{"id":4408,"date":"2023-03-22T14:22:57","date_gmt":"2023-03-22T14:22:57","guid":{"rendered":"http:\/\/roydadnaft.ir\/English\/?p=4408"},"modified":"2023-03-22T14:22:59","modified_gmt":"2023-03-22T14:22:59","slug":"saudi-aramco-ceo-warns-of-industry-underinvestment-says-natural-gas-oil-to-remain-essential","status":"publish","type":"post","link":"https:\/\/roydadnaft.ir\/English\/4408\/","title":{"rendered":"Saudi Aramco CEO Warns of Industry Underinvestment, Says Natural Gas, Oil to \u2018Remain Essential\u2019"},"content":{"rendered":"
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<\/a>Saudi Arabia\u2019s state-owned oil producer posted record profits for 2022, up nearly 50% year\/year, lifted by soaring oil and natural gas prices.<\/p>\n\n\n\n

Saudi Arabian Oil Co., better known as Aramco, tripled the\u00a02022 profit recorded by ExxonMobil,lifted by higher sales volumes and improved margins for refined products. Commodity prices surged early in the year following Western sanctions on Russia following its invasion of Ukraine.<\/p>\n\n\n\n

\u201cAramco delivered record financial performance in 2022, as oil prices strengthened due to increased demand around the world,\u201d CEO Amin H. Nasser said. \u201cWe also continued to focus on our long-term strategy, building both capacity and capability across the value chain with the aim of addressing energy security and sustainability.<\/p>\n\n\n\n

\u201cGiven that we anticipate oil and gas will remain essential for the foreseeable future, the\u00a0risks of underinvestment in our industry are real\u00a0\u2013 including contributing to higher energy prices.\u201d<\/p>\n\n\n\n

To leverage Aramco\u2019s \u201cadvantages of scale,\u201d the company has begun its largest capital expenditure (capex) program in history. Last year capex rose by 18% to reach $37.6 billion. Capex now is set at $45-55 billion\/year, with increases \u201cuntil around the middle of the decade,\u201d he said.<\/p>\n\n\n\n

The CEO said there is not enough \u201cinvestment getting into the markets right now\u2026We encourage the industry, policymakers, investors\u2026to avail additional investment to really increase the amount in the sector, so that we can meet future demand.\u201d<\/p>\n\n\n\n

Some integrated and independent producers have slowed capital for oil and natural gas projects to invest in the energy transition and to reward investors. Aramco, however, is spending more in all areas \u2013 and giving shareholders extra dividends. <\/p>\n\n\n\n

The focus, said Nasser, \u201cis not only on expanding oil, gas and chemicals production, but also investing in new lower-carbon technologies with potential to achieve additional emission reductions in our own operations and for end users of our products.\u201d<\/p>\n\n\n\n

Aramco in October launched a $1.5 billion Sustainability Fund. The fund is directing investments to technologies that support the company\u2019s Scope 1 and Scope 2 net-zero 2050 targets in operational assets, as well as to develop lower-carbon fuels.<\/p>\n\n\n\n

One project planned for Saudi Arabia is a carbon capture utilization and storage hub in Jubail, with storage capacity of up to 9 million metric tons\/year of carbon dioxide by 2027.<\/p>\n\n\n\n

Meanwhile, the Upstream arm \u201ccontinues to execute its growth plans to promote long-term productivity of Saudi Arabia\u2019s reservoirs,\u201d Aramco management said. To that end, the company is implementing a government mandate to increase Aramco\u2019s crude oil production to 13.0 million b\/d by 2027. The government owns about 95% of Aramco.<\/p>\n\n\n\n

For its natural gas developments, compression projects at the Haradh and Hawiyah fields began commissioning activities. Full capacity is expected to be reached this year. Construction at the Hawiyah Unayzah Gas Reservoir Storage, the first underground gas storage project in the Kingdom, \u201cis at an advanced stage and has commenced injection activities,\u201d the company said. The program is designed to provide up to 2.0 Bcf\/d of natural gas \u201cfor reintroduction into the Kingdom\u2019s Master Gas System by 2024.\u201d<\/p>\n\n\n\n

Aramco also plans to participate in developing an integrated refinery and petrochemical complex in northeast China. Aramco could supply up to 210,000 b\/d of crude oil feedstock to the complex if the project proceeds. In addition, Aramco and TotalEnergies in December sanctioned a large petrochemical complex in Saudi Arabia. <\/p>\n\n\n\n

The global markets are facing some headwinds, though. Oil and gas prices have eased into this year. Inflation is high, and rising interest rates are stinging buyers. Still, China is resuming activity, with demand rising, following an extended pandemic-related lockdown last year. <\/p>\n\n\n\n

\u201cWe are cautiously optimistic,\u201d Nasser said. \u201cIf you consider China opening up, the pick-up in jet fuels, and the very limited spare capacity, we are cautiously optimistic in the short- to mid-term that markets will remain tightly balanced.\u201d<\/p>\n\n\n\n

Average hydrocarbon production last year was 13.6 million boe\/d, including 11.5 million boe\/d of liquids. <\/p>\n\n\n\n

Meanwhile, Iran and Saudi Arabia last Friday struck a deal to resume diplomatic relations. Iran had been blamed for attacking Aramco facilities in 2019, which led to a spike in oil prices. <\/p>\n\n\n\n

\u201cThe deal will hopefully result in less geopolitical tension and enhance regional stability, which will definitely have a positive impact on the global market,\u201d Nasser said.<\/p>\n\n\n\n

Aramco posted record net income of $161 billion for 2022, up 46.5% year\/year. Free cash flow totaled $148.5 billion, also a record, from $107.5 billion in 2021. <\/p>\n\n\n\n

The fourth quarter dividend, to be paid by the end of March, was increased by 4% to $19.5 billion. Bonus shares are to be offered to eligible shareholders.<\/p>\n

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