11 minute read
View from the top: Talal Al-Marri, President and CEO, Aramco Overseas
Energy Focus meets Talal Al-Marri, President and CEO of Aramco’s subsidiary in Europe, Aramco Overseas
How does Aramco Overseas proactively support the Aramco global enterprise to ensure it fulfi ls its mission to provide energy around the world?
Our activities centre on the European market, but we also cover key locations for the company in other regions, such as central Asia and parts of the Far East including South Korea and Malaysia. Across them all, we look to provide best-in-class solutions to the global business, in particular our physical operations upstream and downstream – which focus on Saudi Arabia and its surrounding geographies.
Aramco Overseas has increasingly become a financial hub for the enterprise, making strategic acquisitions on behalf of the global business. In recent years, we have diversified the portfolio, become the primary vehicle for managing the enterprise’s downstream investments, utilising synergies as we oversee, manage and finance key acquisitions. Our full acquisition of Arlanxeo in the Netherlands, a world leader in synthetic rubber, also takes us further towards downstream integration.
In addition, our trading arm Aramco Trading now has a physical presence in Europe through its London operation. Trading focuses on the delivery of refined products, their blend, and managing associated risks.
In support of our supply chain, sourcing of the very best parts and components is vital to our operations – Europe again emerges as a leader in meeting this need. Our endeavours have built up decades-long relationships in places such as Italy, Spain and the UK – all seasoned supplier bases for us – while new locations such as Romania and the Caspian Sea are also adding value. Taking the UK as an example, we have benefitted immensely through collaborations on the North Sea, where relationships exist with not only our supply chain, but also newer areas of our business. As an energy cluster, Aberdeen is where a number of companies operate and innovate, while also maintaining connections with other key locations in the region, such as Oslo and The Hague.
Energy hotspots in Europe provide us with not only physical materials, but also intellectual gains, which is why we have three active research centres in Aberdeen, Paris and Delft, covering upstream and downstream research. The emphasis is not only improving current techniques, but also suggesting novel concepts, with the potential to innovate on behalf of the industry. Our ‘octane-ondemand’ (OOD) fuel engine technology, worked on in Paris, is evidence of this innovation.
The past decade has seen us active in the venture capital space, and through Aramco Energy Ventures we have invested in numerous technologies related to energy. It has been an area of healthy progress for us, as successful technologies have been acquired and undergone testing for suitability with our physical operations. Aberdeen is a key location for pursuing start-up investments as part of our venture capital strategy, and is home to three companies in our portfolio.
Solutions also include on-boarding the right talent to take our enterprise forward, from experienced drillers working on our rigs, to data scientists and artificial intelligence (AI) specialists who explore the cutting edge of our industry. Europe is also a leader in terms of executive talent, so we are also actively pursuing leaders who can take the business forward – not just in our core business but also in newer areas such as our downstream expansion and integration, and investor relations following the recent flotation.
Underlining the importance of future generations to our enterprise, we have around 400 Aramco-sponsored students, predominantly in the UK, earning qualifications that can place them across the company. The majority are undergraduates, studying at leading universities in relation to their field, while our postgraduates work on more specialised assignments – often forming part of faculty incubators, or working on specific solutions related to the energy industry at large.
As the industry gears up for a new reality amid COVID-19, what strategy has Aramco put in place to help its employees support its supply chain and improve operational productivity?
Our approach to the pandemic since its onset has been to focus on the safety of our people, industry and communities – this is simply our number one priority. With safety in mind, we are still operating in a manner that ensures business continuity – and ultimately the reliability of our oil production.
Our business infrastructure has meant that our employees continue to add value from remote locations, adapting to the current working reality we face. This is from the top down, also spreading out to our valued partners, who we are keen to support during this most challenging of periods.
We have given support to locations in Europe significantly affected, including the UK, Spain, France, Italy and the Netherlands – all of which have been vital to our growth in the region. That assistance has also extended to our non-European offices, such as Malaysia. As in Europe, our support focuses on front line care, as this is where the greatest vulnerability is – particularly for those doing outstanding work in fighting this pandemic daily, at a time when services have come under strain. Across locations, this has included delivery of around 103,000 pieces of personal protective equipment and approximately 1.5m meals to workers and their families.
We have been conscious of our partners, not just to ensure their safety but also out of concern for their own business continuity. Without them, we would not be the global enterprise we are today, and we want to support years of mutual success as best we can.
In terms of our expenditure and productivity, our Global President and CEO Amin Nasser, speaking in May, reflected on the need to adapt to what is now a complex and rapidly changing environment. In previous economic cycles, Aramco has demonstrated resilience, with a strong balance sheet and low-cost structure. The global business has taken steps to optimise capital spending this year, as we expect the pandemic to weigh on earnings. By reducing CAPEX and driving operational excellence, we are confident that energy demand will rebound as economies recover.
Aramco has ambitious growth plans as it transitions to become the world’s leading integrated energy and chemicals company. What do these plans involve?
We will continue to make acquisitions that enable greater integration across our value chain, recently demonstrated by our majority acquisition of SABIC, a major presence in petrochemicals. It allows Aramco to be a fi rm part of a sector expected to record a growth in oil demand. Furthermore, it is consistent with our long-term downstream strategy to grow our refining and chemicals capacity, and create value through integration. It expands our capabilities in procurement, manufacturing, marketing and sales, not to mention access to markets where SABIC is already established. It has transformed Aramco into one of the major petrochemical players.
Is the current approach to reducing greenhouse gas emissions producing acceptable results?
