Oil price discussion and analysis

[Value Collector]

The difference is:

With debt there is a promise to repay that debt.

With equity there is only a duty to do the best you can with other people's money.

Equity.

While it is not be this simple, to summarise: This difference between the two is important in that equity losses generally only effects the single investors in that stock. Potentially banks loan assets through margin lending but banks are cautious enough here to close large positions out in this area.

Loan assets.

When a loan asset (bank asset) is destroyed through liquidation of the borrower it requires the bank to cover the position through raising further capital or reining in deposit liabilities and loan assets shrinking both sides of the banks balance sheet to maintain the capital requirement it requires to operate as a bank. 10bn loss in bank capital roughly equates to 100bn less deposit liabilities allowed.

This the effects asset prices and hurts other banks balance sheets and then we enter the potential spiral of doom we came close to in 2008.

I am far from certain there is going to be a lack of funding for business in 2016 due to Shrinking balance sheets especially considering I have been mostly cash since early 2015. I have got it wrong to date.

That said less wrong than I have been with my godfreys ( ) .

I am just not comfortable with where this heads when a few major oil companies go broke. They all have loads of debt and this is what worries me so far as the market more generally is concerned. Not destruction of equity but destruction of banks loan assets.

While this will sound absurd: that bhp has seen 10s of billions of dollars equity wiped due to its fall from grace doesn't hurt Woolworths shares directly. However If 10s of billions of working capital (what stands in place to balance deposit liabilities at banks when loan assets are destroyed) was was wiped from commbanks balance sheet, Australia including woolworths would be in more trouble than Flash Gordon. This is why I posted in this oil thread at first instance. The reference to CommBank above.

btw Woolworths is only a reference to a broader market stock that of course has no special relationship with oil stocks if that isn't clear from my post.

Finally what people I move with find most perverse about my view on this is that I am considering again hitting oil producers hard with my smsf.

As I see it if oil stays where it is or moves lower oil stocks along with most of the market will be hit pretty hard. Oil worse sure but; if oil moves up only oil stocks will rally hard.

I see only limited upside for the time being in stocks (broad world economies) except oddly enough oil stocks (oil economies) assuming oil price moves positive.

My point is that at the time of capital allocation, ie when the investment is being made, the investment is expected to generate enough cashflow to return the initial investment to the investor, whether that be a debt investor or an equity investor.

Offcourse if you are using debt to buy assets, the life of the debt should match the life of the assets or be very long term debt if assets are long term.

Debt in the form of bonds etc can be a permanent part of a companies capital make up, it's just another level of investment really, equity investment suits some people, bond investment suits others, there is no problem with a company taking on some bond holders as part of their capital structure, yes bonds all expire at some point in time, but you can migrate risk by spreading out maturities, and having multiple options for handling the maturity.

Anyone, I am not trying to have a conversation about debt vs equity, just pointing out that when allocating capital the point of making an investment is that the asset should generate enough cashflow to pay back both debt and equity holders, and the debt holders have the equity holders capital as a buffers, if the assets can't earn enough to pay back the equity and debt, well you made a bad investment.

 

[Value Collector]

Also, a companies share price falling doesn't = equity being destroyed.

A share price falling just means investors are not willing to pay as much for a company's equity as they were earlier.

There is a difference between market cap and share holders equity.

------------------

Also the big oil companies have enjoyed years of high oil prices, and retained billions of dollars to fund their growth, so there is a huge equity buffer before bond holders will take a haircut, I mean yes most of the big oil companies have debt on their balance sheet, but large amounts of their cap ex has been cashflowed,

 

[Smurf1976]

The way I see it:

1. When oil was at roughly $100 per barrel, it was only US shale and Canadian tar sands that were leading to overall production growth. Sure, some other sources were growing but in aggregate supply was going down if you exclude Canada + USA.

2. If you only exclude US shale, that is you do include Canada's tar sands, then production was about flat over a period of several years.

3. At $30 per barrel it us no longer profitable to develop new tar sand or shale oil projects. Assuming that investors don't choose to fund something that is expected to be unprofitable right from the start, logically there will be little or no further development of these sources at the current price or anything close.

4. Tar sands production has an extremely long life and does not peak and decline in the way that conventional oil fields do. It's more akin to a metal smelter or a coal-fired power station than to conventional oil production. You build a great big processing plant and run a mine (normal mining methods) to get the feedstock that goes into it. Apart from maintenance outages, that gives you a very stable rate of production.

