World largest oil company praises co-op with China

Thursday, Nov 13, 2008

Saudi Arabia's leading oil firm is looking to step up supplies to and cooperation with China in anticipation of an emergence from the global economic slowdown, Abdallah S. Jum'ah, president of Saudi Arabian Oil Company, or Saudi Aramco, said on Monday in Beijing.

He saw the economic slowdown in China as short-term, and was focused continuous cooperation in the long haul. We think China is one of the biggest growth markets of oil in the world,"" said Jum'ah, also chief executive officer of Saudi Aramco, which manages the world's largest proven oil reserves and is the world's largest producer of crude oil.

The oil business is a long-term business. The current economic situation may contribute to the demand reduction. This is experience we have gone through before, and we can weather it this time. We expect demand to come down, but that is not making us panicky or very unhappy. It's the nature of business,"" he told Xinhua. We're very happy with the cooperation, and we're very happy with all the deals that we have done with our friends in China. The deals are beneficial for both parties.""

The cooperation mainly embraces direct oil supply to and joint ventures in China, China's corporate presence in gas exploration in Saudi Arabia and Chinese engineering contracts for Saudi Arabia. According to China's General Administration of Customs, the nation became a net oil importer in 1993 and relies on imports to meet around 46.5 percent of its total demand of 346 million tones a year. Since Saudi Aramco began to supply crude oil to China in 1990, it has become the biggest oil supplier to China, Abdallah Jum'ah said.

In 2006, the company signed a memorandum of understanding with Sinopec, China's largest oil refiner. Under the accord, China will increase its imports from the Saudi producer up to 1 million barrels a day (50 million tonnes a year) by 2010. We're supplying China with around 750,000 barrels per day,"" said Jum'ah. Beyond 2010, his company would continue to supply China with its requirements. ""2010 is not a time for the memorandum to come to an end,"" he added. He reckoned it would supply 1 million barrels a day thereafter.

Source: Xinhua