Saudi Aramco to boost capacity by 550,000 b/d by 2025 amid plans to hit 13 million b/d

Saudi Aramco plans to ramp up its oil production capacity by 550,000 b/d by 2025 as it forges ahead with plans to boost its maximum sustainable capacity to 13 million b/d in the coming years.

“The Marjan and Berri crude oil increment programs are in the final stages of detailed engineering, and construction activities continue to progress,” Aramco said in its second quarter earnings report released Aug. 9. The Marjan and Berri projects are expected to add production capacity of 300,000 b/d and 250,000 b/d, respectively, by 2025, the company said.

Aramco also completed in the second quarter the Ain Dar and Farzan crude oil increment targeting secondary reservoirs that will add a total production capacity of 175,000 b/d, it added.

The world’s biggest energy company is in the Front End Engineering and Design or FEED stage to boost its maximum sustainable capacity by 1 million b/d to 13 million b/d, CEO Amin Nasser said Aug. 8. The FEED stage is expected to last around two years and the increments will mainly come from offshore fields, he added.

Aramco is boosting its oil production capacity at a time when Western oil majors are curbing their investments and future development in new increments as part of their energy transition policies.

Aramco’s capital expenditure in 2021 is expected to reach $35 billion, up from $26.9 billion in 2020.

Renewables investments

The company’s profit surged fourfold in Q2 to Saudi Riyals 95.5 billion ($25.5 billion) due to higher oil prices and improved global demand. However, its oil production fell 7.5% to an average of 8.6 million b/d and total hydrocarbon output shrank 8% to 11.7 million boe/d due to the OPEC+ cuts implemented this year.

The net profit uptick was partially offset by lower crude oil volumes sold and higher crude oil production royalties.

Aramco wants to invest in renewables as part of its clean energy pivot.

“The company remains committed to the global energy transition and views renewable energy as a complement to its own energy products, supported by vast solar and wind resources in-kingdom,” it said. “The company is currently evaluating potential projects with partners to make investments in renewables.”

The company is also keen to be a low-carbon intensity producer and has verified by an independent third party its scope 1 and scope 2 upstream greenhouse gas emissions for 2020, which had a carbon intensity of 10.6 kg CO2e/boe.

Aramco also is boosting its gas output, with the Hawiyah Unayzah Reservoir Gas Storage program close to the final engineering design phase that will help add up to 2 bcf/d for re-introduction into the Master Gas System by 2024.

Downstream turnaround

Upstream capital expenditures for Q2 increased by 5.6% to Saudi Riyals 20.15 billion ($5.4 billion) as the company carried on with ongoing crude oil increments and other development drilling programs.

Downstream capital expenditures for Q2 surged by 79.7% to Saudi Riyals 7.4 billion ($1.97 billion), primarily due to the consolidation of Saudi Basic Industries Corp.’s capital expenditures and various project upgrades including the Master Gas System. Aramco acquired last year 70% of chemical maker SABIC.

The downstream sector swung to a profit in Q2, compared to a loss in the year-earlier period, due to the consolidation of SABIC’s results, rising refining and chemicals margins, and “the associated inventory movement gains as energy market fundamentals continue to improve.”
Source: Platts