Saudi Aramco is reportedly postponing three chemical expansion projects within Saudi Arabia amid a drop in oil prices and capital beinf redeployed towards global ventures.
The Saudi-listed oil producer has put on hold major engineering and design work at three facilities, Bloomberg reported, citing people aware of the move.
The move is aimed at long-term spending and redirecting funds to high-priority areas, the report said.
The deferred projects form part of Aramco’s crude oil-to-chemicals strategy, with two joint ventures in Yanbu on the west coast of the Red Sea and another facility in Jubail on the east coast of the Arabian Gulf, the news agency said.
Aramco has already halted another joint venture with local chemical producer Sabic to build a new crude oil conversion plant at Ras Al-Khair.
Sabic, which is also listed on the Saudi stock exchange, is 70 percent owned by Aramco.
Oil prices have fallen by 12 percent so far this year to an average of $66 a barrel. The downturn has weighed on Aramco’s earnings, which have declined for ten consecutive quarters.
The oil major is prioritising investment in international refining and chemical facilities as they are located close to major demand centres such as China and South Korea.
However, Aramco continues to spend on oil and gas production projects, such as the Jafurah gas field, with the first phase expected to begin production later this year.
The company plans to spend more than $50 billion in 2025, focusing investments on gas exploration and production projects and maintaining oil production capacity.
Currently, Aramco has four major crude-to-chemicals projects underway: two in China, one in South Korea, and another in partnership with TotalEnergies in Saudi Arabia. All are expected to come on stream within the next three years, the report said.