Saudi Aramco has released its annual review for 2011 and with it comes a strategic target for the oil giant to become a fully integrated energy company that incorporates almost all of the hydrocarbon value chain both domestically and internationally.
The 2020 Strategic Intent has placed adding unconventional gas resources and increased refining and petrochemicals production next to crude oil as key sectors it wishes to increase its operations in.
Aramco believes lengthening the value chain will promote a technology-driven economy in the kingdom and in turn will provide millions of skilled jobs for Saudi’s burgeoning population.
This is reflected in Aramco’s recent project activity with three 400,000 barrels-a-day (b/d) refineries planned or under execution and the $20bn petrochemicals joint venture with the US’ Dow Chemical that was officially named the Sadara Chemical Company in November. All of these schemes will provide fuel and base chemicals for conversion industries across the country.
By Aramco’s own admission 2011 was a busy year for the company on several fronts.
With disruption to oil supplies in other countries such as Libya and Iran the Saudi Arabia has plugged the gap in supply and Aramco witnessed a large increase in oil production during 2011 averaging 9.1 million b/d compared to 7.9 million b/d in 2009 and 2010.
In exploration 161 new wells were drilled and Aramco’s onshore and offshore maintenance teams continued operations on all major fields.
Aramco’s major upstream project continues to be the $9bn Manifa offshore oilfield. Offshore construction is now 97 per cent complete on the scheme and the project is expected to finish on schedule.
The company’s natural gas operations continue to grow and Aramco has reported gas production of 9.9 billion cubic feet-a-day (cf/d) during 2011 compared to 9.4 billion cf/d in 2010 and 8.6 billion cf/d in 2009.
Delivered gas sales to the kingdom’s industrial and power sector also rose to 7.4 trillion British thermal units-a-day (btu/d) in 2011 compared to 7.2 trillion btu/d in 2010 and 6.3 trillion btu/d in 2009.
The ongoing gas projects include the offshore non-associated Karan field, which Aramco has reported as 90 per cent complete. The Wasit Gas Development project is not faring as well unfortunately with MEED reporting in May that the scheme faced extensive delays to an issue with the density of the sulphur contained in the offshore Hasbah and Arabiyah fields.
In downstream, Aramco produced 495 million barrels of refined products domestically and exported 123 million barrels. The company sold 550 million barrels of refined products domestically, which reflect the kingdom’s alarming 5-7 per cent growth of gasoline and diesel consumption.
Despite a couple of setbacks Aramco will probably be happy with 2011 and it must be remembered that is a transitional phase at the oil giant. As oil prices continue to be in triple figure and demand for Saudi crude being driven by events elsewhere, 2012 also promises to be a good year for the company.