Saudi Aramco resurrecting its Ras Tanura refinery project is proof that despite the hand wringing that has been evident in the regions hydrocarbons industry over the past 12 months, there is still life in the sector yet.
Aramco has been around at the top of the industry for long enough to realise that nothing lasts forever. The same way that oil prices were never going to stay around the $110 a barrel level once the US started fracking oil, they will also never stay low for ever either.
However, the signs are that they could stay lower, much lower, than the magical $100 a barrel figure. This is why Aramco are starting to turn its attention once again to downstream.
The Ras Tanura refinery is Saudi Aramcos largest, at 550,000 barrels a day (b/d). It is imperative that the refinery is brought up to international standards in terms of the sulphur content of its products. This means the scheme was never going to be cancelled.
Aramcos main focus in 2015 is to ensure that gas spending is maintained and that its vast oilfields keep producing over 10 million b/d. That is likely to change in future, with its focus shifting to transforming the company into the worlds most powerful, fully integrated energy company.
From a contractors perspective, it is clear that many companies operating in the kingdom will be hoping that Ras Tanura is the beginning of a new age of capital spending in downstream schemes and that larger projects will follow.
The reality is that $20bn petrochemicals or $30bn+ oil-to-chemicals projects are the type of big ticket items only $100 oil can pay for. So dont hold your breath if you are expecting such schemes to drop in the next couple of years.