Saudi Aramco’s total hydrocarbon output reached 14.4 million b/d of oil equivalent in the third quarter of 2022, as Saudi Arabia, the world’s largest oil exporting country brought on more supply to the oil markets over summer, the company said during its Q3 financial results Nov. 1.
Output reached 11.02 million b/d in September, close to its quota and increased 100,000 b/d from August, supported by strong exports and high levels of crude burn, according to the latest Platts survey from S&P Global Commodity Insights Oct. 10.
Saudi Arabia has since reversed course and has backed a massive 2 million b/d cut beginning in November in response to recessionary pressures and flagging demand in the market.
State-run Saudi Aramco’s record output coincided with oil prices above $100 at the beginning of Q3, helping the producer earn $42.4 billion in net income for the period, a 39% increase year on year.
“While global crude oil prices during this period were affected by continued economic uncertainty, our long-term view is that oil demand will continue to grow for the rest of the decade given the world’s need for more affordable and reliable energy,” Aramco President and Chief Executive Amin Nasser said in a statement to local bourse Tadawul, where its shares trade.
Aramco’s capital spending in Q3 rose 19% year on year to $9 billion.
Upstream plans
Saudi Aramco’s compression projects at the Haradh and Hawiyah fields that will provide additional gas to meet growing demand have begun commissioning activities, the company said.
Initial output is expected by end-2022 with full capacity expected in 2023.
The expansion at the Hawiyah gas plant, which is part of the Haradh increment program, has started precommissioning and is expected to be onstream next year.
Saudi Aramco plans to raise its sustainable production capacity to 12.3 million b/d by 2025.
Saudi Arabia claims a current production capacity of about 12 million b/d but Platts Analytics estimates it closer to 11.5 million b/d. The kingdom, alongside fellow OPEC producer UAE, holds virtually all of the world’s remaining spare capacity.
The kingdom plans to bring on additional capacity in increments, with its Dammam field set to provide a further 75,000 b/d by 2024, and the offshore Marjan and Berri fields expected to add 300,000 b/d and 250,000 b/d, respectively, by 2025. The expansion of the Zuluf field is projected to add another 600,000 b/d by 2026, with the Safaniyah development also set to add 700,000 b/d by late 2027.
Downstream push
Saudi Aramco downstream projects consumed about 42% of the company’s crude production in Q3.
The company is allocating a significant amount of its crude for conversion into high value chemicals and aims to quadruple its currently capacity to 4 million b/d by 2030.
Aramco’s current oil-to-chemicals capacity will also include assets under local chemicals manufacturer SABIC, which it acquired in 2020.
“Our plans for our downstream expansion continue to move forward as we seek to leverage the significant potential of our products to meet rising global demand for petrochemicals, which will be critical to the materials transition that is required to support a lower-carbon future,” Nasser said.
The company also plans to produce up to 11 million mt of blue ammonia annually by 2030 as it looks to transition to lower-carbon fuels as part of its net-zero strategy for 2050.