Dhahran, Saudi Arabia-Saudi Aramco today released its 2016 Annual Review, highlighting the significant calendar year achievements in progressing its long-term strategy as the world's leading integrated energy company.
Amin H. Nasser, President and CEO of Saudi Aramco said: “Driven by operational efficiency and fiscal discipline, we continued to build and deliver on our strategic goals in 2016 despite the backdrop of a challenging environment. The company crossed a threshold in its transformative journey to optimize its operations and maximize delivery across all of its capabilities. At the same time, we remained true to our commitments of value creation, technology delivery, and human capital development.”
Saudi Aramco continued to deliver significant achievements to progress its long-term, integrated strategy despite persistently low oil prices and weak growth in the global market. The Company's upstream business has a resilient low cost position which will endure based on premium reservoir characteristics and Saudi Aramco's unwavering focus on operational excellence and project management.
Upstream
In 2016, Saudi Aramco continued to achieve milestones in exploration and capacity expansion. The Company discovered two new oil fields and one new gas field; added 250,000 barrels of crude oil production per day to its Shaybah facility where it also started a second natural gas liquids processing train; and reached full operational feed capacity of 2.5 Bscfd at the Wasit Gas Plant.
Downstream
Saudi Aramco strengthened its downstream strategy, taking further steps to expand and integrate its domestic and global portfolio. In-Kingdom, the Sadara joint venture with The Dow Chemical Company, with a production capacity of 3 million tons of performance plastics, started commissioning of the region's first mixed feed cracker; the Phase II Petro Rabigh ethane cracking project with Japan's Sumitomo Chemical Co. achieved full operation; and the Company's 400,000 bpd Jazan refinery reached 55% completion.
Internationally, in the U.S., Saudi Aramco signed an agreement with Shell to separate the assets of Motiva Enterprises, paving the way for further downstream expansion. In the Netherlands, Saudi Aramco launched Arlanxeo, a specialty chemicals joint venture with LANXESS. The company also began volume exports of aramcoDura — a new base oil product brand. Further advancing the company's environmental commitment, Saudi Aramco acquired Converge® — a breakthrough technology that converts CO2 into cleaner, high-value end products with significant performance, cost, and carbon footprint improvements.
Technology R&D
Saudi Aramco continued to focus its research and development on high impact technologies with the potential to create significant competitive advantage. The company's R&D commitment resulted in 285 new patents filed and 175 new patents awarded. Saudi Aramco also achieved breakthroughs, such as the industry's first trillion-cell simulation and hydrocarbon migration algorithm, making it possible to model the physics of hydrocarbon reservoirs from their original generation to their final production. The Company also signed a Heads of Agreement with Saudi Basic Industries Corp. (SABIC) to conduct a feasibility study on the development of a fully integrated crude oil-to-chemicals complex. Phase 1 of the study was completed in 2016.
Climate initiatives
Sustainability remained a major innovation focus. In 2016, the level of flared gas per raw gas production continued at less than 1% and is set to decline further. The company recovered more than 9 Bscf of gas through its zero discharge technology. Saudi Aramco also collaborated with GE to install the Kingdom's first wind turbine at the Turaif Bulk Plant; progressed partnerships on fuel and engine research with U.S. and European automakers; and alongside the member companies of the Oil and Gas Climate Investments Initiative, pledged an investment of $100 million to develop and accelerate the commercial deployment of innovative, low-emission technologies.
Localization of goods and services
Saudi Aramco's In-Kingdom Total Value Add (IKTVA) program enables a thriving commercial ecosystem that benefits our business and the country. In 2016, the Company increased its value of material procurement from local manufacturers by $800 million to $2.9 billion, reaching the highest level of locally sourced content in the company's history. Saudi Aramco also signed numerous joint ventures throughout the year in connection to the IKTVA program, including with GE, Schlumberger, Nabors Industries and Rowan Companies.
Talent development
More than 6,800 participants attended training at Saudi Aramco's Upstream Professional Development Center; nearly 4,000 Saudi nationals graduated from the Apprentice Program and joined the company's workforce; and more than 2,000 students were sponsored and enrolled in global universities. Consistent with Saudi Vision 2030's drive to build a knowledge economy, Saudi Aramco invested in youth programs focused on science, technology, engineering, and mathematics (STEM) skills. It delivered the STEMania program, which seeks to increase the number of women entering STEM fields to 300 students in the Eastern Province.
CEO Amin Nasser commented, “I want to thank our people for the many significant contributions they made in 2016. Their inspiration and dedication have once again shown that, despite short-term strains, we remain dedicated to turning potential into opportunity and generating more value.”
Citizenship & Kingdom
The Custodian of the Two Holy Mosques, King Salman ibn 'Abd Al-'Aziz Al Sa'ud, inaugurated the King Abdulaziz Center for World Culture, the company's initiative to drive the country's creativity and culture. Moreover, Saudi Aramco will continue investing in innovative technology, supporting the country's energy future through a shift to clean gas for utilities.
Future
Looking ahead to the future, CEO Amin Nasser said: “We are determined to create additional value for the company. We will maintain our focus on reliable energy supply to customers around the world, and envision pursuing ultra-clean sustainable oil, doubling our gas supplies, establishing a leading position in renewables, and becoming a global powerhouse in refining chemicals and marketing, all enabled by the finest technologies and most talented employees in the world.”