Saudi Aramco, the oil giant, is establishing a corporate development arm to optimize its portfolio of various assets and secure access to growth markets.
The new arm will commence operations on September 13, 2020 and will be led by senior vice president Abdulaziz Al Gudaimi.
Gudaimi has been leading the company’s ambitious plans to expand its domestic and foreign refining and petrochemical businesses.
The world’s biggest company said in a statement that the new division would help “rapid and efficient decision-making” and its response to evolving market dynamics as it looks to cope with the low oil prices.
Saudi Aramco, the world’s largest oil-exporting company, confirmed in July that it is reorganizing its downstream market segment into four commercial units.
In the oil industry, the upstream segment is centered on exploration and production while the downstream business is based on refining, chemicals and marketing. By far the most profitable segment for Aramco has been its upstream business.
After the reorganization, the downstream segment of the company will function across four units – fuels, power and pipeline, chemicals, distribution and terminals.
The downstream reorganization, which is also led by Mr Al Gudaimi, will be completed by this year’s end.
“We continue to leverage our capabilities in assessing our existing portfolio, identifying new opportunities and adapting to a rapidly evolving global landscape. The corporate development organisation will focus on growth opportunities as we further sharpen and strengthen our strategic focus to optimize our portfolio and, in doing so, maximize value for our shareholders.”
The state-owned Saudi oil giant is expected to continue its efforts to boost its production potential by 2021 to 13 million bpd (barrels per day) .
Aramco’s overall production in the second quarter reached 12.7 million barrels of oil equivalent per day, as the company boosted its output after the failure of Opec+ (Organization of Petroleum Exporting Countries) talks in April.
The fall in oil prices and the effect of the corona virus on energy demand have changed the forecasts for projects by energy companies around the world. Aramco, which is preparing to cut its capital expenditure significantly, has suspended an agreement to construct a $10 billion refining and petrochemical complex in China, says sources.