Professional Documents
Culture Documents
many
layers of
opportunity
the
many
layers of
opportunity
Disclaimer: The use of terms such as “company,” “Saudi Aramco,” “organization,” “it(s),” “our(s),” “their(s),” “we,” and “us,” and of abbreviated titles,
is for convenience in reference only and is not intended as an accurate description of the individual status of any legal entity or corporate relationship, or
to indicate that Saudi Aramco is conducting commercial activities outside the Kingdom of Saudi Arabia.
This Annual Review does not constitute an offer to sell or the solicitation of an offer to buy any securities of Saudi Aramco in any jurisdiction. The
information in this Annual Review is presented as of the date of this Annual Review and is subject to change without notice. The delivery of this
Annual Review is not, under any circumstances, intended to create the implication that there has been no change in the matters discussed herein.
This Annual Review is not intended to be a comprehensive description of Saudi Aramco.
The information presented in this Annual Review is not audited and is subject to change. You should not place undue reliance on the information
contained herein. Additionally, the historical information and other information presented herein are likely not indicative of Saudi Aramco’s expected
results in future periods.
All statements, other than statements of historical fact, included in this Annual Review are forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as “will,” “anticipate,” “expect,” “plan,” “believe,” “intend,” and “should” or the negative of these
terms or other comparable terminology. These statements relating to future events, or Saudi Aramco’s future performance, reflect management’s
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performance, or achievements to be materially different.
08 page
45
review
board of directors enhancing our
commercial ecosystem
page
10
chairman’s message
page
57 human resources
11
and safety:
page realizing potential
65
page
17
upstream: transforming
citizenship:
energizing the
knowledge economy
74
potential into opportunity
page
page
25
downstream: adding value
our performance
in 2016
through integration page
80
page
33
technology:
awards
powering innovation
King Salman
ibn ‘Abd Al-‘Aziz Al Sa‘ud
The Custodian of the Two Holy Mosques
board of directors
Governance
Our behavior is what defines us — as a company, customers, suppliers, and new and existing business
as employees, and as people. Everything we do partners. Our Board of Directors (the “Board”), which
is anchored by our Corporate Values: Excellence, encompasses a wealth of diverse experience and a
Safety, Accountability, Integrity, and Citizenship. future-oriented mindset, models standards for
We hold ourselves to the highest business and integrity and ethical behavior.
ethical standards, and are dedicated to building
The Board oversees our regular reporting and
and maintaining trusted relationships.
independent auditing practices. The audit process,
endorsed and monitored by the Board, is intended
Our corporate governance structure defines to ensure an independent, confidential, and robust
our strategic direction and ensures our industry review of company operations and provide a clear
leadership. It also shapes who we are and how and transparent reporting channel from the auditors
we are seen by the world — including our to the Board and the Supreme Council of the Saudi
Arabian Oil Company (Saudi Aramco).
10 Annual Review 2016
message
growing in new directions, including remain significant for decades to come.
building a stronger downstream portfolio
Saudi Aramco’s success would not have
with international refining, chemicals,
been possible without the support imparted
and marketing opportunities.
by the Custodian of the Two Holy Mosques
For the global oil and gas industry, 2016 By seeking new prospects, realizing King Salman ibn ‘Abd Al-‘Aziz Al Sa’ud, and
was a challenging year. Yet, challenges potential, and building new capacities, Crown Prince HRH Mohammed ibn Salman
often are the prelude for new the company created greater value for ibn ‘Abd Al-‘Aziz Al Sa’ud.
opportunities and greater value ahead. itself, its customers and stakeholders,
The company was honored by the
I believe that history — and indeed, the proving again that at Saudi Aramco,
presence of King Salman in December,
near future — will prove that despite the energy is opportunity.
when he visited Dhahran and inaugurated
discouraging business climate, 2016 was a During the year, the Kingdom of five oil and gas projects, the King
turning point for both Saudi Aramco and Saudi Arabia launched its landmark Abdulaziz Center for World Culture, and
the Kingdom, as well as for the global oil Vision 2030, an ambitious economic the Sadara joint venture in Jubail. These
and gas industry. and social transformation program. The are initiatives that deliver on the Kingdom’s
This past year, Saudi Aramco leveraged its Vision, which aims to diversify the national promise for a better tomorrow through
capabilities, talent, innovation, and fiscal economy beyond oil and build a thriving new energy capabilities and new value
discipline to ensure resilience and realize private sector, will enable Saudi Aramco to creation opportunities. In summary, 2016
landmark achievements, including record expand its global presence. Concurrently was not just a successful year, but I believe
high rates of crude oil production, raw with the Vision, the company will enlarge it is a bridge to a better tomorrow.
gas processing, and sales gas production, its supply chain and improve business
On behalf of the Board of Directors, I thank
along with stronger integration within reliability through a local network of
the men and women of Saudi Aramco who
the entire petroleum value chain. All of suppliers and manufacturers while
delivered superior performance despite
this was achieved against the backdrop increasing the competitiveness of Saudi
challenging conditions, and I also thank our
of persistently low oil prices and a weak Arabia’s energy sector — and in the
customers, partners, and the communities
global economy. process, generate sustainable growth
in which we operate for their contributions
and quality jobs for Saudis.
