Saudi Aramco reshuffled its senior management and created a division focused on “portfolio optimization,” as the world’s biggest oil producer adapts to low crude prices and seeks new ways to raise cash.
The Saudi state energy company appointed senior vice president Abdulaziz Al Gudaimi to lead a new Corporate Development team that will “assess existing assets” and boost access to “growth markets,” it said in a statement on Sunday. He will report to Chief Executive Officer Amin Nasser and start on September 13.
“The organisation will support rapid and effective decision-making on the company’s portfolio,” Aramco said.
Aramco also named Nasir Al Naimi as acting head of the upstream business — the exploration and production arm — while Mohammed Al Qahtani will take over the downstream unit, according to people familiar with the situation, who asked not to be identified because they’re not authorised to speak to media. The downstream business involves refining, chemicals, pipelines and fuel retailing, and was previously led by Al Gudaimi.
Aramo is adjusting to weaker energy prices as the coronavirus pandemic hammers the global economy, with Brent crude having fallen 32% this year to around $45 a barrel. The company is slashing investment so it can fulfill its pledge to pay a $75 billion dividend in 2020, even as its debt surges. Most of the dividend goes to the Saudi state, which needs the funds as it faces a major revenue squeeze.
Earlier this year, Aramco hired advisers for a potential multi-billion dollar sale of a stake in its pipeline business. And Chairman Yasir Al-Rumayyan said in February there were non-core assets that could be monetized.
In another potential sign of Aramco’s changing priorities, Bloomberg reported it suspended plans for a $10-billion refinery in China. The project was unveiled with great fanfare last year. Aramco said in a statement on Monday it was still working with its Chinese partners and committed to the Chinese market.
Aramco didn’t comment on the appointments to the upstream and downstream businesses. The company’s shares have dropped 3 per cent in Riyadh this year. That’s far less than other major energy firms such as Royal Dutch Shell Plc, which has fallen 51 per cent, and Exxon Mobil Corp., down 41 per cent, partly because of Aramco’s dividend promise.