Aramco reinforces its leading role in global energy supply

Saudi Aramco, the world’s leading integrated energy and chemicals company, released Friday its 2017 Annual Review highlighting strategic achievements that reinforce the company’s role as the No. 1 producer of crude oil and condensate, adding value by integrating refining and chemicals production, and expanding cleaner natural gas supply to meet domestic demand.

Saudi Aramco President and CEO Amin H. Nasser said: “In 2017, Saudi Aramco continued to deliver on its long-term strategy of reliable supply to meet customer needs, thereby driving economic growth in the Kingdom and around the world. Despite uncertain, volatile market conditions, we continued to create long-term value to benefit our shareholder, customers, and partners. This year’s review underscores how Saudi Aramco is committed to playing its part in meeting the world’s energy needs today and tomorrow by continuing to invest wisely throughout the cycle and across the value chain.”

Amin Nasser noted that in 2017, Saudi Aramco progressed a slate of oil and gas mega-projects in the Upstream. He also highlighted that in the Downstream, the company continued to enhance its global network and completed key agreements designed to extract maximum value across the hydrocarbon value chain. Importantly, he said Saudi Aramco’s safety performance remained strong and among the highest in the industry.

Upstream highlights

In 2017, Saudi Aramco reinforced its premier upstream oil and gas position, optimizing its stewardship of the Kingdom’s hydrocarbon resources. Designed to maximize long-term value, the company’s upstream strategy focuses on leveraging competitive advantages in production scale.

The company will maintain its position as the world’s leading crude oil producer by production volume by tempering production from mature fields, accelerating younger fields and secondary reservoirs, and developing fresh reserves from new increments, while diversifying operations to capture value from strategic integration and expand natural gas activities.

The company produced an average of 10.2 million barrels per day (bpd) of crude oil, including condensate. Total raw gas processing averaged 12.4 billion standard cubic feet per day (scfd). The company discovered two new oil fields (Sakab southeast of Haradh and Zumul in the Rub’ Al-Khali) and a gas reservoir (Jauf, in the Sahba field), and continued its program to increase the capacity of the Khurais field by 300,000 bpd in 2018.

The company continued its efforts to increase domestic gas supplies, providing additional feedstock to drive industrial utilities expansion and improve national energy efficiency, while making more crude oil available for export. Major project achievements included readying the Midyan non-associated gas field to produce 75 million scfd of natural gas and 4,500 bpd of condensate, displacing liquid fuels for use in power generation, and progress on the Fadhili Gas Plant designed to process up to 2.5 billion scfd of raw gas, a component in raising the company’s overall gas processing capacity.

Additional programs to expand capacity included the Hawiyah Gas Plant’s new processing facilities, which are expected to come on-stream in 2021, and add more than 1.1 billion scfd of processing capacity for a total of approximately 3.6 billion scfd. The company started engineering, procurement and construction of a natural gas liquids deep recovery train at the Uthmaniyah Gas Plant that will recover ethane and other NGLs from natural gas produced from the Uthmaniyah Gas Plant and the Hawiyah Gas Plant expansion.

Downstream highlights

Saudi Aramco’s Downstream continued to provide an engine for the company’s growth and diversification, driving value across the hydrocarbon chain by expanding and integrating the company’s portfolio and partnerships, and creating additional revenue streams. In 2017, crude oil exports averaged 6.9 million bpd, and gross refining capacity was 4.9 million bpd.

Saudi Aramco completed the acquisition of Motiva, which includes North America’s largest single-site crude oil refinery in Port Arthur, Texas, and signed an agreement to participate in Malaysia’s Refinery and Petrochemicals Integrated Development (RAPID) project with Petronas, which includes a 300,000 bpd refinery, three million tons per annum of olefins capacity, and chemicals manufacturing units. In addition, a Memorandum of Understanding was signed with Norinco to build a 300,000 bpd capacity refinery and expand another in China.

In-Kingdom, the company’s Sadara joint venture with The Dow Chemical Company also witnessed a milestone with the full operation of the last of its 26 plants — a commissioning that takes Saudi Arabia’s chemicals industry to the next era. The facility achieved reliable operations at full design feed capacity of 85 million scfd of ethane and 53,000 bpd of naphtha.

Our approach to downstream integration, expansion and petrochemicals growth is underpinned by our unwavering commitment to technology and innovation, and developing world-class collaborative partnerships to advance cutting-edge science.

This means efficiently applying existing and proven Crude Oil to Chemicals Technologies (COTC) on a large scale industrial basis, and also pioneering new Crude to Chemicals (C2C) technologies that advance the forefront of knowledge and boundaries of what is possible in petrochemicals production.

