Saudi Arabia to slash oil exports by 800,000 barrels per day

Saudi Energy Minister Khalid Al Falih speaking during a news conference in Riyadh

Brent crude and WTI prices continue strong start to 2019 as Saudi Arabia energy minister Khalid al-Falih cuts exports further

OPEC kingpin Saudi Arabia will slash its oil exports in January by 10 percent compared to November, the energy minister said Wednesday.

Addressing a press conference on Wednesday, Minister Khalid al-Falih said that the latest audit "confirms our belief that Aramco is the most valuable company in the world".

Opec and its allies decided last month to cut their overall output by 1.2 million bpd from January, to boost prices hit by a supply glut and fears demand could plummet.

The kingdom lowered its production by 420,000 bpd to 10.65 million bpd in December after pumping more than 11 million bpd in November, according to a Bloomberg survey. But prices have partially rebounded in the past few days after a new deal, in which Opec and non-Opec oil producers agreed to trim output by 1.2 million bpd, came into effect in January.

That figure is "more than sufficient to bring balance to the market", said Falih, adding that the production cut would trim excess supply.

The energy ministry said proven oil reserves stood at 263.2 billion barrels at the end of a year ago, up from the figure of 261 billion barrels that has been used for nearly three decades.

For nearly 30 years - despite rising production, large swings in oil prices and improved technology - Riyadh had annually reported the same number for reserves at around 261 billion barrels, according to a statistical review by BP.

In addition to Saudi Aramco concession area reserves, the Kingdom also owns half of the oil reserves in the Partitioned Zone jointly owned by Saudi Arabia and the State of Kuwait.

Natural gas reserves were also revised upwards from 302.3 trillion cubic feet (8.56 trillion cubic metres) to 324.4 trillion cubic feet, the ministry said.

Saudi Arabia's first independent audit of its reserves, which was conducted by consultants DeGolyer & MacNaughton, comes at a time when the kingdom is undertaking plans to further develop its energy sector.

Saudi Arabia, the world's top oil exporter, is the third biggest crude producer after the United States and Russian Federation.

"D&M's evaluation was limited to "booked" oil and gas resources in the Saudi Aramco's concession area and does not cover other available hydrocarbon resources in the Kingdom, such as the significant unconventional gas reserves recently discovered but not yet 'booked" by Saudi Aramco or the kingdom", Aramco said in the statement.

But the kingdom has posted budget shortfalls each year since a major 2014 crash in crude prices, and has turned to borrowing as well as pursuing economic reforms.

It was the first time Riyadh has tapped worldwide debt markets since the October murder of journalist Jamal Khashoggi, which tarnished Saudi Arabia's public image.

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

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