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Saudi Aramco’s Quest to Become the World’s Biggest Oil Consumer

Saudi Aramco’s Quest to Become the World’s Biggest Oil Consumer thumbnail

Saudi Aramco is well known as the world’s top crude exporter. If all goes to plan, it may also become the biggest user of the fossil fuel.

More than a third of Aramco’s oil is currently fed into its fully-owned and joint venture refineries, according to its bond prospectus. The company plans to double its refining network to handle as much as 10 million barrels a day by 2030, locking in a friendly buyer for the kingdom’s crude.

Aramco’s “goal is to provide a reliable destination for its future oil production,” said John Stewart, an analyst at consultant Wood Mackenzie Ltd. The expansion “would make it the biggest refiner in the world by some margin.”

Moving Up in Downstream

Aramco is already the fourth-biggest refiner and aims to double capacity

Source: Wood Mackenzie; Aramco

Note: Net capacity excludes Aramco partners’ stakes in joint refineries

Saudi Arabia is leaning on Aramco’s coffers to build its sovereign wealth fund and help develop new industries that can break the kingdom’s reliance on oil. For its part, Aramco is trying to wring more profit from the crude it pumps by turning it into gasoline and diesel as well as plastics and other materials used in consumer goods. The company is spending $69 billion for a majority stake in petrochemicals maker Saudi Basic Industries Corp.

The Saudi Arabian Oil Co., as the state-owned producer is formally known, will still probably sell to outside buyers even if it hits its refining target. The company processes a mix of crudes from its fields in Saudi Arabia. Its refinery ventures abroad, while designed to use the company’s crude, will likely rely on a mix of oil from the kingdom and other suppliers.

Branching Out

How Saudi Aramco’s refinery capacity will stack up by the end of 2019

Source: Aramco

Note: Gross capacity of Aramco’s fully-owned and joint venture refineries

Aramco fully owns three refineries in Saudi Arabia and the Motiva Enterprises LLC plant in the U.S. Other facilities are joint ventures with foreign partners. By the end of the year, it will start crude processing at new facilities in the kingdom and in Malaysia that will bring its total refining capacity to more than half the company’s current oil production. By 2030, half of Aramco’s refining capacity will be located outside of Saudi Arabia, WoodMac estimates.

That will make Aramco an even bigger consumer of the oil it pumps. The company said as much in its prospectus, describing its expansion as a way “to secure crude oil demand by selling to its captive system” of refineries.

Global Refinery Reach

Aramco crude-processing capacity will exceed 5.6 million barrels a day by 2020

Source: Aramco

Note: * Includes planned/actual capacity additions; ** starting this year

Aramco has signed provisional deals to meet its refining capacity target. It also plans to grow in chemicals, an industry where demand is rising faster than that for transport fuels. The company aims to turn some 3 million barrels of daily crude production into chemicals.

Ambition for Growth

Aramco has announced refinery projects that would meets its growth targets

bloomberg



65 Comments on "Saudi Aramco’s Quest to Become the World’s Biggest Oil Consumer"

  1. Not JuanP on Mon, 15th Apr 2019 7:09 pm 

    Davy is still as full of shit as usual.

  2. Robert Inget on Mon, 15th Apr 2019 7:24 pm 

    PETE is correct. At this stage in oil history shale is
    contributing far more product than ‘conventional’
    (vertical drilling).

    Several questions come up over and over.
    1) Is anyone making money @ $70 tight oil?
    2) What’s the ‘useful’ life of a 30 M $ shale well?
    3) Have all the (US) sweet spots been exploited?
    4) Shale oil, NOT apart from being high condensate, (half liquid gas) Is NOT the least bit Heavy Crude.

    Blame super computers, not fraccing for finding a hundred years supply of Natural Gas. But don’t blame technology for shale OIL riches which may never materialize.

    Refineries are set-up to handle HEAVY crude.
    While condensate rich shale makes gasoline,
    that 32% Pete refers to is not by a long shot all
    heavy oil like one finds in Alberta, Venezuela, California’s tar pits or the GOM required to make jet fuel, more to the point, diesel.

