meed-logo

line1 line2 line3
SIGN IN / REGISTER

Aramco increases spending despite drop in profits

13 August 2024

Commentary
Indrajit Sen
Oil & gas editor

Register for MEED’s 14-day trial access 

Saudi Aramco’s profits in the second quarter and first half of 2024 may have slid year-on-year, but that has not impacted the company’s capital expenditure (capex). Project spending, on the contrary, has spiked sharply.

Capex rose to $12.13bn in the second quarter from $10.46bn in the same period last year. Second-quarter capex also increased from the first quarter, during which Aramco spent $10.83bn.

In the first half of the year, the company’s spending increased to $22.96bn, compared to $19.20bn in the first half of 2023.

Aramco has demonstrated robust capex so far this year on major projects that are critical to its strategic goals of maintaining oil production potential at 12 million barrels a day (b/d), raising gas production by 60% by 2030, with 2021 as its baseline, and achieving a liquids-to-chemicals conversion capacity of 4 million b/d by the end of the decade.

Vigorous project spending

Despite the Saudi government shelving its oil output capacity-building programme at the start of the year, Aramco has already spent an estimated $2bn on offshore engineering, procurement, construction and installation (EPCI) contracts year-to-date.

Gas projects, however, have dominated Aramco’s capex in 2024. In April, Aramco awarded EPC contracts totalling $7.7bn to expand the Fadhili gas plant in the Eastern Province of Saudi Arabia. The project is expected to increase the Fadhili gas plant’s processing capacity from 2.5 billion cubic feet a day (cf/d) to up to 4 billion cf/d.

Following that, on 30 June, Aramco officially awarded $25bn-worth of contracts for EPC works and other services for two of its major gas expansion programmes: the third expansion phase of the Master Gas System (MGS-3) and the second expansion phase of the Jafurah unconventional gas development.

Aramco awarded 15 lump-sum turnkey contracts for the MGS-3 project, worth $8.8bn. Aramco also awarded 16 contracts, worth a combined total of about $12.4bn, for the Jafurah second expansion phase.

Furthermore, since awarding contracts for the Jafurah second expansion phase, Aramco has made significant progress with the third and fourth expansion phases of the massive unconventional gas development programme, estimated to have a total capex allocation of $110bn.

Buoyant capex outlook

Aramco said last year that it expected its total capex in 2024 to be in the range of $48bn to $58bn.

As the first seven months of the year have demonstrated, far from witnessing a slump in capex, 2024 may well turn out to be a record year for Aramco’s project spending.

Looking beyond 2024, Amin Nasser, Aramco’s president and CEO, told MEED in May that he expects his company to ramp up capex in the next two years as it strives to achieve its strategic 2030 goals.

This capex guidance indicates that Aramco’s spending boom on oil production, gas capacity expansion and liquids-to-chemicals projects could extend into 2026.

https://image.digitalinsightresearch.in/uploads/NewsArticle/12331371/main0345.jpg
Indrajit Sen

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Qiddiya seeks contractors for indoor arena project

    22 June 2026

     

    Register for MEED’s 14-day trial access 

    Saudi Arabian gigaproject developer Qiddiya Investment Company (QIC) has invited contractors to prequalify for a contract to build an indoor sports arena within its Qiddiya entertainment city project.

    The invitation was issued on 21 May, with a submission deadline of 28 June.

    The multipurpose arena is designed to International Olympic Committee standards.

    It will be located in District 18, in the Uptown South area of Qiddiya.

    Once completed, the indoor arena will be capable of hosting a wide range of sports, cultural and entertainment events.

    The arena will feature numerous sports courts for basketball, handball, futsal, volleyball, tennis, boxing and gymnastics.

    It will have a seating capacity of 18,000 spectators.

    The project is scheduled for completion by 2030.

    QIC’s other major projects include an e-sports arena, the National Tennis Centre, Prince Mohammed Bin Salman Stadium, a motorsports track, a racecourse, the Dragon Ball and Six Flags theme parks, and Aquarabia.

    QIC opened the Six Flags theme park to the public in December last year.

    The park covers 320,000 square metres and features 28 rides and attractions, including 10 thrill rides and 18 aimed at families and young children.

    The Qiddiya project is a key part of Riyadh’s strategy to boost leisure tourism in the kingdom.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17375504/main.jpg
    Yasir Iqbal
  • Egypt signs gas deal with Harbour Energy

    22 June 2026

    Egypt’s Ministry of Petroleum & Mineral Resources has signed a new agreement with London-headquartered Harbour Energy.

    Under the scope of the agreement, Harbour Energy will drill two new exploration wells and carry out maintenance work for one of the existing wells within the Dsouq-1 development contract.

    Harbour Energy committed an initial $6m investment and a $1m signing bonus for the Dsouq concession. Total investment could rise to $18m if commercial discoveries are made.

    The signing was witnessed by Egypt’s Minister of Petroleum, Karim Badawi.

    He said that his ministry is continuing to implement a package of investment measures and incentives aimed at encouraging partners to increase investments and intensify exploration, development and production activities.

    The agreement was signed by Syed Saleem, a member of the executive branch of the state-owned Egyptian Natural Gas Holding Company (EGAS), and Samah Sabry, the executive director of Harbour Energy for the Middle East and North Africa region.

    Harbour Energy drilled two new wells in Egypt during the fiscal year 2025/2026, resulting in the addition of reserves estimated at 35 billion cubic feet of gas.