To help ensure reliable supplies of to our shared success.
petroleum energy to meet future For Saudi Aramco, the most notable
demand, Saudi Aramco completed feature of the Kingdom’s transformation
its second expansion of the Shaybah will be the future offering of part of the
crude oil facility and commissioned the company’s shares in local and international
giant Wasit Gas Plant, boosting its overall stock markets. This move drives further
crude oil production and gas processing diversification and growth of the national
economy, while elevating the international Khalid A. Al-Falih
capabilities. Sadara, the world’s largest
Minister of Energy,
petrochemical complex ever built at one visibility of the company’s decision making Industry and Mineral Resources
time, commenced commissioning and governance, and building confidence Chairman of the Board of Directors
activities as well. in its long-term strategy.
These mega-projects, and others currently Internationally, 2016 was a turning point
under construction, will help meet growing for the oil market as the downturn, which
domestic demand for energy, substantially started in 2014, reached bottom, and
11
president’s
localization program, with its emphasis on
in renewables, and becoming a global
developing reliable local supply, exports,
powerhouse in refining, chemicals, and
foreword
and job creation. The value of our direct
marketing — all enabled by the finest
material procurement from local
technologies and most talented employees
manufacturers increased by $800 million
in the world.
to reach $2.9 billion in 2016, representing
43.5% of our material procurement I want to thank our people for the many
Since its earliest beginnings, Saudi
spending and is the highest level of local significant contributions they made in
Aramco has sought to be the world’s
content in the company's history. 2016. Their inspiration and dedication
most reliable producer of petroleum
have once again shown that, despite
energy. Our long-term approach to We marked a significant milestone
short-term strains, we remain dedicated
managing the Kingdom’s hydrocarbon in our efforts to support the Kingdom’s
to turning potential into opportunity and
resources has consistently delivered development with the inauguration of the
generating more value from the Kingdom’s
superior performance and growth. King Salman International Complex for
resource base.
Maritime Industries and Services in Ras
More recently, our vision has been to
Al-Khair. The complex is envisioned to
become the world’s leading integrated
become the largest maritime industries
energy and chemicals company,
complex in Saudi Arabia and a hub for
reinforcing our focus on the long-term.
regional maritime engineering,
While our strategic direction remains
construction, and related expertise.
unchanged, three major developments
are worth highlighting for their impact Third, the Paris Agreement underscored Amin H. Nasser
on our business in 2016. our view that shaping the future energy President and Chief Executive Officer
landscape in a greenhouse gas
First, the oil market remained challenging,
constrained world requires an industry led,
causing project deferments or cancelations
technology-driven, collaborative approach.
across the industry. We responded to
We are proud to be part of the $1 billion
this challenge by intensifying our focus
investment in innovative low emission
on excellence and on lowering costs,
technologies by the Oil and Gas Climate
addressing every aspect of our business.
Initiative. Once commercialized, these
We strengthened our Operational
technologies have the potential to
Excellence and Capital Efficiency programs,
reduce greenhouse gas emissions on
while enhancing our robust leadership and
a global scale.
performance management systems.
12 Annual Review 2016
Detroit Aberdeen
Boston
New York City London
Washington, D.C. The Hague, Maastricht,
Paris and Delft
Milan
Houston
Alexandria
13
Turaif
al-Jawf
Safaniyah
Tabuk Jubail
Ju’aymah
Ras Tanura
Duba
Qatif
Yanbu’ Qassim Dhahran
Wasea al-Hasa
Madinah Riyadh
Rabigh
Thuwal
Jiddah as-Sulayyil
Abha
Najran
Jazan
Beijing Tokyo
Seoul
Daejeon
Shanghai
Fujian
Xiamen
New Delhi
Singapore
14 Annual Review 2016
key figures
10.5
total hydrocarbon crude oil produced
13.5
production*
million bpd
million boepd
260.8 12.0
condensate reserves processed
298.7 8.3
gas reserves sales gas produced
920 5.4
ethane produced worldwide refining
capacity
million scfd
million bpd
1.4
NGL produced Saudi Aramco share of
3.1
refining capacity
million bpd
million bpd
upstream:
transforming potential
into opportunity
We create maximum value from the energy and chemicals company. For more than
Kingdom’s resources by reinforcing our eight decades, we have prudently managed
preeminent position in exploration and Saudi Arabia’s oil and gas reserves to maximize
production, replacing produced oil, their long-term value, and to enable the
increasing gas reserves, and growing oil growth of economies around the world.
and gas production while optimizing costs. Petroleum is the original wellspring of
In 2016, we achieved a new record for crude Saudi Arabia’s prosperity, and the foundation
oil production, averaging 10.5 million barrels of its continued growth. Our drive to create
per day (bpd). We also produced a record level more value from the resource base is powered
of sales gas, averaging 8.3 billion standard by the expertise and ingenuity of our people,
cubic feet per day (scfd). our relentless focus on best-in-class practices,
operational efficiency, the use of innovative
On their own, the Kingdom’s hydrocarbon technologies, and research into the sustainable
reserves represent potential energy. The use of hydrocarbons. Together, these
transformation of potential into opportunity capabilities further diversify the economy
requires the best people, practices, and and launch new business opportunities
technology — attributes that underlie our for oil field service providers, suppliers,
aim to become the world’s leading integrated manufacturers, and technology developers.
