- Saudi Aramco is reviewing expansion plans at home and abroad as it copes with sharply lower oil prices and a heavy dividend burden, WSJ reports.
- Aramco will review a $6.6B plan to add petrochemical production at its Motiva refinery in Texas, as well as a big natural gas project with Sempra Energy in the same state, according to the report.
- Aramco had agreed to buy 20 years worth of liquefied natural gas from the Sempra-led project planned for Port Arthur, Tex., and to take a 25% equity stake in the project's first production phase.
- The Saudi state-run company also reportedly is pausing investments in refineries in China, India and Pakistan.
- In Saudi Arabia, Aramco is delaying plans by a year to boost crude production capacity by ~1M bbl/day to 13M bbl/day.
- The Financial Times reported last month that Aramco planned to cut its capital spending to $20B-$25B this year in order to pay a $75B dividend it pledged to investors during its IPO last year.
Think about that: cutting upwards of $10 billion in capex projects (seed corn) just so they can maintain that $75-billion dividend payout each year. The prince must be going nuts.
And will their plans to delay an increase in production help support the price of oil? In a word, "no."