Saudi Aramco is continuing its pioneering thermal crude oil to chemicals (C2C) technology program that was successfully piloted in 2017 and delivered higher chemicals yield than previously achieved. We also established a strategic partnership with leading technology providers, Chicago Bridge & Iron and Chevron Lummus Global, to de-risk and scale up this technology.

Saudi Aramco also signed a memorandum of understanding (MoU) with Saudi Arabian Basic Industries (SABIC) to develop a fully integrated crude oil to chemicals (COTC) complex in Saudi Arabia that is anticipated to process 400,000 bpd and deliver an annual output of 9 million tons per annum of chemicals and base oils, in addition to transport fuels.

Aramco Performance Materials began commercial operations in 2017, selling its first consignment of cost competitive and sustainable CONVERGE polyols that are used in a broad range of high performance applications such as polyurethane coatings, elastomers, and adhesives, and contain up to 50% carbon dioxide, demonstrating how it can be converted into useful products.

In the drive to grow its base oils business, Saudi Aramco marked a number of milestones in 2017, including establishing a global interchangeable slate of Saudi Aramco branded base oils among the company’s LUBEREF, S-Oil, and Motiva affiliates, and starting domestic sales of aramcoDURA and aramcoPRIMA base oils.

Technology and innovation highlights

Continued investment in pioneering technology, a global R&D network, and collaborative partnerships are key elements driving the company’s operational efficiency and production performance.

In 2017, computational modeling resolution enhancements were made to the cornerstone TeraPOWERS and GigaPOWERS reservoir simulators for better understanding of reservoir enhancements. The GeoDRIVE integrated seismic imaging platform, another company technology, was developed to enable ultra-high resolution subsurface mapping and characterization.

Saudi Aramco also expanded its use of innovative nonmetallic materials. More than 2,300 kilometers of non-metallic pipe was deployed, resulting in significant cost avoidance throughout the life cycle. Nonmetallics also create additional markets for crude oil in the construction, automotive, renewable energy and other sectors, and support local manufacturing opportunities.

Saudi Aramco’s commitment to innovation was highlighted by the fact that in 2017, 230 US patents were granted — a record for the company. A significant number of these patents reflect the company’s continued investment in further reducing the greenhouse gas intensity of crude oil and its derivatives that will reap benefits for energy producers and consumers alike.

Sustainability initiatives

Sustaining low carbon intensity crude oil is a major focus, achieved by applying best practices at every stage of operations.

In 2017, a major well-to-refinery study of all the crude oil grades supplied to the Chinese market from over 20 countries highlighted that Saudi Arabian crude oils have the lowest carbon intensity, reflecting the productivity of Saudi Aramco reservoirs, low water production hence less energy expended, and low flaring rates. Flaring intensity remained at less than 1% of annual gas production in 2017.

In fuel engine technology, the company completed a vehicle demonstration at its Aramco Fuel Research Center in Paris with a fully integrated octane-on-demand system that reduces CO2emissions. The technology uses two fuels to achieve anti-knock quality and improves efficiency over gasoline engines by an estimated 8%.

Citizenship

Saudi Aramco continued its long-standing tradition of positive outreach in line with the company’s strategic objectives.

With ongoing programs to boost competency in critical science, technology, engineering, and math (STEM) disciplines, Saudi Aramco continued to help prepare a highly skilled future workforce, a key focus for the Kingdom’s majority youth population. Outreach in 2017 also included support for higher education programs, including energy studies, sustainability and energy efficiency.

Facilitating the growth of micro industries provided tools for communities throughout Saudi Arabia to improve their economic well-being. Programs protecting the Kingdom’s unique and ecologically sensitive habitats included the Mangrove Eco-Park at Ras Tanura currently under construction, and the Shaybah Wildlife Sanctuary.

The company’s King Abdulaziz Center for World Culture, expected to attract 1.5 million visitors each year, offered a diverse slate of content to enrich the arts and cultural offering.

The company also reached out to people in need with programs designed for immediate, positive impact, such as “I Want to Hear,” which provided 1,000 people with hearing aids, examinations and fittings.

Moving Forward

President and CEO Amin H. Nasser said: “Our achievements in 2017 reflected Saudi Aramco’s steadfast commitment to helping ensure global energy demand will be met for years to come, pursuing technologies and initiatives to derive even greater value from oil through petrochemicals and advanced materials, and investing in R&D to continue reducing energy’s carbon footprint and improving the Company’s operational efficiency. Our highly capable and talented employees will build on 2017’s successes to reinforce our leading position in oil and gas exploration and production, further our downstream growth, and maintain our focus on innovation.”