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Global Energy And Kingdom Saudi Arabia Policy
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GLOBAL ENERGY AND KINGDOM SAUDI ARABIA POLICY
By Mas ud HMN*)
We come under topic is time for oil policy of Kingdom Saudi Arabia. Very interesting to understand because have relate among maximum capacity sustainable in market energy with action packed of Policy Aramco recently That is important thing. Particularly price war .able to drill down international investment Any how Aramco policy is positive decision on contribution global energy industry. We has to say respect and high appreciate to Kingdom Saudi Arabia.
Lets we view the policy It has been an action-packed few days for watchers of Saudi Aramco. Following last week’s financial results for 2019, on recently the company opened up to a grilling from international investment analysts in an hour-long conference call where they were able to drill down into the detail of the financial statements.
Having listened to the online broadcast of the call, here are some we key takeaways on the current financial state of the world’s biggest company. Issue more relevant to cited two person resource namely first Amin Nasser and second Frank Kane. We will discuss below.
Number one factor is low price oil. First, Aramco did not start the “price war” underway in global energy markets, but it is determined to win it. CEO Amin Nasser was adamant on this point. “We can sustain a low oil price,” he told the analysts. Aramco is confident it can carry on pumping and shipping growing quantities of oil at a faster rate than the Russians or the Americans, thereby winning back valuable market share in the global energy industry. It believes it can offer customers better prices and more reliable supplies than its main competitors.
Factor number two , Aramco has the financial and industrial resources to equip it for a lengthy battle for market share. In addition to production costs among the lowest in the world, it has low gearing and borrowings, and the flexibility to adapt its capital expenditure to maximize financial efficiency. Capital investment plans have already been “optimized” for the current year, and a review of next year’s requirements is underway. “Our unique scale, low cost, low capital intensity and reliability deliver growth and outstanding returns,” Nasser said.
Third factor , it has the capacity to dramatically increase output in a short time frame. One analyst noted how when Aramco significantly boosted its “maximum sustainable capacity” last decade, it took roughly six years to do so. Now, Aramco will have 12-million-barrel capacity from next month, up from 9.8 million just a few weeks ago, with 12.3 million possible via the use of inventory reserves by the end of the year. It will take a while longer to get to the 13 million the government demanded recently, but that can be done mainly through enhancement and expansion of existing fields and without big capital expenditure.
Aramco is confident it can carry on pumping and shipping growing quantities of oil at a faster rate than the Russians or the Americans, thereby winning back valuable market share in the global energy industry.
Finally factor of Aramco is conscious of its new status as a public company and is committed to keeping its shareholders happy. According Frank Kane a annalys Journalis Bussines based in Dubai, he believe the shares will always to some degree reflect price volatility in the global oil markets, as they have done in recent days, but public companies have to accept the verdict of the stock markets. Their job is to keep their side of the bargain, mainly by maintaining dividend levels at acceptable leves l ( Arab News Daily,March,18,2020 ) He state Aramco made clear to the analysts that it would stick by its pledge to pay $75 billion per year, the biggest dividend, paid by any public company.
This way, last and by no means least, in days when we are all worried about coronavirus and its economic effects, Aramco will keep a firm eye on the other big global challenge we all face: Climate change. Nasser made clear that the company is committed to maintaining and even improving its status as one of the “cleanest” oil companies, with very low levels of carbon intensity and methane emissions Many experts bussnes attend this argument.
Some bussines company practicion agree to views.Its spending on climate change-related technology research and development at research centers around the world will be maintained. Its forthcoming annual review will have a “sustainability” report telling shareholders of its progress in the environmental, social and governance fields so important to modern investors.
My opinion and many expert believe were not allowed to pose questions during the hour-long call, but the market verdict will soon be apparent. The analysts who took part in the call will go away and produce reports based on what they heard in response to their questions, so in the next few days we will see what they made of it all.For what it is worth in these volatile days, Aramco shares were trading up on some day after the call, as the investment their recommendations into their buying institutions. We can look at with optimistic thinking.
*) Mas ud HM is Doctor Lecture Muhammadiyah University Prof Dr Hamka (UHAMKA) Jakarta
Emai; masud.riau @ gmail.com
Jakarta March, 20th,2020