Saudi Aramco, in line with newly announced government policies, will continue to invest in new oil, gas, and petrochemical projects, despite the current global economic downturn, according to government leaders and company officials.
“We believe the elements [needed] to succeed in this environment are the ability to integrate petrochemicals with refineries and gas plants, securing feedstocks at competitive pricing, and achieving higher efficiency on product chain integration,” said Abdulaziz Al-Judaimi, Aramco’s vice-president for new business development.
Al-Judaimi told participants at Chemical Market Associates’s 24th World Petrochemical Conference that rising energy and raw material costs have caused rationalizations across the industry, but that Aramco nevertheless remains confident of weathering the economic downturn.
Al-Judaimi’s pledge coincided with an earlier statement by Aramco CEO Khalid Al-Falih that the state firm still plans to spend 100 billion Saudi riyals ($26.7 billion) on a petrochemical project in Ras Tanura to be undertaken in partnership with Dow Chemical.
“This investment will amount to approximately 100 billion riyals when completed and will include the construction of integrated industrial cities where the private sector can invest in conversion and support industries,” Al-Falih told delegates at a chamber of commerce meeting in the country.
“Despite the difficult global economic situation currently, and the challenges facing the energy sector, the kingdom will continue with its long-term investments,” Al-Falih said, echoing a decision by senior government leaders.
On Mar. 25, Saudi Arabia’s council of ministers announced that the country would continue its long-term investment projects in the oil and gas sectors to increase production to ensure an adequate energy supply in world markets.
“The Kingdom will go ahead with this policy despite the current economic situation and the challenges being faced by the energy sector,” the Cabinet said following its weekly meeting chaired by King Abdullah.
The Cabinet said the Kingdom would also focus on research and development, acquiring modern technology to develop a variety of environment-friendly energy products.
The Cabinet came to its decision after reviewing the outcome of the recent meeting of the Organization of the Petroleum Exporting Countries when Saudi Arabia’s petroleum and mineral resources minister Ali Al-Naimi warned of a possible “catastrophic” energy supply crunch without prompt investment.
“In years to come, if traditional energy supplies should prove inadequate because capital expenditure was curtailed due to unsustainable prices, unreliable indication of future demand, or hopes for a substitute that oil cannot deliver, such a supply crunch would be catastrophic,” Al-Naimi told OPEC delegates.
