with a stabe market price.

Another miscalculation, you say?

Dang it Ed don't bring facts to the table when your talking to the haters. It's just not fair!

Oh, they are going broke pretty fast. They make a lot of money, but they have an insane level of domestic spending. Essentially, the whole friggen country is on the government teat. The income is good, but the outgo is stunning.

They fundamentally miscalculated this "maintain market share at all cost" strategy by underestimating the US producers ability to cut costs and maintain production. [/quote]


That is in line with an article I read a while back.

The basic idea was to break our domestic oil before first.



I cant believe we have supported the Saudi's and their plans. Not only that but supported the massacre of Yemen.

Amazing that when we have so much North American oil we would support the evil bastids over yonder.

You suppose that when the Saudi's buy all the refining that they will want much Bakken or Tar Sands oil? Any domestic?

Good info EdM. Thanks, and very interesting.

Makes me wonder how the new 9/11 legislation might impact their acquisition plans and current holdings. It may make their assets here subject to attachment and liens if they have any adverse court rulings.