saudi aramco presentation
TRANSCRIPT
SAUDI ARAMCO Saudi Arabian Oil Company (Aramco)
Headquarters in Dhahran, Saudi Arabia
By
Buke Ivan (IPSK)
INDUSTRY - OIL AND GAS HEADQUARTERS - DHAHRAN, SAUDI ARABIA
History
Operations
Energy strategies
Global marketing challenges
Cultural factors and barriers
Summary
Lessons for Uganda’s nascent industry
PRODUCTS PETROLEUM, NATURAL GAS AND OTHER PETROCHEMICALS REVENUE US$478 BILLION OWNER SAUDI ARABIAN GOVERNMENT (100%)
HISTORY Industry Oil and gas
Founded 1933 (as California-Arabian Standard Oil Co.)
1944 (as Aramco)
1988 (as Saudi Aramco)
Headquarters Dhahran, Saudi Arabia
Area served *Worldwide
Saudi Aramco's origins trace to the oil shortages of World War I and the exclusion of American companies from Mesopotamia by Great Britain and France under the San Remo Petroleum Agreement of 1920
On 31 January 1944, the company name was changed from California-Arabian Standard Oil Co. to Arabian American Oil Co. (or Aramco)
Started production from the Karan Gas Field, with an output of more than 400 million scf per day
Owns world's largest proven crude oil reserves at more than 261 billion barrels
Saudi Aramco operates the Ghawar Field, the world's largest onshore oil field and Safaniya Field, the world's largest offshore oil
Operates the world's largest single hydrocarbon network, the Master Gas System.
Manages over 100 oil and gas fields in Saudi Arabia, including 288.4 trillion standard cubic feet (scf) of natural gas reserves
2015 Forbes report, Aramco is said to be the world's largest oil and gas company.
The world's largest oil and gas company.
STRATEGIC INTENT. IN 2020, SAUDI ARAMCO IS THE WORLD’S LEADING INTEGRATED ENERGY AND CHEMICALS COMPANY, FOCUSED ON MAXIMIZING INCOME, FACILITATING THE SUSTAINABLE AND DIVERSIFIED EXPANSION OF THE KINGDOM’S ECONOMY, AND ENABLING A GLOBALLY COMPETITIVE AND VIBRANT SAUDI ENERGY SECTOR.
OUR VALUES
• integrity
• safety
• accountability
• excellence
• citizenship
Employer of choice 61,907 employees
Joint and Equity Ventures
Houston
Motiva Enterprises LLC
Alexandria
The Arab Petroleum Pipeline Co. (SUMED)
Fujian
Fujian Refining and Petrochemical Company Ltd.
Sinopec SenMei Petroleum Company Ltd.
Seoul
S-OIL
Tokyo
Showa Shell
Guide to Strategic Intent.
Reinforce our preeminent position in oil and gas exploration
and production.
Integrate our business across the hydrocarbon value chain
to create impact
Enable the sustainable development of the Kingdom
Lead in technology development and innovation
Strengthen our position as an employer of choice
wise stewardship of our resources
For this reason, the wise stewardship of our petroleum
resources is our number one priority. We continually seek new
ways to find and produce these resources more efficiently, from improving our understanding of subsurface dynamics to
deploying cutting-edge well completions.
Viewing our extensive
hydrocarbon reserves, people —
understandably — see oil and
gas deposits. We see something
different.
We see molecules that, with
science and imagination, have
the potential to power every
human endeavor and to create
breakthrough materials that
improve the quality of our lives.
OPERATIONS.
OUR OPERATIONS ARE GLOBAL AND THEY INCLUDE;
EXPLORATION
PRODUCTION
REFINING
CHEMICALS
DISTRIBUTION
AND MARKETING
UP STREAM
EXPLORATION
DISCOVERY &
RECOVERY
• Discovering more hydrocarbon resources and recovering more from these
hydrocarbon resources are the key objectives of our upstream technology strategy.
