As Saudi Aramco, the Saudi national oil company, prepares for a widely-awaited initial public offering next year, its chief executive, Amin H. Nasser, is at the center of the planning.
Mr. Nasser has run Aramco, which produces more oil than any other company in the world, since 2015, and also oversees a wide range of joint ventures and investments. Along with the public offering, Aramco is also crucial to Saudi-led efforts to cut oil production in an effort to buoy prices. Brent crude, the international benchmark, was above $100 a barrel in 2014 before tumbling sharply. It is now at about $60 a barrel.
He spoke to Stanley Reed, a New York Times reporter, on the sidelines of an event sponsored by the Oil and Gas Climate Initiative, a partnership of 10 international oil companies that aims to reduce greenhouse gas emissions from the industry.
Their conversation, edited for grammar, style and clarity, follows.
Q. How will the privatization, or initial public offering, help Saudi Aramco?
A. I think that privatization will definitely elevate, first, our international visibility as a company, our decision-making strategies, and also our achievements to date, and our governance. We know that we have excellent governance. A lot is not known about Saudi Aramco in terms of performance and all of that. So a lot of numbers can be shared later on, when we are listed.
You will see, first of all, a lot invested in technology to add more value. While everyone else cut technology spending, we are increasing our technology spending. We have eight technology hubs outside Saudi Arabia, and three inside Saudi Arabia, for a total of 11. Two of our technology hubs focus on better fuel formulation, less carbon footprint, more efficiency in car engines.
That all will hopefully, at a certain point, be shared with investors when we are listed.
Do you have any doubt that the listing will happen?
No, the listing is happening. You have confirmation from the Crown Prince this week, and our minister of energy and the minister of finance, all the stakeholders in the kingdom. It is happening in 2018.
Is Aramco working on renewables, like wind and solar power?
It is an important element of our strategy, to get into renewables. The kingdom, as I said, is looking at producing 9.5 to 10 gigawatts by 2023. So yes, we are interested and we are going to be a major player in renewables.
Are your customers unhappy about your holding back production to honor your agreements with OPEC and Russia?
We have a long-term relationship with our customers. They appreciate our reliability, the quality of our products. We value all of these relationships. We are always there when the market goes down and there are not enough resources, because we do have the spare capacity and we always meet our obligations.
There is a requirement placed on the company, based on the cuts by OPEC members and non-OPEC members, and we are abiding by that guideline. Our customers and partners understand that issue and because of the long-term relationship, it is not impacting our business transactions with them. They value the partnership that we have together.
Are you losing market share?
Everything is temporary. We are in a market that is very dynamic, and so far things are going well. We are meeting our obligations in certain markets. And there has been no issue so far.
Are you happy with how the production cuts are working?
We are seeing inventories go down, which is great. Don’t forget, it was just an additional supply of 2 million barrels that brought the price from $100 to $40. Now, you don’t want the opposite to happen. You need to make sure there is ample supply.
You need to make sure inventories are balanced in a way where it meets the objectives of both the consumers and producers. So inventories are going down, prices are moving upward as a result of that balance between supply and demand.
Is there concern in Saudi Arabia that as renewables rise in importance, oil could become a stranded asset and lose its value?
We don’t subscribe to that thought about stranded assets. We think that oil will have more value in the future, and that rational development of our oil assets should be done reasonably over a long time.
If you look today, the requirement is 98 million barrels per day. Over the last three years, demand has grown by 5 million barrels per day. Add to that, a natural decline of 5 percent in existing fields. So you need to bring additional crude reserves to the market to meet the natural decline, and to meet the additional demand that we are going to see.
So I think oil will remain for decades to come. Transformation is happening, but it is going to take a long time.