Recently, Aramco also a 44.4 percent slump in net profit for 2020 as a result of weak demand for oil amid the coronavirus pandemic. This means now Aramco will also cut its capital expenditure.

In this regard, Hasnain Malik, head of equity research at Tellimer told the media, “The dividend is in line with expectations, which is what holders of Aramco will care about most, but lower capex implies the company does not expect high oil prices to last for the long-term.”

Last month, it was reported that Aramco signed a memorandum of understanding (MoU) with the Kingdom’s largest telecommunication company Saudi Telecom Company (STC) and its 5G deployment partner Huawei. As per the deal, the parties will explore the application of 5G when it comes to oil and gas.

In 2020, Aramco discovered two new oil and gas fields in the Northern region of Abraq Al Toloul and Al Jof, according to Saudi Arabia’s energy minister. Prince Abdulaziz bin Salman said the new oil field discovered by Aramco in Abraq al-Toloul produces nearly 3,189 barrels per day (bpd) of crude oil, along with 1.1 million cubic feet of natural gas.

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Prince Abdulaziz bin Salman said the new oil field discovered by Aramco in Abraq al-Toloul produces nearly 3,189 barrels per day (bpd) of crude oil, along with 1.1 million cubic feet of natural gas.

Aramco’s chief executive officer Amin Nasser revealed earlier this month that the oil behemoth will go ahead with its plan to boost its output capacity by 1 million barrel of oil per day (bpd) to 13 million barrel of oil per day, according to its

He revealed that the Aramco will go ahead with its plan to boost output capacity despite a significant cut in its capital expenditure for 2020 and 2021.

Reportedly, during a conference call with its investors, Amin Nasser said, “We are proceeding with increasing our MSC (maximum sustainable capacity) from 12 to 13 million barrels … it should not have a major impact on capital in 2021.”

Aramco has revealed that its capital expenditure for 2020 will be at the lower end of a $25 billion to $30 billion range.

Earlier this year, Aramco announced that it will reorganise its downstream business to support its global growth strategy.

Aramco pumps around 8.5 million barrels per day (bpd) of crude, of which it exports about 6 million bpd.

Aramco said that its downstream model will be divided into four units which are fuels including refining, trading, retail and lubes; chemicals; power; and pipelines, distribution, and terminals.

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He revealed that the Aramco will go ahead with its plan to boost output capacity despite a significant cut in its capital expenditure for 2020 and 2021.

Reportedly, during a conference call with its investors, Amin Nasser said, “We are proceeding with increasing our MSC (maximum sustainable capacity) from 12 to 13 million barrels … it should not have a major impact on capital in 2021.”

Aramco has revealed that its capital expenditure for 2020 will be at the lower end of a $25 billion to $30 billion range.

Saudi Aramco recently revealed that its profit plunged 73 percent in the second quarter of the year due to a slump in demand for crude oil and prices amid the coronavirus crisis.

However, the company stuck with plans to pay $75 billion in dividends this year.

“Look at China, their gasoline and diesel demand is almost at pre-COVID 19 levels. We are seeing that Asia is picking up and other markets (too),” Nasser told the media

“As countries ease the lockdown, we expect the demand to increase. We intend to pay the $75 billion, subject to board approval and market conditions,” he said.

Last year, Aramco went ahead with its much anticipated IPO on the Saudi Stock Exchange and became the most valuable company in the world with valuation of $2 trillion.

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Reportedly, Aramco is looking to raise capital ahead of its distribution of $75 billion in dividends through 2020 and payments for its $70 billion acquisition of the chemicals producer Saudi Basic Industries.

Aramco could raise around $10 billion from the sale of its stake in its pipeline unit.

Aramco has already held some preliminary discussions with potential advisers on the deal, but talks are still at an early stage.

Previously, Aramco Chairman Yasir Al Rumayyan told the media, “We have a lot of assets that could be monetised because they are non-core assets, which can improve the performance of the company.”

The oil price war and the coronavirus pandemic have heavily affected the company’s spending plans.

Negotiations between Saudi Arabia, which is the unofficial leader of OPEC, and Russia collapsed as the latter did not agree with OPEC’s decision to slash oil production in light of the Covid-19 outbreak.

