Additional efficiencies may be required and 2021 plan is under review, says CEO Amin Nasser 
 DUBAI: Saudi Aramco, the world’s biggest oil company, is working on plans to speed up a big rise in productive capacity as the battle for market share in the global crude business increases. Amin Nasser, president and CEO, told analysts in a web broadcast that Aramco could produce 12 million barrels per day by next month, and reach 12.3 million barrels from existing inventory within months. That level could be sustained without any additional capital expenditure. Pushing the total maximum sustainable capacity (MSC) to 13 million — as the Kingdom’s government has ordered — would take longer. He declined to give a timetable for that increase. “We’ve just had the request to increase the MSC, and we’ll be doing it on an accelerated basis,” Nasser said in response to an analyst who noted that the last time the MSC was increased it took about six years to do so, between 2004 and 2010. “The last time we had such a significant increase, it’s true that it took a number of years, but it was a different time and a different state of capital availability,” Nasser said. “We do have the flexibility to accelerate it if required, and we’re currently looking at that. It depends if it’s agreed it should be within existing fields or the grassroots increment that we’ll be bringing in,” he added. “That’s being evaluated right now, and depending on that decision we’ll be considering the time frame.” The speed with which Aramco can push its MSC to 13 million barrels per day will help determine the overall state of the global oil market, as well as the response of other producers in Russia and the US. The conference call was to help elaborate on Aramco’s financial results for 2019, announced the previous day. The figures showed net income of $88.2 billion, down on the previous year as lower output and prices met with difficult global macroeconomic conditions. Nasser said 80 percent of the reduction in income was due to factors outside Aramco’s control. The company said in its results that it would reduce its capital expenditure from the $35 billion to $40 billion range indicated last year, to between $25 billion and $30 billion in the current year. Nasser told an analyst that because of the hit to global demand from the economic effects of the coronavirus outbreak, Aramco was considering a possible further reduction in capital expenditure for next year. “Additional efficiencies may be required and the 2021 plan is under review,” he said, explaining that the increased gas output associated with higher oil production would enable Aramco to “optimize” spending on gas. Much of the hour-long discussion — the first time Aramco has faced investors as a listed company — centered on the falling global demand from the global pandemic, which has led to a big fall in demand for energy. “With regard to the impact of coronavirus, the situation is rapidly evolving and its impact on growth is uncertain,” he said. “However, we’ll ensure that we’ll maintain the strength of our operations and our finances, and we’ve already taken steps to rationalize our planned 2020 capital spending,” he added. “Our vision is clear. Our unique scale, low cost, low capital intensity and reliability deliver growth and outstanding returns while maintaining our position as the most reliable energy company. For example, we have more than five decades of reserves, so we don’t face the same production difficulties others do.” In answer to an analyst’s question about future oil price levels, Nasser said: “We have lower costs than any other company. We can sustain a low oil price.” The price of Brent crude fell to just above $30 per barrel during the conference call. Nasser reiterated Aramco’s promise to prioritize dividend payments to nongovernment shareholders to maintain them at $75 billion per year, the latest dividend paid by a listed company in the world. Aramco’s Chief Financial Officer Khalid Al-Dabbagh said the 2019 results showed that on four main financial criteria — profitability, cash flow, return on capital and dividends — Aramco was bigger than all the main independent oil companies combined.