Aramco is strengthening its Big Data and Artificial Intelligence (AI) unit that connects its assets to oprinize investments and ensure higher profits. This unit will also contribute to making decisions from trading to acquisitions.
This was revealed in an interview by Reuters with Yasser Mufti, Aramco’s executive vice president for products and customers. “We have 70 people working on this, and we are still adding more,” Mufti told Reuters.
Global Optimizer unit
The data and AI unit, Global Optimizer, was established within Aramco in 2022. This came within the framework of a comprehensive reform process that the state oil company began in 2021.
Under a broader renewal program, the company aims to invest in many businesses and respond to market changes faster. Aramco also conducts asset reviews to enhance returns on its investments.
Aramco’s investments
As part of its corporate strategy, “Aramco continues to explore potential deals such as the purchase of a stake in retail business Gas & Oil Pakistan, as well as refineries in Asia,” Mufti said.
Currently, Aramco is in talks to buy a stake in Shandong Yulong Petrochemical Company. This came after a series of investments in Chinese refineries. Moreover, it bought a stake in the liquefied natural gas company MidOcean Energy. Additionally, it has listed shares of its base oil unit Luberef, with other share sales also reportedly planned.
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Enhanced returns
According to Oliver Wyman, who advised the project, more sophisticated business models such as Global Optimizer could translate into $1.5-2 per barrel of additional earnings before interest and taxes compared to traditional models. The consulting firm estimates that major oil companies make between $4 and $7 in profits per barrel of oil.
Saudi Arabia, the world’s largest oil exporter, relies heavily on Aramco’s profits. The kingdom owns 90.19 percent of the company, and the Public Investment Fund (PIF) owns eight percent.
Commenting on the increased returns, Mufti said: “We built up a lot of capacity to optimize, to trade, to deal with risk, to deal with uncertainty.” He added that high-quality assets and a commercial mindset could “push these numbers to be on the high side if not higher than that range.”
He stressed that the challenge is how Aramco can maintain the highest possible amount of profits before interest and taxes. He added: “A handful of refineries are likely contributing their full potential of additional earnings through the Global Optimizer, while others still have more potential.” In addition to higher shareholder returns, increased profits will also benefit Aramco’s partners in joint projects.
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