• Saudi Aramco has been exploring for oil and gas reservoirs since 1982 making it a top
game player in the industry for decades
• Most of this process takes place at the Exploration and Petroleum Engineering Center
(EXPEC).
• Saudi Aramco has got a well skilled workforce consisting of mostly geophysicists and
geologists
All it’s activities of the company are monitored by the;
• Saudi Arabian Ministry of Petroleum and Mineral Resources together with the
• Supreme Council for Petroleum and Minerals.
The above bodies provide the Regulatory Framework in order to provide a comprehensive legal framework that takes into account both the upstream and midstream aspects, as well as development of an effective petroleum revenue management framework
Young geoscientists examine core samples to maximize recovery of oil and gas.
EXPLORATION 2
Continued our research into the usage of autonomous underwater vehicles (AUVs) to conduct
seismic data gathering in shallow waters.
We have developed and deployed more intelligent acquisition and processing methods to improve the clarity and resolution of seismic data. Our seismic acquisition and analysis is being integrated more with electromagnetic and high-resolution gravity sensors, especially for subsalt
imaging and in areas of complex geology.
Reservoir management
The new Exploration Explorer System, launched in 2014, has transformed the way we deal with oil
and gas prospects. It provides a state-of-the-art method to track the phases of decision making.
The system also displays the prospective resources, their types, volumes, locations, and depths in a manner that gives our exploration teams a unified vision of the project.
We commissioned the first successful use of CO2 to replace hydraulic fracturing in a gas well in
the Middle East.
AT THE SHAYBAH FIELDSECOND, DURING 2014, MAJOR CONSTRUCTION OF THE NEW NGL (NATURAL GAS LIQUIDS) RECOVERY PLANT WAS 96% COMPLETE. GAS PRODUCTION WITH THE CONSTRUCTION OF OUR WASIT GAS PLANT, NGL PRODUCTION IS PROJECTED TO BEGIN IN THE SECOND QUARTER OF 2015.. BY JULY 2017, AFTER THE INTRODUCTION OF TWO STEAM TURBINE GENERATORS, THE TOTAL POWER GENERATION CAPACITY AT SHAYBAH WILL EXCEED 1.3 GIGAWATTS. MIDYAN GAS PLANT, THE FADHILI GAS PLANT WILL PROCESS 2.5 BILLION SCFD FROM ONSHORE AND OFFSHORE FIELDS AND IS ON TRACK TO COME ON-STREAM BY 2019.
Crude sample
April 2013, our Manifa crude oil
increment was approaching its full production capacity of 900,000 bpd of
Arabian Heavy crude oil at the end of
2014.
We continued work on two major projects at the
Shaybah field in 2014. First, we are raising oil
production capacity by 250,000 bpd for the
second time, bringing total oil production
capacity to 1 million bpd of Arabian Extra Light
crude oil by April 2016
PRODUCTION
While the company did not originally plan on refining oil, the Saudi
government wished to have only one company dealing with oil
production.
Therefore, on 1 July 1993, the government issued a royal decree
merging Saudi Aramco with Samarec, the country's oil refining
company. The following year, a Saudi Aramco subsidiary acquired a
40% equity interest in Petron Corp., the largest crude oil refiner and
marketer in the Philippines. Since then, Saudi Aramco has taken on the
responsibility of refining oil and distributing it in the country
REFINING Currently, Saudi Aramco's refining capacity is more than 4 million barrels per day (640,000 m3/d)
(International joint and equity ventures: 2,460 Mbbl/d (328,000,000 m3/d),
domestic joint ventures: 1,908 mpbd,
and wholly owned domestic operations: 5395 Mbbl/d (158,200,000 m3/d).)
This figure is set to increase as more projects go on.
