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Aramco’s Oil Production Costs Least in the World at $2.8 Per Barrel

AAWSAT AR
AAWSAT AR
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Aramco’s Oil Production Costs Least in the World at $2.8 Per Barrel

AAWSAT AR
AAWSAT AR

Saudi Aramco has revealed that it offers the world’s lowest average cost of crude oil production.

It said the average cost of crude oil production in the company amounted to SAR10.6 ($2.8) per barrel of oil equivalent in 2018.

The average capital expenditure incurred by the company in the exploration and production sector for 2018 is SAR17.1 riyals ($ 4.7) per barrel of oil produced according to the methodology of the market adviser, Aramco said in a statement.

It also explained that it occupies a unique position as the world’s lowest-cost producer, according to a comparison of production cost data in the five major international oil companies: “Exxon Mobil,” “Shell,” “Chevron,” “Total,” “BP” and other oil and gas companies.

The company said its reserves consist of 201.4 billion barrels of crude oil and condensate, 25.4 billion barrels of natural gas liquids and 185.7 trillion standard cubic feet of natural gas.

It pointed out that its oil equivalent reserves are sufficient to cover the 52-year-old proven reserves life span, which is longer than that of any of the five major international oil companies, which ranges from nine to 17 years, based on publicly available information.

According to the news circulated, Saudi Arabia has informed the Organization of the Petroleum Exporting Countries (OPEC) that it raised its crude production in October to 10.3 million barrels per day (BPD), a 1.1 million BPD surge compared to September.

Meanwhile, the Kingdom affirmed on Thursday that the initial public offering (IPO) and listing of the company's shares will have no impact on compliance with the agreement to reduce production.

OPEC’s Secretary-General Mohammed Barkindo said that Saudi Arabia, OPEC’s top producer, and de facto leader, has reassured the exporting group that a stock market listing of oil giant Aramco would not affect the Kingdom’s role in the group or commitment to output deals.

He said he was confident that the OPEC and its allies (OPEC+) would continue with a supply curb agreement in 2020 and that the fundamentals of the global economy remained strong.

Barkindo noted that there would likely be downward revisions of supply going into 2020 especially from United States shale, adding that some US shale oil firms see output growing by only around 300,000-400,000 BPD.

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US Treasury Targets Russia's Gazprombank with New Sanctions

FILE PHOTO: A bronze seal for the Department of the Treasury is shown at the US Treasury building in Washington, US, January 20, 2023. REUTERS/Kevin Lamarque/File Photo
FILE PHOTO: A bronze seal for the Department of the Treasury is shown at the US Treasury building in Washington, US, January 20, 2023. REUTERS/Kevin Lamarque/File Photo
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US Treasury Targets Russia's Gazprombank with New Sanctions

FILE PHOTO: A bronze seal for the Department of the Treasury is shown at the US Treasury building in Washington, US, January 20, 2023. REUTERS/Kevin Lamarque/File Photo
FILE PHOTO: A bronze seal for the Department of the Treasury is shown at the US Treasury building in Washington, US, January 20, 2023. REUTERS/Kevin Lamarque/File Photo

The United States imposed new sanctions on Russia's Gazprombank on Thursday, the Treasury Department said, as President Joe Biden steps up actions to punish Moscow for its invasion of Ukraine before he leaves office in January.
The move, which wields the department's most powerful sanctions tool, effectively kicks Gazprombank out of the US banking system, bans its trade with Americans and freezes its US assets, Reuters reported.
Gazprombank is one of Russia's largest banks and is partially owned by Kremlin-owned gas company Gazprom. Since Russia's invasion in February 2022, Ukraine has been urging the US to impose more sanctions on the bank, which receives payments for natural gas from Gazprom's customers in Europe.
The fresh sanctions come days after the Biden administration allowed Kyiv to use US ATACMS missiles to strike Russian territory. On Tuesday, Ukraine fired the weapons, the longest range missiles Washington has supplied for such attacks on Russia, on the war's 1,000th day.
The Treasury also imposed sanctions on 50 small-to-medium Russian banks to curtail the country's connections to the international financial system and prevent it from abusing it to pay for technology and equipment needed for the war. It warned that foreign financial institutions that maintain correspondent relationships with the targeted banks "entails significant sanctions risk."
"This sweeping action will make it harder for the Kremlin to evade US sanctions and fund and equip its military," Treasury Secretary Janet Yellen said. "We will continue to take decisive steps against any financial channels Russia uses to support its illegal and unprovoked war in Ukraine."
Gazprombank said Washington's latest move would not affect its operations. The Russian embassy in Washington did not respond to requests for comment.
Along with the sanctions, Treasury also issued two new general licenses authorizing US entities to wind down transactions involving Gazprombank, among other financial institutions, and to take steps to divest from debt or equity issued by Gazprombank.
Gazprombank is a conduit for Russia to purchase military materiel in its war against Ukraine, the Treasury said. The Russian government also uses the bank to pay its soldiers, including for combat bonuses, and to compensate the families of its soldiers killed in the war.
The administration believes the new sanctions improve Ukraine's position on the battlefield and ability to achieve a just peace, a source familiar with the matter said.
COLLATERAL IMPACT
While Gazprombank has been on the administration's radar for years, it has been seen as a last resort because of its focus on energy and the desire to avoid collateral impact on Europe, a Washington-based trade lawyer said.
"I think that the current administration is trying to put as much pressure and add as many sanctions as possible prior to January 20th to make it harder for the next administration to unwind," said the lawyer, Douglas Jacobson.
Officials in Slovakia and Hungary said they were studying the impacts of the new US sanctions.
Trump would have the power to remove the sanctions, which were imposed under an executive order by Biden, if he wants to take a different stance, Jacobson said.
After Russia's invasion in 2022, the Treasury placed debt and equity restrictions on 13 Russian firms, including Gazprombank, Sberbank and the Russian Agricultural Bank.
The US Treasury has also worked to provide Ukraine with funds from windfall proceeds of frozen Russian assets.