Saudi Arabia revises up oil reserves estimate to 268.5 billion barrels

London — Saudi Arabia, which continues to mull a public listing of its state-owned oil giant Aramco, announced Wednesday its crude reserves were slightly higher than previously thought, as it unveiled the first third-party review of its closely guarded field data in decades.

Aramco held 268.5 billion barrels of oil reserves as of the end of 2017, up from a previously estimated 266.3 billion barrels, it said.

At current rates of production, that would allow Saudi Arabia, the world's largest crude exporter, to pump for almost another 70 years.

Saudi crude output was 10.60 million b/d in December, according to the latest S&P Platts OPEC production survey, though it hit an all-time high of 11.02 million b/d in November.

Gas reserves, meanwhile, stood at 325.1 Tcf, an increase of 17.2 Tcf over the previous estimate, the audit revealed.

Saudi energy minister Khalid al-Falih said the audit confirms Aramco "is the most valuable company in the world," given that the country's reserves are among the least expensive globally to develop.

"This simply illustrates that the kingdom's potential in meeting the world's growing needs for oil and gas is quite staggering," Falih said at a press briefing in Riyadh, according to media reports. "We are going to be quite ready to deliver on that."

The oil reserves estimate matches well with BP's highly cited "Statistical Review of World Energy," which pegged the reserves at 266.2 billion barrels at the end of 2017, while Rystad Energy has estimated them at 276 billion barrels.

Excluding the Neutral Zone shared between Saudi Arabia and Kuwait, Saudi reserves total 263.2 billion barrels, the government said.

Only Venezuela, another OPEC member, has comparable reserves at some 303.2 billion barrels, according to BP, much of it extra heavy oil that is energy- and capital-intensive to extract, in contrast to Saudi Arabia's low-cost crude. Falih said Aramco's cost of production averages about $4/b.

Russia and the US, who vie with Saudi Arabia to be the largest oil producer, hold only 156.2 billion barrels combined, according to BP.

The Saudi audit was performed by Dallas-based consultancy DeGolyer and MacNaughton, which reviewed 80% of Aramco's oil concessions and 60% of its gas concessions.

Falih said figures include only so-called P1 proven reserves, which can be readily developed.

Harder to extract "probable" and "possible" reserves were not included in the audit, but "with additional technologies and studies, Saudi Aramco has consistently been able to graduate these probable and possible resources to proven reserves" over the years, Falih said.

Saudi Arabia has long mooted a public listing of the company in a move that could value Aramco at $2 trillion, to help finance structural domestic economic reforms that would reduce its reliance on oil revenues.

But the share flotation has been delayed several times over financial disclosure and exchange listing requirements, as well as internal disagreements on about how to proceed, with reports that the Saudi government is seeking alternative ways to raise money from the company.

More recently, Aramco has said it is in discussions to acquire a major stake in Saudi petrochemicals company Sabic from the country's Public Investment Fund, which would further expand its downstream segment but further delay any plans for an initial public offering.

Falih said the kingdom was targeting 2021 for the Aramco IPO.

--Herman Wang, herman.wang@spglobal.com

--Edited by Keiron Greenhalfgh, newsdesk@spglobal.com