Posted on 05/01/2015 5:45:02 AM PDT by thackney
Saudi Arabia has been making some big moves lately, most notably in its leadership reshuffle, but the country also has raised the number of rigs it has actively drilling for oil and natural gas by 30% since March 2014.
James Williams, an energy economist at WTRG Economics, suggests that the Saudis are working toward increasing their oil-production CLM5, -0.65% LCOM5, -0.99% capacity to gain even more leverage over the oil market than they already have as the Organization of the Petroleum Exporting Countries’ so-called swing producer.
The concept isn’t totally new, as some media reports also mention Saudi efforts to boost production capacity, but the recent changes to the nation’s government could be seen as backing that all up.
King Salman bin Abdulaziz, who rose to the throne in January of this year, recently replaced his crown prince and foreign minister — appointing his nephew Deputy Crown Prince Mohammed bin Nayef as his new heir apparent.
Khalid al-Falih was also chosen to replace longtime oil minister Ali al-Naimi as the new chairman of state-owned oil company Saudi Aramco.
The King is populating his cabinet with younger people to prepare for a “generational shift,” said Williams, adding that the new crown prince and his deputy could easily rule the kingdom for four or five decades.
This comes at a time when the King is also “developing the capacity to diminish Iranian influence in the Arab countries,” Williams said.
And maybe Saudi Arabia is using its power in the oil market to do just that.
The most recent data from Baker Hughes BHI, -0.42% show that Saudi Arabia had 125 active oil and gas rigs in March of this year, up from 96 the same time a year earlier....
(Excerpt) Read more at marketwatch.com ...
It’s deja vu all over again.
With the assistance of the Saudis & the US government, the US oil industry is going in the crapper just like the 80s.
The longer I live, the more the cycle of stupidity in this country aggravates me.
http://uk.reuters.com/article/2015/05/01/saudi-oil-aramco-idUKL5N0XS0BI20150501
Saudi Arabia has approved a restructuring of Saudi Aramco that includes separating it from the oil ministry, a Saudi-owned TV station reported, in a decision analysts said aims to make the state oil giant more transparent and keep it away from political sway.
There were no indications that the restructuring, which Al Arabiya reported on Friday citing sources, will lead to fundamental changes in how the world’s top crude exporter decides its energy policy.
Aramco officials could not be immediately reached for comment but Arabiya’s reports closely reflect official thinking.
On Wednesday King Salman appointed Saudi Aramco’s chief executive Khalid al-Falih as chairman of the state firm. Falih also becomes health minister under a major reshuffle in the leading OPEC state.
Separating Aramco from the oil ministry is likely to be only the first step in a shake-up of the Saudi oil sector, analysts said.
“This decision will bring more flexibility to the company to take decisions on a commercial basis, and keep full financial control,” said Mohammad Al Sabban, a former senior adviser to Saudi Oil Minister Ali al-Naimi.
Others see the move as possibly paving the way for a member of the royal family to be appointed as the next oil minister to replace 79-year-old Naimi, while leaving Aramco to be run by technocrats.
I wasn’t implying any collusion between the US government and the Saudis. Just that the US government is still making it as difficult as possible for our energy industry while this is going on.
Let the Saudi’s pump as much as they want. I only wish I could see them when their reserves dry up. How fast do you think they would revert to total squalor and anarchy?
This is the reason they are doing what they are doing. They have made fundamental changes in their outlook on oil. They used to think that oil would be in demand for the forseeable future. But now they recognize things have changed. First the US oil boom, which is producing as much as they are, and second, we are starting to get viable alternatives to gasoline with electric vehicles. Oil producing nations can't price oil as much as they want any more, in fact they have to price it low enough that these alternatives are adopted more slowly.
The second change is that they know they need to get away from oil revenue, and 95% of their trade comes from it. They have begun a plan to increase non-oil inductry to get ready for the time they would be selling oil.
yeah ....well..... i heard they were pumpin SALT WATER OUT OF SOME OF THOSE “WELLS” and the eastern provinces are sinking and one day the HOUSE OF SAUD will relocate to switzerland or the Bush Ranch....
Saudi Arabia reveals design for £67BILLION megacity, built in the middle of the desert
They are going to need a bigger desalinization plant.
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