{"id":12593,"date":"2016-11-04T16:45:46","date_gmt":"2016-11-04T20:45:46","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/aramco-oil-giant-feels-the-heat\/"},"modified":"2016-11-04T16:45:46","modified_gmt":"2016-11-04T20:45:46","slug":"aramco-oil-giant-feels-the-heat","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/aramco-oil-giant-feels-the-heat\/","title":{"rendered":"Aramco: Oil Giant Feels the Heat"},"content":{"rendered":"

\u201cThe role of energy in global economic development is undeniable, but so is the environmental sustainability of the planet. For Saudi Aramco, addressing climate change is a critical objective,\u201d <\/em>Amin Nasser, President and CEO of Saudi Aramco \u2013 October 2016[i]<\/a><\/p>\n

One could argue that no single company in the world has more to lose from climate change than Saudi Aramco (Aramco). Besides being the world\u2019s largest company, with an estimated value exceeding 2 Trillion dollars, it presides over 266 Billion barrels of proven crude oil reserves (18% of global capacity) and produced an average of 10.2 million barrels\/day in 2015[ii]<\/a> (14% of global production). This is significant because the burning of oil derivatives (gasoline, diesel, kerosene) generates, among other things, CO2<\/sub> the now infamous greenhouse gas that has been identified as a leading cause of climate change. The war on climate change has placed Aramco in a challenging position that will likely get worse in the near future when more stringent emissions policies come into effect.<\/p>\n

Saudi Aramco brands itself as a \u201cfully integrated energy and chemicals company\u201d[iii]<\/a> and it certainly lives up to that description. It is one of the largest refiners in the world, and has significant interests in power generation and bulk chemicals production that are integrated within its global network of operations. But just as our bodies rely on the flow of blood, Aramco relies on the flow of oil. Oil production remains the core of the company\u2019s operations, and with costs of production around $5 per barrel, by far its most profitable. Aramco thus realizes that it cannot ignore the threat of climate change, and the impact it can have on its most critical product.<\/p>\n

What are the key threats?<\/em><\/p>\n

The threats climate change poses to Aramco are inter-related but follow a specific sequence.<\/p>\n