Saudi Aramco’s chemical production is growing

Sept. 29, 2014

Saudi Arabia’s state-owned oil company, Saudi Aramco, is become a growing global competitor in chemical production, new analysis reveals.

Saudi Arabia's state-owned oil company, Saudi Aramco, is become a growing global competitor in chemical production, new analysis reveals.

According to research firm IHS, Saudi Aramco is making the most of its feedstock cost advantages and a favorable geographic portfolio to expand its chemical operations, particularly through domestic and international joint ventures.

Like other oil and gas majors, Saudi Aramco's product focus in the chemical sector is comparatively narrow, IHS said. It produces commodity chemicals and polymers, including olefins and derivatives and aromatics. This part of the business currently accounts for about 10 percent of the group's revenues and earnings.

Commenting on the rapid growth of Saudi Aramco's chemical business, Sanjay Sharma, vice president for the Middle East and India at IHS Chemical, noted that its first petrochemical facilities started operating in 2007.

"Saudi Aramco is pursuing a business strategy that identifies advantaged feedstock and optimizes the linkages between refinery, gas processing operations and petrochemicals. This trend of integrating refineries and petrochemicals is common in other regions, but is a more recent trend in the Middle East, which is leading to more aromatics and derivatives production," Sharma added.

Strong competitive advantages have been achieved from such integration and the manufacturing site synergies in the company's large petrochemical complexes, Sharma pointed out.

Saudi Aramco is headquartered in Dhahran, in Saudi Arabia's eastern province. It is the global leader in crude oil production and export, a major producer of natural gas and the world's sixth largest refiner. The company has more than 57,000 employees in 77 countries.

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