Aramco Game-Changing Move: In a strategic move towards maximizing profit, Saudi oil behemoth Aramco is significantly boosting its big data and artificial intelligence unit, known as the Global Optimizer. This department, housed under its downstream business, now plays a pivotal role in decision-making processes, ranging from trading strategies to potential acquisitions. Yasser Mufti, Aramco’s executive vice president for products and customers, offered rare insight into the operations, revealing that the unit, which currently comprises 70 experts, is expanding.
Traditionally, such sophisticated commercial models, like the Global Optimizer, can translate to an additional $1.5-$2 per barrel of earnings before interest and taxes (EBIT) compared to traditional models, as estimated by consultancy firm Oliver Wyman, which played a role in advising on the project. The consultancy further notes that major oil companies typically make between $4 and $7 of downstream earnings per barrel of oil.
Mufti emphasized the transformative impact of this initiative, stating that high-quality assets combined with a commercial mindset could potentially push earnings to the higher end of this range. The move aligns with Aramco’s broader overhaul initiated in 2021, aiming to make investments that better reflect the company’s extensive footprint and enhance responsiveness to market changes.
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As Aramco continues its exploration of potential deals, such as the recent stake acquisition in Gas & Oil Pakistan, Mufti underlined ongoing talks about a stake in Shandong Yulong Petrochemical and other undisclosed refinery investments in Asia. The profit boost resulting from the Global Optimizer will not only benefit Aramco but also its joint venture partners.
Saudi Arabia, heavily reliant on Aramco’s profits, faces a shifting landscape in oil prices. With analysts forecasting a net profit of $121.9 billion for Aramco in 2023, down from $161.1 billion last year, the oil giant seeks to sustain high recurring EBIT amid market uncertainties.
This article delves into Aramco’s groundbreaking move, exploring how big data and AI are reshaping the company’s profit landscape and positioning it for sustained success in a dynamic global energy market.
Our Reader’s Queries
What does Aramco stand for?
As we progressed, we also put Saudi Arabia on the map for its energy resources. Our company, now known as Aramco (the Arabian American Oil Company), achieved a significant milestone in 1949 by producing 500,000 barrels of crude oil per day.
What are the Aramco projects for 2023?
The Haradh and Hawiyah fields’ gas compression projects are currently undergoing commissioning activities and are expected to be fully operational by 2023. Additionally, the Hawiyah Gas Plant expansion, which is part of the Haradh gas increment programme, is also undergoing commissioning activities and is expected to be operational by 2023.
Who owns Aramco?
Saudi Aramco, also known as Saudi Arabian Oil Company, is the biggest oil producer globally. The company is mainly state-owned and operates from Dhahran, Saudi Arabia. It is the most profitable company worldwide, surpassing even tech giants like Apple (AAPL) and Alphabet’s Google (GOOGL).
What are the activities of Aramco?
We specialize in refining and petrochemical manufacturing, producing top-quality products for both domestic and international markets. Our supply and trading, distribution, and retail operations allow us to reach large and rapidly expanding markets. Our downstream activities provide high-value products that are in high demand, both at home and abroad.