On Sunday, Saudi Aramco Chief Executive Amin Nasser revealed the oil giant's intentions to expand its investments in China.
Nasser articulated that Saudi Aramco is actively exploring further opportunities in China's thriving oil market, noting its robust and expanding demand. This also comes amid a decrease in the company's profits in 2023.
Aramco's Shift Towards China
Following the release of the company's financial results, which revealed a 24.7% decline in net profit to $121.3 billion mainly due to lower oil prices, Nasser highlighted Saudi Aramco's strategic emphasis on the Chinese market during a media briefing, as reported by Reuters.
"So far we are in the early part of 2024, demand is healthy and growing in China," he remarked.
Nasser elaborated on the significance of China's refining capabilities, highlighting their advanced integration and high conversion rates.
He indicated that Saudi Aramco is currently assessing additional avenues for investment in China, reflecting the company's commitment to capitalizing on emerging opportunities.
Furthermore, Nasser expressed optimism regarding the global oil market's outlook for 2024, foreseeing continued strength.
He projected a growth rate of approximately 1.5 million barrels per day, with expected demand reaching 104 million barrels per day, an increase from the 2023 average of 102.4 million barrels.
Despite a drop in net profit, Aramco increased its dividend payout. The company's dividends for the year totaled $97.8 billion, up by 30%, marking the company's second-highest profit on record.
Aramco's Adaptations, Expansion Strategies
Earlier directives from the Saudi government instructed Aramco to abandon plans to expand production capacity to 13 million barrels per day and revert to the previous target of 12 million barrels per day.
This decision affected projects such as Safaniyah and Manifa, which are currently on hold. Meanwhile, projects like Zuluf, Marjan, and Berri remain underway and are projected to contribute significantly to crude production.
Nasser assured that despite the adjustments in production targets, Aramco remains committed to optimizing its maximum production capacity within the 12 million barrels per day target. He outlined strategies to offset production declines through the addition of output from ongoing projects, maintaining operational stability.
In addition to its focus on China, Aramco is also eyeing expansion in the gas sector, aiming to increase production by 60% by 2030 compared to 2021 levels.
Moreover, Aramco is evaluating prospects in the lithium sector, according to Reuters, particularly in extracting lithium from oilfield brine.
This initiative aligns with the growing global demand for lithium, essential in battery manufacturing, reflecting Aramco's strategic adaptation to evolving market trends.
Nasser's statements affirm Saudi Aramco's proactive approach to navigating market challenges while seizing opportunities for strategic investments, underscoring the company's resilience amidst evolving economic dynamics.