5. Shale on the other hand peaks and declines extremely fast. We're talking months not years or decades as is the case with conventional oil fields. Already we're seeing a drop somewhere around 0.5 - 0.7 mmbpd (depending on whose numbers you use) and that's just the beginning.

6. It is highly probable that at $30 per barrel we'll see less conventional oil fields developed than we'd see developed at a higher price. Basic economics there.

Adding all that up, declining production capacity would seem to be pretty much certain unless OPEC and other government oil producers, who tend to be less focused on short term financials, decide to increase capacity despite the lower prices

Now, if production capacity goes down then unless demand also drops (but the trend is definitely up not down) then at some point the "surplus" disappears. Then the Saudi's etc will be making some serious money once again.

I do think there's a definite plan being pursued here. It's not rocket science to work out that collapsing the price will kill off supply growth whilst encouraging higher consumption. That helps get rid of the competition whilst maintaining a large market for those still producing oil who can then decide what price they'd like to charge with the confidence that buyers have no real choice other than to pay up at least in the medium term.

 

[notting]

My personal take on oil over the last week or so is best illustrated by this short animaltion -

[video]https://pbs.twimg.com/tweet_video/CZT2aZTWAAAcVSb.mp4[/video]

 

[luutzu]

Two Ways to Look at Oil (over)Supply:

If a major, “pioneering” $US18B project to turn coal seam gas to LNG could only manage to produce 7.8million tonnes LNG per year (with 1 mt being 8.873 mmboe, GLNG produces 69.209 mmboe per year), then a 1.5mmboe per day oversupply is obviously a glut – right? Not quite.

The1.5mmboe oversupply is equivalent to 41 days of GLNG production (69.2/365 days = 0.19Mb/day). That is, in a single day the world over produces the equivalent of 41 days production from a new $US18B project at Gladstone.

Looking at it in that scale and that perspective, alone, then it appear the current over production is one heck of a flood. But look at it as a mere 1.5% oversupply and ask ourselves: Can the oil producers of the world afford to do this for an extended period of time? That is, can they afford the equivalent of an $US18B investment’s 41 days of production flooding the market and reducing their profit for the trouble? The average 1.5Mb/day oversupply caused oil to crash by more than half within a year since late 2014. Some 15 months later it reduces the price of oil by about 70% to under $30/barrel.

Again, taking Santos as an example – According to its Q4-2015 report, the entire company currently produces 57.7mmboe per year from all its assets. Under key facts on its website Santos has 622 mmboe reserves (1P), 1,245 mmboe (2P reserves) and 1,721 mmboe (contingent 2P reserves). Standard definition define 1P as proved reserves, 2P as the sum of proved and probable reserves. This mean that from its proved and probable reserves, a multi-billion dollar company the size of Santos could only supply the world’s current demand of 96M barrel for some 18 days – with it more than doubling its 2014 production (from 57.7 mmboe with additional 69.209 mmboe when GLNG is at full capacity), Santos would only be able to achieve this 18 days demand over some 10 years.

It seem that the world is quickly running out oil and gas, all this glut is to simply shock the analysts, crash the market and take over rivals on the cheap.

 

[Smurf1976]

Also consider the difference between hydrocarbons.

The Qld LNG plants are producing LNG (methane) only. They aren't producing oil, condensate, propane, butane or ethane, just methane as LNG.

LNG is certainly a substitute for oil in industry and power generation and for direct use as gas (homes etc) but it doesn't power aircraft and natural gas powers only a minor portion of the ships, trucks and cars in use. We need actual crude oil and/or condensate for that.

 

[Smurf1976]

Santos would only be able to achieve this 18 days demand over some 10 years.

Bingo!

Oil in the ground is really only a useful thing to know to the extent that it influences how much oil can be brought above ground on a daily basis. The two are related but not in a linear manner.

We could well run short of oil, even if there's plenty still in the ground, if we simply aren't extracting it fast enough. There are geological limits there, you can't pump a field dry in just a year or two, as well as the limits imposed by infrastructure, politics, finance, availability of labour and materials and so on.

A country might have enough oil in the ground to supply their consumption for 10 years. But that doesn't mean they can actually use it to supply their use for all of that 10 years and then suddenly stop. In practice the flow rate will be lower and it will take far longer than 10 years to extract all of that oil.