18 Annual Review 2016
Oil production: investing in million bpd of Arabian Extra Light crude oil —
double the facility’s original capacity.
capacity
• We continued drilling wells to increase the
Our investments in upstream, from exploration production capacity of our Khurais field,
to production and processing, are designed located 150 km southeast of Riyadh, by
to maintain our supply flexibility and world 300,000 bpd to raise current capacity
leading production capacity, enabling our role from 1.2 million bpd to 1.5 million bpd
in stabilizing oil supplies in the future. We by mid-2018.
maintained our spare oil production capacity
We continuously optimize our crude oil mix,
by optimizing the mix of crude oil grades
guided by our outlook and assessment of
from a balanced portfolio of mature and
future performance. To maximize long-term
young reservoirs.
value, optimize costs, and advance recovery
In 2016, we successfully executed a rates, we completed technical assessments
demanding drilling and workover schedule for producing fields, integrating subsurface Crude oil
and made significant progress on the computational models with surface facility production
following major projects: networks to identify and exploit beneficial
• Our second 250,000 bpd expansion project synergies. We also drilled new water (million bpd)
at Shaybah, located in the Rub’ al-Khali injection wells to provide reservoir pressure
or Empty Quarter, came onstream in 2016, support and installed electrical submersible
raising its overall production capacity to 1 pumps to increase well production rates 10.5
and reduce the costs associated with
surface facilities.
20 Annual Review 2016
• We started up a second NGL processing The plant will supply nonassociated gas
Raw gas
train at Shaybah. and condensate to the Saudi Electricity
processed
Company’s new power plant in Duba in
• Our Wasit Gas Plant, located north the Kingdom’s northwest, generating
(billion scfd)
of Jubail Industrial City, reached its full opportunities for economic growth in
12.0 operational feed capacity of 2.5 billion scfd. the region.
Sales gas produced • We commenced construction of our »» In another first, the plant was
grassroots Fadhili Gas Plant, located designed from inception to use the
(billion scfd) 30 km west of Jubail Industrial City, in Tail Gas Treatment process to reach
late 2016. The facility is emblematic of the maximum sulfur recovery rate of
our broader impact on not only increasing 99.9%, helping protect air quality.
8.3 supplies of gas, but also driving economic
»» The project’s value extends well beyond
growth, developing the Saudi workforce,
the resources it will process: The
and reducing emissions.
development of Fadhili will add billions
»» Designed to process 2.5 billion scfd and of dollars to the local economy, with an
deliver 1.7 billion scfd of sales gas to the expectation that 40% of the plant’s
Master Gas System, Fadhili will be our materials and services to be sourced and
manufactured in Saudi Arabia.
first plant to treat nonassociated gas Our significant investments in new gas
from both onshore and offshore fields. processing capacity help meet Saudi Arabia’s
demand for energy, reduce the use of
»» It will be the first to have the
liquids for electricity generation, and enable
capability to use low Btu gas to fuel
opportunities in energy consuming industries
an independent power plant, yet switch
such as steel, aluminum, and other
to sales gas as needed. This flexibility
downstream value-added sectors.
enables us to generate electricity from
lower value gas and maximize supplies
into the Master Gas System.
22 Annual Review 2016
In addition to boosting
oil production capacity at
Shaybah, we also started
up a second NGL processing
train. The new volumes of
To learn more about NGL will serve as feedstock
our upstream training for industrial cities and help
center, see pg. 60 meet growing demand.
upstream: transforming potential into opportunity 23
Our refining and chemicals
facilities in Saudi Arabia — some
wholly owned, some ventures
with global companies —
increase opportunities for
domestic conversion industries,
manufacturers, and service
providers, adding value to
the Kingdom’s resource base.
25
downstream:
adding value
through integration
With a diversified, integrated, and robust ethane at Sadara, our joint venture with The
business portfolio, our supply, trading, and Dow Chemical Company in Jubail Industrial
marketing model will mitigate oil price City. With our partner Sumitomo of Japan,
volatility, generate additional revenues, we neared completion of an expansion at
and expand opportunities for conversion Petro Rabigh, our integrated refining and
industries, local manufacturers, and service chemicals complex on the Red Sea coast.
providers — all of which drive job growth And we launched Arlanxeo, a specialty
and value creation. chemicals joint venture headquartered in
the Netherlands.
Continuing our journey to become
the world’s leading integrated energy Unlocking the greater potential value
and chemicals company, in 2016 we inherent in hydrocarbon resources lies
created additional value from our resource at the heart of our downstream strategy.
base by progressing a suite of major We plan to capture synergies by integrating
downstream projects. at both the operational and geographical
level — connecting oil and gas supply,
In refining, we made steady progress on refining, chemicals, and base oils in regions
our wholly owned Jazan Refinery, which of high growth potential. Our integrated
includes an integrated aromatics complex, business model enables us to attain higher
in the Kingdom’s southwest. In chemicals, value from every hydrocarbon molecule
we started up the mixed feed steam cracker that we produce and grow our global
with the capacity to crack 85 million scfd of market share.
