Page 5 - MEOG Week 44 2021

MEOG COMMENTARY MEOG

from offshore fields. Over full-year 2020, the company’s crude
He added last week that expanding MSC “will sales to wholly owned and affiliated refineries
take a couple of years; it’s not going to come at averaged 3.5mn bpd during 2020, accounting
full capacity at 13mn b/d until 2027”. for 37% of its total 9.2mn bpd average crude
production.
Operations Aramco has a long-stated aim of achieving a
In line with the easing of OPEC+ production global refining slate of 8-10mn bpd. At year-end
restrictions, Aramco’s output continued to tick 2020, it had a gross refining capacity of 6.4mn
upwards. bpd and a net capacity of 3.6mn bpd. With talks
Total hydrocarbon production, which covers ongoing for the acquisition of a 20% stake in the
oil, gas, condensates and NGLs was reported at downstream business of India’s Reliance Indus-
12.9mn barrels of oil equivalent per day (boepd), tries Ltd (RIL) in an all-stock deal worth $20-
up from 11.7mn boepd in Q3. Crude accounted 25bn, it could achieve its refining footprint goal
for the majority of the increase, rising to 9.5mn in one move.
bpd from 8.6mn bpd in Q2. Reliance’s oil-to-chemicals (O2C) division
The company is also nearing completion of owns and operates a refining slate of 1.82mn bpd
the Hawiyah Gas Plant expansion project, which comprised of the world’s largest refining complex
is part of the Haradh Gas increment programme, at Jamnagar and another sizeable facility located
covering reservoirs around the supergiant Gha- within the Jamnagar Special Economic Zone.
war oilfield, which is anticipated on-stream in By closing the Reliance deal, reaching full
2022. Meanwhile, at midyear Aramco said that operational capacity at the 400,000 bpd Jazan
the Hawiyah Unayzah Reservoir Gas Storage refinery on Saudi’s Red Sea coast and the
programme had entered its final engineering Pengerang Petrochemical Co. (PRefChem) facil-
phase and is seen providing up to 2bn cubic feet ity in Malaysia is finally commissioned, Aram-
(57mn cubic metres) per day of gas by 2024. co’s participated refining capacity would rise to
The company is usually tight-lipped about 8.6mn bpd (4.3mn bpd net).
its upstream efforts, though it is perhaps indic- Expanding dedicated outlet options is central
ative of the company’s repositioning efforts that to Aramco’s plans to shelter its key crude oil reve-
the 1.5GW Sudair Solar PV plant was afforded nue stream from market volatility. According to
more column inches than any specific oil and the firm’s 2020 annual report, it supplied an aver-
gas projects. The project marks Aramco’s first age of 54% of crude feedstock to its international
participation in the Public Investment Fund’s JV refineries, outstripping its weighted average
(PIF) renewable energy programme and is participation in these facilities of 42%.
being developed in partnership with ACWA However, while this offers obvious benefits
Power and Water & Electricity Holding Co. under buoyant market conditions – Aramco’s
(Badeel) with Aramco’s Saudi Aramco Power downstream division reported an EBIT of $4bn
Co. (SAPCO) subsidiary holding a stake of 30%. during Q3, representing an upward swing of
As the company continues to “optimise its nearly 600% year-on-year – downstream per-
portfolio” in the downstream as part of a strat- formance has slowed by around 13% compared
egy to further integrate and diversify its opera- to Q2 as margins have been eroded by the rising
tions, Aramco’s wholly owned and joint venture cost of feedstock. Having bet big on downstream
refineries and petrochemical facilities consume through its refining expansion and the acqui-
greater volumes of its crude oil output. During sition of a 70% stake in Saudi Basic Industries
the first nine months of the year, the company’s Corp. (SABIC) for over $69bn, Aramco, and
downstream arm consumed 43.5% of oil pro- indeed the Kingdom’s leadership have a delicate
duction, up from 39.5% during the same period balancing act to navigate to ensure strong perfor-
last year. mance across the board.™

Week 44 03•November•2021 www. NEWSBASE .com P5