RIYADH (Reuters) - Saudi Aramco expects oil prices to rebound in the first half of 2017 and for demand to remain healthy following two years of painfully low prices, the state-owned producer’s Chief Executive Officer Amin Nasser said on Tuesday.
“The gap between supply and demand is closing ... Our anticipation now is that it will be balanced by the first half of 2017,” Nasser told a conference. “That will see an adjustment upwards in terms of prices.”
Nasser also said that preparations for an initial public offering (IPO) of a stake in the company were “going very well”.
“We are in the process of preparing all segments of the company in terms of issuing our quarterly results starting hopefully next year in 2017,” Nasser added.
He reiterated the listing will happen sometime in 2018 in Tadawul, the Saudi stock exchange as well as other markets, which Saudi Aramco is still evaluating.
Nasser said climate change is driving the transformation of the global energy system, which is commendable, he said.
“But a successful transformation requires alternatives that are ready to reliably and economically shoulder the burden of growing world demand.”
“Pragmatism demands that sufficient investments must continue to be made in oil and gas during the long transition,” he said.
Doubling gas production to 23 billion standard cubic feet per day (scfd) will help Aramco increase the share of clean gas in power generation to 70 percent.
Nasser has said Aramco will play a major role in achieving the kingdom’s target of generating 9.5 gigawatts of power from renewable energy by 2030.
To turn carbon dioxide into chemicals, Aramco has acquired Novomer, a U.S. company, Nasser told the conference.
On the sidelines of the conference, asked by reporters to give details on the size of the investment, Nasser said an announcement will be made soon.
“It is a company that will convert Co2 to valuable chemical products. It is very important, especially when we talk these days about climate change. This investment is spot on.”
Besides climate change, the company is maintaining its investments not only in oil but also in gas “even under current market conditions”.
Nasser said he expects a gradual increase in unconventional gas as a share of Aramco’s total gas production starting with the end of 2017.
Aramco is also looking at other investments in downstream, in Indonesia, China, Malaysia and other markets and is looking to similar offshore drilling rig investments such as a joint venture it set up with Nabors Industries of the United States.
“We are talking to companies for the offshore (rigs),” he told reporters.
Reporting by Reem Shamseddine Writing by Noah Browning; Editing by Gareth Jones and James Dalgleish