Page 5 - MEOG Week 12 2022

MEOG COMMENTARY MEOG

retaining complete operational control and Under attack Image source: Aramco
ownership. The day the results were announced, Aramco
Aramco agreed two major deals last year, facilities came under attack once again from
raising $27.9bn by leasing and leasing back 49% missiles and drones launched by Yemen’s Iran-
stakes in first its oil pipeline subsidiary, then that aligned Houthi militia, targeting a water desali-
of gas, with the latter deal achieving financial nation plant at Al-Shaqeeq, a distribution station
close last month. at Jazan, a power station near Aramco’s HQ in
Dhahran and gas facilities at Yanbu’ and Khamis
Spending plans Mushait.
Aramco reiterated its commitment to increas- While president and CEO Amin Nasser said
ing maximum sustainable capacity (MSC) from that “there were no injuries or fatalities and, no
the current level of 12mn bpd to 13mn bpd by impact to the company’s supply to its custom-
2027, and noted that it would raise 2022 capex ers”, the Yanbu Aramco Sinopec Refining Co.
to a guidance of $40-50bn. Of this, acting chief joint venture with Sinopec reduced throughput
financial officer Ziad Al Murshed said around at its 430,000 bpd refinery on the Red Sea coast
30% ($12-15bn) would be spent on upstream but said it would compensate for the shortfall in
oil, 27% ($10.8-13.5bn) on upstream gas and a output from its stockpiles.
third ($13.2-16.5bn) on downstream activities. Speaking out against the attacks, the Saudi
Aramco said that raising production is “in Press Agency (SPA) quoted a source at the
line with the company’s belief that substantial Ministry of Foreign Affairs as saying that Saudi
new investment is required to meet demand Arabia would not accept any responsibility for
growth, against a broader decline in upstream shortages in global oil markets stemming from
investment across the industry globally”. Houthi efforts to disrupt the Kingdom’s oil
Meanwhile, it intends to increase gas produc- operations.
tion by more than 50% by 2030 from the current The same day, the US said it has transferred
9.2 bcf to around 13.8 bcf (391 mcm) per day. an undisclosed number of Patriot anti-missile
Aramco anticipates that expanded gas pro- interceptors to Saudi Arabia, fulfilling an urgent
duction and utilisation will provide around request from Saudi authorities. Patriot systems
1mn bpd of extra liquids for export, while work are used widely for air defence by both the
remains ongoing on the second expansion phase Saudi military and Aramco and the company is
of the MGS, taking its throughput capacity from understood to have invested heavily to beef up its
9.6 bcf (271 mcm) to 12.5 bcf (354 mcm) per day defences after a string of major attacks in 2019.
and delivering around 5.2 bcf (147 mcm) per Given strong market sentiment and oil prices
day of gas to central and western regions of the fluctuating around $100 per barrel, Aramco
Kingdom. is likely to continue blazing a trail with its top
MGS Expansion II is seen reaching comple- percentile performance and attracting further
tion during the second half of the year. attention from the Houthis.™

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