Saudi Aramco targets 2023 capex spending of up to $55 billion

Saudi Aramco, the world's largest oil-exporting company, forecast its capital expenditure for 2023 at $45 billion-$55 billion in its largest spending exercise to date as it looks to increase its maximum sustained output capacity to 13 million b/d by 2027, the company said in its full year financial results on March 12.

Hydrocarbons production in 2022 averaged 13.6 million boe/d, including 11.5 million b/d of liquids output, the company said in a statement. In 2021, average oil output was 9.2 million b/d and hydrocarbons output was 12.3 million boe/d, according to the company's annual report. Capital expenditure in 2022 was $37.6 billion and will be $45 billion to $55 billion this year, Aramco said.

"Aramco has embarked on the largest capital spending program in its history," CEO Amin Nasser said. "Given that we anticipate oil and gas will remain essential for the foreseeable future, the risks of underinvestment in our industry are real — including contributing to higher energy prices."

Aramco is taking steps to increase its crude oil maximum sustained capacity to 13 million b/d by 2027, from 12 million b/d.

The company's net income for 2022 rose 46.5% to $161.1 billion due to "stronger" crude oil prices, higher volumes sold and improved margins for refined products, Aramco said.

While last year's spending of $37.6 billion was up 18% on the year, it was still below guidance of $40 billion-$50 billion.

Spending was lower than guidance due to the inclusion of investments particularly in oil-to-chemical projects which are "still undergoing further discussion and regulatory approval," Nasser told reporters on a call after the earnings release.

The Platts Dated Brent benchmark was assessed at $82.395/b on March 10, down 31.9% year-on-year. Saudi Arabia pumped an average of 10.46 million b/d in February, according to the latest S&P Global Commodity Insights monthly survey of OPEC+ production.

Upstream investments

Aramco plans to continue to raise spending "until around the middle of the decade," it said in the statement to the local bourse Tadawul, where its shares trade.

Its plans to incrementally raise output to 13 million b/d by 2027 "is proceeding," the company said.

Construction and and engineering activity to add 300,000 b/d and 250,000 b/d capacity from the offshore Marjan and Berri fields, respectively, by 2025 "continue to progress," it said. Plans for the offshore Zuluf field to process 600,000 b/d of crude oil is in the "engineering phase" with the facility expected to come online by 2026.

The Dammam development, which is expected to add 25,000 b/d and 50,000 b/d in 2024 and 2027, respectively, is also under construction.

Aramco's natural gas compression projects at the Haradh and Hawiyah fields started commmissioning and full capacity expected to be reached in 2023.

Construction at the Hawiyah Unayzah gas reservoir storage, a project to store gas underground is at "an advanced stage" and has "commenced injection activities."

It is the kingdom's first project of its kind to provide up to 2 Bcf/d of gas for re-introduction into Saudi Arabia's master gas system by 2024.