The plan is part of a wider effort to diversify the economy and develop production for value-added petroleum products.
The number is up from the company’s 2016 estimate, according to Reuters. The wire service also reported that $134 bn will go to drilling and well services and another $78 bn to maintain oil output potential.
In November, Saudi Aramco announced that it would collaborate with state-run Saudi Basic Industries Corp (SABIC), a producer of diversified chemicals, to develop a crude oil to chemicals complex. The facility is expected to open in 2025, processing 400,000 barrels of crude and producing nine million tonnes of chemicals per day.
In the announcement the President and CEO of Saudi Aramco, Amin H. Nasser, said, “This project converges the commercial and strategic interests of both Saudi Aramco and SABIC, while reinforcing Saudi Aramco’s efforts to optimise the investment of our petroleum resources. COTC will also help expand our downstream portfolio”.
In early 2016 the government outlined its ‘Vision 2030’ plan, where it announced that it will sell up to 5% of the state-run company in an initial public offering to bolster a sovereign wealth fund made to invest in non-oil sectors of the economy.
Renewable energy is also a focus. The goal for 2030 is 9.5 gigawatts of clean energy a year, with a significant portion of that process being facilitated by Saudi businesses. The plan did not go into detail about how they will achieve this other than saying it will ‘liberalise’ the fuels market and review the bureaucracy required to invest in the renewable energy sector.
Renewable energy is becoming an increasing threat to the demand for fossil fuels. By diversifying its products, Saudi Arabia is reducing its exposure to a potential reduction in demand for fossil fuels due to the emergence of renewable energy.