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
  • Firms submit King Salman airport project prequalifications

    8 July 2026

     

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s King Salman International Airport Development Company (KSIADC) received prequalification statements on 1 July from contractors for two new packages at King Salman International airport (KSIA) in Riyadh.

    These include the construction of a permanent East-West corridor and landside access roads serving the North and South terminals.

    The scope covers the construction of roads, bridges and tunnels.

    The client is expected to float the tenders soon.

    The latest development follows KSIADC's selection of three groups to deliver the Terminal 6 apron, taxiways and other airfield infrastructure at KSIA.

    KSIADC, which is backed by Saudi sovereign wealth vehicle the Public Investment Fund, will initially deliver the project on an early contractor involvement basis.

    In March, MEED exclusively reported that KSIADC had selected three groups for the construction of Terminal 6.

    In November last year, MEED reported that KSIADC was targeting mid-2026 to award the contract for the construction of Terminal 6.

    MEED reported in May 2025 that US firm Bechtel Corporation had been appointed as the delivery partner for the terminals at KSIA.

    According to local media reports, KSIADC’s acting CEO, Marco Mejia, said the project developer has completed the project’s masterplan.

    The reports added that Terminal 6 will boost the airport’s capacity by 40 million passengers.

    The project is expected to be delivered before the start of Expo 2030 Riyadh.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17588533/main.jpg
    Yasir Iqbal
  • WEBINAR: Saudi Giga Projects: Market Update for Q3 2026

    8 July 2026

    Webinar: Saudi Giga Projects: Market Update for Q3 2026 
    Tuesday 21 July 2026 | 11:00 AM GST  |  Register now

    Agenda:

    • Saudi projects market outlook and giga projects update
    • 2026 contract awards, project activity and market performance
    • Giga project reprioritisation, funding allocation and delivery progress
    • Key project announcements, milestones and market developments to watch
    • Major contracts awarded across construction, infrastructure and utilities
    • Upcoming tenders and contract award opportunities over the next 6–12 months
    • Geopolitical risks and their impact on project execution and investment
    • Progress across NEOM, The Red Sea, Diriyah, Qiddiya and New Murabba
    • Major non-giga project opportunities and growth sectors across Saudi Arabia
    • Short-, medium- and long-term outlook for the Saudi projects market
    • Audience Q&A

    Hosted by: Yasir Iqbal, MEED's construction editor

    Click here to register

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17588750/main.jpg
    Yasir Iqbal
  • Genel Energy buys Egypt-focused oil company for $360m

    8 July 2026

    Register for MEED’s 14-day trial access 

    UK-listed Genel Energy has agreed to acquire Egypt-focused Capricorn Energy in a $360m all-cash deal.

    Genel said the acquisition will combine its Kurdistan production base with Capricorn’s portfolio of Egyptian oil and gas assets.

    The company also said the deal will allow it to obtain production in a country with a “well-established regulatory regime, stable contracts and attractive fiscal terms”.

    Several approvals are still required before the acquisition can be finalised.

    In a statement, Genel said: “Genel’s strategy is to build a business with resilient diversified cash flows that deliver sustainable value to shareholders.

    “The Genel board and Genel management are resolute in their belief that this can best be achieved through strategic acquisitions, which add substantial high-quality producing assets to its existing portfolio.”

    Genel’s existing oil and gas assets include its 25% non-operated working interest in the Tawke PSC in the Kurdistan Region of Iraq.

    The company said this asset generated working interest production averaging 17,520 barrels a day (b/d) of oil in 2025 and had operating costs of around $4 a barrel.

    The combined group is expected to hold reserves of 117 million barrels of oil equivalent and production of 41,003 b/d.

    Capricorn is headquartered in Edinburgh and has been listed on the London Stock Exchange for more than 30 years.

    Its core operations are in Egypt’s Western Desert region, where it holds onshore development and production assets.

    In May 2025, Capricorn agreed with Egyptian General Petroleum Corporation to consolidate eight of its 50:50 jointly owned concessions into a single integrated licence with enhanced commercial terms. Capricorn announced in March 2026 that it had received formal parliamentary ratification of the agreement.

    The deal has been announced at a time when Genel is seeing frequent disruption to operations at its assets in Iraqi Kurdistan.

    Production was temporarily suspended at the Tawke field in February after the US and Israel attacked Iran, increasing security concerns in the wider region.

    While the security situation is understood to have improved in the Iraqi Kurdistan region and many oil companies have resumed operations, there are now concerns that the Iraq-Turkiye Pipeline could be shut due to an agreement between the two countries expiring later this month.

