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Saudi Aramco is producing more than 9.9 million barrels a day of crude oil as it fully recovers from the worst ever attacks on its energy infrastructure.

Output reached that level on Sept. 25 and is a "little bit" higher now, Ibrahim Al-Buainain, chief executive officer of state-owned Aramco's energy trading unit, said at Fujairah in the United Arab Emirates. Saudi Arabia has also restored some spare capacity after the Sept. 14 attacks, he said.

"On the 25th, yes, we reached that target of production," he said. "We produce depending on the market and depending on capacity, so actually we are a little bit higher than this."

Immediately before the attack, Aramco was pumping 9.8 million barrels a day, in line with its average production level in August.

Aramco has said it's committed to meeting demand from all of its customers and didn't miss any contracted shipments. Oil markets surged after a swarm of explosives-laden drones and missiles struck some of Saudi Arabia's biggest processing plants, knocking out about 5% of global crude supply with one blow.

Al-Buainain had initially expected the strikes to push oil prices higher by $10 a barrel. While benchmark Brent crude surged as much as $11.73 on the first trading day after the attacks, it has since given up most of that gain as Aramco has quickly restored capacity and production, while global demand concerns remain.

Aramco is building redundancy into its systems that allowed the company to be resilient to the assault on the Abqaiq processing plant and Khurais field, Al-Buainain said.

The attacks, however, highlighted the fragility of global supply chains and the vulnerability of Saudi Arabia's lifeblood industry, and they raised the risk to reliable flows from the Persian Gulf after a series of tanker bombings in May and June.

Aramco cut refinery runs at home in the days after the strikes to make more crude available to customers and offered some of those buyers alternative grades to meet its supply commitments. Aramco Trading, which Al-Buainain heads, also bought refined products on the market to make up for any shortfalls in fuels at home.

Aramco Trading, officially known as Saudi Aramco Products Trading Co., buys and sells crude produced in other countries and procures non-Saudi oil for the company's joint-venture refiners.

Saudi Aramco has approached Asian state oil producers, including Malaysia's Petroleum National and China's Sinopec Group, about potential cornerstone investments in its initial public offering, people with knowledge of the matter said.

Saudi Aramco has recently been holding talks with potential investors, including China's sovereign wealth fund and China National Petroleum Corp., according to the people, who asked not to be identified because the information is private. It has also reached out to state-owned entities from the United Arab Emirates and Kuwait, including Abu Dhabi sovereign fund Mubadala Investment Co., as well as Canadian pension funds, the people said.

Deliberations are at a preliminary stage, and Aramco hasn't yet received any firm commitments, the people said. Aramco and its advisers are arranging meetings with some potential cornerstone investors this week and next week, according to the people. The funds could decide against buying into the offering, they said.

Aramco is leaning on business partners and friendly governments to help achieve its preferred valuation of $2 trillion even after oil prices fell more than 25% over the past year. It's casting a wide net to attract enough demand as it accelerates preparations for the listing, with an aim of listing on the Saudi stock exchange as soon as November.

Petroleum National, known as Petronas, partnered with Aramco on its $27 billion refinery and petrochemical complex in Malaysia's southern state of Johor. Aramco has been deepening its ties in Asia, the world's top oil-consuming region, with refinery deals to bolster its market share.

Chinese state entities held talks with Aramco during its original efforts to drum up interest in the listing. Aramco invited Sinopec Group to invest in March 2017. The company, officially known as China Petrochemical Corp., is the country's biggest buyer of Saudi crude.

Information for this article was contributed by Jasmine Ng, Scott Deveau and Julian Lee of Bloomberg News.

Business on 10/01/2019

Print Headline: Saudis say oil output restored

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