©AFP

Saudi Arabia will continue to meet rising demand for its oil and press ahead with global expansion plans in spite of the “challenging” backdrop for the industry.

In some of the first public comments from Saudi Arabia’s state oil company since a government reshuffle at the weekend, Amin Nasser, chief executive of Saudi Aramco, emphasised its willingness and ability to compete in global markets.

“Whatever the call on Saudi Aramco we will meet it,” he said during a rare media visit to the headquarters of the state oil company in Dhahran.

At the weekend, Saudi Arabia replaced Ali al-Naimi, its veteran oil minister, with Khalid al-Falih, chairman of Aramco and a close adviser to Mohammed bin Salman, the deputy crown prince who has emerged as the man with his hands on the levers of power in the kingdom.

“We are seeing a global increase in demand,” he said, citing strength in India, the US and other parts of the world. Mr Nasser said oil demand was expected to rise by 1.2m barrels a day this year.

The oil industry is watching for any signs of a change in Saudi policy or production levels almost two years after the oil price rout began.

The crash, in which oil fell from above $100 a barrel in mid-2014 to below $30 in January, has ravaged the budgets of producer countries, led to widespread lay-offs in the oil industry and stoked fears of a deflationary spiral in the global economy.

Prince Mohammed has hinted that the kingdom could easily accelerate output to more than 11m b/d as Iran, the regional rival, tries to recoup market share after years of sanctions. Last year, Saudi Arabia’s crude output averaged 10.2m b/d.

On his first day in office, Mr Falih said there would be “stability” in the kingdom’s oil policy but said it was prepared to meet “existing and additional hydrocarbons demand from our expanding global customer base, backed by our current maximum sustainable capacity”.

On Tuesday, Mr Nasser declined to say if Aramco would raise production but indicated the kingdom would meet heightened domestic electricity demand in the summer months. The desert country burns crude oil at its power plants in summer as air-conditioning use soars.

Mr Nasser said the latest stage of an expansion project at the Shaybah oilfield in the south-east would be finished in a couple of weeks, adding 250,000 b/d of production capacity and taking the field’s maximum output to 1m b/d. This would help offset falling output at mature fields.

Aramco was also eyeing joint ventures in Vietnam, China, Indonesia as well as the US as it prepares for a stock market flotation.

“Even though it is challenging, it is an excellent opportunity for growth,” said Mr Nasser. “We are capitalising on this opportunity.”

Last month, Saudi Arabia unveiled plans to transform its economy, pledging to end its “addiction to oil”. The cornerstone of the “Vision 2030” programme being pushed by Prince Salman is an IPO of a small part of Aramco.

The planned sale of a 5 per cent stake could value the oil company at more than $2tn, according to Prince Mohammed, as well as potentially granting more independence from government oil policy.