Aramco: Capital expenditures jump 18% in 2021

The Saudi Arabian Oil Company (“Aramco” or “the Company”) today announced its full-year 2021 financial results, reporting that Capital expenditure in 2021 was SR 119.6 billion ($31.9 billion), an increase of 18% from 2020.

This growth was primarily driven by increased activities in relation to crude oil increments, Tanajib Gas Plant and development drilling programs. Aramco expects 2022 capital expenditure to be approximately SR 187.5 -150 billion ($40-50 billion), with further growth expected until around the middle of the decade. This is in line with the Company’s belief that substantial new investment is required to meet demand growth, against a broader decline in upstream investment across the industry globally.

As a result of progress in its portfolio optimization program, the Company signed in December a lease and leaseback deal involving its gas pipeline network with a consortium of investors led by BlackRock Real Assets and Hassana Investment Company. The deal closed in February 2022 and the consortium acquired a 49% stake in a newly-formed Aramco subsidiary, Aramco Gas Pipelines Company, with Aramco receiving upfront proceeds of SR 85.1 billion ($15.5 billion).

Earlier in 2021, Aramco closed a similar deal for its oil pipeline network with another international investor consortium, including EIG Global Energy Partners and Mubadala. The consortium acquired a 49% stake in Aramco Oil Pipelines Company, a subsidiary of Aramco, for SR 46.5 billion ($12.4 billion).

Moreover, Jazan Integrated Gasification and Power Company, a joint venture consisting of Saudi Aramco Power Company (SAPCO), Air Products, ACWA Power and Air Products Qudra, signed agreements for the asset acquisition and project financing of SR 44.2 billion ($11.8 billion) relating to the Jazan Integrated Gasification Combined-Cycle power plant, an Air Separation Unit and certain ancillary assets from Aramco located in Jazan Economic City.

Aramco also raised SR 22.5 billion ($6 billion) in Q2 2021, as it expanded and diversified access to capital through the issuance of three tranches of US dollar-denominated Shari’a-compliant Sukuk trust certificates. The issuance was the world’s largest order book of US-dollar denominated Sukuk.