Saudi Aramco is taking the initiative to ensure a steady supply of oil and gas to the world, by successfully meeting the challenges faced by the energy industry.

“When we look at the global energy situation today, we find a convergence of a wide range of complex challenges. These include misperceptions about future adequacy of supply, underinvestment in oil infrastructure, a mismatch between refinery configurations and the types of crude in the market, increased demand for natural gas, the need for a well-trained and innovative workforce, and stewardship of the natural environment,” the oil giant says in its 2006 Annual Review titled Taking the Initiative.
“Perhaps never before has the petroleum industry faced such immense challenges — or been presented with so many promising opportunities. At Saudi Aramco, we are taking the initiative to address these challenges and assure a steady, reliable supply of the petroleum energy the world needs now — and in the future.”
 Worldwide energy demand continues to expand dramatically, according to statistics from Saudi Aramco. According to the International Energy Agency (IEA), global energy demand is projected to increase by more than 50 per cent by 2030, with half of the increase accounted for by electric power generation and one-fifth by transportation, the latter almost entirely in the form of oil-based fuels.
Oil will remain the largest single source of fuel, with demand projected to rise from the 2005 rate of 84 million barrels per day (bpd) to 116 million bpd in 2030, according to the IEA report.
“While the issue of oil supply is important today, it will become even more critical in the coming years,” the report states. Aramco believes petroleum will be plentiful for many decades. Although the company currently manages crude oil reserves of approximately 260 billion barrels, it continues to expand its reserve base. At current production levels, Saudi Aramco is confident that it has many decades’ worth of oil to produce.
When disruptions have occurred to various producers in recent years, Saudi Arabia, as it has for decades, ramped up production to reassure energy markets and provide consumers with a steady, reliable supply of petroleum. As an enterprise, Saudi Aramco says it is committed to playing its part in meeting future demand growth and is backing that commitment by embarking on the largest capital programme in its history.

MEGA-PROJECTS
Saudi Aramco currently has half a dozen major crude oil increments at various stages of development, with a total production capacity of some 3 million bpd. Some of that capacity will offset natural decline, while the remainder will expand its maximum sustained production capability, which by the end of 2009 will reach 12 million bpd, the company says, adding that it has also developed scenarios to increase that level, should market conditions warrant expansion.
A slate of mega-projects also will enable Saudi Aramco to maintain spare production capacity of 1.5 to 2 million bpd above forecast production, in keeping with the kingdom’s commitment to keep world markets stable, according to the report.
“The challenges present in the worldwide refining industry have also created a unique set of opportunities for companies willing to seize them. We are expanding our worldwide refining capacity through overseas joint and equity ventures. Domestically, we are preparing to build two new export-oriented refineries.
“In addition, we are proceeding with the construction of our joint-venture PetroRabigh integrated refining-petrochemical project,” the report states.

Facts & Figures
KEY WORKFORCE
The report continues: “Worldwide, the petroleum industry is facing a major hurdle in finding the human resource talent necessary to tackle the coming challenges. Since the inception of Saudi Aramco nearly 75 years ago, we have operated one of the largest industrial and professional training programmes in the industry. Our predominantly Saudi workforce has guided the company to the prominent position it holds in the world today. We continue to develop and deploy at every level the latest training and professional development programmes across our entire business, from engineering and exploration to health care and IT.
“The petroleum industry is not only facing challenges regarding supply, infrastructure and human resources, but also an array of environmental challenges that must be met and overcome. One response is the development of alternative energy sources. According to IEA forecasts, the share of renewable energy sources such as wind, solar, photovoltaics and sea wave energy will rise to about 8 per cent of the world’s primary energy mix by 2030, with the remaining 92 per cent coming from non-renewable sources.
“Saudi Aramco believes the development of alternative sources of energy is important, and given the projected growth in total demand, contributions from all sources will be needed. However, many projections for energy supplies from alternative sources may not be realistic, and if decisions about adding conventional energy supplies are made on these projections, the world could face a significant gap between demand and supply.
“While a number of renewable and alternative energy sources have long-term promise, they face considerable technical, environmental and commercial hurdles. Their development should be pursued wisely and on the basis of commercial viability and technical feasibility.
“Because fossil fuels will continue to meet the lion’s share of the world’s energy needs for many decades to come, improving their efficiency and lightening their environmental footprint are among the most important steps that can be taken to preserve the natural world for future generations.”

Facts & Figures
FOR THE PEOPLE
The challenges faced by both energy producers and consumers alike are considerable, but Saudi Aramco believes the kingdom of Saudi Arabia – and by extension its national petroleum enterprise – is uniquely placed to respond to these pressing needs.
Saudi Aramco’s unmatched crude oil reserves, relatively low exploration and development costs, technological prowess, long experience in managing mega-projects, and financial strength position the company to honour its commitments over the long term, both abroad and at home, it says.
Domestically, Aramco says its role is to leverage the kingdom’s hydrocarbon reserves to benefit its people and expand its economy.
“Our programme of investments and initiatives addresses both domestic objectives and the larger energy trends shaping the global economy,” the report states. At Saudi Aramco, we understand how much the world depends on our activities and operations: This involves not just abstract supply and demand figures, but rather the livelihoods and living standards of billions of people.
“Those of us in the petroleum industry have both the responsibility and the privilege of enabling people around the globe to live fuller, more meaningful and more productive lives, while building a still more prosperous future for their children. This is an obligation we take very seriously,” the report concludes.
Source: 2006 Annual Review