Saudi Aramco is reviewing spending plans for 2021 and beyond and has reduced capital spending for 2020 to $25-30 billion due to market conditions. Capital expenditure in 2019 was $32.8 billion compared to $35.1 billion in 2018.
Without additional capital spend, the company could continue its maximum production capacity of 12 million b/d for up to a year, said Amin Nasser, president and chief executive officer, on call with analysts following the company’s 2019 results release.
The company received regulatory approval in February to develop, in phases, Jafurah field in the Eastern Province (OGJ Online, Feb. 24, 2020). The field—the largest unconventional gas field in the Kingdom to date with an estimated 200 tcf of resources—is expected to begin phase one production in early 2024.
Saudi Aramco’s average total hydrocarbon production in 2019 was 13.2 MMboe/d. Net income for full-year 2019 was $88.2 billion, compared to $111.1 billion in 2018. The decrease was primarily due to lower crude oil prices and production volumes, coupled with declining refining and chemical margins, and a $1.6 billion impairment associated with Sadara Chemical Co.
Saudi Aramco agreed in 2019 to acquire the Public Investment Fund’s 70% equity interest in SABIC, one of the world’s largest chemicals companies, for $69.1 billion (OGJ Online, Mar. 27, 2019). Upon closing, anticipated in this year’s first half, Saudi Aramco expects to become one of the world’s largest petrochemical producers by production capacity.
In December 2019, the company completed its initial public offering, which followed a $12 billion inaugural international bond issuance in April 2019.