Saudi Aramco signs deals with US companies to boost low-carbon strategy

Saudi Aramco pledged in 2021 to achieve net-zero carbon emissions by 2050. Bloomberg

Saudi Aramco, the world's largest oil-producing company, has teamed up with three US entities to accelerate the development of lower-carbon energy solutions expected to play a key role in its future.

Preliminary agreements were signed with Aeroseal, Spiritus and Rondo Energy, to team up with them in various fields, the Riyadh-based company said on Friday.

The agreements were signed during a visit by US Energy Secretary Jennifer Granholm to Riyadh, who met Saudi Energy Minister Prince Abdulaziz Al Saud.

Aeroseal, based in Ohio, will explore opportunities to deploy its air-sealing services in Saudi Aramco's operations.

New Mexico-based Spiritus is looking to address cost challenges of air-capture technology, while Rondo Energy, based in California, will explore the deployment of heat batteries in Saudi Aramco’s global centres.

All agreements are aimed at reducing Saudi Aramco's operating costs and supporting initiatives for carbon emission reductions.

"We see the technologies of Aeroseal, Spiritus and Rondo to have the potential to scale globally, and specifically in the Middle East," Ali Al Meshari, senior vice president of technology, oversight and co-ordination at Aramco, said.

“Aramco has stated its ambition to achieve net zero and greenhouse gas emissions across its wholly-owned operated assets by 2050 and sees opportunities to potentially build a lower-carbon new energy business."

The energy industry is rapidly moving towards more cleaner forms of energy and environment-friendly solutions as the world transitions to a lower-carbon future and adheres to sustainable development goals.

Saudi Aramco joined the efforts in 2021, pledging to achieve net-zero carbon emissions by 2050, right after Saudi Arabia, the Arab world's biggest economy, said it aimed to neutralise its emissions by 2060.

Oil and gas, however, will continue to be a part of the energy mix "for decades to come and we need to invest in that", its chief executive Amin Nasser said at that time.

The company believes that a circular carbon economy is the best framework for achieving "the greatest impact in reducing global emissions, while ensuring consistent economic growth", according to its website.

A circular economy is one that focuses on reducing the extraction of natural resources, minimising waste and regenerating natural systems.

Aside from reducing carbon dioxide emissions, Saudi Aramco has introduced several circular carbon economy initiatives, including enhancing fuel efficiency, conserving water and creating next-generation materials that make consumer products greener.

"Innovative technologies deployed at scale can help reduce the costs of reducing carbon emissions, and we are investing in developing these through our research and development, venture capital and technology deployment programmes," Mr Al Meshari said.

Earlier this month, Saudi Aramco said it expects to pay $31 billion in dividends to the Saudi government and its shareholders despite reporting a lower profit in the first quarter on lower sales.

Net profit for the three months to the end of March declined by 14.4 per cent annually to $27.3 billion, the company said on May 7.

Revenue fell by about 4 per cent year on year to $107.2 billion, driven by “lower crude oil volume sold, partially offset by an increase in crude oil prices during the period”, it said.