(Reuters) – Saudi Aramco will renegotiate some contracts and postpone some projects due to falling oil prices, the head of Saudi Arabia’s state oil company said on Tuesday, stressing the top crude exporter will not single handedly balance the global oil market.
Brent crude oil (LCOc1) prices traded near $48 per barrel on Tuesday, down nearly 60 percent since last June on ample global supplies and a decision by OPEC to keep its production ceiling unchanged.
OPEC’s largest producer, Saudi Arabia in November refused to cut its output to arrest the price slide and decided instead to focus on market share.
Saudi Aramco Chief Executive Khalid al-Falih, speaking at a conference in Riyadh, did not specify which projects or contracts would be affected by the low oil prices.
“We will have to adjust to the realities of today. We will push some projects into the future, we will stretch some of them, we will renegotiate some contracts,” Falih said.
Reuters reported last week that Aramco had asked oilfield service companies for discounts in the wake of the oil price slide.
Falih said the imbalance in the oil market had nothing to do with Saudi Arabia, and a fair price is what would ultimately balance supply and demand, a sign that Riyadh is sticking to its strategy of allowing the market to stabilise itself.
“Saudi Arabia has a policy, the policy is set by the government through the Ministry of Petroleum, and they have said that Saudi Arabia will not single handedly balance the market,” he said.
“The math will tell you that our exports… are gradually declining. So the reason for the imbalance in the market absolutely has nothing to do with Saudi Arabia.”
Saudi Arabia pumped 9.61 million barrels per day of crude in November and exported 7.3 million bpd.
Asked what a fair price for oil is, he said: “It will be the price that ultimately balances supply and demand. I don’t think anybody, no single person, can dictate what that price is. I would be foolish if I did that.”
Aramco has already invested $3 billion in developing its unconventional gas resources and has earmarked an additional $7 billion, he said.
(Writing by Rania El Gamal; editing by Jason Neely)