Saudi Arabia’s official oil company, Saudi Aramco is now slowing down and reviewing its multi-billion-dollar expansion projects due to lower oil prices and a huge dividend burden.
The world’s largest company is now cutting down its $20 billion refining and petrochemical plant in Yanbu, on the western coast of Saudi Arabia, according to sources. The project was supposed to get permission by the end of this year and completed by 2025.
A deal with Sempra Energy’s Texas Liquefied Natural Gas (LNG) Terminal is also on hold. Aramco had agreed to buy a 25 percent equity of the US based company as a part of the first phase. This several billion-dollar deal is currently being reviewed by the company.
Such turnabouts are made by the world’s biggest oil company as it tries to keep up with the pledge made by the oil firms of the country to pay a $75 billion dividend annually in the coming years.
Other global oil giants like BP and Royal Dutch Shell have cut down their dividend in recent times to preserve cash as the oil demand is falling due to corona virus.
Even though the oil prices have picked up to $45 a barrel since April, compared to the previous year it is at least 30 percent lower.
Currently, Aramco has delayed all of its major projects and now the company is planning to invest in its existing assets. As per the sources, it is working to increase the crude production to 13 million barrels a day from the current 12 million barrels.
According to a media report, Aramco has also suspended its deal to construct a $10 billion refining and petrochemical complex in China’s northeastern province of Liaoning.
Reports suggest that Aramco is likely to go ahead with its huge stake purchase in India’s Reliance Industries’ oil-to-chemical business considering it is a market with growing energy demand.
Thank you very much for choosing GCC Business News to be an important part of your professional life. You will receive a confirmation e-mail. Please check SPAM or UPDATES folder