Our enterprise has historic strength in relation to carbon intensity, ranking among the least carbon-intense sources of crude oil in the world. This is the result of multiple factors, including our implementation of conscious practices in reservoir management, flare minimisation, emissions management and methane leak detection.
At Aramco, we appreciate that a transition to a low-carbon future is a complex process; alternatives take time and require investment in order to provide a meaningful share of the global energy mix. With this in mind, we employ an interdisciplinary approach to innovation in areas such as carbon management, focused on carbon capture and converting emissions to value. Net-zero emissions remains our goal.
What is your view on energy transition technologies such as CCUS and energy storage, and their future role within the Middle East?
We believe that capturing and storing CO2 could potentially contribute to reducing emissions. Recently, we have been demonstrating our applications in this area, proving that it is possible to capture CO2 and inject it into our reservoirs to test if it can enhance the oil recovery process.
Amin Nasser spoke earlier this year about the ‘4Rs’ – reduce, reuse, recycle and remove – which high impact solutions such as CCUS can bring about. Together with KAIST (Korean Advanced Institute for Science and Technology), we are working on carbon reclamation by developing novel technologies.
Across locations, we have also been keen to work with industry, in this case automotive, on innovations that can reduce emissions. I mentioned our Paris office’s OOD technology earlier. The facility is mirrored by a similar operation in Detroit, at the heart of the US auto industry. OOD sits alongside other projects, such as gasoline compression ignition, opposed-piston engines and mobile carbon capture – the latter based around a redesigned exhaust system that captures CO2 and stores it onboard the vehicle.
The Middle East is very much the focus given that it is home to our operations. We aim to lead the conversation in the region, which has to date included hosting dedicated events on carbon capture, including the demonstrations already mentioned in places such as the Saudi capital Riyadh.
Aramco’s corporate venture capital arm is launching a new US$500m fund to promote energy efficiency and renewable energy solutions. How will these technologies be selected?
Aramco Energy Ventures invests in the most promising entrepreneurial-driven technologies that align with our strategic priorities, supporting energy innovation and sustainability.
Our global investments generate greater value through innovative upstream and downstream technologies, driving renewable energy, water, and energy efficiency solutions.
These investments accelerate the development of new technologies, and ultimately contribute to economic development when applied to new commercial opportunities, cost reduction and performance improvement.
Aramco Energy Ventures, whose mission is to source and develop relationships with strategically significant and innovative energy technology companies, invests globally in start-up and high-growth companies with technologies of potential strategic importance.
Ultimately, we look to invest in companies whose technology is at prototype to early expansion stage, with potential to enhance energy production, improve operational efficiency and increase value in our downstream processing activities.
In addition to the three investments in Aberdeen, we also have a further three across the UK, ensuring our search for innovation is not limited to recognised industry hubs.
Do you see digital technology and data as an untapped opportunity for the energy industry?
Very much so. The fourth industrial revolution – cloud computing, connectivity, AI and big data – have become a focus for the enterprise. For this to truly work, however, integration is required across the entire business in order to realise efficiencies and help minimise environmental impact.
Big data can provide us with complex, real-time insights, and it is already part of our reservoir management and forecast production. The cloud, too, intrinsically complements this, providing a scalable, agile platform for our data.
This platform will also serve our push into AI and robotics. Our research teams in Dhahran (global headquarters) have invented robots that are capable of shallow water inspection and monitoring. Pipeline inspections, usually carried out by trained divers, could then be transferred to robots – dramatically increasing the safety of such tasks, and reducing associated time and costs.
Again, to touch upon our interdisciplinary approach, our recently opened 4IR Center in Dhahran is a hub accessible across our operations. A 2,500-square metre space dedicated to developing advanced analytics and machine learning solutions, the Center also hosts a virtual reality zone used to develop and train operators through augmented reality, providing simulations of real world scenarios.
Also worth mentioning is our involvement with the World Economic Forum (WEF); we are not only regular attendees through Davos, but are also a member of its fourth industrial revolution initiative.
In terms of the here and now, regarding our day-to-day function, digital technology is part of our adaptation to the pandemic. We have brought online many in-house activities and our collaborative work. Just recently, we participated in a webinar on AI with experts from across industry. Typically this would have been face-to-face, which does have its advantages, but in the current climate we have to adapt, maintaining discussions and the ideas they bring through digital means. In my view, this is critical.
It has been said that the level of collaboration between the UK and Aramco could be higher. How do you see this developing?
The UK and its companies are strategically important to Aramco. In fact, we work with more than 3,000 companies, including 160 manufacturers that design, build and deliver key commodities to Aramco facilities. Aramco has spent US$1.2bn in the UK in just the past five years, and we continue to explore new opportunities.
In terms of lessons, the UK remains a knowledge economy for us, in terms of both improving on current techniques and introducing us to novel ideas. We have a research centre in Aberdeen for this reason, focusing on well completion and drilling techniques – because we know that there are valuable and insightful knowledge gains from those associated with the North Sea.
Also worth noting is that the academic prowess here is also very high, with leading universities pioneering digitalisation methods while also developing bio-science and membrane technology – which could one day have applications for us at Aramco.
What advice can you give to British suppliers interested in working with Aramco?
I’d advise all companies to familiarise themselves with our pre-qualifications. We have a global procurement system that has different requirements for service providers and manufacturers. It is important that companies are aware of these, so they can navigate through the process with the help of our in-house procurement specialists.
I would also add that companies should not be deterred by our size and scale; we are keen to hear from those who believe what they have to offer is value-adding. From our sourcing endeavours to our research and our venture capital investments, Aramco is keen to hear from the UK, as we are sure that it can meet our aim of on-boarding best-in-class.
