Aramco upsets management as it adjusts to oil crisis

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(Bloomberg) –


© Photographer: Bloomberg / Bloomberg
An employee walks past the crude oil storage tanks at the Juaymah Storage Farm at the Ras Tanura Oil Refinery and Oil Terminal in Ras Tanura, Saudi Arabia on Monday, October 1, 2018. Saudi Arabia looks to transform its economy dependent on crude. by developing new industries and embarking on petrochemicals to take greater advantage of its energy deposits.

Saudi Aramco has reshuffled its leadership and created a division focused on “portfolio optimization” as the world’s largest oil producer adjusts to low crude prices and seeks new ways to raise cash.

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The Saudi state energy company has appointed senior vice president Abdulaziz Al Gudaimi to lead a new business development team that will “assess existing assets” and improve access to “growing markets”, he said. he said Sunday in a statement. He will report to Managing Director Amin Nasser and will start on September 13.

“The organization will support quick and efficient decision making on the company’s portfolio,” said Aramco.

Aramco has also appointed Nasir Al Naimi as the interim head of the upstream activity – the exploration and production arm – while Mohammed Al Qahtani will take over the downstream unit, according to people familiar with the situation, who have asked not to be identified as they “are not authorized to speak to the media.” The downstream business includes refining, chemicals, pipelines and fuel retailing, and was previously led by Al Gudaimi.

Aramo is adjusting to falling energy prices as the coronavirus pandemic hammers the global economy, with Brent falling 32% this year to around $ 45 a barrel. The company is reducing its investments so that it can meet its commitment to pay a dividend of $ 75 billion in 2020, even as its debt increases. Most of the dividend goes to the Saudi state, which is in need of funds as it faces significant revenue squeeze.

Read more: Saudi Aramco’s $ 75 billion ambition needs the help of oil or bonds

Earlier this year, Aramco hired consultants for a potential multi-billion dollar sale of a stake in its pipeline business. And President Yasir Al-Rumayyan said in February that there were non-core assets that could be monetized.

In another potential sign of shifting Aramco’s priorities, Bloomberg said it had suspended its $ 10 billion refinery projects in China. The project was unveiled with great fanfare last year. Aramco said in a statement Monday that it is still working with its Chinese partners and engaging in the Chinese market.

Aramco has not commented on the appointments to upstream and downstream companies. The company’s shares have fallen 3% in Riyadh this year. That’s much less than other big energy companies such as Royal Dutch Shell Plc, which fell 51%, and Exxon Mobil Corp., down 41%, in part because of Aramco’s dividend promise. .

(Updates with Aramco’s comment on the Chinese project in the seventh paragraph.)

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