SAUDI ARABIA - Part 3 - Exports & Logistics.

State-owned Saudi Aramco this week was exporting 6.6m b/d of crude oils, down from 6.9m b/d as an average for the whole of 2006, plus about 1m b/d of condensate and NGL as in the past year. In addition, Saudi Arabia is exporting about 200,000 b/d of refined products out of Saudi Aramco's JV refineries and purchasing 800,000 b/d of fuels from these plants for internal consumption.

In its Annual Review 2006 out earlier this year, Saudi Aramco said its crude oil output in 2006 fell 1.7% to 8.9m b/d and exports fell 3.1% to 6.9m b/d. Raw natural gas delivered to gas plants in 2006 rose 4.5% to 8,200 MCF/d, compared to 7,800 MCF/d in 2005. Saudi Aramco's crude oil production capacity in 2009 will reach 12.5m b/d.

Saudi Aramco is the only oil producer in the world which has no physical constraints on its short- or long-term export decisions. This is thanks to an awesome combination of logistics it has built up in Saudi Arabia and in other parts of the world, backed by huge petroleum reserves and an operational capacity of over 10.6 b/d (see Part 2 in omt14SaudiFieldsOct1-07).

The biggest market for Saudi Arabia is Asian/Pacific, taking over 4.68m b/d of its crude oils, fuels and NGL/condensate, i.e., 60% of total petroleum exports. Its second biggest market is the US, accounting for more than 1.85m b/d of crude oils, refined products and gas liquids. At times in the past four years total Saudi oil and gas liquids exports to the US exceeded 2.5m b/d. Europe, which until 1997 used to be the second market for Saudi oil and NGL, accounts for about 1m b/d of crudes (down from 1.5m b/d in late 1997 and 2m b/d in 1995). Africa, the Middle East and other parts of the world account for about 270,000 b/d of crude oil, NGL and fuel exports.

Despite a big rise in project and asset costs (see omt13SaudiProspSep24-07), Saudi Aramco is investing heavily in overseas downstream acquisitions. Its JV with Shell in the US, Motiva, is spending $7 bn on expansion of its 275,000 b/d refinery at Port Arthur, Texas, to 600,000 b/d by 2010. This will make it the biggest refinery in the US (see Part 4 in omt16SaudiOverseasOct15-07).