Saudi Aramco review confirms record crude oil production in 2016
FRANK KANE - Thu, Jul 6th 2017 3:29 PM
Saudi Aramco review confirms record crude oil production in 2016
DUBAI: Saudi Aramco pumped more barrels of crude per day in 2016 than any oil company in history, according to the company’s annual review published Thursday.
The review shows that crude production at Aramco — the biggest oil company in the world — averaged a record of 10.5 million barrels of oil per day last year, much bigger than any of its rivals in Russia, Iran or the US.
The 2016 review also reveals that reserves are steady at around the 260 billion barrel mark, though this is being reassessed separately by independent audit, and that Aramco’s share of worldwide refining capacity was 3.1 million barrels per day.
The review comes as Aramco gears up for an initial public offering (IPO) on Saudi and global stock markets, which is expected to value it at $2 trillion, according to an official estimates.
The Aramco chairman, Khalid Al-Falih, who is also minister of energy, industry and natural resources, said 2016 was a “challenging year.”
But he added: “Challenges often are the prelude for new opportunities and greater value ahead. I believe that history — and indeed, the near future — will prove that despite the discouraging business climate, 2016 was a turning point for both Saudi Aramco and the Kingdom, as well as for the global oil and gas industry.”
The IPO of Aramco — expected in the second half of next year — is the key feature of the Kingdom’s ambitious plan, known as Vision 2030, to transform the economy away from dependency on energy revenue.
Al-Falih said: “The Vision, which aims to diversify the national economy beyond oil and build a thriving private sector, will enable Saudi Aramco to expand its global presence. Concurrently with the Vision, the company will enlarge its supply chain and improve business reliability through a local network of suppliers and manufacturers while increasing the competitiveness of Saudi Arabia’s energy sector — and in the process, generate sustainable growth and quality jobs for Saudis.
“For Saudi Aramco, the most notable feature of the Kingdom’s transformation will be the future offering of part of the company’s shares in local and international stock markets. This move drives further diversification and growth of the national economy, while elevating the international visibility of the company’s decision making and governance, and building confidence in its long-term strategy,” he added.
Amin Nasser, president and chief executive of Aramco, said: “Since its earliest beginnings, Saudi Aramco has sought to be the world’s most reliable producer of petroleum energy. Our long-term approach to managing the Kingdom’s hydrocarbon resources has consistently delivered superior performance and growth. More recently, our vision has been to become the world’s leading integrated energy and chemicals company, reinforcing our focus on the long-term.”
He said that three major developments had impacted Aramco’s business in 2016.
“First, the oil market remained challenging, causing project deferments or cancelations across the industry. We responded to this challenge by intensifying our focus on excellence and on lowering costs, addressing every aspect of our business.”
The second was the National Transformation Program (NTP), part of the Vision 2030 strategy, which “reaffirms Saudi Aramco’s role as an important driver of the Kingdom’s growth and enables the expansion of our commercial ecosystem.”
Finally, he said that the Paris Agreement on climate change “underscored our view that shaping the future energy landscape in a greenhouse gas constrained world requires an industry led, technology-driven, collaborative approach.
“We are proud to be part of the $1 billion investment in innovative low-emission technologies by the Climate Initiative. Once commercialized, these technologies have the potential to reduce greenhouse gas emissions on a global scale,” he added.
Although the review does not contain any new financial information, advisers to the company regard it as an important agenda-setting part of the preparation for the IPO, highlighting the depth and breadth of Aramco’s business in Saudi Arabia and the world.
In upstream activity, the review said that Aramco discovered two new oil fields and one new gas field in 2016.
Downstream, it took steps to expand and integrate its domestic and global portfolio, in refining, chemicals and plastics.
In research and development, Aramco filed 285 new patents of which 175 have been awarded, and conducted the first feasibility study along with Saudi Basic Industries Corporation (SABIC) to develop a fully integrated crude-oil-to-chemicals complex.
There were also initiatives on climate change, localization of goods and services within the Kingdom, and talent development among the Saudi workforce.
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