Crude-to-chemicals is “very important” to Saudi Aramco, with the company’s recently completed acquisition of Sabic “ideal,” according to Aramco’s president and CEO Amin Nasser.
Speaking exclusively to IHS Markit vice chairman Daniel Yergin in the latest CERAWeek Conversations, Nasser also says he believes “the worst is behind us” in terms of oil markets, and that he is “very optimistic” about already-recovering demand for the second half of 2020.
Aramco completed its $69.1-billion purchase of a 70% stake in Sabic, the world’s fourth-largest petrochemicals company, on 17 June. Describing Sabic as a leading global company for petrochemicals, Nasser says Aramco’s “aspiration from the beginning” was that it needed to be a leading energy and petchems company. “We have a leading position when it comes to upstream and refining. We needed to integrate further our refinery with petrochemical; in addition, we are looking at crude-to-chemicals. We could not do all of these aspirations in terms of adding value, extracting more value from our barrels, without a big acquisition.”
Sabic was ideal, he says. “It’s run based on best-in-class when it comes to operations. It works in more than 50 countries. There’s a lot of synergy with Saudi Aramco; we operate also in similar markets. There’s a lot of value that can be extracted by acquiring a significant position in Sabic,” he says. “I’m sure we can achieve our goals of adding value to our shareholders, both shareholders in Sabic and Saudi Aramco, by turning our feedstock to petrochemicals and adding value. Crude-to-chemicals is very important to Aramco.”
Climate change and sustainability are two of Aramco’s highest priorities, although oil and gas will continue to be a strong part of the worldwide energy mix in the long term, Nasser says. “Climate change is a priority. You see it in a lot of our centers, in addition to discovery and recovery, and improving our cost. Climate change, carbon capture and sequestration, turning CO2 into useful products, the use of hydrogen from crude oil or from gas, ultra-clean engine fuel systems,” he says.
Discussing the near-term outlook for oil markets, Nasser says worldwide crude demand has recovered to close to 90 million b/d, up from 75–80 million b/d in April. Looking forward, demand by the end of the year will be 95–97 million b/d, according to various forecasts, he notes. “We see it in China today—it’s almost at 90%. In gasoline it’s around 95% in China. Gasoline and diesel are picking up to pre-COVID-19 levels. Jet fuel is still lagging in terms of less air travel. More countries will start opening up. So, we see that reflected in the demand on crude,” he says.
The demand forecasts for the end of the year “all depend on whether there will be a second wave of coronavirus or not,” Nasser says. “But I am also not as concerned about a second wave because I think we are much better prepared now. All countries, all medical establishments are much better prepared. We learned a lot during the first wave.” More than half of Aramco’s office workers worked from home during the height of the COVID-19 pandemic, while all the company’s fields and plants ran smoothly with “very high reliability,” he adds. “When it comes to field presence, everybody was working, especially in remote areas and offshore sites. We were able to manage the situation very well by putting all the precautions necessary to maintain their safety and health while maintaining our operational resilience during this time.”
This period also included the ramping up by Aramco of its production from 9.7 million b/d to 12 million b/d in just 20 days, before reducing it to 7.5 million b/d, Nasser says.
By: Marc Thomas
Source: Chemical Week
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