Saudi Aramco President and CEO Amin H. Nasser today told delegates attending the 13th annual Gulf Petrochemicals and Chemicals Association (GPCA) Forum that a key Saudi Aramco objective is to bring its downstream business to the same prominence as its upstream, as the company undergoes substantial expansions in refining, marketing and lubes.
In line with the forum theme “Exceeding Transformation & Investing in Growth,” Nasser commented on Saudi Aramco’s pivotal role in enabling new industrial and business partnerships as well as infrastructure, not only in core oil and gas downstream, but also in advanced technologies and energy-related, value-adding activities.
“Our ultimate target of 8-10 million barrels per day of integrated refining and marketing capacity will create a better balance between our upstream and downstream segments,” Nasser said.
In a keynote speech before executives and experts from the world’s leading manufacturers, suppliers, and others spanning the chemicals and petrochemicals sector, Nasser highlighted chemicals as the most promising element of the company’s downstream strategy. He said that chemicals will represent about one-third of world oil demand growth between now and 2030, and nearly half by 2050. Petrochemicals will add nearly seven million barrels per day (bpd) of oil demand by 2050, reaching a total of some 20 million bpd. This growth will be driven by an expanding world population and a growing middle class enjoying more affluent lifestyles.
Nasser said: “Saudi Aramco will make the most of those prospects with chemicals investments of more than $100 billion over the next 10 years—not including a prospective acquisition. We are expanding this business both in Saudi Arabia and in fast-growing overseas markets like China and India, with the aim of converting two million barrels per day of crude oil into petrochemicals—and we may eventually move our target higher to three million barrels.”
He added, “Our downstream business ventures will provide a reliable destination for Saudi Aramco’s future oil production, and diversify both the company’s business portfolio and the Kingdom’s economy.”
Saudi Aramco’s downstream strategy seeks to enhance its resource base by targeting increased horizontal and vertical integration across the hydrocarbon value chain. “With a diversified, integrated, and robust business portfolio,” Nasser said, “our supply, trading, and marketing model will mitigate oil price volatility, generate additional revenues, and expand opportunities for conversion industries, local manufacturers, and service providers —all of which drive job growth and value creation.”
Negotiations are underway for a major share in Riyadh-based diversified chemicals leader SABIC, with the aim of creating one of the world’s strongest integrated energy and chemicals companies. The acquisition would leverage Saudi Aramco’s innovative developments in crude oil to chemicals technology, or C2C, a process that eliminates the refinery stage to transform crude oil directly into valuable petrochemicals.
Held on November 26-28 in Dubai, the GPCA Forum is the region’s leading downstream-focused industry event, boasting an attendance of more than 2,000 delegates from almost 600 companies in 50 countries.