Saudi Aramco is pressing ahead with the 0.4 mb/d Jazan refinery, which will take total Saudi refining capacity from 2.91 mb/d in 2015 to 3.3 mb/d by the end of 2018,
REFINERIES(Some)
Jeddah Refinery (60,000 bbl/d (9,500 m3/d) nominal capacity)
Ras Tanura Refinery
Riyadh Refinery
Yanbu Refinery
Refining capacity (in thousands of barrels per day)
Wholly
owned
domestic
1,006
Domestic joint ventures 1,905
Worldwide 5,375
International joint ventures 2,464
Saudi
Aramco share 3,104
The Saudi Aramco Total Refining and Petrochemical
Company (SATORP), our joint venture with France’s
Total in Jubail on the east coast of Saudi Arabia, is
one of the largest, most complex refineries in the
world. It is capable of fully converting 400,000 bpd
of Arabian Heavy crude oil into low-sulfur gasoline,
diesel, and jet fuel that meet the highest standards
and specifications in the United States.
S-OIL, comprising 31.9 million shares. S-OIL is South
Korea’s third largest refiner.
REFINING .1
CHEMICALS
Saudi Aramco's downstream operations are shifting its
emphasis to integrate refineries with petrochemical
facilities in production of chemically refined products
such as naphtha, butane, and propane. .
Their first venture into it is with Petro Rabigh, which is a
joint venture with Sumitomo Chemical Co. that began
in 2005 on the coast of the Red Sea
The investment in the Fujian Refinery and
Petrochemical Company with Sinopec and ExxonMobi
There are also plans to construct a new project in
Yunnan province with CNPC. Fujian Refining &
Petrochemical Company(FREP), is our joint venture with Fujian Petrochemical Company Limited, ExxonMobil,
China Petroleum and Petrochemical Company Limited
(Sinopec), and the Fujian provincial government. FREP
is a key element in our Asia chemicals strategy.
Petro Rabigh integrates chemicals production with
refining, realizing additional value from our resource base.
below: The purchase of a majority stake in South Korea’s
S-OIL achieves stronger integration of our global
downstream assets.
DISTRIBUTION
Saudi Aramco has deployed several tankers to ship crude oil, refined oil and gas to
various countries.
It has created a subsidiary company, Vela International Marine, to handle shipping to
North America, Europe and Asia.
Other distributors like;
MARKETING ‘’We believe that large, integrated energy and chemicals companies
can build and sustain a dynamic and profitable downstream business
that yields returns across the entire hydrocarbon value chain. In 2014,
we made significant strides toward accomplishing this goal.’’
o Forging ties with china and japan
o Partnership
o Collaborations with North America, Europe and Asia
o Investments in market venture . Ie, , Vela International Marine
o Conferencing; Navigating the various transitional phase(s) that the
world is facing globally in the sector. Sept 26-28 OPEC’s international
energy forum in Algeria. Plans of putting a cap on oil prices in the
near-term.
o Forecasting future market demands for oil and gas globally.
o Cooperative engagement – suppliers and Saudi Aramco
o strategizing to partner with local downstream-integrated players to
secure market outlets in these non-OECD markets.
ON THE LOGISTICAL FRONT, OUR EXTENSIVE DISTRIBUTION NETWORK IS CONTINUOUSLY
UPGRADED TO SERVE CUSTOMERS.
FROM A COST, RELIABILITY, AND EFFICIENCY STANDPOINT, PIPELINES ARE A PREFERRED
METHOD OF TRANSPORTING OUR ENERGY TO OUR PROCESSING PLANTS, REFINERIES, AND
MAJOR DISTRIBUTION POINTS.
In 2014, we continued our efforts to turn around the performance of Motiva Enterprises,
a Houston-based refining and marketing joint venture between Saudi Refining, Inc. (a
Saudi Aramco subsidiary), and a Shell Oil affiliate. This effort was carried out in collaboration with our Shell Oil partner to enhance refinery processes to upgrade
performance and better position the company to capture market opportunities.
MARKETING.1
Enabling opportunities
downstream
Aramco Trading Company, our wholly owned subsidiary, was
specifically established to maximize downstream integration and
generate further value by optimizing our growing global
downstream presence.