    If the pipeline does stop operations, it will negatively impact Genel as it is the main route through which the company’s Iraqi oil is exported.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17587599/main.jpg
    Wil Crisp
  • Axens signs Egypt refining deal

    8 July 2026

    Register for MEED’s 14-day trial access 

    France’s Axens has signed a long-term agreement with the Egyptian Refining Company (ERC) that covers product supply, digital transformation and refinery performance optimisation.

    ERC operates Egypt’s $4.4bn Mostorod refinery, which was inaugurated in September 2020.

    In a statement about the deal, Axens said that it will “leverage its comprehensive and integrated portfolio of technologies, equipment, catalysts and services to support ERC’s operational, economic and sustainability objectives”.

    It added: “With its end-to-end expertise across the entire refining value chain, Axens is uniquely positioned to support ERC from early-stage project studies through engineering, unit start-up, operational optimisation and long-term technical follow-up.

    “This fully integrated approach will help ensure reliability, operational excellence and environmental performance across the refinery’s life cycle.”

    Quentin Debuisschert, the chief executive and chairman of Axens, said: “This long-term agreement marks an important milestone in the relationship between Axens and ERC.

    “It reflects our ability to support customers beyond technology licensing by delivering a fully integrated offering that combines all process and catalyst technologies a modern refinery needs, services, digital solutions, operational expertise and training.

    “We are committed to supporting ERC’s ambitions in operational excellence, digital transformation and sustainability while helping maximise the long-term value and competitiveness of its assets.

    “We are proud and motivated to continue supporting ERC in ensuring the economic and operational success of its refinery."

    Mohamed Saad, the president of ERC, said: “ERC values its strong partnership with Axens and the confidence this agreement brings for the future.

    "This collaboration will help us continue enhancing refinery performance, maximising operational efficiency and delivering high-quality products to support Egypt’s energy needs.”

    The Mostorod refinery is located 10 kilometres north of Cairo and has the capacity to produce about 4.7 million tonnes of petroleum products annually.

    It sells all of its output directly to the national oil company Egyptian General Petroleum Corporation under a 25-year agreement.

    When the refinery was brought online and reached full capacity, it boosted Egypt’s capacity to produce diesel by 30% and increased gasoline production by 15%.

    Operations started at the refinery in November 2019.

    Qatar Petroleum is a stakeholder in the project. It owns 38.1% of the Arabian Refinery Company, which in turn owns 66.6% of ERC.

    The Mostorod refinery mainly produces Euro 5 refined products, including diesel and jet fuel, which are intended for consumption primarily in Cairo and surrounding areas.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17587498/main.jpg
    Wil Crisp
  • Gulftainer commits to $2bn expansion plan

    8 July 2026

    Gulftainer has unveiled a $2bn strategy to transform from a ports and terminals operator into an integrated global trade infrastructure company, a long-horizon commitment made at a port that was struck three months ago and in a region where the shipping lanes it depends on are under renewed attack.

    The strategy restructures the company around four platforms: container terminals and maritime gateways, inland logistics and multimodal transport, logistics parks and industrial ecosystems, and regional maritime services connecting strategic trade corridors.

    At the centre of the strategy is Khorfakkan Port, the UAE's deepwater gateway on the Gulf of Oman. Expansion works will raise annual handling capacity from 3.5 million twenty-foot equivalent units (TEUs) to 5 million TEUs, a 43% uplift, with a long-term master plan targeting more than 10 million TEUs. Planned integration with Etihad Rail will turn the port into a fully multimodal gateway linking sea, road and rail.

    The commitment comes despite the port's recent exposure to the conflict in the region. On 5 April, a fire broke out at Khorfakkan after debris fell on the facility following the interception of an unidentified object. In a post on X, the Sharjah media office said the incident injured four people, one Nepalese national seriously and three Pakistani nationals with minor to moderate injuries. The strait through which Khorfakkan-bound traffic passes has come under further attack in recent days, with merchant vessels struck near the Strait of Hormuz.

    Inland, Al-Dhaid Logistics Park and Sajaa Logistics Park will together provide 2.3 million TEUs of annual inland capacity, extending Gulftainer's reach.

    The company positions itself as a key enabler of the India-Middle East-Europe Economic Corridor and the UAE's role in China's Belt and Road Initiative, linking ports, shipping services, inland logistics networks and digital platforms across major global trade routes. The transformation follows nearly five decades of operation and is being implemented under the New Gulftainer strategy.

    Gulftainer's partnership with the Sharjah Ports, Customs & Free Zones Authority underpins the Khorfakkan expansion. The port sits within an integrated maritime network spanning both the Arabian Gulf and the Gulf of Oman, offering shippers several routing options across the two waterways.

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

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17588407/main.jpg
    Colin Foreman