Aramco has petchem ambitions beyond $70bn Sabic deal: CEO

Bloomberg

Saudi Aramco’s chief executive officer said he has bigger ambitions in petrochemicals beyond the planned $70 billion acquisition of a strategic stake in local company Sabic, touting plastics as a key hedge against an electric-car driven slowdown in global oil demand growth.
“We still have to do more,” Amin Nasser, chief executive officer of state-owned Aramco, said in an interview in Riyadh.
Nasser’s comments are the latest signal Aramco is transforming from a giant oil producer into a vertically integrated energy company. The shift comes as the International Energy Agency (IEA) forecast that demand for petrochemicals — the building blocks for plastics — will become the largest force in global oil demand growth, out-pacing consumption from cars, planes and trucks.
“Our strategy is to be the leader in energy and chemicals, not only in energy,” Nasser said while attending an investing conference in Riyadh. “We will be the leader in chemicals.”
The IEA, the energy watchdog for industrialised nations, forecast that petrochemicals will account for more than a third of the growth in global oil demand until 2030, and about half the growth to 2050. In particular, Nasser wants to increase the percentage of each barrel the company refines that’s then tra-nsformed into petrochemicals.
“We are aiming for more integration,” he said, referring to the chain running from oilfields through refineries and into petrochemical plants. “Instead of four to seven percent crude to chemicals, that’s the normal integration, we are looking at 25, 30, 35 percent. More integration is the way forward.”
Within the oil industry, petrochemical units have often been marginal to the bottom line, but when oil prices plunged in 2015 and 2016, the calculus changed for majors like Exxon and Shell.