عربي English Türkçe اردو فارسى
Logo
Latest News
Business

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

AAWSAT AR
AAWSAT AR
TT
20
TT

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.

Most Viewed

 
Business

IATA: Saudi Aviation Contributes $90.6 Billion to Economy, Supports 1.4 Million Jobs

A Boeing 787-9 Dreamliner operated by Riyadh Air at King Khalid International Airport (Riyadh)
A Boeing 787-9 Dreamliner operated by Riyadh Air at King Khalid International Airport (Riyadh)
TT
20
TT

IATA: Saudi Aviation Contributes $90.6 Billion to Economy, Supports 1.4 Million Jobs

A Boeing 787-9 Dreamliner operated by Riyadh Air at King Khalid International Airport (Riyadh)
A Boeing 787-9 Dreamliner operated by Riyadh Air at King Khalid International Airport (Riyadh)

A recent study by the International Air Transport Association (IATA) has revealed the substantial economic and social contributions of Saudi Arabia’s aviation sector.

Released during IATA Aviation Day for the Middle East and North Africa, the report—titled The Value of Air Transport in Saudi Arabia—highlights how aviation and related tourism are key engines of job creation and economic activity across the Kingdom.

According to 2023 data, the aviation sector in Saudi Arabia contributed $90.6 billion to the national economy, representing approximately 8.5% of GDP. This figure accounts for the sector’s direct impact, extended supply chain activities, employee spending, and tourism-driven revenue. The report positions aviation as a critical pillar of the Kingdom’s economic development strategy, especially within the framework of Vision 2030, where enhanced air connectivity plays a central role.

The study found that around 141,100 people are directly employed in the aviation sector, contributing $14.3 billion - or 1.3% of GDP - through their work. When factoring in indirect employment, such as jobs in supply chains, hospitality, and services tied to aviation and tourism, the sector supports approximately 1.4 million jobs across the country.

Tourism alone, underpinned by air connectivity, contributed $52.9 billion to the Saudi economy and generated 1.1 million jobs. International tourists arriving by air added an estimated $60.6 billion annually through their spending on goods and services provided by local businesses.

Beyond its economic footprint, the aviation industry also delivers strong social value and supports the United Nations’ Sustainable Development Goals. Greater accessibility has played a major role in this, with global airfares declining by 70% over the past 50 years. In Saudi Arabia, real ticket prices fell by 30% between 2011 and 2023, during which the country recorded an average of 1,429 flights per 1,000 residents.

The sector’s role extends to facilitating trade, investment, and innovation. In 2023, Saudi airports handled 713,000 tons of air freight, helping to power e-commerce growth and strengthen the country’s supply chain resilience, especially during times of crisis.

International flights accounted for 54% of total outbound traffic from Saudi Arabia in 2023, with 28.6 million passengers departing the country. The Asia-Pacific region was the top destination, with 11.4 million travelers (40% of total international passengers), followed by Africa with 7.1 million (25%) and other Middle Eastern countries with 5.9 million (21%).

Kamil Al-Awadhi, IATA Regional Vice President for Africa and the Middle East, emphasized that keeping aviation a strategic priority - while maintaining global standards, offering competitive operating costs, and adopting smart regulatory frameworks - will further enhance Saudi Arabia’s global competitiveness and support its economic and social development goals.

Looking ahead, IATA identified three key areas to ensure long-term sustainability in Saudi aviation. These include strengthening collaboration with stakeholders and aligning with global best practices; ensuring that expanding airport and digital infrastructure projects are efficient and competitive, particularly through private sector partnerships; and investing in human capital development. In support of this, IATA has signed agreements with Saudi partners to train more than 1,000 graduates and aviation professionals.