Jul 27 | 2020
(MENA) SABIC Acquisition Complete
Oil giant Saudi Aramco has begun a reorganization of its downstream business as it aims to “enhance integration” across the hydrocarbon value chain.
The energy major is moving quickly to counteract the recent slump in oil prices, and expects to have the restructure largely complete by the end of the year. The new business will focus on an operating model centred around four commercial subdivisions.
“I am excited that we are launching a new operating model that we believe will help streamline our operations and reinforce our position as a major global energy and petrochemicals player,” said Abdulaziz M. Al Gudaimi, senior vice president of Aramco Downstream.
The reorganization will create four units under the downstream business: chemicals, power, fuels (covering refining, trading, retail and lubes), and pipelines, distribution and terminals.
“This reorganization is yet another step in Aramco’s strategy to develop a global integrated downstream business that enhances our competitiveness by maximizing our value capture across the hydrocarbon value chain.”
This goal was advanced last month with the completion of Aramco’s share acquisition of a 70 percent stake in Saudi Basic Industries Corp., or SABIC. Valued at more than US$69 billion, the stake gives Aramco a strong base in the manufacturing sector.
Ranked as the most profitable firm in the world, Armaco has weathered falling oil prices better than competitors due to its low average post-tax breakeven costs for production. Last year, the firm successfully completed a record initial public offering valuing the firm at between of US$1 trillion and US$2 trillion.
The group’s CEO was recognized for his achievements in the sector this week by peers in the ICIS Top 40 Power Players. The Chemists' Club Kavaler Award recognized his "unprecedented" work and sustained support for major breakbulk projects across the group’s portfolio.
"Saudi Aramco CEO Amin Nasser has made huge advances in petrochemicals with the US$69 billion acquisition of SABIC, the construction of mega projects worldwide and the ongoing development of crude oil-to-chemicals technology. The level of project activity for Aramco is unprecedented for any company. Its global ambitions and investments in petrochemicals will create waves in the industry for years to come," said Joseph Chang, global editor of ICIS Chemical Business.