Earlier this month, Aramco announced that it will increase crude production by 300,000 barrels per day over the company’s maximum sustained capacity of 12 million barrels.

The move to increase crude production is a part of the Saudi government’s plan to stay competitive in the global oil market amid a price war with Russia.

Aramco has also decided to reduce refinery runs in April as well as in May in order to boost oil output. The Saudi government has directed Aramco to continue supplying 12.3 barrels of oil per day.

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The Saudi government has directed Aramco to continue supplying 12.3 barrels of oil per day.

Saudi Arabia has made its intentions clear that it will not back down from the oil price war or decrease oil output despite a global slowdown due to the Covid-19 outbreak.

Chief Executive Amin Nasser recently told the media, “In a nutshell, Saudi Aramco can sustain the very low price and can sustain it for a long time. For the production in May, I doubt it would be any different from next month.”

He further revealed that Aramco, which is the largest exporter of oil in the world, aims to boost its oil output to 13 barrels of oil per day.

Negotiations between Saudi Arabia, which is the unofficial leader of OPEC, and Russia collapsed as the latter did not agree with OPEC’s decision to slash oil production in light of the Covid-19 outbreak. This resulted in Saudi Arabia slashing oil prices by 10 percent.

In retaliation, Russia plans to increase output by between 300,000 and 500,000 barrels per day to possibly as much as 11.8 million barrels. Other OPEC members such as Iran and Nigeria too announced that they would increase output.

Previously, during the period between 2014 and 2016, oil producers including Saudi Arabia and Russia engaged in a market share war to squeeze out shale production from the US by reducing prices and offering more supplies to Asia.

The market share war, however, ended in 2016 when Russia and Saudi Arabia called a truce and decided to cut production.

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The move to increase crude production is a part of the Saudi government’s plan to stay competitive in the global oil market amid a price war with Russia.

With regard to the increase in crude production, in a statement to the Saudi stock exchange, Aramco said, “Saudi Aramco announces that it will provide its customers with 12.3 million barrels per day of crude oil in April. The company has agreed with its customers to provide them with such volumes starting 1 April 2020. The company expects that this will have a positive, long-term financial effect.”

Recently, negotiations between Saudi Arabia, which is the unofficial leader of OPEC, and Russia collapsed as the latter did not agree with OPEC’s decision to slash oil production in light of the Covid-19 outbreak.

Last week, Saudi Arabia, which is the world’s top oil exporter, slashed oil prices by 10 percent.

As a result, global oil prices have dropped by 30 percent so far. Oil stocks across various exchanges in Asia-Pacific, Tokyo, Australia, Hong Kong, and the US plunged in early Monday trading. The Tadawul too suffered due to the global shares rout.

Interestingly, shares of Aramco opened higher on Monday despite the plunge in global oil prices.

In retaliation, Russia plans to increase output by between 300,000 and 500,000 barrels per day to possibly as much as 11.8 million barrels. Other OPEC members such as Iran and Nigeria too announced that they would increase output.

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Many believe this move from Saudi Arabia will start a price war with Russia, who did not agree with OPEC’s decision to slash oil production in light of the Covid-19 outbreak. Both parties held a meeting in Vienna, Austria recently.

Due to the collapse in negotiations between Saudi Arabia and Russia, oil stocks across various exchanges in Asia-Pacific, Tokyo, Australia, Hong Kong, and the US plunged in early Monday trading. Oil prices were already low due to a global slowdown.

John Kilduff, founding partner of Again Capital, told CNBC, “This has turned into a scorched Earth approach by Saudi Arabia, in particular, to deal with the problem of chronic overproduction.”

Previously, during the period between 2014 and 2016, oil producers including Saudi Arabia and Russia engaged in a market share war to squeeze out shale production from the US by reducing prices and offering more supplies to Asia.

The market share war, however, ended in 2016 when Russia and Saudi Arabia called a truce and decided to cut production.

So far, global oil prices have dropped by almost 30 percent.

Last month, Russian Energy Minister Alexander Novak and his Saudi counterpart, Prince Abdulaziz bin Salman, also held discussions with regard to the global oil market and cooperation within OPEC and non-OPEC allies.

During the same period, Saudi Arabia and Russia also discussed potential joint investment programmes worth more than $10 billion.

