Transcription
The company has grown significantly. You know, it is that we have grown a lot, is gas. If you look at, we always talk about gas growth of more than 60% by 2030. So gas is bringing us a lot of growth opportunities. Looking at in downstream liquid to chemical, huge growth with our aspiration to have 4 million liquid to chemical over the next few years. And with that also today, if you look at how much we are on liquid chemical, almost 45% of that target of 4 million barrels of liquid to chemical. That is significant growth, as I'm sure you've seen through the tools and technology and digitalization and AI to maintain our low cost structure, extraction cost and development cost and at the same time reduce our carbon footprint. We are accelerating our transition to net zero and scope one and scope two by 2050 by tapping into carbon capture and storage. One of the biggest projects globally with 9 million tonne. So it is significant growth that you see capturing the opportunities that we see today. We always look at it long term. When we look at our investment, we don't focus on quarter sort of years, we look at decades in terms of investment. So it opened a lot of opportunities for the company to grow. Yeah.
Did the IPO in 2019 influence the strategic direction of the company? The company was always focused on long term in terms of its investment and building capabilities, as I see it, in gas and downstream liquid chemical and digitalization and transitions and renewables and new areas that we are looking at is minerals and all of these things. But the thing the IPO opened up for us is a lot of it allowed us to share our performance metrics with with the outside, with that with the market today. Before, we were sharing all of the data, but we did bring a lot of third party to verify. Today, as a listed company, you are required to bring a third party to verify your data and emissions, in in safety and in digital maturity, in a lot of things. So we are proud of our performance. We have been always proud of our performance. The IPO opened the opportunity for us to share our data and information with the public as part of our performance.
The listing price was 32 riyals a share. Right now, we're trading around 25. How do you interpret the current discounts versus the IPO price? This is almost six years on. I would tend to look at the market. It goes through volatilities. In a low market, you will see an impact on chip prices and all of it. And and we have been through this cyclicality many times, so it's not an issue for us. So today, it's the downstream is it's a downside, especially chemicals, refining, oil prices drop, and that has an impact, always will have an impact on share prices. But this volatility is always, you know, short term, and there will always be a growth. And you have to, when you look at it, let's look at it in a down cycle where I look at it in an up cycle. So we think cyclicality, we are used to it, and we know how to. The most important thing is, is to continue to look at it in terms of a long term, in terms of our investment and capturing the opportunity that exists today where others will not do as much investment in a down cycle. For us, we always capture the opportunity because we look at things on decades, not quarters. Yeah.
Let's talk about one of those investments, and that's in artificial intelligence. I've spent the last couple of days touring the various divisions, and at everywhere I've been, every single division I've spoken to have talked about how they've been incorporating technology into their end results and how it's been enhancing productivity. Would you say that AI has been a game changer for your operations? Oh, it's transformative, definitely for any business, not only Saudi Aramco, which is important. You need to embed it, but you need to have the computing infrastructure to capture it. You need to have that we have 90 years of data quality, quality data available online because we have built that computing infrastructure over the 90 years history. We are benefiting from AI because too many think we have the talents who are AI enabled, trained. Don't they know what to what to do and how to capture opportunity? This is where you see a lot of the use cases delivering results for us. Technology realization in 2023 used to be $2 billion. It's somewhat we realized from technology. In '24, $4 billion, and we're looking at 2 to $4 billion per year in technology to our benefit, that benefiting out from this technology application. AI is is in everything embedded, not only in terms of allowing us to reduce our cost structure, more efficiency. It also helps us in reducing our carbon footprint. It is very important to enable. You see it reducing emissions, increasing productivity, and with that, the number of wells, water reduction, and with that emissions, and least pumping in everything, it's embedded, and we are looking at the benefits of AI, integrating it in everything that we are doing and how embedded it is.
Would you say the ultimate vision is to move away from being an oil company that deploys artificial intelligence to becoming a technology company that happens to produce oil? Well, we think of ourselves as a technology company delivering energy, to be honest with you, because if you go around and you see everything that it's all about technology, AI, the computing infrastructure, that training, if you look at our talents, how many people trained right now, we have two AI specialists, a couple of hundred. But the AI enabled trained a professional around more than 6000. We are training more and more every year, and these are the subject matter experts in their fields. They're understanding, they can capture all the opportunities that exist in AI. A company can give you applications, can give you the hardware, that can give you the software, that ships the GPU. But you need the subject matter expert that are trained and enabled in AI to create these use cases and capture all of these opportunities. And this is where we are seeing the value.
