Saudi Aramco, one of the world’s leading integrated energy and chemicals companies, is playing a pivotal role in driving Saudi Arabia’s economic diversification plan under Vision 2030.
The state-owned firm’s expansion and integration strategy has focused on creating new economic opportunities, as well as developing new innovative solutions to deliver on the Kingdom’s environmental goals.
Experts told Arab News that Aramco’s expansion strategy is fueling Vision 2030 while balancing sustainability concerns and pursuing a greener future.
Aramco Sustainability
Saudi-based economist Talat Hafiz noted that Aramco aims to achieve sustainability. “Among the several features that Aramco is careful to achieve aside from growth is reaching a level of sustainable business that supports the company’s growth in a very complex business environment, especially when considering the changes happening in the world energy mix and the introduction of new energy alternatives such as renewable and nuclear energies,” he said.
Hafiz pointed to Aramco’s technological investments and sustainability efforts as key aspects of the firm’s strategy and the Kingdom’s efforts to achieve its goals. “Aramco is a major player locally and internationally in ensuring that its business is sustainable not only financially but also to support the Kingdom’s efforts to reach net-zero emissions goals by 2060. Aramco is committed to becoming carbon neutral by 2050 and has since been unveiling numerous initiatives and projects,” he said.
A Focus on Innovation
Aramco is paying special attention to developing innovative solutions by investing in new technologies. To this end, the firm has created a special $1.5bn fund to invest in technology that can reduce the use of fossil fuels. This aligns with Aramco’s commitment to reducing its carbon footprint and enhance energy efficiency.
Furthermore, Aramco Ventures, the firm’s venture capital arm, has received a $4bn fund to invest in the development of disruptive technologies. The firm also plans to expand into new markets in Asia and North America and harness its venture capital arm to embrace disruptive technologies.
This reflects how Aramco is dedicated to diversifying its portfolio and supporting startup businesses across the world, in line with its long-term objectives regarding new energies, chemicals, and digital technologies.
Diversification Efforts
Since its establishment in the 1930s, Aramco has made remarkable milestones that have consolidated its footprint as a key player in global energy markets. The firm has extended its outreach to Europe, Asia and the Americas, strengthening cooperation with international partners in developing sustainable energy solutions.
In addition to energy, Aramco has been working to bolster its footprint in other sectors in Saudi Arabia. Most recently, Aramco announced a collaboration with the leading real estate developer, ROSHN Group, to construct the Aramco Stadium, with a capacity of 47,000 seats in Al Khobar city.
Moreover, Aramco sponsored the Esports World Cup held in Riyadh in July. The firm also participated with a pavilion that offered visitors with rich virtual racing experience.
Hafiz highlighted the firm’s diversification and expansion strategy, saying that Aramco can “easily mitigate the risks associated with any investments locally or abroad.” He added the firm’s expansion strategy aims to add value through creating new market opportunities and allowing for more integration, given that Aramco is a diversified energy company.
Aramco Expansion
Aramco’s expansion has generated significant economic benefits both locally and globally. In recent months, Aramco finalized deals to expand its outreach in several markets. These included acquiring a 50% stake in the Jubail-based Blue Hydrogen Industrial Gases Co.; a 10% stake in HORSE Powertrain joint venture between French carmaker Renault and Chinese automaker Geely; and a 40% equity stake in Gas and Oil Pakistan.
Furthermore, the firm’s diversification efforts mirror those of Saudi Arabia, generating “substantial revenue” for the Kingdom, according to economist and policy adviser Mahmoud Khairy.
“This income allows the government to invest in various sectors, promoting a more balanced economic structure. Aramco’s investments in non-oil sectors, including petrochemicals, refining, and renewable energy, are designed to create a more diversified economic structure and reduce the Kingdom’s reliance on crude oil exports,” he said.
Khairy told Arab News that Aramco’s strategic partnerships and acquisitions abroad have benefited Saudi Arabia by drawing foreign expertise and technology to the Kingdom. “These global engagements help transfer knowledge and best practices to the Kingdom, aiding in its economic modernization,” he said.
Additionally, Aramco’s expansion has created jobs across many sectors, such as manufacturing and logistics, reduced unemployment rates, and cultivated a skilled workforce.
