Saudi Aramco CEO eyes downstream conversion

Saudi Aramco’s president and CEO, Amin H. Nasser, is calling for a new era of industrial diversification, anchored by specialty chemicals, according to a transcript of his remarks made this week at the fourth Saudi Downstream Forum.

This diversification would be underpinned by a widespread and rapid domestic expansion of small to medium enterprises that produce high-value finished and semi-finished products in the petrochemicals conversion sector, Nasser said. 

This approach will unlock opportunities for Saudi Arabia's economic diversification, job creation and innovation potential, and create a world-leading downstream industry, the CEO said at the event in Jubail.

“To date, the Kingdom’s downstream economic growth has achieved global leadership in the manufacture and export of commodity products," Nasser said. "While Saudi Arabia certainly needs its commodities production strength, we also need to radically alter the downstream equation to derive greater benefits in-Kingdom, through knowledge-based and innovation-driven small and medium sized enterprises. Saudi Arabia is already a global leader in petroleum and petrochemical commodities, but today we have a tremendous opportunity to also become a leader in downstream conversion.”

With most of the country's petrochemicals presently being exported as commodities, major opportunities exist to add value by turning them into high-value, semi-finished and finished products, the CEO said. Diversification into specialty chemicals is expected to increase returns from the current level of about $500/ton to about $2,000/ton by 2040, according to Aramco officials.

Nasser said that Saudi Aramco’s vision for the creation of a world-leading downstream sector in Saudi Arabia is built on four key drivers: maximizing value for the Kingdom’s crude oil production, including vertical and horizontal integration across the hydrocarbon chain; enabling the creation of conversion industries that produce semi-finished and finished goods to diversify the economy; developing advanced technologies and innovation; and, enabling the Kingdom’s sustainable development.

Saudi Aramco says its strategy is to strike a better balance between its unparalleled upstream capacity of 12 million bpd of crude oil and its current refining capacity of 5.4 million bpd of crude oil for in-Kingdom and worldwide. Saudi Aramco has a plan to raise its total global refining capacity throughput to between 8 to 10 million bpd in the future.

Saudi Aramco is also collaborating with the Ministry of Petroleum and Mineral Resources, the Royal Commission for Jubail and Yanbu, and the Saudi Arabian General Investment Authority to build value parks and locate service providers adjacent to petrochemical facilities, such as Rabigh PlusTech Park at Petro Rabigh on the west coast and the PlasChem Park adjoining Sadara in Jubail Industrial City 2.

In his keynote remarks, Nasser called on the industry to do much more to support the development of home-grown downstream technologies -- such as breakthrough crude oil-to-chemicals technologies that will make oil a viable petrochemical feedstock. Saudi Aramco is currently developing and testing highly advanced oil-to-chemicals technologies, he said.

Warren Wilder, vice president of chemicals at Saudi Aramco, also spoke at the forum and explained why global partnerships are of increasing importance to his company. 

“International partnerships and collaboration are a hallmark of Saudi Aramco’s successful strategy to optimize the full value and economic potential of the Kingdom’s hydrocarbon reserves," Wilder said. "We continue to look for opportunities in growing markets, and many of these opportunities will involve the integration of petrochemicals with new refineries.”

The biennial forum is Saudi Arabia's largest downstream gathering, combining a strategic conference and international exhibition.