26 Annual Review 2016
capacity.
downstream: adding value through integration 27
In 2016, Sadara marked a historic landmark investing in an ethylene oxide and propylene
with the startup of its mixed feed steam oxide pipeline, and coordinating our efforts
cracker, making it the first chemicals facility with the PlasChem Value Park team and the
in the GCC countries to crack naphtha. The Royal Commission for Jubail and Yanbu’ to
cracker, which breaks ethane and naphtha attract investors and future customers.
to form new molecules, including ethylene
The Petro Rabigh PlusTech Park,
and propylene, enables the production of a
integrated with Petro Rabigh, is expected to
diversified range of plastics and chemical
generate more than 2,000 jobs and attract
products designed to meet the rigorous
private sector investment of over $1 billion.
standards of sectors such as advanced
Given the park's potential to attract new
packaging, construction, electronics,
customers, we contributed 50% of the
furniture, and the automobile industry.
park’s development costs and currently
own a 50% stake in its infrastructure and
PlasChem and PlusTech assets. Our main role is to promote and
market PlusTech Park to attract downstream
Parks: multiplying value conversion industries that will consume our
The potential to grow our in-Kingdom fuel and feedstocks. So far, 30 local and
employment is especially strong in the international plastics converters have signed
chemicals sector. Currently, the regional agreements to operate in the park, 14 of
chemicals industry accounts for less than which have commenced production.
1% of the global number of jobs in the We also neared completion of the
sector and related industries. Our expansion Petro Rabigh Phase II project to expand
into the industry will raise that percentage. its cracking facility to crack an additional
For example, adjacent to Sadara is the 30 million scfd of ethane and add an
PlasChem Value Park. Expected to create aromatics complex to produce new
Khalid Al-Faifi grew up in
the mountains of Jazan and
1,500 direct jobs and generate opportunities differentiated products. The full operation now works as a mechanical
for thousands more indirect jobs, the park has of the cracking facility was achieved in 2016, engineer at our Jazan Refinery,
attracted some of the world’s largest chemical and the remaining assets are scheduled to
under construction in the
Kingdom’s southwest. Al-Faifi,
and oil services investors. Our support includes start up in mid-2017. and thousands more like
him, are helping transform
the area into a magnet for
opportunity and investment.
28 Annual Review 2016
brand for Groups I, II, and III, with the By optimizing our supply chain and
66.7 5.9
capacity to produce 4.7 million tons per balancing the utilization of our assets,
year, representing 14% of global base we seek to meet our in-Kingdom customers’
oil demand. In late 2016, our sales and needs safely, efficiently, and reliably. In
marketing subsidiary, Aramco Trading 2016 exports
pursuit of these goals, in 2016 we continued
Company (ATC), began volume exports by region:
work to upgrade our distribution system.
of Group I base oil under the new brand crude oil
name aramcoDURA®. To enhance supply reliability, we completed
a project to increase the capacity of the Asia
In addition to commencing exports of Riyadh-Qassim pipeline from 125,000 to NW Europe
aramcoDURA®, ATC celebrated five years 160,000 bpd, boosting the reliability of Mediterranean
of successful operations and remained refined product supply to this central region. U.S.
focused on creating more value from trading
Our project to re-commission the Yanbu’ Other
operations and maintaining reliability and
profitability from our refined products South Terminal and integrate it with the
portfolio. ATC pursued efficiency gains by Yanbu’ Crude Oil Terminal progressed in
optimizing freight contracts, hiring a new lead 2016, with construction reaching 64%
logistics provider, and increasing the number completion. Integrating the two terminals
of local and international hubs to offer greater creates greater operational agility and
storage options and shipping flexibility.
downstream: adding value through integration 31
bolsters our downstream network integrity increase capacity from 8.6 to 9.6 billion
to meet demand in Saudi Arabia. The South scfd and deliver gas to King Abdullah
32.5
Terminal will facilitate crude oil deliveries to Economic City — a grassroots industrial 46.1
our Jiddah and Jazan refineries and to our and commercial city 120 km north of
YASREF joint venture refinery while Jiddah — and the Rabigh area. Construction 11.9
9.5
maintaining crude oil export capability. of the first phase was 72% complete
at year-end, and engineering and
Gas System, we are 73% and 38% complete, respectively. The refined
products
enabling the growth of the additional volumes of fuel and feedstock
will help our customers diversify and
high-demand utility and create jobs.
