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Aramco plans to spend some $ 16 billion on contracts with small and medium-sized businesses to strengthen cooperation with this segment of the economy, Reuters reported, citing Saudi media.
Every year, the Saudi oil giant spends about 45.33 billion US dollars (170 billion riyal) on various services, said the company's deputy director of procurement and supply, Mohammed Bin Ayed al-Shamri, quoted by Al Arabiya. At least some of this money could be used to stimulate the growth of small and medium-sized businesses in an economy that is trying to wean itself off the oil that has nurtured it for decades.
The amount is minimal compared to Aramco's growth strategy for the future. In addition to several refinery projects in Asia, which will cost a few tens of billions of dollars, the oil giant is also developing internationally, eager to diversify and move away only from oil production and exports. gross.
Last November, Aramco's chief executive, Amin Nasser, announced that the company would spend $ 500 billion over the next ten years to expand internationally, a fifth of which would go to petrochemical projects and $ 160 billion natural gas projects.
Nasser said the amount of the investment was segregated from the $ 70 billion that he planned to invest in acquiring a majority stake in the large local petrochemical group Sabic, that Aramco recently announced that it will fund with a combination of its own international link funds.
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"We need a major acquisition to be able to quickly enter different markets," Nasser told Bloomberg in November, referring to the acquisition of Sabic. Many analysts believe that demand for petrochemicals is the main driver of crude oil demand in the future. It therefore makes sense that a company the size of Aramco is seeking to gain greater exposure to this segment of the industry.
It is expected that Aramco will use nearly a third of its daily production rate, about 3 million b / d of crude oil, to produce chemicals. In addition, the company plans to double its refining capacity by 2025. "You can absorb market volatility when the balance between upstream and downstream is balanced," said the general manager. "That's where our strategy goes."
By Irina Slav for Oilprice.com
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