One area where we have integrated our operations from
production to customer is in China’s Fujian Province and the
eastern part of Guangdong Province. This is home to our marketing
venture, Sinopec Sen Mei (Fujian) Petroleum Co. Ltd. (SSPC).
Having a network of 942 retail sites and 14 distribution terminals,
SSPC sells wholesale and retail motor gasoline, diesel, and illuminating kerosene.
Aramco Trading achieved a new milestone in 2014 when it began
officially marketing paraxylene from SATORP and polyolefins,
polymers, and monoethylene glycol from Petro Rabigh.
MARKETING 1.1
Our crude oil and natural gas liquids (NGL) export terminals supply energy
to consumers around the world. This interconnected network of oil and gas
processing plants, refineries, pipelines, bulk plants, air refueling sites, and
terminals is monitored and controlled from the Operations Coordination
Center in Dhahran, ensuring responsiveness and reliability.
Distribution network, The network now extends nearly
20,000 km, roughly equal to traveling from Riyadh to New
York City and back again. Five marine ports load millions
of barrels of oil and refined products each day onto ships
destined for terminals in the world’s three major energy
markets: Asia, North America, and Europe.
MARKETING 1.2 Safe, reliable delivery to our customers
ENERGY STRATEGIES
Maximizing the Impact of Our energy Resources
Improving production and Performance
Generating Breakthroughs across the Value
Chain
Enabling a Sustainable Future for Saudi the
Kingdom
Energizing People and Ideas
Sustainable development for our Citizens
GLOBAL MARKETING
CHALLENGES
Low global prices for oil
Aramco computers were attacked by a
virus on 15 August 2012 the attack was part
of Iran's retaliation for the U.S. involvement in
Stuxnet.
Globally competition from other OECs
There are limited growth opportunities to
companies available in the downstream
sector.
The challenges of increasing production
and addressing unemployment
Bottlenecks in transport and export facilities
CULTURAL FACTORS
AND BARRIERS
Decree from the in-Kingdom Total Value add (IKTVA) a
Program which is designed to drive domestic value creation
and maximize long-term economic growth and
diversification to support a rapidly changing Saudi
economy.
Dry lands research and exploration.(Collaboration with Tittori
University)
Operational hazards e.g.. Fire, harsh hot climate..
Inaccurate data for planning, engineering and
maintenance processes.
WE CONTINUOUSLY STRIVE TO LEVERAGE OUR
INTELLECTUAL PROPERTY (IP) PORTFOLIO, PRACTICES,
AND PROCESSES TO POSITION SAUDI ARAMCO
AS A GLOBAL TECHNOLOGY LEADER.
WE PURSUE PATENTS IN AREAS WHERE IP PROTECTION
PROVIDES A COMPETITIVE ADVANTAGE, GLOBAL
RECOGNITION, STRATEGIC POSITIONING, AND
PRODUCT DIFFERENTIATION.
Our research and development
activities focus on applying our
expertise and ingenuity to generate
innovative ideas that will make our
resources more accessible, useful,
sustainable, and competitive. To achieve this goal, we foster a
culture of innovation and
exploration.
At Saudi Aramco, we believe technology leadership drives
continued and future success in the
energy sector and is essential to
achieving our aspirations to help solve
global energy challenges and
stimulate the local knowledge
economy.
Performance areas (research and
developments. R&D)
GRANTED 99 PATENTS BY THE UNITED STATES
PATENT AND TRADEMARK OFFICE.
154 NEW PATENT APPLICATIONS WERE FILED.
Over the past few years, we have created a global research network with the establishment of research facilities in targeted innovation hubs in the United States, Europe, and Asia.
Introduction of a balanced portfolio of technically feasible and commercially viable technology options. Upstream, we are actively working on technologies that enable greater efficiency in resource discovery and recovery. Downstream research domains seek to develop and implement process improvements and production efficiencies that support our growing petrochemicals business as well as new production and refining efficiencies to reduce costs and support higher value product yields.
