Saudi Aramco is planning their initial public offering, and might be the world’s biggest at that. The oil company plans to invest over $300 billion in the next decade to maintain its production capabilities while also allowing them to explore for more natural gas.
President and CEO Amin Nasser said that the outlook for oil supplies are “increasingly worrying,” with about $1 trillion in investments lost during the industry downturn and a decreasing number of deposits being discovered. To offset rising demand, at least 20 million barrels is the needed output per day.
Although there are many other companies pushing for innovation, Nasser said in a speech that “the petroleum industry will be at the heart of global energy for years, and the transition to use of alternatives will be long and complex.”
The state run company, which is also the world’s biggest oil exporter increased their production to an annual record last year. Aramco is at the heart of the nation’s strategy to wean the Saudi economy off of oil. In the record IPO, the government is planning on selling about 5% of the company in 2018.
The volume of conventional oil discovered around the world over the past four years, is down more than 50% from the previous four, showing that the world might be starting to lessen the demand for fossil fuels. For example, France plans to end the sale of gasoline- and diesel-powered vehicles by 2040 to try and become a carbon-neutral nation, and Volvo car group has stated that it is phasing out cars that rely on internal combustion engines.
Although electric vehicles are gaining traction, they currently make up less than two-tenths of one percent of the world’s 1.2 billion vehicles, and are unlikely to account for more than 10% by 2030.
Aramco plans to double its production of gas resources to 23 billion cubic feet a day within the decade, and will raise the share of gas in the kingdom’s utilities to about 70%, the “highest of any G-20 nation.” This will be happening while Saudi Arabia is committed to developing solar energy and restructuring its nation to be “nothing less than a solar powerhouse.”