Saudi Aramco’s CEO Khalid Al-Falih

Saudi Aramco’s CEO Khalid Al-Falih has said that 2014 was a year of accomplishments for his company.

“In upstream, we reliably met domestic and international oil demand, and the oil and gas reserves that we will book this year will significantly exceed our annual production,” he said.

In his annual year-end letter to 61,500 employees, Al-Falih said the energy giant was also successful in increasing the level of integration along the entire petroleum value chain, from refining to chemicals, to power generation to marketing.

Despite lethargic global oil demand, Saudi Aramco’s combined oil and gas production approached an all-time high, boosted by record gas production of almost 8 billion standard cubic feet per day (BSCFD).

“It has been another tremendous performance that continues to reinforce the preeminent global position of our core upstream business,” he added.

Al-Falih reminded employees about the challenges ahead.

“As we move into 2015, let us rise to the challenges once more, taking efficiency, productivity and cost management to new heights while remaining focused on our long-term strategic vision of leveraging our commercial activities,” he said.

Al-Falih also spoke about oil market volatility in the second of half of 2014 when the price of oil dropped from over $115 per barrel in June to below $55.

“The market remains volatile, and I know that this uncertainty has been unsettling for many of you and your families. I therefore want to assure you that while we have responded by making short-term adjustments and strictly adhering to our principles of fiscal discipline, these actions are designed to further strengthen our resilience to withstand this short- to mid-term turbulence. Indeed, because we deliberately focused on resilience-building under healthy market and financial conditions (anticipating the inevitable down cycles and shocks) we are able to remain resolutely committed to our long-term strategies while remaining vigilant, agile, efficient, and prudent,” the president told employees.

Furthermore, in keeping with the company’s new brand positioning represented by the tagline “where energy is opportunity,” the market volatility not only poses challenges, but offers some opportunities as well, Al-Falih said.

For example, there is the potential to execute our projects at lower costs, as investment deferrals by others cause suppliers and service providers to lower prices; the opportunity to hire the expertise we need, as others lay off employees or defer hiring; and the potential to attract third-party investment in the support infrastructure we want to build in the Kingdom, while conserving our own capital. We will certainly take advantage of

any opportunities that might advance our long-term objectives and strategies, as

we always have,” he pointed out.

Aramco’s exploration division successfully added eight new fields.

“Our Manifa crude program was largely completed, while we continued the expansion of Shaybah’s production capacity from 750 thousand barrels per day (MBD) to 1,000 MBD. We made significant progress on our unconventional gas program, and also on our massive Wasit Gas Program and Shaybah NGL — the combination of which will provide feedstock for chemicals production, cleaner fuel for power generation to the Kingdom, and support our economic diversification goals.”

Speaking about 2014 achievements, he said the Sadara joint venture in Jubail was on track for the start-up of some of its plants in 2015, while the construction of PetroRabigh II project was progressing well.

“Together, these ventures and projects will go a long way in realizing our strategy to be the world’s top refiner and a world-leading manufacturer of chemicals. Moreover, we made solid strides in building our power generation portfolio, enhancing the reliability of our critical operations while greatly elevating energy efficiency and reducing our costs,” the CEO said.

Al-Falih said he was proud of the determination to succeed that demonstrated by employees when faced with a challenging environment.

“You delivered results across the spectrum of our operations that had a meaningful impact for our company and stakeholders. You showed once again that this company is at its best when it is stretched, and I was delighted that almost 55,000 of our employees benefited from the first company-wide Saudi Aramco Incentive Plan (SAIP), reinforcing our performance-driven culture.”

[wpResize]