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Not only is Saudi Aramco not considering a secondary listing for the moment, but the CEO also revealed that the Saudi Aramco will discuss the possibility of listing Aramco’s shares on an international stock exchange, but not at this point in time.

Last December, Saudi Aramco broke Alibaba’s record of being the world’s biggest initial public offering by listing its shares on the Riyadh Stock Exchange.

Recently, the Saudi-based oil giant signed a total of 66 memorandum of understanding (MoU) and strategic collaborations worth $21 billion under its In-Kingdom Total Value Add (IKTVA) Programme.

The agreements were signed with international companies such as Hyundai Heavy Industry, Seimens, Aasia Steel, Oilfields Supply Center (OSC), Al-Khorayef Petroleum, Mitsubishi Hitachi Power Systems, Schneider Electric, Honeywell, Advanced Electronic Company (IT), XDM 3D Printing, Shengong New Materials, XINFOO, and Saudi Exports Development Authority.

Amin Nasser told the media, “Future readiness is forged from a culture of excellence – by giving people the skills they need to succeed in the jobs of the future. We’re enabling a vibrant commercial ecosystem that will drive efficiency and reliability of our operations. Through effective governance, IKTVA has created infrastructure, streamlined processes, and built capabilities that improve return on investment and leverage greater value for our company.”

This week, Saudi Aramco also announced its plans to invest around $110 billion for the development of Al-Jafurah gas field. Aramco has already received regulatory approval. The Al-Jafurah gas field is located southeast of Ghawar, the world’s biggest conventional oil field.

Aramco is the most profitable company in the world and the only company to reach a valuation of $2 trillion.

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According to the central bank, the digital banking guidelines of Saudi Arabia complement its banking licensing guidelines and minimum criteria.

These new digital banking guidelines issued by Saudi Arabia must be considered as additional conditions to be met along with the licensing guidelines for conventional banks, according to SAMA.

In a statement, SAMA said, “The additional guidelines are to keep up with the developments in the financial and information technology sectors and to achieve the objectives of the Financial Sector Development Program (FSDP) and Saudi Vision 2030 by developing the digital economy.”

According to the new digital banking guidelines issued by Saudi Arabia, digital banks must set up as a locally incorporated joint-stock company and also maintain a physical presence in the kingdom. They must also possess technological knowledge and have experience in the financial sector.

The digital banks also must have a clear business plan which includes IT infrastructure, financial projections, and a target segment. In some cases, digital banks operating in Saudi Arabia may have to set up consumer grievance centres, since digital banks don’t have physical branches.

Last year, SAMA started processing applicants for three new banking licences in the kingdom. Reportedly, two of the new licences will be for traditional banks and one will be for a digital bank.

During the same period, Saudi Arabia also updated its banking as well as digital banking licensing guidelines with an aim to make it easier for banks to apply.

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According to local media reports, around $30 billion of Aramco IPO proceeds will be pumped into Saudi Arabia’s local economy. The kingdom will also invest heavily in its defence industry as tensions between the kingdom and Iran escalates.

Saudi Arabia will pump Aramco’s IPO proceeds into its economy in phases and will continue for several years.

In an interview at the World Economic Forum, Mohammed Al Jadaan told the media “If you look at history, we in this region have managed to weather through worse geopolitical situations, including actual, real wars. We in Saudi have to focus on the economy and reform. Our focus is firmly on non-oil GDP growth, with a focus on tourism, entertainment, sports, technology, and financial sector”

He added, “We work with our military industry to develop our own military assets in the mid-term to deal with these risks, including investment by Public Investment Fund (PIF).”

By upgrading different sectors within its economy, Saudi Arabia plans to reduce the kingdom’s dependence on oil.
Over the years, Saudi Arabia’s economy has suffered due to lower oil prices; however, Mohammed Al Jadaan predicts healthier oil prices in 2020 due to solid demand, reduced output and easing trade tensions.

Saudi Aramco raised around $25.6 billion in its initial public offering after listing its shares on the Riyadh Stock Exchange at $8.53 per share.

Initially, Aramco planned to raise $100 billion by listing its shares on the Riyadh Stock Exchange as well as the London Stock Exchange. However, the oil giant refrained from an international listing.

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