Saudi Arabia says vast oil reserves even bigger than thought

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Saudi state oil giant Saudi Aramco plans to issue its first worldwide bonds in the second quarter of 2019, the country's energy minister Khalid Al-Falih said Wednesday, Kallanish Energy reports.

The Kingdom plans to ship about 7.1 million barrels per day (bpd) in February, down from 7.2 million bpd in January.

However, "a cause for concern is that the EIA (Energy Information Administration) data was not all rosy, as the crude drawback of 1.7 million barrels came below market expectation of a 2.5 million barrel draw back", he added.

OPEC and its allies decided last month to cut their overall output by 1.2 million bpd starting January to shore up sliding prices.

Saudi Arabia, one of the world's largest oil producers, says it has 268.5 billion barrels of proven crude oil reserves, a figure higher than previously known.

Oil has ticked upwards again today for its eighth straight session as Opec cuts in the New Year and hopes US-China trade talks pushed prices up. "We have seen peaks and drops in prices completely unjustified by the fundamentals".

Brent crude had hit $85 a barrel in early October, but prices dived more than 40 percent over the following two months on oversupply and fears a trade war between the United States and China could slash demand.

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Saudi Arabia had a target to lower output to 10.311 million bpd as of January 1, when the supply cut accord took effect.

The audit, conducted by Dallas-based consultant DeGolyer & MacNaughton Corp., is the first since Riyadh fully nationalized Saudi Aramco between 1976 and 1980, and it comes as the kingdom tries to generate interest in Aramco ahead of a potential initial public offering. Gas reserves totalled 325.1 trillion cubic feet (Tcf), an increase of 17.2 Tcf over the previous estimate.

Saudi Arabia Minister of Energy, Industry and Mineral Resources is arriving in Pakistan tomorrow and is likely to sign a Memorandum of Understanding (MoU) for setting up an oil refinery at Gwadar.

Saudi Arabia is expected to announce a slight rise in its crude oil and gas reserves on Wednesday after being independently audited, according to a source familiar with the matter.

Industry experts say it can cost between $30 to $50 to produce a barrel of USA shale oil.

The operation was not fully concluded, so the interest rates have not yet been calculated.

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