And what role do you see a more technologically advanced Aramco playing and benefiting broader society in Saudi Arabia? Well, you know, when area is we generating more value to our shareholders and maximizing the value. Tokyo, that is important for the majority shareholder, which is the government and the shareholders of Saudi Aramco. And that is important. But also in in reducing, as I said, a technology, I mean, carbon footprint, which is important in creating the future technology that allow us to reduce and create technology that will allow us to make that commission today. A lot of technologies that we are looking at now are good to reduce emissions, but they are not commercial because their cost is high. If I take you to one of the demonstration site where they have captured, it's still it's very expensive. It costs you more than 600 to $800 to to produce a clean barrel, if you think about it, just to capture the carbon that emitted from one barrel from it and then sequestering it. But that these type of technologies and other technologies in terms of engine, better engines that are more efficient, it needs time and need to a lot of these technologies that will make them more commercial. We are looking at a lot of technologies and renewables and battery storage that will help us in the future. So this is where we think we can add value. At the same time, something very important without the air and technology. I always say 20 years ago, the CEO of Saudi Aramco, at that time, they were asking him what is the cost for extraction, Saudi Aramco? And his answer was $3. Today, if you ask me what is the cost for extraction, it's still $3. This is with the maturity of the fields, with the increase in water production, with inflation, and all of it helped by what? By technology, digitalization, AI, all of these things, capitalizing on them, and Harsanyi harnessing the talents that we have that are capable of capitalizing on these technologies.
President Trump was in Saudi Arabia in mid-May, and Aramco announced a series of agreements with US companies potentially worth up to $90 billion spanning various sectors. Can you tell us more about the importance of these partnerships? You know, our relations with U.S. started since inception, 1090 years ago, so we have great relations with all the companies. Now, some of our biggest companies that we are using today in servicing our plans and operation project management. For example, if you look at procurements every year and services from the U.S., around $40 billion. So they have been here with us since inception, since the start of the company in 1953. And they have continued to be with us, helping us. For example, if you go to our visit, our gas or oil fields, you will see the Schlumberger, the Halliburton, the Baker Hughes. They are still there. They have been here for decades and they are still there supporting us and helping us in delivering energy to the world.
You've mentioned sustainability. Energy intensity comes up a lot, and people may be surprised to hear that Aramco has a scope one and scope two net zero target by 2050. Of course, this doesn't include scope three emissions, which constitute the lion's share, to do with end-user combustion. What what role do these emission targets play in the strategy of a company where your primary production and primary purpose is to produce oil? Yeah, well, if you look at our numbers in methane and CO2, you will find out that we have the lowest emitters when it comes to methane or CO2 compared to any company in the world energy company. When you look at the numbers, and we continue to maintain that by investing and ensuring that we are more efficient in the way we are doing business. So we put that target of achieving net zero and scope one and two by 2050. To deliver on that, we need to continue to be more efficient in our operation, capitalizing on AI and technology. We are building one of the biggest projects in the world in carbon capture and storage at 9 million tonne that was approved by our board recently. And we are looking at renewables for especially to invest big time in scope two, our target to have 12 gigawatts by 2030 of renewable solar and wind in the kingdom. Mainly, we're looking at hydrogen provided, hopefully, we are ready and prepared if there is an offtake to scale up our hydrogen production to the world. So we are, we have a strategy and we are delivering on that strategy to achieve net zero and scope one and two by 2050 with milestones and deliverables. One of them is the big one is the carbon capture and storage of 9 million tonne that was approved recently.
In your speeches the last few years, you've talked about the need for affordable, secure and sustainable energy. You also have been an advocate for a pivot away from the push that the world has been making towards a very quick energy transition. Again, a couple of things have happened in the last few years. You've had the energy crisis in Europe. The Trump administration has come in and rolled back some of the green incentives introduced by the Biden administration. Where do you think we are right now in the debates? Well, we have always said that we need a transition reset or a reality check in the transition to deliver on our ambition for a net zero. What we need is pragmatic solutions to deliver on what we are all aiming for. And what we always asked for is that we need to take into consideration the Global South. Almost 70 to 80% of the energy, global energy in 2050 will be in the Global South, not on the Global North. So one size fits all will not work. And anything that is driven heavily by incentive, that's not sustainable. The Global North can afford a lot of incentives, but that's not sustainable for a reason. The minute these incentives disappear, and they will distribute that additional cost will be best to consumer. And that's where we are seeing the increase in cost. What we need is something that, while sustainable, is affordable and secure. We have always talked about a different mix of energy that is will be required. If you look at coal today, it's almost at 8.7, 8.8 billion tonne. Since the Paris Agreement, coal increased by 14%. So this is a source of energy that we thought a long time ago that it will decline. It increased since the first agreement by 40%. So because it is secure, it is affordable, it's indigenous in certain countries because it gives them security. So what we need is something that is pragmatic, that takes into consideration the whole world, just inclusive, not something that is good for certain part of the world. And they can drive it incentives and buy policies that are not sustainable over the long term. This is what we have been always seeing, and we are seeing the result of that. Hydrogen is a good example. Everybody talks about hydrogen and the growth in hydrogen and the cost is going to go down. And you can see it today. Yeah.