Bass Strait (for example) started production in 1966 and peaked in 1985. It still produces small amounts of oil, and a lot of gas, today and will still be producing for a long time to come. But we couldn't get all that remains out quickly even if there was a crisis situation and we desperately needed fuel - there's geological limits there.

 

[Smurf1976]

This seems a bit like a conspiracy theory article but I think it's worth a read given the nature of it. If true, then it would explain what's been going on in all markets (not just oil) thus far in 2016.

http://peakoil.com/publicpolicy/the-secret-behind-the-next-global-crash

Persian Gulf traders, and that includes Westerners working in the Gulf confirm that Saudi Arabia is unloading at least $1 trillion in securities

 

[Smurf1976]

Have a look at this chart of OPEC proven oil reserves and ask yourself a few questions.

How plausible is it that the UAE has discovered exactly the same amount of oil as they have extracted each and every year since 1986?

How plausible is it that with one exception they all had sudden, huge jumps in proven reserves all about the same time (1980's)?

The data looks seriously manipulated to me. Qatar's might be OK but the rest look dubious at best.

My personal suspicion is that they probably did it accurately in the past, until the 1980's, then switched to reporting the total of what's been discovered to date as "reserves" and ignoring what has already been extracted. That is just a theory but it seems more plausible than the official data does.

https://upload.wikimedia.org/wikipe...px-OPEC_declared_reserves_1980-now_BP.svg.png

 

[luutzu]

This seems a bit like a conspiracy theory article but I think it's worth a read given the nature of it. If true, then it would explain what's been going on in all markets (not just oil) thus far in 2016.

http://peakoil.com/publicpolicy/the-secret-behind-the-next-global-crash

Would those trillions include their downstream/refining assets in Aramco?

Read, probably just before Xmas, that they're thinking of floating those downstream assets but keeping the oil assets.

Might not be much of a stretch to think that, beside the other pluses, in crashing the oil price their refining businesses will be making bucketloads more. High margin, high growth... analysts love those growth and margins so they will be offloaded for a pretty penny.

Use proceeds to buy more oil assets (and weapons and mercenaries) then turn the tap down and some people will get the short end of the stick.

If so, well play tyrants. Well play.

 

[luutzu]

Bingo!

Oil in the ground is really only a useful thing to know to the extent that it influences how much oil can be brought above ground on a daily basis. The two are related but not in a linear manner.

We could well run short of oil, even if there's plenty still in the ground, if we simply aren't extracting it fast enough. There are geological limits there, you can't pump a field dry in just a year or two, as well as the limits imposed by infrastructure, politics, finance, availability of labour and materials and so on.

A country might have enough oil in the ground to supply their consumption for 10 years. But that doesn't mean they can actually use it to supply their use for all of that 10 years and then suddenly stop. In practice the flow rate will be lower and it will take far longer than 10 years to extract all of that oil.

Bass Strait (for example) started production in 1966 and peaked in 1985. It still produces small amounts of oil, and a lot of gas, today and will still be producing for a long time to come. But we couldn't get all that remains out quickly even if there was a crisis situation and we desperately needed fuel - there's geological limits there.

True true. Having the rights, knowing where it is is one thing. Getting to it, and does it economically (pipelines, rail etc.) is another matter. Read that Santos is pumping a lot of water out of one of their fields to release the trapped gas to then feed their GLNG second train.

It is somewhat insane when you think about it. We're almost completely dependent on a finite resource that by some estimate will run out within a century... and we're in not much of a hurry to ramp up alternatives.

 

[luutzu]

Have a look at this chart of OPEC proven oil reserves and ask yourself a few questions.

How plausible is it that the UAE has discovered exactly the same amount of oil as they have extracted each and every year since 1986?

How plausible is it that with one exception they all had sudden, huge jumps in proven reserves all about the same time (1980's)?

The data looks seriously manipulated to me. Qatar's might be OK but the rest look dubious at best.

My personal suspicion is that they probably did it accurately in the past, until the 1980's, then switched to reporting the total of what's been discovered to date as "reserves" and ignoring what has already been extracted. That is just a theory but it seems more plausible than the official data does.

https://upload.wikimedia.org/wikipe...px-OPEC_declared_reserves_1980-now_BP.svg.png

Are you going to trust them or your lying eyes?

