Shutterstock Save for later Print Download Share LinkedIn Twitter Long-term strategies by Mideast Gulf national oil companies (NOCs) to add to their downstream operations look prescient, as Europe’s push to cut Russian energy imports rearranges global trade flows. Initially seen as a way to lock in demand for their crude, new refinery investments are coming online at a time when the world is short of liquid fuels. Over the past two decades, downstream investments have largely focused on large-scale integrated refinery and petrochemical projects, both at home and abroad, with the latter mostly in Asia. But recent deals have seen Saudi Aramco and Abu Dhabi National Oil Co. (Adnoc) also take rare positions in European refining, and more expansion is in the works. At home, Gulf NOCs benefit from widely available, lower-carbon and lower-cost hydrocarbon feedstocks. Their investments in downstream projects in Asia, still the primary engine of global oil demand growth, meanwhile are crucial to lock in demand via long-term supply deals and the chance to configure joint refineries to run specific crude slates. Now as high oil prices are producing huge profits, Gulf NOCs have doubled down on their downstream investments. Aramco alone has announced several major deals in recent weeks, covering a $7 billion crude-to-chemicals scheme in South Korea; a petrochemical complex with TotalEnergies to be integrated with the existing Satorp refinery joint venture in the kingdom; and an integrated refining and petrochemicals complex in China as well as a petchem facility in Saudi Arabia, both with Sinopec.
