Saudi arabia Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in saudi arabia, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Oil Gas & Petrochemicals
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Overview

Saudi Arabia possesses approximately 17 percent of the world’s proven petroleum reserves and is the world’s largest net exporter of petroleum. As of December 31, 2024, Aramco’s reserves under the Concession agreement were 250 billion barrels of oil equivalent, including 190.2 billion barrels of crude oil and condensate, 26.1 billion barrels of NGL and 209.8 trillion standard cubic feet (tscf) of natural gas.

Saudi Aramco, one of the world’s largest integrated energy and chemicals companies, operates across the upstream, midstream, and downstream segments. In 2024, Aramco’s total hydrocarbon production was 12.4 million barrels oil equivalent per day (mmboed) in total hydrocarbon production, including 10.3 million barrels per day (mmbpd) of liquids, largely crude oil. Saudi Aramco boasts that it produces the lowest-carbon barrel of oil in the industry and has committed to achieve net-zero emissions by 2050, outstripping the government’s 2060 net-zero target. Saudi Arabia continues to invest in areas such as cleaner conventional engines, carbon capture, utilization and storage (CCUS), hydrogen, and renewables. 

Saudi Arabia Key Highlights

Aramco’s total revenue for the year ended December 31, 2024, was $436.61 billion, compared to $440.88 billion in 2023. Specific to the fourth quarter of 2024, Aramco’s Board of Directors declared a base dividend of $21.14 billion, and a performance-linked dividend of $220 million based on full-year results of 2024. In 2024, total dividends paid were $124.2 billion, representing an increase of 27 percent from 2023.

In January 2024, the Saudi government directed Aramco to maintain Maximum Sustainable Capacity (MSC) at 12.0 mmbpd. Per Aramco, this directive will not impact near-term projects including the Dammam development and the Marjan, Berri, and Zuluf crude oil increments. Production from these projects will sustain MSC at 12.0 mmbpd. During the year, Aramco also made the decision to more than double its venture capital funding from $3 billion to $7 billion through Aramco Ventures.

Leading Sub-sectors

Upstream

Saudi Aramco continues its major expansionary phase and channeling investments in its upstream segment that include exploration, developing and producing crude oil, condensate, natural gas and NGL. Aramco, as the world’s largest crude oil exporter, is concentrating the bulk of its spending on upstream activities. Aramco’s principal and flagship oilfields remain the world’s largest conventional onshore oil field (Ghawar) and the largest conventional offshore field (Safaniah). Aramco owns and operates the Abqaiq facility, which is its largest oil processing facility and the largest crude oil stabilization plant in the world.

The Jafurah contracts include subsurface and Engineering, Procurement and Construction (EPC) contracts worth $10 billion, with capital expenditure at Jafurah expected to reach $72 billion over the first 10 years of development, with reserves of 15 tscf of gas and 2 billion barrels of condensate. Meanwhile, work is progressing at the Jafurah unconventional gas project, which is known to be the largest liquid-rich shale gas development in the Middle East with an estimated 200 trillion cubic feet of raw gas, whose production can be used as feedstock for petrochemical and metallic industries.

Aramco’s Upstream segment will continue its investments in crude increments to maintain MSC at 12.0 mmbpd and continue to grow its gas business.  Aramco continued to scale up its investments in both brownfield and greenfield developments. In Aramco is also developing unconventional gas fields in Jafurah with a goal to increase gas production by more than 60 percent percent by 2030 compared to 2021 levels.

Progress continues with construction and engineering activities on the Marjan and Berri crude oil increments, which will add crude oil production capacity of 300 mbpd and 250 mbpd, respectively. Construction activities are continuing on the Dammam development project, which is expected to add crude oil production of 25 mbpd in 2024 and 50 mbpd in 2027. In addition, Zuluf crude oil increment, which is expected to process 600 mbpd of crude oil from the Zuluf field through a central facility by 2026.

Key Aramco Joint Ventures (JVs):

Onshore Drilling:

  •  Saudi Aramco Nabors Drilling (SANAD) is a 50-50 JV established in 2017 between U.S.-based Nabors Drilling and Aramco to position Saudi Arabia as a leading provider of drilling rigs.
  • Arabian Rig Manufacturing (ARM) is a 70/30 JV between U.S.-based NOV and Aramco established in 2018 aimed at positioning Saudi Arabia as a leading provider of drilling rigs. The project is one of NOV’s largest investments for rig manufacturing outside the U.S.

