Aramco will invest half a trillion dollars over the next ten years, according to CEO Amin Nasser
Saudi Aramco will seek more acquisitions to speed its expansion in refining and petrochemicals as Saudi Arabia pushes ahead with plans to diversify its economy from reliance on sales of crude.
The purchases will be in addition to Aramco’s planned purchase of government-controlled chemicals producer Saudi Basic Industries Corp., Aramco Chief Executive Officer Amin Nasser said Tuesday in a speech in Dubai. The deal to buy the chemicals producer, known as Sabic, from the Saudi sovereign wealth fund could be valued at about $70 billion.
“Saudi Aramco will make the most of those prospects with global investments in the chemicals space of roughly 100 billion dollars over the next 10 years -- in addition to prospective acquisitions,” Nasser said.
Aramco, the world’s biggest oil exporter, plays a key role in Saudi efforts to develop new industries and sources of income. Crown Prince Mohammed bin Salman is championing a plan to diversify the economy and create jobs. The Sabic deal will help fund that project by shifting funds from Aramco to the wealth fund. The plan necessitated a delay in Aramco’s initial public offering, a cornerstone of the diversification plan, until 2020 or 2021, Prince Mohammed said in an interview in October.
“The talk now is about 2021, more or less,” as Aramco needs Sabic on its books for at least one year before it can IPO, Nasser said.
To tap into growth for fuels and chemicals, Aramco, known formally as Saudi Arabian Oil Co., wants to more than double its refining capacity by the middle of the next decade. It also wants to transform as much as 3 million barrels of crude a day -- about 30 percent of its output -- into chemicals. Demand for petrochemicals will rise faster than for any other segment of the oil industry, according to the International Energy Agency.
“We are expanding this business both in Saudi Arabia and in fast-growing overseas markets,with the aim of converting two to three million barrels per day of crude oil into petrochemicals,” Nasser told an industry conference in Dubai.
Aramco will invest half a trillion dollars over the next ten years in oil, natural gas, chemicals and refining projects, Nasser said in an interview on Sunday at company headquarters in Dhahran, Saudi Arabia.
It’s seeking to boost domestic gas output to power the country while freeing crude for export and to supply a burgeoning demand for chemicals. Aramco targets boosting gas production to 23 billion standard cubic feet a day and capacity to 25 billion within the next 10 years compared with the current level of 14 billion cubic feet a day, Nasser said Tuesday.
Aramco is developing so-called unconventional resources that are harder to develop than typical fields in the north and east of the country. The company has 16 rigs currently drilling for unconventional gas and has completed more than 70 wells this year, he said.
The company will more than triple unconventional gas output to 190 million standard cubic feet per day by the end of the year, it said last week. Aramco began commercial production of unconventional gas from the North Arabia field near the Wa’ad Al Shamal industrial site at 55 million standard cubic feet per day in May.For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.