Aramco will move oil spending to gas, chemicals and liquids

Reuters

• Aramco to reallocate oil spending
• New strategy announced soon
• Production increase postponed

The capital expenditure originally allocated for increasing production capacity at state oil company Saudi Aramco will instead be used to expand into the gas, liquids and chemicals sectors, Saudi officials said this week.

Aramco is adapting as the world moves towards low-carbon energy. It will announce its new strategy soon, CEO Amin Nasser told the International Petroleum Technology Conference in Dhahran, Saudi Arabia, this week.

Saudi Arabia postponed its plan to boost oil output capacity from 12 million barrels per day (bpd) to 13 million bpd by 2027. The decision raised questions about its views on the future of oil demand. 

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Energy consumption in 2025 will change completely, Nasser said, driven by the interplay of supply and demand. He added that global oil demand is expected to hit 104 million bpd in 2024 and 105 million bpd in 2025.

Besides oil and gas, Aramco is exploring opportunities across all energy sectors, including hydrogen and solar energy.

Also speaking at the conference, Saudi energy minister Prince Abdulaziz bin Salman said Aramco is looking to invest more into the chemicals and renewable energy sectors: “This is something we want to put lots of money on.”

Nasser stressed the company is also committed to investing in other industries, and is considering establishing new technology companies in pursuit of innovation and profit.

The world’s largest oil producer, Aramco said in January that it had more than doubled the spending allotted to its venture capital arms to $7.5 billion as part of its investment in new energy and digital technologies. 

Saudi Arabia’s decision to postpone oil capacity expansion plans should not be interpreted as an assessment that demand for crude is falling, Opec‘s secretary general told Reuters on Tuesday.

“We stand by what was published in our latest outlook, we firmly believe that it is robust,” Haitham Al Ghais said.