IN ITS downstream operations, Aramco continues to expand its global refining capacity and the integration of refining and chemicals facilities.

Refining crude oil and condensates, fractionating natural gas, and selling and distributing natural gas, natural gas liquids (NGLs), petrochemicals and petroleum fuels, Aramco’s Downstream department operates oil refineries, natural gas fractionation facilities, petrochemical plants, and petroleum and natural gas product distribution facilities, Aramco says in its 2012 Annual Review.

To grow its chemicals business, Aramco moved forward in 2012 with implementation of phase two of the development of PetroRabigh, its joint venture with Sumitomo Chemical, and the grass-roots development of Sadara, its joint venture with The Dow Chemical Company which will be the largest petrochemical facility ever built in one phase.

Aramco is optimising its downstream portfolio to add even more value to its hydrocarbon resources while driving the creation of new jobs, not just in its company, its affiliates or service providers, but also in the conversion, manufacturing and service clusters around its integrated refining and chemical facilities.

To support Saudi Aramco’s expansion into the petrochemicals business, its scientists are at work researching new efficient methods for the production of ethylene and propylene directly from crude oil, bypassing the refining process.

After conversion, these olefins will be directed into more value-added derivatives. Such new technologies will help the company make new products in new ways and generate more value from the kingdom’s natural resources as well as increasing the company’s intellectual capital.

The Saudi Aramco Products Trading Company commenced operations at the beginning of 2012 and traded 265 million barrels of refined products in the course of its first year to balance the kingdom’s supply and demand.

In October, it assumed responsibility for domestic shipping functions. Formally established as Aramco Trading, a wholly owned company subsidiary, the organisation is entirely focused on importing and exporting refined petroleum products, supporting Saudi Aramco’s efforts to maximise downstream integration and generate further value by optimising its growing global downstream presence.

Refining is a key element in Aramco’s downstream strategy

In 2012, Aramco Trading also represented Saudi Aramco’s interest in sales and purchases of refined petroleum products such as condensates, naphtha, gasoline, middle distillate fuels, fuel oil, residual petroleum products and sulfur. Looking forward Aramco’s relentless focus on providing more and cleaner energy to the world, powered by the capabilities of its employees and partners, guides its decisions and creates unique value for its customers.

Through a combination of subject-matter expertise, rich assets and robust technology, Saudi Aramco is becoming a world-leading fully integrated energy and chemicals company and continuing to play its role as a major player in the kingdom’s economy.

The company’s capabilities enable it to confidently continue pursuing a strategy based on optimising profits while managing market risks. It allows the company to maintain its status as the world’s most reliable supplier while expanding into new operational areas.

It ensures that, as it enhances its global leadership position, Aramco leverage these capabilities for the benefit of all its stakeholders. By strengthening its business the people at Aramco also become better citizens – through job creation and reducing its domestic energy demand to ensure a brighter, more sustainable future for generations to come.

In the end, it is its refining, marketing and chemicals capabilities that helps the company meet domestic energy demands in an efficient manner, while driving and enabling a vibrant energy services sector, and allows the company to compete internationally in strategic high-growth markets with the industry’s best companies. It is its capability that enables the company to help shape a better tomorrow.

SUPPORTING THE KINGDOM
In 2012, Aramco launched strategic initiatives to maximise the economic value of the kingdom’s energy resources. The goal of these initiatives is to satisfy energy demand in the kingdom with a future-oriented, sustainable energy mix, and to aid in the development and diversification of the kingdom’s economy.

The initiatives will unleash key enablers that will support the necessary transformation within Saudi Aramco for the benefit of the company and the kingdom. The kingdom’s unique hydrocarbons endowment gives the nation, and Saudi Aramco, the unrivalled opportunity to develop a vibrant energy-service industry that can serve the kingdom’s domestic needs and provide internationally competitive services that will accelerate the kingdom’s GDP growth.

Throughout 2012, Saudi Aramco continued its approach to developing the national energy sector and further focused on building relationships with local contractors, pursuing the goal of 70 per cent local content in its operations by 2020.

During 2012, every Saudi Aramco organisation embraced the challenge and adopted the goal to further accelerate development of a competitive energy sector. Aramco also supported various national energy programmes, such as those led by the Saudi Energy Efficiency Centre, through efforts to create awareness of the opportunities energy efficiencies will bring to Saudi Aramco and to the kingdom. These programmes were accompanied by further progress on the development of guidelines and standards for energy efficiency in power generation and the distribution sector, and in commercial and residential construction.

Aramco remains committed to doing its part to address economic and social challenges in the years to come, and to improve living standards, strengthen labor productivity and create new jobs for the kingdom’s citizens.

Saudi Aramco has grown tremendously during its 80-year history. Once strictly an oil and gas production company, Aramco has now grown its refining business and ventured into petrochemicals while exploring renewables. With this expansion has come a substantial increase in the complexity of the decisions Aramco must make. Also trending upward in relation to its growth have been volatility, financial market risk, and an increasingly complex domestic development agenda.

Growth will require changes in how Aramco develops its strategy, for the short and long term alike. Its Strategy Development and Corporate Decision Making Initiative is designed to help the company ensure an agile corporate decision-making process that enables the company to continue to compete effectively as Aramco grows – across its multiple businesses and in the face of challenges.

To achieve its 2020 strategic intent, to continue to provide safe and reliable operations, and to execute with excellence and strong controls – Aramco must perform at an even higher level.

Aramco’s multi-billion dollar investments are futile without investing in the skilled workforce to manage and operate them. The company’s goal remains to further develop its people to be the best they can be, whether that be as a leader, a technician, an operator or a professional.

Aramco will continue to challenge its employees with appropriate developmental opportunities and meaningful work assignments to engage, inspire, motivate and retain its best people. Aramco’s commitment is to continue to attract the most talented and motivated men and women in the industry as it becomes a global employer of choice.