Offshore Drilling:

  • Aramco Rowan Offshore Drilling Company (ARO) is a 50-50 JV between Aramco and Valaris to ensure Saudi Aramco drilling data redundancy and backup replication.
  • International Maritime Industries (IMI) is a JV established in 2017 between Lamprell, Aramco, national shipping carrier Bahri, and Hyundai Heavy Industries to establish and operate a maritime yard in Saudi Arabia.
  • Downstream Aramco has an integrated global downstream business, primarily consisting of refining and petrochemical manufacturing, supply and trading, distribution and power generation. Other activities such as base oils, lubricant, and retail operations also fall under this category. Aramco’s flagship downstream project is Sadara, which was established in 2011 as a joint venture with Dow and known to be the world’s largest integrated chemicals project. Aramco’s downstream investments diversify its revenue by integrating its oil and gas operations to optimize value across the hydrocarbon chain, supporting crude oil and gas demand and facilitating the placement of its crude oil.

 

Aramco also has an integrated petrochemicals business within its downstream segment, intended to enable it to capture incremental margins in the hydrocarbon value chain. Aramco’s chemicals business spans from production of basic chemicals such as aromatics, olefins, and polyolefins to more complex products such as polyols, isocyanates and synthetic rubber. Aramco continues to grow its chemicals business with new investments. In June 2020, Aramco completed the acquisition of a 70 percent stake in Saudi Basic Industries Corporation (SABIC) in a deal worth $69.1 billion. With the acquisition of SABIC, Aramco is among the preeminent producers of petrochemicals in the world. SABIC operates a wide range of industrial plants and facilities in Jubail, including a $175 million large-scale CO2 utilization plant that includes 15 miles of pipelines through its manufacturing affiliate, Jubail United Petrochemical Company (United). Aramco is integrating its refining and chemicals facilities and investing in large-scale liquids-to chemicals projects.

As the sole supplier of gas to the kingdom and plans to further expansion plans, Aramco aims to increase gas production by more than 60 percent percent by 2030 compared to 2021 production levels, subject to domestic demand. With this anticipated increase in gas production, Aramco expects an increase of up to one mmbpd in high value associated liquids production, and approximately one mmbpd additional liquids released from the substitution of liquids burning with gas in the utility sector. Saudi Aramco signed an $11 billion 20-year lease-and-leaseback deal with an investment consortium led by BlackRock subsidiary Global Infrastructure Partners (GIP) for natural gas processing facilities in the Jafurah basin. Aramco will retain a 51 percent stake in the subsidiary, while GIP and co-investors will own the remaining 49 percent. This facility will process large volumes of unconventional gas extracted from the Jafurah basin. The Jafurah basin, estimated to hold 229 trillion cubic feet of raw gas, should begin production in late 2025, providing natural gas for domestic energy needs.  Aramco views the LNG market as a complementary asset to their portfolio given gas is a vital fuel and feedstock for various industries.

Aramco made significant progress bringing onstream the Hawiyah Gas Plant expansion and producing the first unconventional tight gas from South Ghawar. Along with progress being made with the Jafurah unconventional gas project, which is the largest liquid-rich shale gas development in the Middle East.

In the downstream sector, Aramco’s focus remains on enhancing its business in key high-growth geographies, increasing the placement of the Kingdom’s crude oil in wholly owned or affiliated refineries and converting more of hydrocarbon molecules into materials. Aramco began construction in two major projects in Asia and one in Saudi Arabia to expand their liquids to chemicals production and also acquired an interest in one of the largest integrated refining and petrochemical complexes in China.

With this, Aramco continues to make significant progress in their various expansions plans in the downstream business, both inside and outside the Kingdom. Engineering, procurement, and construction contracts were also awarded for a significant expansion at Aramco’s SATORP refinery in Jubail. When completed, this new petrochemical complex will include one of the largest mixed-load steam crackers in the region.

Aramco’s Downstream segment is expected to continue its strategic expansion and integration across the hydrocarbon value chain. Due to anticipated growth in demand for chemical products, the downstream segment will capitalize on this potential and expand its business in key global markets. The downstream segment also plans to increase refining capacity in strategic locations, grow its liquids-to-chemicals business, expand trading activities, increase its marketing business for retail and lubricants, and leverage the Downstream transformation program to further enhance its earning potential.