Asia
NW Europe
technology:
powering innovation
agencies, and other stakeholders to open in 2019, will include labs and offices to
further research and promote clean energy support research in the areas of chemicals,
technologies to mitigate climate change. intelligent systems, solar energy, reservoir To learn more about
engineering, computational modeling, and Converge®, see pg. 52
At our headquarters in Dhahran, a key
environmental protection.
development in 2016 was commencing
the expansion of the Exploration and
Petroleum Engineering Center – Expanding knowledge
Advanced Research Center (EXPEC
ARC). The project includes construction of
through collaboration
a new research building and laboratory for Collaborating with technology leaders in
enabling integrated research on sustainability academia and industry enhances our
technologies. When complete, the new competitiveness and expands our global
facilities will house 850 professionals and technology footprint. We undertook a wide
support staff. range of activities in 2016 to transform ideas
We also broke ground on a new research into sustainable solutions, including signing
center at KAUST, integrated with the a Heads of Agreement with Saudi Arabian
research staff and facilities at the university Basic Industries Corporation (SABIC), a leading
and positioned to capitalize on the Saudi petrochemicals manufacturer, to conduct
international network of academic institutions a feasibility study on the development of a
affiliated with KAUST. The center, expected to fully integrated crude oil-to-chemicals
complex to be located in Saudi Arabia.
technology: powering innovation 43
The project aims to maximize chemical yields, A highlight of 2016 was the acquisition
transform and recycle byproducts, drive of Novomer’s Converge® polypropylene
efficiencies of scale, optimize resources, and carbonate polyols product line. The acquisition
diversify the mix of petrochemical feedstock of the technology, driven by our integrated
to enable new economic opportunities and to downstream expansion strategy, will enable
develop a world-class labor force. Phase I of the conversion of waste CO2 into cleaner, high-
the joint study was completed in 2016. value materials with significant performance,
cost, and carbon footprint improvements.
enhancing our
commercial ecosystem
By leveraging the immense promise of the Our IKTVA initiative to grow the energy
Kingdom’s resources, we enable a thriving services sector and increase the amount
commercial ecosystem that benefits our of goods and services procured in the
business and the country. Kingdom enables us to operate more
efficiently while helping to strengthen and
The Kingdom’s Vision 2030 is a blueprint diversify the local economy and domestic
for attaining greater levels of sustained supplier base. Our efforts to broaden the
economic growth and diversification, and impact of our commercial ecosystem extend
for creating new opportunities for its citizens. to addressing climate change, including
Our strategic objectives are consistent with many efforts to reduce greenhouse gas emissions
aspects of Vision 2030, and our support for and promoting energy efficiency within our
the Vision, built upon collaboration, will enterprise and with end-users, further
enable the achievement of shared goals — and enabling economic growth.
in ways that produce more impactful results.
46 Annual Review 2016
content in our history. We also completed We also signed two joint venture agreements
the third-party IKTVA certification of our designed to help spur the localization of the
100 top service providers, representing 80% energy value chain and enhance in-Kingdom To learn more about
of our procurement. technical capabilities: our achievements in
drilling, see pg. 22
A significant landmark of the commitment • With Nabors Industries Ltd., a global leader
to our IKTVA program by leading international in drilling rigs, to manage and operate
businesses was the expansion of the General onshore drilling rigs along with capital
Electric (GE) GEMTEC gas turbine commitments toward future rigs
manufacturing facility. At the facility, in manufactured in Saudi Arabia.
support of our Master Gas System Expansion
• With Rowan Companies plc, a global
Project, four high-efficiency gas compression
offshore contract driller, to own, operate,
trains were assembled locally for the first
and manage offshore drilling rigs. The
time. As part of the program, GE Oil and Gas
agreement also committed the new
qualified a network of Saudi-based suppliers
company to purchase future newly built
rigs constructed in Saudi Arabia.
enhancing our commercial ecosystem 47
These two joint ventures, which are expected domestic production. In 2016, we
to create 5,000 jobs, illustrate our strategy to advanced the project with the signing of a
connect energy, people, and ideas to create Memorandum of Understanding with GE and
new opportunities and additional value for Cividale SpA of Italy to build a $400 million
our company and for Saudi Arabia. forging and casting manufacturing facility
near the complex — the first of its kind in
Africa and the Middle East.
New industries, new
growth opportunities By 2030, the King Salman
With the laying of the cornerstone by The International Complex for
Custodian of the Two Holy Mosques for the
King Salman International Complex for Maritime Industries and Our strategic investments
assembling an international team of testing, the solution offered by the technology Energy intensity
renewables experts. is a robotic, dry cleaning technology that is required to
fully automated to run on schedule or on produce one
We also continued to participate in the
command. The technology has multiple barrel of oil
Kingdom’s renewable program, advancing equivalent
efforts to introduce new fuels and renewable patents pending and discussions are
resources to the Kingdom’s utility mix. This underway to commercialize the technology
(thousands of Btu)
effort included our support for the Kingdom’s and bring the product to market.
drive to become a solar powerhouse: We partnered with GE to erect the Kingdom’s
• A new agreement to conduct a joint first wind turbine at our Turaif Bulk Plant.
feasibility study (under the auspices of the Conceived as a demonstration project to
National Industrial Cluster Development highlight the viability of wind power, the
Program) with Showa Shell, a public turbine, installed in January 2017, is capable 123
places us at the forefront of also identify ways to cut the energy intensity
of both transport and industry, and work with
During 2016, we brought 984 megawatts • We reached 29,000 families and students Energy conservation
of new power capacity online by completing at 167 schools in three cities with our savings in company
a suite of cogeneration projects, including the water conservation campaign, raising operations
expansion of facilities at Shaybah, completion awareness and demonstrating ways of
of facilities at Wasit Gas Plant, and the reducing water consumption. (thousands of
construction of joint venture facilities with boe per day)
Arabian sand gazelles, and ostriches. and renewables. oryx, Arabian sand gazelles,
and ostriches — part of our
efforts to protect ecologically
sensitive areas and promote
environmental responsibility in
Saudi Arabia.
