Saudi Aramco has not yet embarked on work to expand its maximum sustained capacity to 13 million b/d from 12 million b/d, according to comments it made in a bond prospectus, seen by S&P Global Platts on June 9.
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"Saudi Aramco is proceeding with engineering evaluations and assessing its options for implementing the government's directive to increase MSC," the prospectus said.
During the grandstanding between Saudi Arabia and Russia that culminated in the collapse of the OPEC+ production cut negotiations in March 2020, followed by a short-lived oil price war, the Saudi Ministry of Energy said it would increase its maximum sustained capacity to 13 million b/d.
The target does not include output from the shared Neutral Zone oil fields, which are owned jointly with Kuwait. The capacity expansion will be executed in increments over the next few years, Aramco CEO Amin Nasser said in March.
The Saudi oil group began its first dollar-denominated Islamic bond sale on June 7, with the proceeds set to be used to help pay its large dividend payments. The exact amount to be raised was expected to be determined on June 9.
As part of its pitch to investors during the its IPO in 2019, Aramco pledged to issue a $75 billion dividend annually for five years. The government, which owns 98.5% of the company, is the primary benefactor of that payment.
The burden of the $75 billion dividend plus the weak oil price environment due to the pandemic weighs heavy on the company's operations. This has meant it has had to delay payments to its contractors by several months, S&P Global Platts reported in January.
Aramco's revenues have been stifled over the past year by the demand destruction caused by the pandemic and also the production cuts implemented by the OPEC+ group to steady the market. Saudi Arabia produced an average of 8.50 million b/d in May, according to the most recent Platts OPEC survey.
In the three months to March 31, Aramco produced an average 11.5 million b/d of oil equivalent, including 8.6 million b/d of crude oil, the bond prospectus said.
As of the end of 2020, Aramco's proved liquids reserves were 224.1 billion barrels, including 261.6 billion barrels of crude oil and condensate, 36.0 billion barrels of NGL and 238.8 trillion standard cubic feet of natural gas.
Its gross refining capacity amounted to 6.4 million b/d and net refining capacity amounted to 3.6 million b/d, the prospectus said.
Saudi Aramco produced an average of 1.0 million b/d of natural gas liquids and 0.2 million b/d of unblended condensate in 2020. It supplied 9.0 billion standard cubic feet per day of natural gas and 1.0 billion standard cubic feet per day of ethane to the kingdom in 2020, the prospectus said.