1 MB pdf - Saudi Aramco

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THE DOWNSTREAMCHALLENGEThe petroleum industry has seen tighter capacities all alongthe oil supply chain, resulting in a smaller margin for error anda curtailed ability to make up for supply disruptions andshortfalls, which in turn have led to greater price volatility.Although oil prices moderated at the end of 2006, thelong-term demand trend will continue to rise, meaningrefining capacities matched to crude oil grades will needto increase accordingly to support continued globaleconomic growth. Increased demand for natural gas isalso placing strains on the industry.Tight capacity is particularly apparent downstream, wherethere is a sizable mismatch between available crude oilsupplies and existing refinery configurations. This gapis forecast to widen unless there are appropriateinvestments in optimal refining systems, since futurecrude supplies are going to be heavier and more sour,while the slate of refined products will continue to growwhiter and lighter with more demanding specifications.Saudi Aramco is taking the initiative to respond to marketneeds through a systematic program of strategicinvestments all along the petroleum value chain to helpmeet future global energy demand while simultaneouslygrowing the Kingdom's economy.Currently, we have more than 3.5 million bpd of refiningcapacity evenly split among Saudi Arabian andinternational markets. We are studying the possibilityover the next five years of working with a range ofpartners to expand that capacity by nearly 50 percent,to almost 6 million bpd. A crucial difference is that muchof this capacity will be able to process heavy, sour crude,helping alleviate the worldwide mismatch between crudequality and refinery configurations.All told, we are considering scenarios to build close to2 million bpd of additional refining capacity domesticallyand around the world, meaning we may be engaged inroughly one quarter of the announced plans for refinerycapacity increases worldwide.In May, we signed separate Memoranda of Understandingwith ConocoPhillips and Total for development of 400,000bpd export refineries in Yanbu' and Jubail, respectively.The projects are part of the Kingdom's strategy to addressgrowing global energy demands, attract foreigninvestment, create profitable businesses and provideincreased job opportunities for Saudis. These refinerieswill be designed to refine heavy, sour crude into highquality,low-sulfur products that meet current and futureU.S. and European specifications.Comprehensive studies to confirm the capital andoperating costs of both refineries are being conducted,with completion expected at the end of 2007. Uponcompletion of these studies, it is anticipated that a jointventure company will be established with each partner.At an appropriate time, and subject to regulatory approvals,an ownership interest in these joint venture companieswill be offered to the public. The targeted start-up forthe proposed refineries is the second half of 2011.30 SAUDI ARAMCO
OUR SLATE OF MEGA-PROJECTS IS NOT LIMITED TO INCREASING CRUDE OIL PRODUCTIONCAPACITY. WE ARE ALSO ADDING GAS AND NGL PROCESSING CAPACITY AT HOME ANDDEVELOPING A STRATEGY TO TRANSFORM OUR CONVENTIONAL REFINERIES INTO PETROCHEMICALMANUFACTURING CENTERS. IN ADDITION, WE ARE WORKING ON A PROPOSED REFINING,PETROCHEMICAL AND MARKETING PROJECT IN CHINA.ANNUAL REVIEW 2006 31
Page 1 and 2: ANNUAL REVIEW 2006taking the initia
Page 3 and 4: 4 Key Figures6 Chairman’s Message
Page 5 and 6: His Royal Highness Amir Sultan Ibn
Page 7 and 8: BOARD OF DIRECTORSFront Row (left t
Page 9: PRESIDENT’S FOREWORDjobs, whateve
Page 12 and 13: TAKING THE INITIATIVEThe challenges
Page 15: World demand for oil is projectedto
Page 18 and 19: THE RESERVES CHALLENGEMAJOR GAS DIS
Page 20 and 21: THE RESERVES CHALLENGEBlock A: LUKO
Page 22 and 23: POWERING THE PLANET, EMPOWERING LIV
Page 24 and 25: THE PRODUCTIONCAPACITY CHALLENGEIn
Page 26 and 27: THE PRODUCTION CAPACITY CHALLENGEAv
Page 28 and 29: THE PRODUCTION CAPACITY CHALLENGETO
Page 34 and 35: THE DOWNSTREAM CHALLENGEA proposed
Page 36 and 37: THE DOWNSTREAM CHALLENGEHawiyah Gas
Page 40 and 41: THE HUMANRESOURCES CHALLENGEAchievi
Page 42 and 43: THE HUMAN RESOURCES CHALLENGEOTHER
Page 46 and 47: THE COMMUNITYCHALLENGEAll efforts t
Page 48 and 49: THE COMMUNITY CHALLENGEWe also work
Page 52 and 53: SAUDI ARAMCO BY THE NUMBERSRECOVERA
Page 54 and 55: SAUDI ARAMCO BY THE NUMBERSDOMESTIC
Page 56 and 57: CRUDE OIL, NATURAL GAS & REFINED PR
Page 58 and 59: SAUDI ARAMCO BY THE NUMBERSWORKFORC
Page 60 and 61: INTERNATIONAL OPERATIONS5NORTH7 6AM
Page 62 and 63: FROM OUR HEADQUARTERS IN DHAHRAN, A
Page 64: www.saudiaramco.com

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