The Saudi Arabian Drilling Academy,
funded and supported by private
drilling companies, instills safety
training and specialized skills in
the next generation of drilling
professionals, thousands of whom
are needed in the coming years.
57
We help our people realize their full potential, one more capable of meeting evolving needs
unlocking the promises of greater value and and managing risks. Our companywide
broader opportunities inherent in the Operational Excellence (OE) initiative
Kingdom’s energy resources. integrates existing management systems and
best practices to raise performance standards
Sustained investment is required to and enable organizations to achieve and
empower the right people with the right sustain leading performance in efficiency,
skills in an evolving and challenging business reliability, and safety in a cost-effective
landscape. We believe the return on this manner. The ongoing implementation of our
investment far surpasses the cost, and that Enterprise Risk Management framework
our development and training programs equips our leadership with the tools to guide
position us to navigate challenging times and oversee our corporate risk management
and allow us to seize new opportunities. strategies and activities.
In 2016, we continued our efforts to build a
proactive, agile, and adaptive workforce —
58 Annual Review 2016
Lost-time homes, on- and off-the-job. Our leadership Any fatality is unacceptable to us. Sadly,
injury rate actively integrates safety into business we lost three employees in two on-the-job
strategies, processes, and performance accidents in 2016. We investigated the
(per 200,000 measures to build a strong safety culture accidents and communicated findings
work hours)
across the enterprise. and lessons learned through an intensive
campaign to all management and key
Our unrelenting focus is personnel across operating areas to ensure
the safety of all our people that the root causes were clearly understood
and addressed.
0.05
and the communities
where we do business. Improving traffic safety
The most serious safety risk for our employees
remained driving off-the-job. To reduce this
Our safety performance risk, we installed driver monitoring devices
in approximately 80% of our company
Our safety performance showed positive
vehicles, and 2,100 devices in the private
trends, with our on-the-job lost-time incident
vehicles of our young trainees as part of
metric remaining consistently low at 0.05 per
our Automatic Vehicle Locator Program.
200,000 man-hours, reflecting the impact of
These devices enable us to track and improve
our deepening safety culture and open
employee driving behaviors and reduce the
reporting environment. We introduced a
risk of traffic incidents.
corporate Process Safety Event Rate key
performance indicator to strengthen our The Traffic Safety Signature Program,
alignment with industry best practices and a collaborative effort with government
launched an incident reporting system to ministries, traffic enforcement agencies,
expand and simplify incident reporting and civilian entities, is designed to drive a
across the company. cultural transformation in traffic safety and
62 Annual Review 2016
eliminate the root causes of traffic incidents. delivering 104 high-quality homes to
Highlights of our activities in 2016 include employees, and distributed 270 lots under
conducting a traffic safety campaign at our East Dammam 2 program. These
Dammam University that targeted more residential developments provide our people
than 1,000 students, and presentations to with safe and comfortable homes and serve as
more than 7,400 students at 77 schools in model communities for planning, efficiency,
the Eastern Province. These events help and construction standards — a blueprint that
empower youth to become safe driving role can be applied by the housing industry across
models and safety advocates for the wider the Kingdom.
benefit of their communities.
citizenship:
energizing the
knowledge economy
The Kingdom is a land rich in natural Throughout 2016, our citizenship
resources — especially oil and gas. But its efforts contributed to three main areas
real wealth lies in the talents of its people consistent with the aspirations of Vision
and the potential of its younger generations. 2030 to create a vibrant society with
strong roots, generating more positive
We help unleash this potential by delivering impacts for the Kingdom’s people.
community-based corporate citizenship
initiatives that give people the tools they We fostered curiosity and creativity in
need to seize the opportunities of the future. children to build a foundation for lifelong
learning; we supported youth programs
Today, consistent with Vision 2030, we focused on STEM skills (science, technology,
continue our focus on enabling the Kingdom’s engineering, and mathematics), the arts,
citizens — particularly Saudi youth — to fulfill entrepreneurship, and employment-
their ambitions, ensuring a brighter future related skills; and we enhanced the ability
for themselves, their communities, and the of families with special needs to participate
Kingdom as a whole. fully in society.
