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Saudi Arabia
Aramco bumps up capital expenditure to boost production
Image credit: Saudi Aramco
ARAMCO HAS ANNOUNCED that it is ramping up capital expenditure in 2022 to US$40-50bn, compared with US$31.9bn in 2021, to boost production in response to increased global demand. Reporting its 2021 financial results, Aramco announced that it will continue to raise crude oil maximum sustainable capacity (MSC) to 13mn bpd by 2027, and potentially increase gas production by more than 50% by 2030. In its Downstream business, the company plans to expand its liquids to chemicals capacity to up to 4mn bpd. Aramco also intends to develop a significant hydrogen export capability and become a global leader in carbon capture and storage (CCS). In addition, the company is targeting investment in renewable energy and nature-based solutions, as it pursues its ambition of achieving net-zero Scope 1 and Scope 2 greenhouse gas emissions across its wholly-owned operated assets by 2050. This includes an aim to reach near-zero upstream methane emissions by 2030. Aramco’s net income increased by 124% to US$110.0bn in 2021, compared to US$49.0bn in 2020. The increase in net income reflects higher crude oil prices, stronger refining and chemicals margins, and the consolidation of SABIC’s full-year results, according to the company. Aramco declared a dividend of US$18.8bn for the fourth quarter, to be paid in Q1 2022. Commenting on the results, Aramco president & CEO Amin H.
Aramco is ramping up capital expenditure to between US$40-50bn for 2022.
Nasser, said, “Our strong results are a testament to our financial discipline, flexibility through evolving market conditions and steadfast focus on our long-term growth strategy, which targets value growth for our shareholders. “Although economic conditions have improved considerably, the outlook remains uncertain due to various macro-economic and geopolitical factors. But our investment plan aims to tap into rising long-term demand for reliable, affordable and ever more secure and sustainable energy. “We recognise that energy security is paramount for billions of people around the world, which is why we continue to make progress on increasing our crude oil production capacity, executing our gas expansion programme and increasing our liquids to chemicals capacity. “We are also investing in CCS, renewables and low-carbon hydrogen production – supporting the global energy transition and advancing our net-zero ambition.” Capital expenditure in 2021 was US$31.9bn, an increase of 18% from 2020, primarily driven by increased activities in relation to crude oil increments, Tanajib Gas Plant and development drilling programmes. Aramco expects 2022 capital expenditure to be approximately US$4050bn, with further growth expected until around the middle of the decade, reflecting the company’s belief that substantial new investment is required to meet demand growth, against a broader decline in upstream investment across the industry globally. In November 2021, the company announced the award of contracts worth US$10.0bn for the vast Jafurah field development, a key component of its unconventional gas programme, which will contribute to greenhouse gas emissions avoidance in the domestic energy sector. In 2021, Aramco’s average hydrocarbon production was 12.3mn bpd of oil equivalent per day (mmboed), including 9.2mn bpd of crude oil. In March 2022, Saudi Arabia pumped 10.28mn bpd of crude oil, up 50,000 bpd month on month, broadly in line with its OPEC+ quota. The OPEC+ alliance has so far stuck to an agreement to marginally increase output each month. Saudi Arabia’s economy is benefitting significantly from the current high oil price. Jadwa Investment forecasts that Saudi Arabia’s oil GDP is expected to rise 15.5% in 2022.
ENOWA, THE ENERGY, water and hydrogen subsidiary of NEOM, has established a Hydrogen and Innovation Development Center (HIDC) in NEOM’s advanced manufacturing and innovation city. The new facility aims to accelerate lab-to-market solutions and business development across the spectrum of hydrogen, green fuel production, utilisation and transport. Scheduled to open in 2023, HIDC will be a testing ground for new technologies in the clean energy industry and a collaborative learning community for research institutions focused on hydrogen and the circular carbon economy (CCE). Through these collaborations, HIDC will look to produce and adopt decarbonised and clean synthetic fuels in partnership with Saudi Aramco. Together with Aramco, Air Products and ACWA Power, HIDC will validate hydrogen innovations, demonstrating the potential for upscaling across the Kingdom and around the globe. By leveraging HIDC’s capabilities in green hydrogen, Aramco will seek to fast-track development of its flagship in-house synthetic fuels programme and demonstrate the commercial and technical feasibility of synthetic fuel production. This collaboration will also enable HIDC to tap into Aramco’s experience in engineering, energy logistics and fuels research and development and to align with Aramco’s ongoing efforts to explore the potential for hydrogen-based low carbon fuels to support the global energy transition.
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oilreview.me
Issue 3 2022
Image credit: ENOWA
HYDROGEN AND INNOVATION DEVELOPMENT CENTER (HIDC) established at NEOM
HIDC partners at the launch announcement.
Aramco's chief technology officer Ahmad Al-Khowaiter said, “With a new vision of future living, NEOM is a perfect place for Aramco to explore and test the boundaries of our in-house cutting-edge technologies. Its vast potential to generate wind and solar power also offers a unique opportunity to deliver renewable hydrogen to power the growth of low carbon synthetic fuels, while offering a platform to test their commercial viability.”
