The rich endowment of resources of both the Kingdom of Saudi Arabia and the Russian Federation can enable companies from both countries to collaborate in creating synergies for a sustainable energy future with business and operational initiatives driven by technology, research and innovation, said Amin H. Nasser, Saudi Aramco President and CEO in a panel discussion at the Saudi-Russian Business Investment Forum.
Jointly organized by the Saudi Arabian General Investment Authority (SAGIA), the Council of Saudi Chambers, and the Russian Direct Investment Fund (RDIF), the forum was held in conjunction with the Royal Visit to Russia by The Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al-Saud.
Nasser said vast opportunities for collaboration between companies from Saudi Arabia and Russia are created by both the Kingdom’s existing economic pillars and the development and diversification envisaged by Saudi Vision 2030.
Nasser outlined a number of areas for potential collaboration with Russian companies in industrial localization; international gas; downstream petrochemicals; technology, research and innovation; trading; and climate change and carbon management.
Nasser also provided strategic insights on the future of energy and how the Kingdom and Russia could pool their sizable resources together in driving the global energy transformation by factoring in alternative energy which can complement oil’s existing preeminence, particularly gas and downstream / chemicals.
Nasser stressed that all these could only be achieved with technology, research and innovation. Saudi Aramco considered this as key drivers of future success, and Saudi Aramco’s goal is to be a world-leading creator of energy and chemical technologies.
“We have already established eight research centers around the world that complement our main research facilities in Saudi Arabia. Considering Russia’s considerable strengths in science and technology, as well as highly talented researchers, scientists and engineers, we are exploring collaboration in R&D field,” he said.
Trading, according to Nasser, would also be an integral enabler to the strategic partnership with Russian entities involving opportunities in and refined products swaps, trading logistics, shipping and storage facilities, and new market venturing.
He also highlighted Saudi Aramco’s industrial localization program In-Kingdom Total Value Add, or iktva, as another area of opportunity for Russian services and manufacturing companies to collaborate with Saudi partners. “Considering the large oil and gas resources possessed by our two countries, we also have a common interest in strengthening oil’s position and there are numerous to collaborate in these areas,” he said.
Saudi Aramco also signed five Memoranda of Understandings (MOUs) with key Russian energy entities during the Royal Visit:
MOU with Saudi Public Investment Fund and Russian Direct Investment Fund – Investment in Energy Services & Manufacturing
The MOU will pave way for new business development in the energy value chain, oilfield services and manufacturing, the Ras Al Khair maritime yard development and potential partnerships in the Energy Industrial City developed by Saudi Aramco.
MOU with Gazprom – Gas Collaboration
The MOU will enable Saudi Aramco and Gazprom, Russia’s premier gas company to develop a significant business portfolio in international upstream gas, allowing the introduction of new vendors and suppliers to the Kingdom’s market. Among the elements of the MOU are LNG trade, LNG value chain and exploration / development as well as product storing.
MOU with LITASCO – Trading Collaboration
The MOU will see collaboration with Swiss-based LITASCO (the international marketing and trading arm of LUKOIL – one of Russia’s largest oil companies) which will give Saudi Aramco and the Kingdom access to Mediterranean refineries where Russian companies have been expanding. The proximity of the Mediterranean with the Red Sea provides an important strategic supply point to the Kingdom.
MOU with Gazprom Neft – Technology and R&D collaboration
The MOU with Gazprom Neft (a subsidiary of Gazprom and Russia’s fourth largest oil producer) will involve technology and R&D collaboration as well as training.
MOU with Russian Direct Investment Fund and SIBUR – Strategic marketing for petrochemicals
The MOU will enable all parties to jointly evaluate potential opportunities for cooperation in the petrochemicals sector, including marketing of petrochemicals products, both on in Russia and Saudi Arabia.