Oil, upstream and down, still the main business core
DUBAI: Traditional oil company activities — both upstream and downstream — are the mainstays of Saudi Aramco’s business, and both performed well in 2016, its annual review released Thursday said.
“We create maximum value from the Kingdom’s resources by reinforcing our preeminent position in exploration and production, replacing produced oil, increasing gas reserves, and growing oil and gas production while optimizing costs,” it said.
Last year — a time of great uncertainty in global energy markets — Aramco achieved a new record for crude oil production, averaging 10.5 million barrels per day, and also produced a record level of sales gas, averaging 8.3 billion standard cubic feet per day.
Aramco discovered two new oil fields, Jubah, 300 km north of Dammam, and Sahaban, 280 km south of Dammam; and one new gas field, Hadidah. At yearend, the total number of fields was regrouped to 130.
“Our proficiency in finding new oil and gas reserves enables our sustainable growth as a company,” the review said.
Last year also saw record gas production, with 12 billion standard cubic feet per day (scfd) of raw gas processed, and a second gas processing train at Shaybah. The Wasit gas plant, located north of Jubail Industrial City, reached full operational feed capacity of 2.5 billion scfd.
Downstream activities are part of Aramco’s diversified business portfolio. “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,” the review said.
In refining, Aramco made “steady progress” on its wholly owned Jazan Refinery, which includes an integrated aromatics complex, in the Kingdom’s southwest. In chemicals, it started up the mixed-feed steam cracker with the capacity to crack 85 million scfd of ethane at Sadara, the joint venture with The Dow Chemical Company in Jubail.
Greater potential
With its partner Sumitomo of Japan, Aramco neared completion of an expansion at Petro Rabigh, the integrated refining and chemicals complex on the Red Sea coast. It also launched Arlanxeo, a specialty chemicals joint venture headquartered in the Netherlands.
“Unlocking the greater potential value inherent in hydrocarbon resources lies at the heart of our downstream strategy. We plan to capture synergies by integrating at both the operational and geographical level — connecting oil and gas supply, refining, chemicals, and base oils in regions of high growth potential. Our integrated business model enables us to attain higher value from every hydrocarbon molecule that we produce and grow our global market share,” the review said.