Prince Abdulaziz bin Salman bin Abdulaziz, the Minister of Energy, conveyed the Saudi leadership's announcement to the citizens and people who love this country about the return of oil supplies to what they were before 3:43 am on Saturday as a result the blatant sabotage act against the two oil facilities in Abqaiq and Khurais of Saudi Aramco.
During a press conference held yesterday in Jeddah, he explained the efforts exerted to enable the Saudi oil industry to overcome the impact of this sabotage. He said: "In continuation of the Kingdom's announcement, this aggression resulted in the interruption of about 5.7 million barrels per day of crude oil production. Of these, 4.5 million barrels per day are from Abqaiq plants, where production is processed from several fields. The interruption of production also included about 2 billion cubic feet of associated gas, 1.3 billion cubic feet of dry gas, 500 million cubic feet of ethane and about half a million barrels of gas liquids.
He added that this interruption represents about half of the Kingdom's production of crude oil, equivalent to about 6% of global production. He stated that in the past two days, the damage has been contained and more than half of the production which disrupted as a result of this blatant sabotage has been recovered. So Saudi Aramco will meet its full obligations to its customers this month, by withdrawing from its crude oil stocks and adjusting the mix of some oils. The Kingdom's production capacity will return to 11 million barrels per day by the end of September, and to 12 million barrels per day by the end of November. Production of dry gas, ethane and gas liquids will gradually return to pre-aggression levels by the end of this month.
Locally, he said that the utilities sector of electricity and water desalination was not affected at all by the interruption of gas supplies, as it was compensated by withdrawing from reserve stocks and shifting to other fuels, and the local market supplies of petroleum products from gasoline and diesel were not affected. The petrochemical industry's supply of ethane has begun to recover gradually, with the understanding and cooperation of industry representatives, and sincere thanks for their cooperation.
The Minister of Energy said that due to the rapid response of the company, the activation of the emergency system and the efficiency and dedication of its employees, citizens and expatriates, had a great role in overcoming the crisis and confirming the company's reliability and strength and preparing for the initial launch of its shares in the market, regardless of the effects of blatant aggression. He stated that the aggression that targeted the Kingdom and its oil sector is not only targeting the Kingdom, but will have a negative impact on the global economy and the security of energy supplies, and we have seen its impact on the financial markets and commodity markets in the aftermath of this attack and the increased pessimistic outlook on the growth prospects of the global economy.
Prince Abdulaziz bin Salman bin Abdulaziz said that the repeated attacks on oil installations or international shipping lines represent at the same time an attack on all countries, whether developing or developed, and therefore the international community is required to protect its interests and economies, by taking a more resolute and firm stance to deter and punish the countries that stand or fund these blatant acts of sabotage and prevent their repetition, especially as the Kingdom seeks to continue its role as a safe and reliable source of supplies and continue its known role to work to stabilize the market and supply security.
In response to a question, Prince Abdulaziz bin Salman bin Abdulaziz said, "We dealt with the blatant sabotage that took place in Abqaiq and Khurais plants and the fires that resulted from this work in the two factories in about 7 hours in an ideal way, and intensified efforts to restore production after extinguishing fires, and these efforts resulted in the recovery of 2 million barrels in the facility of Abqaiq, adding that the restoration of production as it was before the sabotage will be by the end of this month.
He praised the efforts of the employees of Saudi Aramco and their perseverance and completion of the effects in a period of 24 hours, which is not surprising for workers in this company, which is one of the largest known companies in the world in the oil sector. This is a commitment from Saudi Arabia to continue the production process, and no company in the world is doing what Aramco has done in this circumstance at this record time.
He pointed out that the Kingdom has for many years established the so-called strategic storage, and this element was active in this period and the situation, and this proves the importance of strategic storage, which serves at critical periods, and the time came to need it, pointing out that Aramco has a large storage capacity as part of safety systems and is keen to provide additional quantities in stock, both at home and abroad, and part of it to cover aspects of operations, and part of them sometimes is asking from Aramco to increase the stock in the Kingdom to deal with some precautionary measures, and this policy proved that it is compatible with what we see of accelerated events.
The Minister of Energy continued that the acts of sabotage suffered by the Kingdom and Aramco are sabotage of all the economies of the world and so every country, whether developing or developed, should feel that it has the responsibility to maintain its economic security, not the economic security of the Kingdom only and whatever the source of sabotage, all of which leads to corruption, and all leads to damage, and aims at weakening this country.
He pointed out that the source of these acts of sabotage, whoever, does not have any ethics, and has desire to make much impact in this sector. He added that the Kingdom in this regard has invited international experts and the United Nations to find out the facts and participate in investigations, and there will be investigations in this act of sabotage, international cooperation to ensure that such acts do not recur, protection of oil installations and holding those responsible to account.
He pointed out that there is work with the industry and petrochemicals, to arrange gradual return, and the most important criterion is to take into account the start with the most affected companies and give priority to them so as not to suffer more from this sabotage act.
He said, "We are delayed in the start of the press conference, about 24 hours for one reason, which is that we want the information, to be received from the Ministry of Energy, and from Aramco, and the Board of Directors of the company, so that the reliability is high, so the delay occurred, and the trade-off was to announce these things today after verification, and we wanted to be the source of information and not speculation.
Prince Abdul Aziz bin Salman bin Abdul Aziz, the Minister of Energy, said, "The assessment of the losses will be carried out by Aramco, and will be reviewed by the Board of Directors of the company, and will be considered by the government ..." He stressed that updating prices for local products has a system and method of calculating them retroactively and not with a future effect. The change in these two days will have no effect, he said.
He said that there will be no decline in September for the Kingdom's exports, which means that income will not be affected, income as it is this month, and the next month, and next, as for stocks, we will have during this period until the end of September, in fact before the end of September, we will have untapped production capacity, which we take into account that it will restore the stock status to what it was before.
Prince Abdul Aziz bin Salman explained that the reason why Aramco is doing its duty in this way is a system followed by the late King Abdulaziz and all kings of the Kingdom to enable the company to operate in a commercial manner and the state to be a regulator. This rule has been respected by the kings of the Kingdom including Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud and HRH the Crown Prince.
For his part, Chairman of the Board of Directors of Saudi Aramco, Yasser bin Othman Al-Rumayyan, in his statement during the press conference that the attacks on the Aramco plants in Abqaiq and Khurais "will not delay the initial public offering (IPO) of Aramco and will not delay its preparations."
The planned IPO of the national oil giant will be ready in the next 12 months and the kingdom is committed to the listing, he added.
Meanwhile, Saudi Aramco President and Chief Executive Officer Eng. Amin Al-Nasser talked about the restoration of Saudi Aramco full production capacity.
He said that many of the company's retired employees, Saudis and non-Saudis, in an exceptional loyalty, communicated with the company and expressed their desire to join the support teams on a voluntary basis to express their continued love and belonging to the company.
Last Modified Date: 18/09/2019 - 7:18 AM Saudi Arabia Time