Saudi Aramco reshuffled its senior management and created a division focused on "portfolio optimisation" 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 team that will "assess existing assets" and boost access to "growth markets," it said Sunday in a statement. He will report to Chief Executive Officer Amin Nasser and start in his new role on Sept. 13.
$75 billion dividends
Aramco 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 its dividend in 2020 even while piling on debt. Most of the payout goes to the government, which faces a major revenue squeeze.
"They have a lot of expansion projects on the table, so they need to manage these and make sure they're not overdoing it, especially in the current oil-price environment," said Iman Nasseri, managing director for the Middle East at oil-consulting firm FGE.
"It all goes back to the need to maintain the promise of paying $75 billion in dividends."
Aramco also appointed 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 authorized to speak to media.
The downstream business involves refining, chemicals, pipelines and fuel retailing and was previously led by Al Gudaimi. His new role "will support rapid and effective decision-making on the company's portfolio," Aramco said.
Earlier this year, Aramco hired advisers for a potential multi-billion dollar sale of a stake in its pipeline business. Chairman Yasir Al-Rumayyan said in February there were also non-core assets that could be monetized.
Aramco didn't comment on the appointments to the upstream and downstream businesses. The company's shares have dropped 1% in Riyadh this year. That's far less than other major energy firms, due partly to Aramco's promise to pay its dividend. For comparison, Royal Dutch Shell Plc has fallen 50%, and Exxon Mobil Corp. is down 41%.