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Saudi Arabia Plans Exploitation of One of Largest Gas Fields in the World

Saudi Aramco is intending to fund the development of the Jafurah gas field. (Asharq Al-Awsat)
Saudi Aramco is intending to fund the development of the Jafurah gas field. (Asharq Al-Awsat)
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Saudi Arabia Plans Exploitation of One of Largest Gas Fields in the World

Saudi Aramco is intending to fund the development of the Jafurah gas field. (Asharq Al-Awsat)
Saudi Aramco is intending to fund the development of the Jafurah gas field. (Asharq Al-Awsat)

Saudi Aramco is intending to fund the development of the Jafurah gas field, one of the largest in the world, at a cost of $110 billion.

Planned to start production in 2025, the field is expected to have approximately two billion standard cubic feet per day of sales by 2030, which will make the Kingdom the world’s third largest producer of natural gas by the end of this decade.

Aramco has contacted private equity firms and other large funds as part of its plans, which would involve the sale of stakes in assets such as carbon capture and storage projects, hydrogen plants, and pipelines, Bloomberg reported.

Bloomberg sources said that US investment banking company Evercore was serving as the adviser to Aramco for the proposed plans.

In 2020, the Saudi giant announced that it secured regulatory approval for the development of the Jafurah unconventional gas field.

Yasir Al-Rumayyan, Chairman of the Board of Directors of Aramco, said that the development of the Jafurah field was expected to support the Kingdom’s leading position in the global energy sector and enhance the Company’s position in the global energy sector, as well as help achieve its goal of being the world’s pre-eminent integrated energy and chemicals company.

For his part, Eng. Amin Al-Nasser, President and Chief Executive Officer of Saudi Aramco, noted that the development of the Jafurah field would expand the company’s resources and support the country’s economic diversification.

In a statement, Aramco said that Jafurah was the largest unconventional non-associated gas field in the Kingdom, with a length of 170 km and a width of 100 km.

It added that the volume of gas resources in the field was estimated at 200 trillion cubic feet of rich raw gas, which would provide a valuable feedstock for the petrochemical industries.

“The Company expects the field’s production, to commence early 2024, to reach approximately 2.2 billion standard cubic feet per day of sales gas by 2036, with an associated approximately 425 million standard cubic feet per day of ethane, representing about 40 percent of current production. The Company also expects the field to produce approximately 550 thousand barrels per day of gas liquids and condensates,” the statement underlined.

It continued: “Saudi Aramco plans to develop Jafurah in accordance with the highest environmental standards. The Company expects that the development of Jafurah would have a positive financial impact in the long term, which will start to show on the Company’s financial results in phases concurrent to the field’s development.”

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Will the IMF’s Bailout Stabilize Pakistan’s Economy?

Men reach out to buy subsidized flour sacks from a truck in Karachi, Pakistan. (Reuters file)
Men reach out to buy subsidized flour sacks from a truck in Karachi, Pakistan. (Reuters file)
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Will the IMF’s Bailout Stabilize Pakistan’s Economy?

Men reach out to buy subsidized flour sacks from a truck in Karachi, Pakistan. (Reuters file)
Men reach out to buy subsidized flour sacks from a truck in Karachi, Pakistan. (Reuters file)

Pakistan this week secured a new $7 billion loan from the International Monetary Fund (IMF) aimed at helping the South Asian nation stabilize its ailing economy.

But the country now faces challenging budget targets it has pledged to the IMF under the loan deal.

Kristalina Georgieva, the head of the IMF said the new bailout package approved for Pakistan is aimed at assisting the government in economic recovery and reduction in inflation along with employment creation and inclusive growth.

“Very productive meeting with Pakistani Prime Minister Shehbaz Sharif!” she wrote on her X account.

“We discussed Pakistan's new Fund-supported program helping ongoing recovery, disinflation, increased tax fairness, and reforms to create new jobs and inclusive growth,” the top IMF official said, referring to her meeting with the PM.

Georgieva’s remarks came after the IMF’s Executive Board has approved a $7 billion loan for Pakistan under the Expanded Fund Facility (EFF).

The loan — which Islamabad will receive in installments over 37 months — came after the Pakistani government’s commitment to implementing the agreed-upon reforms.

Last Thursday, the global lender said its immediate disbursement to Pakistan will be about $1 billion.

The office of the Pakistani PM said later the immediate release will be about $1.1 billion.

Assurances

The significant financing assurances provided by Saudi Arabia, UAE and China have facilitated the IMF's approval of the new loan.

IMF Pakistan Mission Chief Nathan Porter declined to provide details of additional financing amounts committed by the three countries but said they would come on top of the debt rollover.

Sharif, on the sidelines of the United Nations General Assembly, told Pakistani media that the country had fulfilled all of the lender’s conditions, with help from China and Saudi Arabia.

“Without their support, this would not have been possible,” he said, without elaborating on what assistance Beijing and Riyadh had provided to get the deal over the line.

Challenging targets

The South Asian country has set challenging revenue targets in its annual budget to help it win approval from the IMF for a loan to stave off another economic meltdown, even as domestic anger rises at new taxation measures.

Pakistan has set a tax revenue target of 13 trillion rupees ($47 billion) for the fiscal year that began on July 1, a near-40% jump from the prior year, and a sharp drop in its fiscal deficit to 5.9% of gross domestic product from 7.4% the previous year.

Minister of State for Finance, Revenue and Power Ali Pervaiz Malik said earlier that the point of pushing out a tough and unpopular budget was to use it a stepping stone for an IMF program, adding the lender was satisfied with the revenue measures taken, based on their talks.

“Obviously they (budget reforms) are burdensome for the local economy but the IMF program is all about stabilization,” Malik said.

Pakistan’s trade deficit decreased by 12.3% in FY2024, dropping to $24.09 billion from $27.47 billion in FY23, according to data released by the Pakistan Bureau of Statistics (PBS).

The Pakistani Geo News website stated that during July 2023-June 2024, total exports, however, saw an increase of 10.54%, reaching $30.645 billion, while imports shrank by 0.84%, amounting to $54.73 billion.

In June 2024, exports of Pakistani products abroad increased by 7.3% to $2.529 billion compared to $2.356 billion in the same period last year, marking the tenth consecutive monthly rise in exports, it added.

In a statement last Thursday, the IMF praised Pakistan for taking key steps to restore economic stability. Growth has rebounded, inflation has fallen to single digits, and a calm foreign exchange market have allowed the rebuilding of reserve buffers.

But it also criticized authorities. The IMF warned that, despite the progress, Pakistan’s vulnerabilities and structural challenges remained formidable.