Saudi Aramco to increase oil and gas production

AS part of its growth strategy, Saudi Aramco has announced that it will increase oil and gas production over this decade, as the world aims to achieve an “unrealistic” transition away from fossil fuels.

This news comes amid record high oil and gas prices and boycotts of Russian supplies in response to the country’s ongoing invasion of Ukraine. According to the Financial Times, Aramco CEO Amin Nasser said that even before the current geopolitical situation, supply and demand was tight due to rising oil consumption, low inventories, and declining spare production capacity.  

News reports add that he said Aramco was doing its part, but that others also needed to increase their investments.   

Saudi Aramco plans to increase crude oil production to 13m bbl/d by 2027, and potentially increase gas production by more than 50% by 2030. In 2021, the company achieved average hydrocarbon production of 12.3m boe/d, including 9.2m bbl/d of crude oil. The crude oil increase is to achieve the Government’s directive to increase production.

The integrated energy and chemicals company is also expanding in its downstream business, with plans to increase liquids-to-chemicals capacity up to 4m bbl/d. In 2021, the company achieved net chemicals production of 53.8m t.

Aramco will also develop “significant” hydrogen export capability and aims to become a global leader in carbon capture and storage. The company will also invest in renewable energy and nature-based solutions as it works to achieve its goal of net zero scope 1 and 2 greenhouse gas emissions across its wholly-operated assets by 2050. The company announced this goal last year, as Saudi Arabia – one of the world’s largest oil producers – committed to net zero by 2060.

Despite the company’s net zero goal, Chairman of the Board of Directors Yasir O. Al-Rumayyan, said that the suggestion that hydrocarbons could be quickly eliminated from the global energy mix is “unrealistic as doing so would severely impede and negatively impact trade and travel. Instead, society as a whole must seek a stable and inclusive energy transition that meets the needs of people in both the developed and developing world”. Reportedly, Nasser similarly referred to energy transition plans as “totally unrealistic”.

He also said: “Our investment plan aims to tap into rising long-term demand for reliable, affordable, and ever more secure and sustainable energy.

“We recognise that energy security is paramount for billions of people around the world, which is why we continue to make progress on increasing our crude oil production capacity, executing our gas expansion programme, and increasing our liquids-to-chemicals capacity.”