How will things play out?
9 replies (most recent on top)
Aramco has now an opportunity to produce Hydrogen using H2S, there is a lot of new technology in that area. I hope they stop throwing high salinity brine, sub product of desalination plants to Persian gulf sea to avoid creating more dead zones. 5 years is a short term but changes starts with the first step.
Solar and wind are viable inside the Kingdom. It is just that Aramco is too incompetent to get it done. Five years ago, Aramco had a great alternative energy team. Then, Riyadh got Green and the work Aramco was doing got noticed. The locals promptly took over, drove competent expats away, and now Aramco has nothing. The same story has been repeating over and over again across the company. There are almost zero functional teams left. Sad to see this happen.
Half of Aramco solar panels doesn't work over parking lot in Almidra, a supposed robot to clean them, yes, they need to clean the sand and dust, doesn't work as well, so you can bet. There is a lot and plenty of useless man hours waste it in the kingdom in this days.
5 years. Twice as strong. Big Saips. Good merits. Happy Aramcons. Party in Bahrain. Party on camp. I see yet another golden age’ for Aramco in the short to medium term. Longer term, all depends. If Aramco can be part of the pivot to renewables, the future is bright. If my memory serves me correctly, an attempt was made a few years back with hiring for a renewables Dept. But came to nothing. Sadly. With all that sun, sand, and wind, it seems a no brainier at some stage. I’m out of Aramco now (enjoyed my days there) and can see the huge shift away from oil and gas in Europe. So Aramco would be wise to start up massive solar farms etc. plus wind. The optics re global warming related to oil and gas is v relevant here in Europe. This summer was v bad. Only the start. Aramco should heed this now. Big big off shore wind farms off Ireland, Uk, Norway, etc., will change the energy dynamics. Might take a few years. But it will happen.
OP, let me kindly put your comments about the past in context.
In 1980, there were about 8 mil Saudis and 2 mil Expats. In 1990, Saudis increased to 11 mil, and Expats increased to 5 mil. In 2015 (latest reliable data), the Saudis numbered 23 mil and Expats were 10 mil. My source is the World Bank in case you want to look it up.
In 1980, Saudi oil exports amounted to $100 bil, in 1990 $50 bil, and in 2015 $200 bil. My source is Macro Trends.
In the last 30-40 years, the Saudi population has tripled, but exports have only doubled. That puts a squeeze on the economy. However, putting the money aside, the government needs to keep locals employed. Too many idle young men can be trouble for any society.
Who is caught in the middle of that? Expats. And not really all Expats, just Expats who have jobs that locals want. Those are high skill, high paying jobs that GC 13+ Expats are doing. With that in mind, I don't know how you could think that things are going to get better for Westerners working in Saudi. They will put as many locals as possible in the better paying office jobs, and make up any labor deficit with lower wage White Collar workers from non-Western countries. This is especially true when it comes to things that management doesn't really care about like economics and efficiency. Almost anybody can boot power point, and Riyadh makes all the important decisions anyway.
Back in the day (1991), I was sitting around a bar enjoying a nice white and tonic in the Hills, and the old timers there were talking about the Iranian revolution of 1979, and how the talk around the bar in ‘79 was this place is going to he-l in a hand basket. Get outta Dodge now. Well 12 years after that we had just seen the Gulf War. I was held up in Baghdad (which sadly did go to he-l in a hand basket thanks to Saddam, Bush, and Blair), and didn’t get to join Aramco till 91 when I heard the story of how it was all going to collapse in the 80s. Now there were some layoffs then. Same as in the 90s when the oil price dived. But most of us continued on and life was good. What I’m saying is that there has been multiple ups and downs, and God knows I’ve been through many, but the company, and the country, did not collapse. So this question of where will Aramco be in five years time (a fun and mischievous question, and well done to the author), the answer is Aramco will be just fine and even stronger than today. For sure, way down the road, the oil age will end (just as the Stone Age did), but that’s not happening anytime soon.
Massive Worldwide recession incoming will lead to prices collapsing. Even with the cartel trying to rig things. Very few expats will survive.
Well, with the demise of the Kingdom, it could get a bit awry.
Still a couple years countdown - sheikhdown.
Profit margins continue to shrink.
More global instabillity will drive prices up, so the overall profits will go up.