66 Annual Review 2016
14,000
Enabling a knowledge- the best possible learning environments, Applicants to iRead
we implemented safety enhancement protocols
based society to improve traffic flow around schools and in
Providing support to students and teachers parking lots at 54 schools, and installed new
in the Kingdom’s education system — from playground equipment at eight schools. We
seminars and workshops that develop skills also replaced air conditioning units with more
to equipping classrooms with the latest energy efficient models at 11 schools. Prototypes produced
5,900
at FABLAB-Dhahran
technology — builds capacity and helps We delivered our STEMania program,
to ensure the country’s youth are ready which works to increase the number of
to take on tomorrow’s challenges at our women entering STEM fields, to 300 female
company and beyond. students in the Eastern Province. In support of
In 2016, we continued our program to higher education, we facilitated 10 seminars
update and enhance our 141 company at women’s universities in Riyadh and
Company built
built schools. We equipped 77 schools Dammam, which attracted 3,000 students. schools equipped
77
with smart classrooms, computer labs, The seminars helped prepare female university with smart classrooms
and modern science labs. To ensure seniors for their transition to the workforce.
citizenship: energizing the knowledge economy 67
2 million
Olive tree seedlings planted participate in the program’s camp and • The Bridges to Saudi international
workshop. More than 1,000 people outreach initiative conducted three programs —
attended the “Reader of the Year” Saudi Film Days, the Saudi Comedy Tour,
ceremony to honor the eight winners. and the Ambassadors of Influence —
in 14 U.S. cities. More than 18,000 visitors
• FABLAB-Dhahran, a digital fabrication
experienced the programs, which featured
laboratory located on the campus of
Educational tablets 27 young Saudi artists, 20 talks, seven
KFUPM, launched its first community
19,551
distributed films, and four exhibits.
project — FABHouse, an energy efficient
house manufactured by young Saudis. In • The “Roads of Arabia: Archeological
2016, 5,900 prototypes were produced at Treasures of Saudi Arabia“ exhibition, a
FABLAB-Dhahran — three times the average joint initiative of the Center and the Saudi
over the previous two years — while the Commission for Tourism and National
Prototyping Week received 115 applications Heritage, opened in December for a three-
from across the Kingdom. month stay at the National Museum of
China in Beijing. The exhibition will also
• To help nurture the local arts and culture
go on display in Seoul, South Korea, and
environment, the Center sponsored 1,000
Tokyo, Japan. Our sponsorship of the
visitors at the award ceremony for the 3rd
exhibition's Asian tour is driven by our
Dammam Saudi Film Festival, an event
commitment to help preserve and promote
organized by the Saudi Arabian Society of
the Kingdom's heritage.
Culture and Arts. The festival featured 70
films and provided a platform to encourage
the country’s nascent film industry.
citizenship: energizing the knowledge economy 69
1,300
hearing aids chemistry, an area of strategic importance to
In 2016, we engaged communities us. Organized by a committee of academics
throughout the Kingdom with a wide from Cambridge and Oxford universities, the
range of programs that build on the country’s program is open to students from around the
cultural and social traditions to facilitate world who are studying in the U.K. Winners
greater economic opportunities while have included students from Saudi Arabia
Coffee farmers instilling sustainable environmental practices. and the United Arab Emirates.
560+
supported By providing enhanced skills, practices, and
tools to a broad spectrum of craft workers, More than 650 volunteers
farmers, and micro-enterprises, we seek to
make a real difference in the ability of people from our affiliate offices in
to achieve a successful future for themselves,
their families, and their local communities.
Houston, Boston, and
We also strive to make positive contributions Detroit supported 11 local
to the international communities in which we nonprofit organizations
operate. Our people support their local
communities by volunteering their time, skills, with a combined 3,525
and resources to help others. For example, in
the U.K., we supported the Cambridge
hours of service in 2016.
Chemistry Challenge, which reached out
to more than 8,500 high school students
70 Annual Review 2016
Beekeepers in al-Bahah,
coffee farmers in Jazan,
olive growers in al-Jawf,
and fishermen in Yanbu’
benefit from our scientific,
technical, and business
support — examples of
how we help empower
people and communities
to create additional value
from traditional resources.
citizenship: energizing the knowledge economy 71
2016: 260.8
2013: 7,488
2015: 10.2
2016: 10.5
2013: 796
2015: 11.6
2016: 12.0
2015 3.8
2016 6.0
2015 4.9
76 Annual Review 2016
Saudi Arabia
Jiddah 77 100% 77
Worldwide
*Saudi Aramco’s share of capacity is based on the percentage allocation of the capacity volumes based on the ownership structure in the respective entities.
Production capacity figures for 2016 reflect the startup of commercial operations at Sadara and the launch of the Arlanxeo joint venture.
our performance in 2016 77
2016 LPG Naphtha Gasoline Jet fuel/ Diesel Fuel oil Asphalt Total
kerosene & misc.
Ras Tanura 4.743 17.578 46.112 11.858 65.893 31.260 5.344 182.788
Total in-Kingdom 11.610 23.308 73.762 16.400 124.498 75.005 18.246 342.829
2016 LPG Naphtha Gasoline Jet fuel/ Diesel Fuel oil Asphalt Total
kerosene & misc.
Grand total 13.390 47.496 143.986 53.376 270.756 117.363 18.246 664.613
Negative figures primarily indicate products that were reprocessed into other refined products.