    The company aims to drill three new exploration wells during the fiscal year 2026/2027.

    Egypt is currently pushing to boost the production of both oil and gas in its territory.

    Earlier this month, Egypt’s Ministry of Petroleum & Mineral Resources announced that it had fully settled all outstanding arrears owed to oil and gas companies.

    Two years ago, in June 2024, the country owed approximately $6.1bn to partners in the oil and gas sector.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    GCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17374536/main4731.jpg
    Wil Crisp
  • Iran invites companies to register for Kharg Oil Terminal development

    22 June 2026

     

    Iran has invited companies to participate in a project to develop the existing Kharg Oil Terminal, according to documents released by the state-owned National Iranian Oil Company and Iranian Oil Terminals Company.

    The project focuses on developing units capable of receiving, storing and exporting extra-heavy West Karun crude oil at a rate of 700,000 barrels a day.

    The scope of the project includes design, purchase, installation and commissioning of the new facility.

    The contract will use the engineering, procurement and construction (EPC) model, according to the tender documents.

    The project aims to use existing oil storage tanks and reconstruct the deepwater crude oil export berth known as Berth Number One.

    The berth known as Berth Number Three will serve as a backup berth for the project.

    The winning bidder for the contract will be responsible for a range of works, including:

    • Carrying out all stages of verification of the project’s basic design, design and engineering
    • Supply and procurement of goods and materials
    • Execution and installation
    • Pre-commissioning and commissioning

    The project is expected to take 30 months to complete, and the winning contractor will also be responsible for maintaining the facility for a further 12 months.

    Companies that wish to submit bids need to do so through Iran’s Government Electronic Procurement System (Setad).

    Companies interested in participating in the tender have seven days from the publication of the tender notice to receive the documents.

    They then have a further 14 days to upload the required documents into the government procurement system.

    Iran exports most of its oil via the Kharg Oil Terminal on Kharg Island.

    US President Donald Trump said strikes in mid-March “obliterated” Kharg’s military assets but did not target the island’s oil infrastructure.

    He warned that if Iran continued disrupting traffic through the Strait of Hormuz, he would reconsider the decision to spare energy targets on the island.

    Trump has threatened several times to take “control” of Kharg Island, but he has not yet followed through on this threat.

    The small coral island is located 33 kilometres from Iran’s coast and has strategic importance because Iran’s coastline is mostly too shallow for large tanker ships to dock.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    GCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17374518/main.jpg
    Wil Crisp
  • EtihadWE tenders water storage and pipeline project

    22 June 2026

    Etihad Water & Electricity (EtihadWE) has invited bids for the construction of a 4-million-imperial-gallon reinforced cement concrete water tank in Madam, Sharjah.

    The scope also includes a DN1000 ductile iron transmission pipeline in Fujairah.

    Madam is located in eastern Sharjah, close to the Fujairah border and within EtihadWE’s Northern Emirates water network.

    MEED understands that the DN1000 transmission pipeline will serve the proposed 4-million-imperial-gallon water tank

    The bid submission deadline is 29 June. Technical proposals will be opened on the same date.

    EtihadWE said the tender is open to experienced and prequalified engineering, procurement and construction (EPC) contractors registered on its vendor list and holding a valid prequalification certificate.

    The utility previously completed a separate water transmission project involving a DN1000 pipeline from the Ghayl New Water Distribution Centre in Ras Al-Khaimah to Madam.

    The local Dhafir Technologies was the EPC contractor.

    The project attracted 16 bids for the main contract during procurement. Among the bidders were Darwish Engineering Emirates (UAE), Green Oasis General Contracting Company (UAE), Lindenberg (UAE), Tamas Projects (UAE), Tecton (UAE) and Wade Adams (UAE).

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17347317/main.jpg
    Mark Dowdall
  • Contractor appointed for The Carlyle Residences DIFC

    22 June 2026

     

    Local construction firm Dubai Contracting Company has won a contract to build The Carlyle Residences project in the Dubai International Financial Centre (DIFC) area.

    The contract was awarded by Dubai-based real estate developer H&H Development.

    The Carlyle Residences by H&H Development will be the first Carlyle-branded residential development outside New York.

    The 33-storey tower will comprise approximately 40 two- to five-bedroom apartments.

    UK-based David Chipperfield Architects is the project architect.

    French firm Tristan Auer is the project’s interior designer.

    Dubai-based enabling firm Swissboring is undertaking the project’s foundation works.

    The latest contract award follows H&H Development’s appointment of Dubai-based construction firm Al-Futtaim Contracting to build 142 villas at Eden Hills in Dubai.

    Separately, in February, H&H and Abu Dhabi-based sovereign wealth fund Mubadala Investment Company announced the launch of the Eden House residential project in Abu Dhabi.

    The project will offer more than 200 residential units across 60 floors and was designed by Dubai-based architectural firm dxb Lab.

    The development will be located on Abu Dhabi’s Al-Maryah Island.

    H&H’s latest contract awards in the UAE market come amid heightened real estate and construction activity, with schemes worth more than $323bn at the execution or planning stages, according to UK-based analytics firm GlobalData.

    GlobalData forecasts that output from the UAE’s residential construction sector will grow by 3% in real terms in 2026-29, supported by infrastructure, energy and utilities developments, as well as residential construction projects.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17346200/main.jpg
    Yasir Iqbal