    Long story short. We are so lucky to have found uneducated investors willing to throw their money
    down a horizontal drain field. At some point these
    smartest men in the room are going away.

    Two of the nations largest oil outfits, Chevron
    and Exxon just bet the companies on shale.
    Several questions remain, why?

  3. makati1 on Mon, 15th Apr 2019 7:58 pm 

    When the SHTF and the world economy/financial system melts down, what future does the Stock Market Casino or FFs have? Retirement plans that suddenly zero out? ALL the social safety nets vaporize?

    You cannot rely on “past performance” as a guide because we are in uncharted waters. I see a reset that makes any previous look like a child’s tea party. It will likely plunge the world into a war that will end everything. I hope not, but it certainly will not be anything like BAU. Not even close. Buckle up!

  4. Timothy Blaine on Tue, 16th Apr 2019 1:38 am 

    Can you imagine Trump or McConnell saying:

    “Preservation of our environment is not a liberal or conservative challenge; it’s common sense; it’s a moral imperative that all presidents have embraced and it’s non-negotiable…”

    Of course not. Each would claim this is left-wing Democratic garbage. Except, these words were spoken by President Ronald Reagan in his 1984 State of the Union address. This told me how evil and cruel and destructive the Republican party has become.

  5. JuanP sock on Tue, 16th Apr 2019 3:13 am 

    This is a juanP posting

    Timothy Blaine on Tue, 16th Apr 2019 1:38 am

  6. Davy Identity Theft on Tue, 16th Apr 2019 3:47 am 

    JuanP sock on Tue, 16th Apr 2019 3:13 am

  7. The Truth Shall Set You Free on Tue, 16th Apr 2019 3:52 am 

    Once again, Davy “Mr. Real Green”, lectures the rest of us on how to be green. This is also another example of Davy hypocrisy. Mr. Real Green Davy is the same individual who supports the most anti-ecological president (Trump) and political party (Republican) ever to exist.

    To borrow from Davy’s vocabulary. Shut up dumbass Davy/

  8. The Truth Shall Set You Free on Tue, 16th Apr 2019 3:56 am 

    DavyDonaldTurd (DDT), your thoughts reflect AND project perfectly like a mirror; the subconscious perceptions that are held about the Self. What you fail to comprehend is your frequent bullying and incessant assaults are a perfect reflection of your state of mind and how you feel about yourself on the inside. Your resentment and anger toward others reveal anger and contempt of yourself, rooted in jealously, fear, and a sense of failure with who you are, questioning your ability to aptly compete with others.

    DDT, use this knowledge to become more self-aware and introspective. By doing so, you can diffuse inner conflict and confusion and become a pacifist of the mind rather than a bellicose, xenophobic, and hateful Trumptard of the mind.

    Clean-up your act, now.

  9. JuanP sock on Tue, 16th Apr 2019 4:05 am 

    JuanP posted this

    The Truth Shall Set You Free on Tue, 16th Apr 2019 3:52 am
    The Truth Shall Set You Free on Tue, 16th Apr 2019 3:56 am

  10. Davy on Tue, 16th Apr 2019 4:08 am 

    “Once again, Davy “Mr. Real Green”, lectures the rest of us on how to be green.”

    JuanP, why don’t you come out from your cowardly mask and debate the subject you lunatic? I am not going to debate a sock puppet. You miss the whole point of real green basically because of your personality disorder of obsessive stalking. You really need to check in somewhere and get help before I ruin your life.

  11. Sunspot on Tue, 16th Apr 2019 6:54 am 

    …so juvenile…

  12. JuanP sock on Tue, 16th Apr 2019 7:38 am 

    This is a JuanP posting

    Sunspot on Tue, 16th Apr 2019 6:54 am

  13. Gaia on Sun, 21st Apr 2019 11:11 am 

    Davy, you are a narcissistic psychopath.

  14. JuanP sock on Sun, 21st Apr 2019 12:06 pm 

    juanP posted this

    Gaia on Sun, 21st Apr 2019 11:11 am

  15. Gaia on Mon, 22nd Apr 2019 4:55 pm 

    The Al Saud royal family should be hit in their weak spot: the wallet.

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