We must have bought the wrong fuel. Ours tend to run empty after we use it - these ones keep on growing or stay the same.

Kuwait should at least drop a bit when Saddam burnt their oil fields in the First Gulf War.

 

[explod]

Of course it is manipulated.

The move down to try and cut the Russians out. But once at that level let to rise to keep the markets bubbling and keep kicking the can down the road further yet.

On the monthly chart the opening drop on the Dow for the start of the year is greater than any month on the ten year chart which includes 2007/08.

Oil will be put wherever they like for political ends.

Time to move on and keep working on that camouflaged cave in the outback Hills.

 

[Smurf1976]

It is somewhat insane when you think about it. We're almost completely dependent on a finite resource that by some estimate will run out within a century... and we're in not much of a hurry to ramp up alternatives.

A key issue there is rate of extraction.

Say that you have 50 oil fields each with 500 million barrels (to keep it simple). That's 25 billion barrels all up.

If they are located onshore in a country with massive oil infrastructure, and the USA is the only such country although individual regions within some other countries (notably Canada) come close, then realistically you can produce somewhere up to 3 billion barrels a year from that reserve base. So that's 8.2 million barrels per day.

If it's in some other reasonably developed country with favourable politics (eg Australia) but without the massive oil infrastructure then somewhere around 5 million barrels per day is a likely limit. You're not going to build an entire new pipeline system just to cater for one year of peak production, instead you'd build lower capacity and extract the oil over a longer period.

If it's somewhere that's hard to access or which is subject to political factors well then the production rate will be even lower. You extract maybe 4% or even just 1% of the reserves each year because that's all you can make happen with all the issues you have to deal with (like people blowing your pipelines up).

So we're using 35 billion barrels per year at present. That includes conventional crude oil from all locations (onshore and offshore including the arctic), condensate (from natural gas extraction), natural gas liquids (ethane, propane, butane - the latter two being commonly known as LPG), tar sands (Canada), upgraded natural bitumen (Venezuela) and US "shale" oil (not to be confused with oil shale, that's entirely different).

Some of that is cheap and easy (onshore oil either large fields in places like Saudi, or small ones in places with infrastructure already nearby such as USA) whilst some of it is high cost (Canadian tar sands, US shale, anything in very deep water).

Not included is oil shale. Estonia is the only country using that as a major energy source but they're just mining the shale (conventional mining methods to do that) and burn most of it "as is" to generate electricity in a process that's essentially the same as using coal for electricity. A little bit does get used for chemicals and liquid fuels, but most is just burnt as a solid in boilers.

So, 35 billion barrels per day all up. To achieve that extraction rate we need at least 350 billion barrels of proved reserves (if it were all in the USA or Canada), or make that closer to 600 billion barrels if it's distributed among mostly developed countries (or undeveloped ones that are at least politically stable).

To the extent that there's x amount in the hands of politically less stable countries, you can't really assume any given rate of extraction. Venezuela claims the second largest reserves, and they certainly have a vast amount of natural bitumen which can be upgraded to produce crude oil, but with the political situation in that country production is going nowhere. Some yes, but it's trivial compared to their claimed reserves.

So it's not a case of saying that we've got x years worth of oil left in the ground. For all sorts of reasons, geological, financial and political, there's a very real limit to how quickly we can get that out of the ground. If we're going to have a shortage it will thus begin well before the last barrel is pumped from the ground.

A bit off topic but I've got three types of suspect looking rocks sitting in the garage at the moment. I think (hope) this includes oil shale although I'm not certain which is which at the moment. Now I'm just working out how to do some testing to confirm what's what (preferably without burning anything down or gassing myself as apparently this particular shale is about 5% sulphur in the actual oil content). I'm not planning to use it for anything, just curious. At this stage I'm very sure I was looking in the right place, not so sure what the rocks I've got actually are (even if one is shale, then what are the other two?).

 

[qldfrog]

A bit off topic but I've got three types of suspect looking rocks sitting in the garage at the moment. I think (hope) this includes oil shale although I'm not certain which is which at the moment. Now I'm just working out how to do some testing to confirm what's what (preferably without burning anything down or gassing myself as apparently this particular shale is about 5% sulphur in the actual oil content). I'm not planning to use it for anything, just curious. At this stage I'm very sure I was looking in the right place, not so sure what the rocks I've got actually are (even if one is shale, then what are the other two?).

would not that be your worst nightmare to find oil shale? In qld do not know about tasmania, you can not own the resources, so the "Close the gates" here in qld/nsw; finding resources under your property is a nightmare..
This is a fundamental right which needs to change if Australia was to become more that a colony laws wise. I believe this is different in WA but on the east coast what can you do when prospective licenses are already covering most of places+ oil shale is usually quite a dirty resource!

