Saudi Aramco to cut back on new $20b investment in Yanbu, preserve cash
Oil giant wants to save up on its cash to meet $75b dividend promise
Riyadh: Saudi Aramco has delayed multi-billion-dollar petrochemical and liquefied natural gas projects as it looks to save cash and preserve its dividend after this year's crash in energy prices.
The world's biggest oil company is scaling back plans to construct a $20 billion crude-to-chemicals plant at Yanbu in eastern Saudi Arabia, according to one person, who asked not to be identified because they aren't authorized to speak to the media. It's also reviewing an earlier decision to buy 25 per cent of Sempra Energy's Texas LNG terminal - which would cost several billion dollars - and has already taken some staff off the project.
The about-turns come as the Saudi state oil firm tries to maintain its pledge to pay a $75 billion dividend annually for the next several years. Rivals such as BP Plc and Royal Dutch Shell Plc slashed shareholder payouts as the coronavirus pandemic caused energy demand to crash.
Oil prices have more than doubled since April to around $45 a barrel, but are still down more than 30 per cent this year. All of Aramco's major greenfield projects - which involve building plants from scratch - are under review, and the company is likely to invest in existing assets instead.
The new plan for Yanbu is to integrate some existing refineries and build petrochemical facilities on to them. Aramco suspended a deal to build a $10 billion refining and petrochemicals complex in China, Bloomberg reported last month. Aramco said it was still committed to downstream investments in China.