Saudi Aramco mulls cost-cutting measures, earmarks billions for shale drilling

RIYADH, January 28, 2015 – Speaking at a conference in Riyadh earlier this week, Saudi Aramco CEO Khalid Al Falih said that the company would postpone projects and renegotiate selected contracts due to sliding oil prices. He did not specify which contracts and projects Saudi Aramco was targeting.

The announcement comes several days after the company reportedly asked oilfield services companies operating in Saudi Arabia to start offering discounts. Speaking on the condition of anonymity, industry sources said Saudi Aramco had in some cased requested discounts of up to 20 percent.

Al Falih also told reporters that Saudi Aramco would be pouring another $7 billion into unconventional shale gas drilling efforts, more than doubling the company’s investment to date. According to estimates by Baker Hughes, Saudi Arabia boasts around 19 tcm (645 tcf) of technically recoverable shale gas reserves. Conventional gas reserves total 8.2 tcm (290.8 tcf).

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