With the $69 billion acquisition of Sabic, a global leader in the chemicals industry in June and investments in oil-to-chemicals technology, state oil giant Saudi Aramco has positioned itself for downstream growth, said Aramco President and CEO Amin Nasser.
"Although we are seeing a number of companies announcing global refinery rationalisations or shutdowns - in Europe, the US and at some scale in Asia - we still see opportunities in certain geographies," stated Nasser.
"We expect more than half the world’s new refining capacity that will come on stream in the next 8-10 years will be in Asia, and 70-80% of that will be focused mainly on plastics," he added.
Nasser was speaking at a the virtual industry event where he was awarded The Chemists’ Club 2020 Kavaler Award, sponsored by ICIS in association with The Valence Group of Piper Sandler.
It is awarded each year to a senior executive recognised for outstanding achievement, as voted on by his/her peers in the ICIS Top 40 Power Players: a global ranking of the leaders making the greatest positive impact on their companies and the chemical industry.
During his address, he commented on the challenges of 2020, his belief in a bright future for the chemical and petroleum industries, and his expectation that petrochemicals will represent over half of the growth in global oil demand over the next decade.
He called Aramco’s acquisition of Sabic earlier this year “transformational”, which enabled the oil giant to deliver on its chemical strategy.
“If you combine our upstream strength and refining capacity of more than 5m bbl/day with Sabic’s chemicals asset base and global presence, it has made us one of the top global chemical players,” said Nasser.
As for further mergers and acquisitions, Aramco remains focused on the integration of Sabic while keeping an eye out for future deals, he pointed out.
"We are not ruling out any good opportunities that come our way in the future, and we continue to evaluate a number of opportunities in major growth markets like China and India as part of our long-term strategy," stated Nasser.
On the transition towards renewable energy, Nasser said new energy sources will play an important role in creating a sustainable energy future.
“However, we also believe that the global energy transition will be gradual. Covid-19 has prompted a lot of debate and discussion that the sun has set on the oil and gas industry - that oil demand has peaked or that this is close to happening. But in my view, the reality is that conventional and new energy sources will run in parallel for many decades to come,” he added.
Dean Curtis, President and CEO of ICIS, said that Aramco's "global ambitions and investments in the chemical industry will create waves in the years to come. Being commended by your peers is one of the highest accolades and ICIS is proud to be involved in recognising success in the chemical industry. It is this community participation that makes our industry and the Kavaler Award so unique."
On the future outlook, Nasser said: "Aramco remains firm on its long-term forecasts on creating value through growth and investment."
Although the drop in oil demand in April created the worst month for the oil industry, Nasser sees “light at the end of the tunnel” and predicts good recovery of markets in the second half of 2021.
"The oil and gas industry has a key role to play in the road to lower emissions. In the future, oil will be produced with much lower emissions and I see a bright future for the petroleum industry. This award is not just for me, but a recognition of the innovation and resilience of all Aramco employees," he added.