2015 LPG Naphtha Gasoline Jet fuel/ Diesel Fuel oil Asphalt Total
kerosene & misc.
Ras Tanura 5.487 19.227 42.304 8.495 71.828 34.385 8.029 189.755
Total in-Kingdom 11.772 25.567 67.906 11.941 130.036 77.311 21.596 346.129
2015 LPG Naphtha Gasoline Jet fuel/ Diesel Fuel oil Asphalt Total
kerosene & misc.
Total share 2.296 20.246 60.448 33.119 123.547 39.196 16.763 295.615
Grand total 14.068 45.813 128.354 45.060 253.583 116.507 38.359 641.744
Negative figures primarily indicate products that were reprocessed into other refined products.
78 Annual Review 2016
2016 Central Eastern Western Total 2015 Central Eastern Western Total
LPG 2.396 8.230 6.006 16.632 LPG 2.095 7.513 5.806 15.414
Gasoline 73.055 40.597 93.721 207.373 Gasoline 71.873 41.014 93.511 206.398
Total 163.314 121.739 401.545 686.598 Total 172.759 130.753 392.801 696.313
6.2
15.8
31.1
32.5
5.4 46.1
66.7 5.9 Asia
5.1 Northwest Europe
11.9 63.8 Mediterranean
9.5 U.S.
other
Exports from Ras Tanura, Ju’aymah and Yanbu’ and transfers at Jiddah, Rabigh, Yanbu’ and coastal bulk plants.
Due to further data reconciliation, the figures in this table have been revised.
our performance in 2016 79
Human resources
65,282
Employees
Saudi 55,466
Expatriate 9,816
Saudi development
programs participants enrolled at year-end 2016
605
Regular development programs CDPNE graduates joining
373
the company
1,441
Non-Employees (CDPNE) Apprentice graduates
3,952
joining the company
1,967
College Degree Programs
5,055
Apprentice Program
80 Annual Review 2016
awards
Our Exploration and Petroleum Engineering of 2016.” The trade publication identifies
Center-Advanced Research Center (EXPEC significant refining and petrochemicals
ARC), along with Schlumberger, received projects that are anticipated to positively
Hart Energy’s Intelligent Systems and impact the global and/or regional downstream
Components category award and the Best industry. Our SATORP and Sadara joint
Completions Technology at the 2016 ventures were honorees in 2014.
World Oil Awards for its Manara Production
Along with our R&D collaboration partner
and Reservoir Management System, the
JGC Catalysts and Chemicals, we were
world’s first “smart lateral” system for
awarded the International Technology
improving well productivity through
Exchange Award by the Japan Petroleum
drainage optimization.
Institute for development of the CAN-15
EXPEC ARC was also recognized at the hydrocracking catalyst, which enables fuel
Abu Dhabi International Petroleum efficiency and reduced emissions.
Exhibition and Conference with the
At the Annual Technical Conference and
top award for Best Oil & Gas Health,
Exhibition, the annual flagship event of the
Safety and Environment Project for
Society of Petroleum Engineers (SPE),
our carbon capture and sequestration
the SPE Kingdom of Saudi Arabia Section was
and CO2 enhanced oil recovery project,
named the recipient of the 2016 President’s
which also won the Energy Institute
Award for Section Excellence. Company
Environment Award.
personnel were honored by SPE at a number
Our Oil & Gas Treatment R&D organization of events, receiving awards for Young Member
received the internationally recognized Outstanding Service, Improved Oil Recovery
Manufacturing Leadership Award for Pioneer Award, Distinguished Membership,
Engineering & Production Technology and Honorary Membership — the highest
Leadership. Winners in this category are honor SPE bestows on an individual.
recognized for embracing new design and
An Honorary Member and two Distinguished
production approaches to drive game-
Service awards were bestowed on three Saudi
changing process improvements through
Aramco geoscientists at the 2016 Annual
adopting technologies such as advanced
Convention and Exhibition of the American
3-D modeling and simulation.
Association of Petroleum Geologists in
The Saudi Arabia National Award Calgary, Canada.
from Energy Globe, given in recognition
Saudi Aramco was named Best Employer
of projects that conserve resources, was
Brand-Private Sector at the LinkedIn Talent
presented to our Berri Gas Plant for its
Middle East and Northern Africa awards.
development of a new ethane liquefaction
heat exchanger that improved efficiency, Our AramcoWorld magazine was honored
reduced operation and maintenance costs, with 12 magazine industry awards — the
and raised ethane liquefaction capacity most ever received by the publication — from
by 25%. The initiative also received a the international juried competition sponsored
Sustainability Leadership Award from by Folio. Winning its first award at the same
the Manufacturing Leadership Awards. competition was Al-Ayyam Al-Jamilah, our
magazine for retired expatriate employees.
Our Jazan Refinery and Terminal Project
was recognized by Houston-based Our film “Where Energy is Opportunity” was
Hydrocarbon Processing in its “Top awarded a bronze medal at the 2016 New
Hydrocarbon Processing Industry Projects York Festivals World’s Best TV and Films.
saudiaramco.com