 

[Smurf1976]

The oil shale I've got (assuming it actually is oil shale, to be confirmed) is from a very well known resource that was actively mined from sometime in the late 1800's to about 1935 with several companies operating and more holding claim over land under which the shale is present.

It was a significant operation at the time, to the point that they refined petrol etc on site. Little trace of it remains today apart from a few random concrete and brick structures in the bush, some old pipes lying in pieces and a lot of (uncapped and unmarked so potentially hazardous - definitely need to watch where you're stepping) ventilation shafts.

There were thoughts circa 1916, at a time when the state had just gone into the electricity business, that government may also be interested in buying out one of the shale operators or alternatively setting up a new operation. One of the owners was actively pushing the idea, the basic concept being that several private operators running independently was inevitably less efficient than a single large operation that government could achieve, but it didn't go anywhere beyond some reports and debate in parliament, economics being the reason. Why the companies didn't then pursue some sort of merger I'm not sure, presumably some were keen and others weren't interested for whatever reasons.

The main products of the old operations were petrol, turpentine, various grades of fuel oil and lubricants. The waste shale after processing was apparently used very successfully as fertilizer.

Since that time numerous companies have taken an interest in it, mostly after the 1970's oil shocks although there was some interest prior to that. CRA (now Rio Tinto) was one, more recently Boss Energy have taken a look and even the Hydro had a look at it back in the 1980's (with thoughts of producing petrol, diesel, jet fuel and LPG, not for electricity generation). Others had ideas of producing road bitumen or using it to fire the kilns in the nearby large scale cement works (now owned by Cement Australia). None of those efforts went anywhere for economic reasons although they all reached the conclusion that it's technically viable.

Personally I have zero interest in starting any oil shale companies or otherwise doing anything with it. Just went for a walk in the bush (nothing wrong with that, the area is fully accessible to the public these days), came across various ruins from the former operation and then spotted a few suspect looking rocks lying on the ground so picked them up and brought them home. Nothing major, just shoved some smaller ones in my pockets and carried the rest in my hands.

There are numerous known small deposits of oil shale in Tasmania although only one area that's large enough to have attracted any serious interest. It's fairly well known that "there's oil on Bruny Island" but in practice it's just a minor shale deposit near the surface.

Apart from the former shale industry, every few years someone comes up with the idea of drilling for conventional oil in Tas but thus far nobody has found it and no major oil company has shown any interest. I doubt there's much if any to be found but guess what's in today's newspaper? Yep, here's the latest attempt:

http://www.themercury.com.au/news/t...s/news-story/16f28a3b310b7a6ca3780a7e52c84d56

Suffice to say I won't be investing in this.

 

[daytradeprofit]

For a long time, I analyze the relationship between the Canadian currency prices and oil
I spoke about this correlation many times in recent years.
now i see there two patterns who catch my eye:
oil chart is in Type of building wedge, it could leading to prices corrections over 50 $
Another thing that watched in Canadian dollars charts
It seems, which makes the same move that was in 2006-7, which led a sharp correction.
As a reminder, you can watch my post on the usdcad in the 1.07 price level That noted usdcad is going to 1:31.
Now, remains to be seen whether this time too it will come......
If yes, then I predict targets, 1.24-1.19 in usdcad area with oil prices in 51-55"

now lets face with the situation we have:

 

[luutzu]

The oil shale I've got (assuming it actually is oil shale, to be confirmed) is from a very well known resource that was actively mined from sometime in the late 1800's to about 1935 with several companies operating and more holding claim over land under which the shale is present.
...

Are you a chemical engineer or a geologist Smurf?

My sister is married to a Geologist and he got the same kick out of finding some rock too

 

[luutzu]

A key issue there is rate of extraction.

Say that you have 50 oil fields each with 500 million barrels (to keep it simple). That's 25 billion barrels all up.