Performance areas c’tnd
Upstream technology ,Here are some
upstream technology highlights from our
work in 2014 to increase recovery rates for oil, part of our strategy to ensure the long-
term sustainability.
Injecting CO2 into reservoirs for
enhanced oil recovery and
sequestration could potentially boost
recovery rates and reduce emissions.
The use of surfactant/polymer
formulations in injected water can help
recover tertiary oil (oil not produced under natural reservoir pressure or
through water injection) more efficiently.
Smart Water Flooding has the potential to
optimize water properties in our carbonate
reservoirs to increase recovery. ( In 2014, a
Smart Water Flood demonstration project at
North ‘Uthmaniyah resulted in a successful
comprehensive formation evaluation at the first
observation well of the field pilot.)
Intelligent Systems Team Creative solutions for real-world problems…
Performance areas/strategy c’tnd
the 11 members of the Intelligent Systems Team in our R&D Center at King Abdullah University of Science and Technology
(KAUST) dared to chart new territory.
So
much
more!!!
(VISIONARY CONCEPT)
TO DELIVER ON OUR ASPIRATIONS FOR THE
FUTURE, WE ARE DEVELOPING INCREASINGLY
SOPHISTICATED UPSTREAM OPERATIONS,
EXPANDING OUR DOWNSTREAM BUSINESS,
AND PURSUING EVER MORE AMBITIOUS
TECHNOLOGICAL INNOVATIONS.
SUMMARY
The immense challenges in transforming Uganda’s economy doesn’t mean there won’t be change in the country. Structural reforms outlined in Vision 2020 are much needed to shift the economy to a more sustainable path and even if only a small part of Vision 2020 is being implemented, the Ugandan economy will look very different in 2020 than it does now. The key question is whether these changes will have a substantial impact on oil policy and the evolution of the energy sector. As discussed above, in spite of expectations of a diminished role, the Uganda energy sector (and particularly the oil and gas sector) remains key to a smooth transition to the vibrant economy envisioned and will continue to play a vital role in the country’s future.
Furthermore, the overall direction of National oil and gas oil policy in terms of its production and investment policy, maintaining spare capacity, integrating down the value chain through investing in refining and petrochemicals, increasing the role of gas in the energy mix, introducing efficiency measures and deploying renewables in the power mix to free crude oil for exports are not likely to change in the next few years as has been confirmed by the UNOC. In fact, one could argue that the Ugandan energy sector would benefit from a more integrated energy policy that takes a holistic view about the energy challenges facing the Country. But the Ugandan energy sector will not be immune from the changes in other parts of the economy as the recent restructuring of the energy ministry, the recent increase in energy price, the emphasis on local content policies, The restructuring and reorganization of such a vital sector and the acceleration of some policies may bring benefits and achieve efficiency gains, but they will also generate uncertainties and risks, which need to be carefully assessed and managed so policymakers don’t end up killing the goose that’s yet to lays golden eggs.
LESSONS FOR UGANDA’S NASCENT INDUSTRY
The government and the national oil company should design Programs to drive domestic value creation and maximize long-term economic growth and diversification to support a rapidly changing Ugandan economy.
Uganda’s government should strategize to create value in every aspect of our Oil businesses, maximizing long-term economic growth and diversification. Through the UNOC Total Value Addition Programs by taking action to drive additional domestic value creation to support a rapidly changing Uganda and foster future prosperity.
Local content is a formal requirement to development as will be required across Uganda’s domestic and international supply chain. This should be Uganda’s long-term strategy
Putting in place mechanisms to ensure transparency not only in Revenue Management, but also in aspects of Efficient Management of natural resources, which are the source of the revenues
Government should play parliament a great oversight role and therefore to ensure that proper allocation, utilization and accountability are done to obtain improved social outcomes.
UNOC Should connect people ideas and energy to realize the full potential of our resources, maximizing the value inherent in every hydrocarbon molecule we produce to advance human progress and promote prosperity.
THANK YOU
FOR YOUR ATTENTION