Do you feel vindicated then? Well, you know, I think Aramco was always pragmatic when we looked at solutions. We are all renewable. We are solar and wind. We will be 20 to 25% of the kingdom, renewable solar. We are in hydrogen, and I would love to see an uptick so I can scale up our hydrogen. We are in oil and gas. We are in carbon capture and storage. We are on solutions also to reduce. So we are in all segments of the hydrocarbon and alternatives. We are investing in all. What we need is something that is pragmatic. It needs to be affordable. Hydrogen. We didn't start any projects in symbol. What we said at that time, we are not going to start this project until we see the offtake. So and luckily we did build venue for the project, otherwise you would have had to build them. We you need an offtake. When you have an offtake, as we will be starting a project. So certain companies, you know, look at all of these things and they decided, and that's why you see a lot of the changes that are happening in a lot of companies that I know today. They are either ditching some projects that they built before and they embedded them or they decided to change their strategy. We have always been consistent that we need a mix of energy that contain all and at the same time we need to be making sure while it's a secure, sustainable and affordable.
Answer comment at Ceraweek that there is more chance of over speaking than the current plan working. But you see a commercial opportunity of ASEAN and willing. What we have always said and we continue to say in there, we need a reality check and we need a reset for the current transition that only take into consideration stringent carbon mandates by certain countries, influenced by policies with huge incentive. That's not going to work.
Do you think oil will always be part of the energy mix? Oh yeah, I have. If you if you go back a few decades back, oil, hydrocarbon in general, it was 80% of the energy mix. $10 trillion on solar and wind over the last 15 years. Still, solar and wind is only 5% of the energy mix. Oil hydrocarbon to date, of course, 30, 40 years back. Today, it's 80% of the energy mix. However, it is 100 million barrel of oil equivalent more because the size is much bigger today. So 80% to what's today is much bigger than 80% of 30 or 40 years ago. So it will continue to be part of the energy mix for decades to come because you can always decarbonize what you have. We need to focus on emissions. That's why we said we need a reset, not a winner and loser, and we need only solar and wind and we don't want hydrocarbon. We'll do that. We need to be focused on emissions and reducing emissions, and that should be the driver over the long term. So I think it will be part of the energy mix for decades. That's why we are investing it in discovering work, by the way. So we have huge reserves, just to show that we are, we believe in that. We are every year replacing every barrel that we produce. So we are not saying we have good for 60 years. We need to stop because things will change after 60 years and you don't need all of that hydrocarbon. No, we strongly believe that you need hydrocarbons for decades.
People will ask where Aramco fits into the Saudi Vision 2030, which is a vision that includes a lot of economic societal transformation, but also diversification away from oil. Where does Aramco fit into that puzzle? We are an important enabler of that vision. That vision is all about, you know, creating different engines to drive the economy, not relying on one engine, which is oil and gas and all of that. So you need to diversify the economy, have different sectors, contribute to the GDP. And this is what's happening today. Other sectors are growing and it's healthy growth that we see in other sectors, and that is important. Relying on one sector only to drive the Saudi economy is not right. And this is where the vision is. They are helping other sectors, growing other sectors across the kingdom to grow. Oil and gas is still important. That's why you see the growth you see here. We are very pragmatic here in the kingdom. Think about it. We are you're talking about 200, 230 gigawatts of solar and wind. We believe in hydrogen, where we will be happy to produce hydrogen. Actually, we have one of the biggest projects in green hydrogen at the deal, and we will be more than happy to build more green hydrogen and blue hydrogen in the kingdom. And at the same time, we are in carbon capture and storage, but we are not neglecting hydrocarbon. We have healthy oil production revenue, maximum sustained capacity of 12 million. We are growing our gas by more than 60% by 2050. So we are focusing in our conventional and growing it while decarbonizing at the same time. And we are building the new, which is solar, wind, hydrogen and others.
You've been CEO for ten years. What does success look like to you for the next decade? You know, continue to deliver on maximizing value to the shareholders is always the important for us. We need to continue to see technology. It is an enabler, transformative in AI and digitalization is is something that we strongly believe that will deliver not only in terms of creating and maximizing value to the shareholder, but also in enabling us to reduce our carbon footprint, harnessing the talents that we have in terms of development and make them more capable, more AI enabled, more technology enabled is something that's important. So Aramco will continue to grow, but it will be more diversified, more and digitalization. You've seen our pivot to our minerals because a lot of what we are doing in the concession areas, we identified a good amount of minerals that we are tapping into. So the company will continue to grow, diversify and at the same time capture opportunities in terms of the chemical sector and liquid to chemicals and all of these things, tapping into the talents that we have. The biggest asset that we have in Saudi Aramco is our human capital. So making sure that we continue to develop them to meet the challenges of the future. There is a lot of challenges ahead of us, especially with sustainability, with the transitions, with disruptive technologies. We need to be ready. That's why we are working with quantum computing, working on AI. That's why that the $7 billion for startups in one of the biggest venture capital in any company around the world. We are always cognizant of what could happen in the future and thinking about what could happen, what disruptive technologies might come in and how can we prepare it or leading In terms of today, we lead globally in terms of not only cost, also in carbon footprint for every barrel we produce. How do we maintain and continue to maintain that leadership while also delivering the new energy that the world wants to?