If they are located onshore in a country with massive oil infrastructure, and the USA is the only such country although individual regions within some other countries (notably Canada) come close, then realistically you can produce somewhere up to 3 billion barrels a year from that reserve base. So that's 8.2 million barrels per day.

If it's in some other reasonably developed country with favourable politics (eg Australia) but without the massive oil infrastructure then somewhere around 5 million barrels per day is a likely limit. You're not going to build an entire new pipeline system just to cater for one year of peak production, instead you'd build lower capacity and extract the oil over a longer period.

If it's somewhere that's hard to access or which is subject to political factors well then the production rate will be even lower. You extract maybe 4% or even just 1% of the reserves each year because that's all you can make happen with all the issues you have to deal with (like people blowing your pipelines up).

So we're using 35 billion barrels per year at present. That includes conventional crude oil from all locations (onshore and offshore including the arctic), condensate (from natural gas extraction), natural gas liquids (ethane, propane, butane - the latter two being commonly known as LPG), tar sands (Canada), upgraded natural bitumen (Venezuela) and US "shale" oil (not to be confused with oil shale, that's entirely different).

Some of that is cheap and easy (onshore oil either large fields in places like Saudi, or small ones in places with infrastructure already nearby such as USA) whilst some of it is high cost (Canadian tar sands, US shale, anything in very deep water).

Not included is oil shale. Estonia is the only country using that as a major energy source but they're just mining the shale (conventional mining methods to do that) and burn most of it "as is" to generate electricity in a process that's essentially the same as using coal for electricity. A little bit does get used for chemicals and liquid fuels, but most is just burnt as a solid in boilers.

So, 35 billion barrels per day all up. To achieve that extraction rate we need at least 350 billion barrels of proved reserves (if it were all in the USA or Canada), or make that closer to 600 billion barrels if it's distributed among mostly developed countries (or undeveloped ones that are at least politically stable).

To the extent that there's x amount in the hands of politically less stable countries, you can't really assume any given rate of extraction. Venezuela claims the second largest reserves, and they certainly have a vast amount of natural bitumen which can be upgraded to produce crude oil, but with the political situation in that country production is going nowhere. Some yes, but it's trivial compared to their claimed reserves.

So it's not a case of saying that we've got x years worth of oil left in the ground. For all sorts of reasons, geological, financial and political, there's a very real limit to how quickly we can get that out of the ground. If we're going to have a shortage it will thus begin well before the last barrel is pumped from the ground.

A bit off topic but I've got three types of suspect looking rocks sitting in the garage at the moment. I think (hope) this includes oil shale although I'm not certain which is which at the moment. Now I'm just working out how to do some testing to confirm what's what (preferably without burning anything down or gassing myself as apparently this particular shale is about 5% sulphur in the actual oil content). I'm not planning to use it for anything, just curious. At this stage I'm very sure I was looking in the right place, not so sure what the rocks I've got actually are (even if one is shale, then what are the other two?).

So fossil fuel price will skyrocket within next decade then?

I'm still a bit surprised by how much infrastructure it takes to supply 1 day's worth of oil consumption. I mean, Santos' GLNG $26B project only produces equivalent of 69M barrel a year, the world consumes at its current low demand at 96M barrel a day!

With these rates of extraction and constraints you're talking about... maybe oilers don't mind the melting ice-caps to make extraction easier for them. Some people are just a bit messed up. Too bad they also run the place.

 

[luutzu]

Saudi Aramco is thinking of offloading its downstream assets, not its reserves.

I'm betting that soon after these IPOs and the cash has been transferred and no possibility of a backsy, they'll start to crank up oil prices again.

http://www.reuters.com/article/us-saudi-aramco-idUSKCN0V20AB

An initial public offering of Saudi Aramco, the world's biggest oil company, could be on the local or international markets but would not include Saudi energy reserves, the company's chairman told Saudi-owned al-Arabiya television.

"The reserves would not be sold, but the company's ability to produce from the reserves is being studied," Khalid al-Falih told the channel in an interview from Davos, Switzerland where the annual World Economic Forum was held last week.

In an interview with The Economist earlier this month, Saudi Deputy Crown Prince Mohammed bin Salman said Riyadh might sell shares in Aramco as part of a privatization drive.

Aramco has crude reserves estimated at about 265 billion barrels, over 15 percent of all global oil deposits, so it could become the first listed company valued at $1 trillion or more if it went public, analysts have estimated...