Saudi Aramco's Plan to Pivot to Sustainable Manufacturing

Saudi Aramco is the world’s single largest oil company. And yet, despite producing nearly 10% of global oil supplies, it understands its responsibility in mitigating climate change.

The production and consumption of fossil fuels is at odds with all recommendations from climate scientists, so, in this age of climate action, Aramco must complete a quite gigantic pivot if it is to continue to be a successful and compliant business.

But what strategies will Aramco employ to achieve this and where will its investments be focused?

According to recent communications, the oil giant is investing heavily in research and development (R&D) for sustainable alternatives to oil, as well as partnering with carbon capture initiatives to reduce its carbon footprint.

By diversifying its portfolio, Aramco aims to eventually decrease its dependence on oil.

Embracing a sustainable future

Aramco, the national oil corporation of Saudi Arabia founded in the 1930s, has long been synonymous with petroleum. However, under the direction of CEO Armin H. Nasser, the company is shifting towards alignment with global energy transition trends.

This pivot not only supports the sustainability of Aramco itself but also bolsters Saudi Arabia’s goals to achieve net-zero emissions.

Now venturing into new territories, Aramco is tapping into the lithium market, essential for electric vehicle (EV) batteries.

The move is significant considering China’s dominion over two-thirds of the global lithium processing industry, further strengthened by its recent export restrictions on these technologies.

As China leads in lithium production and battery tech, Aramco’s foray into this sector denotes a major strategic shift and places it at the forefront of essential mineral markets.

Through collaboration with Ma'aden, the Middle East and North Africa’s largest mining firm, Aramco is not just entering but potentially leading the development of the lithium supply chain.

Aramco's strategic partnerships in mineral supply chains

Joining forces with Ma'aden empowers Aramco extensively within the lithium sector, merging its technological insight and geological expertise with Ma'aden’s mining proficiency to establish a formidable lithium production base in Saudi Arabia.

According to Aramco’s Upstream President, Nasir K. Al-Naimi, the partnership aims to "positively contribute to the global energy transition" by creating a vital link in the supply chain of transition minerals.

“Ma'aden has embarked on one of the largest exploration programmes across the Arabian Shield to tap into the estimated US$2.5tn in mineral resources,” says Dr Darryl Clark, Ma'aden’s Senior Vice President of Exploration.

“This proposed joint venture would allow us to expedite the exploration of the Arabian Platform, combining Aramco’s extensive knowledge with Ma’aden’s robust mining and exploration skills.”

As Aramco expands and innovates within the realm of sustainable energy, it not only widens its business spectrum but also plays a key role in fostering a more sustainable energy landscape.

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