Opportunities

Aramco is still bullish on the traditional oil and gas segments and is expected to proceed with investing billions of dollars in the sector to continue to meet demand over the next decade for high-quality oil and gas industry-related technologies, particularly in the non-metallics arena. Aramco views nonmetallic solutions – such as the development of advanced plastics – as a strategic way to not only provide a solution for corrosion, expand the life cycle of investments, reduce its carbon footprint but also as a way to increase demand for its products. To date, Aramco has identified four key areas that could benefit from non-metallic materials: automotive; recycling; building and construction; and packaging.

Saudi Arabia is taking note of the increased interest and opportunities in the renewables segment and is investing heavily in technologies to produce hydrogen, including blue hydrogen (where the carbon dioxide is captured and stored) and green hydrogen (via electrolysis powered by renewable energy, fully eliminating harmful greenhouse gas emissions). Saudi Arabia is targeting hydrogen production — both blue and green — of 2.9mn t/yr by 2030 and 4mn t/yr by 2035. The country’s first green hydrogen plant is a joint venture between Saudi ACWA Power, Neom, and Pennsylvania-based Air Products to build a green hydrogen-based ammonia production facility located at Neom.

Saudi Arabia is also pursuing several Carbon Capture Utilization and Storage projects. In November 2022, Aramco signed a joint development agreement with SLB and Linde to establish a carbon capture and storage hub in Jubail in the east coast of Saudi Arabia. The facility will be able to store up 9 million tons of carbon dioxide a year by 2027. In operation since 2015, the Kingdom’s CCUS project, the Uthmaniyah Gas-Oil Separation Plant, owned by Saudi Aramco (Aramco), is located 62 miles west of Dhahran at the Ghawar oil field.
Aramco is expanding their New Energies portfolio through investments in several renewable projects which are valued at $3.2 billion ACWA Power, water and electricity holding company Badeel (a PIF-owned company), and SAPCO (a subsidiary of Aramco) signed agreements with the Saudi Power Procurement Company in July to invest approximately $8.3 billion in seven large-scale renewable energy projects in Saudi Arabia, including five solar photovoltaic plants and two wind power plants with a total capacity of 15GW. In addition, Aramco continues to engage with potential customers about the long-term hydrogen offtake contracts critical to advancing the global hydrogen market. Aramco has acquired a 50 percent percent equity interest in a blue hydrogen company (Jubail based Blue Hydrogen Industrial Gases Company) with the intention of developing a hydrogen network to serve domestic customers.

Localization Considerations

Saudi Aramco’s localization program, known as In-Kingdom Total Value Add (IKTVA), is an integral part of Saudi Aramco’s procurement process designed to drive domestic value creation and maximize long-term economic growth and diversification to support a rapidly changing Saudi economy. It is designed to drive increased investment, economic diversification, job creation, and workforce development within Saudi Arabia. IKTVA is mandatory for Aramco Suppliers. 

Aramco suppliers must report qualitative and quantitative information across eight major categories:


1. Revenue
2. Goods, Services, and Depreciation/Amortization
3. Saudi Payroll Related Costs
4. Saudi Training and Development
5. Saudi Supplier Development
6. Research and Development
7. Investments
8. Others

From this data, Aramco calculates an IKTVA ratio that approximates the percent of Aramco’s spend with you that remains in Saudi Arabia or develops Saudi Arabia’s supply chain and capabilities.
IKTVA is assessed against the following factors:

A. Localized goods and services
B. Salaries paid to Saudis
C. Training and development of Saudis
D. Supplier development spending
R. Research & Development
X. Export Revenue Factor (percent)
E. Company revenue
percent iktva = [(A+B+C+D+R)/E]+X

For details, visit the Saudi Aramco website and search for IKTVA. U.S. companies may also contact Aramco Services Company in Houston, TX to explore opportunities and to register as a vendor to Aramco. Details are available on the Aramco Americas website.

Resources

  • Saudi Aramco
  • Aramco Services Company Houston
  • Ministry of Investment
  • MEED Business
  • OPEC
  • Bloomberg
  • International Monetary Fund (IMF)

Events

  • Offshore Technology Conference, May 4-7, 2026, Houston, TX
  • IKTVA Forum, January 2026
  • ADIPEC, November 2-5, 2026, Abu Dhabi, UAE
  • MEOS, April 6-8, 2027, Manama, Bahrain

For more information, contact Mohammed.Shujauddin@trade.gov

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