Dhahran, Asharq Al-Awsat– Saudi Aramco currently has half a dozen major crude oil increments at various stages of development, with a total production capacity of some three million barrels per day, according to the Company’s President and Chief Executive Officer Abdallah S. Jumah.
“In other words, in the next five to six years, we will be adding production capacity. Some of that capacity will offset natural decline, while the remainder will serve to expand our maximum sustained production capability, which by the end of 2009 will reach 12 million barrels per day,” he said.
“At the same time, in keeping with Saudi Arabia’s current oil policy and as a commitment to world oil markets, we will maintain our surplus production capacity of one-and-a-half to two million barrels a day, even as our actual production grows. This surplus capability is expensive to develop and maintain, but over the years it has repeatedly proven its worth, and so we bear this cost to promote market stability and continued global economic development,” said Jum’ah in this year’s state-of-the-industry address through a live direct video transmission from Dhahran to Kuala Lampur for Asia’s annual conference on Oil and Gas.
During the address, he spoke about the strategic programs of Saudi Aramco, which is considered as the biggest petroleum resort in the world.
More than 1000 petroleum specialists and officials from the various countries of the world are attending the conference, which is convened this year under the motto of “Balancing the interests of producers and consumers’.
“I consider it a particular honor to participate in the Asia Oil & Gas Conference, not only because Saudi Arabia is an integral part of the region, but also because the Far East is the destination for roughly fifty percent of Saudi Aramco’s crude oil exports and well over half of our refined product and NGL exports. Of course, we also have substantial refining and marketing joint ventures in the region, and are partnering with Asian firms in a number of domestic initiatives, including major undertakings in both the upstream gas and downstream petrochemical sectors,” Jumah said.
“Without a doubt, energy security concerns have always been an important aspect of the oil industry landscape, but a number of developments over the last several years have brought these anxieties to the forefront,” he said.
“Without a doubt, developments in Asia have also changed the dynamics of the international energy market-in my opinion, forever. Furthermore, because oil is a fungible commodity, measures to increase global energy security will be meaningless unless they include Asia and the Pacific as willing participants.
“Surely, it would be much more productive to work together to address both the structural and cyclical challenges that we all confront. If we are to be successful in those efforts, we have to consider both the supply and the demand sides of the equation, recognize that both producers and consumers have important roles to play in tackling industry issues, and understand that today’s market is the product of a complex interplay of factors that cannot be addressed with either simplistic solutions or isolated initiatives.
“Instead, I believe we need a clear and comprehensive vision of the energy future, which will be made reality by advanced technology, dedicated people and good old-fashioned hard work. That is why at Saudi Aramco, we are doing our part to meet these various challenges through a series of major initiatives all along the petroleum value chain, using not only our own resources but also drawing upon the strengths of our world-class partners, many of them from the Far East. I would like to share some of those initiatives with you.”
“Our efforts begin with a stepped up oil and gas exploration program. We currently manage approximately 260 billion barrels of oil, or roughly a quarter of the global total. But we continue to expand our reserve base, and conservatively estimate our additional potential of recoverable oil to be in the range of 200 billion barrels. At Saudi Aramco’s present production levels, that means we will have well over a century’s worth of oil to produce.
“We’re also pursuing major initiatives further downstream. We are looking at the expansion of refining capacities in Korea through S-Oil, in the Philippines through Petron, and in the United States using our Motiva joint venture with Shell. And, of course, we are working with Sinopec on downstream projects in the People’s Republic of China, in both Fujian and Shandong provinces. Saudi Aramco is also working with international partners to develop two export-oriented refineries in the Kingdom, which will not only help to alleviate the tight global refining situation, but since they are being designed to process heavier crudes, will also address the mismatch between today’s crude slate and existing refinery configurations. Even further downstream, we have begun construction with Sumitomo Chemical on a world-class, integrated refining and petrochemical facility at our Rabigh Refinery, and are studying additional domestic petrochemical integration projects. In all of these various projects, we are taking care to protect and preserve the natural environment, and to lighten the carbon footprint of our various operations on the ecosystem,” Jumah noted.
“We are also expanding the capacity of our Master Gas System, the largest natural gas network of its kind. Although Saudi Aramco is producing and processing gas to power the development and diversification of Saudi Arabia’s economy, these operations do have a positive international impact. By using gas as the primary fuel and feedstock for domestic industries and utilities, we are able to redirect crude oil to international markets, helping to meet growing worldwide demand even as we continue to fulfill our domestic obligations.
Finally, our regional affiliate offices constitute another important aspect of our business, especially when it comes to Asia. In addition to our subsidiaries in the US and Europe, we have sales & marketing, logistics and purchasing offices in Singapore, Hong Kong, Beijing and Tokyo, with project engineering offices in a number of other Asian cities. This network is charged with listening to our customers, working with our vendors and service providers, helping us understand the complexities of these markets, and articulating the region’s needs here in Dhahran. In the years to come, we will continue to invest in Asia and work to attract additional Asian investment in Saudi Arabia, because we believe this is our natural market and that you are our natural partners.
Ladies and gentlemen, we have undertaken these various efforts and initiatives because at Saudi Aramco, we understand the difference that a reliable supply of energy makes in the daily lives of individuals, families, larger communities and whole countries,” he concluded.