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Saudi Aramco aims to become a top three oil trader by 2022 as part of a broader strategy to build a more robust energy company that can withstand market downturns. The aim of Saudi Aramco to position itself among the top players comes as a challenge for major giants such as BP, Royal Dutch Shell, and Vitol. Chief Executive officer of Aramco said that the company is targeting about 6 million barrels per day of crude and refined products.
The company seeks to trade its crude, which until now has been sold to customers in a direct long-term contract. [optin-monster-shortcode id="swikrbu1d9j9aq0o4cko"]
Aramco Latest achievements:
Saudi Aramco consented to a joint venture with NORINCO and Panjin Sincen to develop an incorporated refining and oil complex in China. The joint venture will create another organization, Huajin Aramco Petrochemical Co. Ltd that will incorporate 300,000 barrels per day refinery with a 1.5 million metric tons per annum ethylene cracker, in Liaoning Province of China.
The Saudi Aramco will supply about 70% of the crude. The recent move by Aramco, clearly demonstrate the company's strategy to make the company more resilient to market downturns.
According to Aramco, further plans for the Joint Venture is to build up retail fuel business as a value chain by the end of 2019.
The estimation of the joint venture is more than $10 billion, and Saudi Aramco will hold 35% of the Joint Venture.
The other landmark which Saudi Aramco achieved to fulfil its broader strategy was to acquire a 9% stake in Zhejiang integrated refining and petrochemical complex. The company signed four MoUs to expend the downstream presence in China.
With the footstep in the petrochemical complex, Saudi Aramco plans to expand its portfolio to tap into the fuel retailing business. The move will help the Saudi giant to compete with global players such as BP and Vitol.
To further enhance the production capabilities, Saudi Aramco in a joint venture with National Oilwell Varco Incorporated (NOV) held its first Arabian Rig Manufacturing in Ras al- Khair, 80 km north to Jubali. The Joint venture is capable of producing ten oil rigs per year. The JV is believed to help Aramco aim to serve the Middle East and North African region.
As per the CEO of Aramco, the company is facing a crisis of perception. Most of the stakeholders of the company do not understand the fact that economic concerns raised by different countries and environmental activists in line with the Paris Climate accord cannot hamper the fuel demand, as major oil demand comes from aviation, transportation industry with almost no good substitute of the oil.
The Benchmark Brent crude oil prices are recovering from the level of $50.47, which marked the closing of 24th December 2018 and reached a 3-month high of $67.73, which marked the dayâs high of 22nd February 2019. However, prices corrected in the response of U.S. President Donald Trump tweet that warned OPEC over the production cut.
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