Chemicals Value Proposition Workshop - Saudi Aramco · Value Chain Mapping Analysis 16 • Saudi...

Chemicals Value

Proposition Workshop February 2020

© Saudi Arabian Oil Company, 2020

Disclaimer

This presentation may contain certain forward-looking statements with respect to Saudi Aramco’s (the “Company”) financial position,

results of operations and business, and certain of the Company’s plans, intentions, expectations, assumptions, goals and beliefs. These

statements include all matters that are not historical fact and generally, but not always, may be identified by the use of words such as

“believes”, “expects”, “are expected to”, “anticipates”, “intends”, “estimates”, “should”, “will”, “shall”, “may”, “is likely to”, “plans” or

similar expressions, including variations and the negatives thereof or comparable terminology.

You should be aware that forward-looking statements are not guarantees of future performance and that the Company’s actual financial

position, results of operations and business, and the development of the industries in which it operates may differ materially from those

made in or suggested by such forward-looking statements. Factors that could cause actual results to differ materially from the Company’s

expectations are contained in cautionary statements in the Company’s Prospectus filed with the Saudi Arabian Capital Markets Authority and

available at https://cma.org.sa/en/Market/Prospectuses/Pages/default.aspx (the “Prospectus”) and include, among other things, the following:

• (1) oil and gas supply, demand and price fluctuations; (2) global economic market conditions; (3) competition in the industries in

which the Company operates; (4) conditions affecting the transportation of products; (5) operational risk and hazards common in the

oil and gas, refining and petrochemicals industries; (6) the cyclical nature of the oil and gas, refining and petrochemicals industries;

(7) weather conditions; (8) political and social instability and unrest and actual or potential armed conflicts in the MENA region and

other areas; (9) managing the Company’s growth; (10) risks in connection with projects under development and recent and future

acquisitions and joint ventures, including with respect to SABIC; (11) managing the Company’s subsidiaries, joint operations, joint

ventures, associates and entities in which it holds a minority interest; (12) the Company’s exposure to interest rate risk and foreign

exchange risk; (13) risks related to operating in a regulated industry and changes to oil, gas, environmental or other regulations that

impact the industries in which the Company operates; and (14) international trade litigation, disputes or agreements.

The Prospectus contains a more complete discussion of the factors that could affect the Company’s future performance and the

industries in which it operates. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a

result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to the

Company or to persons acting on its behalf are expressly qualified in their entirety by the cautionary statements referred to above.


Saudi Aramco: Public

• Drives domestic value creation byworking with suppliers for mutualbenefits

• Envisions to improve investment, andmaximize long term economic growthand diversification

• Focuses on delivering quality jobs,advancing innovation and enhancingglobal competitiveness

IKTVA is designed to reward Saudi Aramco’s suppliers for the use and development of local labor and sub-suppliers

© Saudi Arabian Oil Company, 2020Source: Saudi Aramco Internal Analysis


Anticipated Market Size

The

Opportunity

The Business

Case

Executive Summary

Raw Material Intermediates Finished

Products

Value Chain Mapping

Each will Provide:

In Oil Field Chemicals, Production Chemicals & New Chemicals

Technologies in Oil & Gas Industry



Workshop Outline

Topics Presenter

Opening Mohammed Al-Twaijri

Ester Based Lubricant

Mohammed Al-TwaijriKinetic Hydrate Inhibitor

Mineral Fiber LCM

Resilient Graphite

Shale Stabilizers

Abdullah AlOmairHTHP Corrosion Inhibitors

Secondary Emulsifiers

OBM Primary Emulsifiers

Calcium Chloride Hassan Aqeel

Calcium Bromide

Organophilic Clay

Khazi AhmedJeelani

Organophilic Lignite

Latex Copolymers

Molecular Sieves

Nano Silica Mohammed Bataweel

Khazi AhmedJeelaniClosing


Ester Based Lubricant February 2020


Saudi Aramco: PublicSaudi Aramco: Public

Potential exist to establish

multiple production facilities in

the kingdom for Ester Based

Lubricant

The opportunity

1. Global demand is expected to

grow at 3% annually for the

next 10 years

2. Attractive cost base including

low logistics, land, utilities, and

labor costs

The business case

Ester Based Lubricant Manufacturing Represent an Attractive Opportunity

Given the current gaps, expected demand and localization potential



Ester Based Lubricant Usage in Oil and Gas

9

Extreme Ester Based Environmental Friendly Lubricant. It is an Additive

Drilling Fluid, Comes in Liquid Form, a Blend of Fatty Amides Acid and

Esters, or Polyol Ester of Fatty Acids. For Usage in Solids-Free Drill in Fluid

Mud and Monovalent Brine to Reduce Torque and Drag in Highly Tortuous

or Extended Reach Wells

Several Usages exist for Ester

Based Lubricant products



Historical global demand

on Ester Based Lubricant

grow from 137,468 TON

in year 2015 and reached

155,279 Ton in Year 2019

Historical Global Demand on Ester Based Lubricant

137,468

141,719

146,102

150,621

155,279

125,000

130,000

135,000

140,000

145,000

150,000

155,000

160,000

2015 2016 2017 2018 2019

Qu

an

tity

(T

ON

)

Historical Global Demand of Ester Based Lubricant



The global demand on

Ester Based Lubricant is

expected to grow at 3%

from 160,082 TON in

2020 and will reach

215,137 TON year 2030

Global Demand on Ester Based Lubricant

3%

160,082 164,884 169,831 174,926 180,173 185,579 191,146 196,880

202,787 208,870

215,137

-

50,000

100,000

150,000

200,000

250,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Qu

an

tity

(T

ON

)

Global Demand of Ester Based Lubricant



Historical Saudi Arabia and GCC’s Demand on Ester Based Lubricant

Source: Saudi Aramco Internal Analysis

Historical KSA demand on


grow from 14,152 Ton in

year 2015 and reached

15,986 Ton in Year 2019.

Total demand from GCC

countries reached 29,716

Ton in year 2019

14,152 14,590 15,041 15,506 15,986

12,155 12,531

12,919 13,318

13,730 26,307 27,121

27,959 28,824

29,716

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2015 2016 2017 2018 2019

Qu

anti

ty (

TON

)

Historical KSA & GCC Demand of Ester Based Lubricant

KSA Rest of GCC



Saudi Arabia and GCC’s Demand on Ester Based Lubricant

The KSA demand on Ester

Based Lubricant is


from 16,480 TON in 2020

and will reach 22,150 TON

year 2030. Total GCC

demand is expected to

reach 41,170 TON by year

2030

16,480 16,974 17,484 18,008 18,548 19,105 19,678 20,268 20,876 21,503 22,148

14,155 14,579 15,017 15,467 15,931 16,409 16,901 17,408 17,931 18,469

19,023

30,635 31,554 32,500 33,475 34,480 35,514 36,579 37,677 38,807 39,971

41,170

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Qu

anti

ty (

TON

)

KSA & GCC Demand of Ester Based Lubricant

KSA Rest of GCC

3%



Advantages of Ester Based Lubricant

14

Non-Damaging to Producing Zones

Non-Toxic

Environmentally Friendly

Helps Prevent Bit Balling and Differential Sticking

Compatible with Seawater and Monovalent Brine-Based Drilling Fluids


Several Advantages exist

for Ester Based Lubricant

products


Value Chain Mapping

15

Key ingredients are available locally and in GCC

region.

Available locally

Localization Opportunity


Fatty Amides Acid

Esters / Polyol Ester

of Fatty Acids

oil-based Feedstock


Key ingredients are available locally and in the region. Opportunity exists for Raw Material processing, intermediate additives manufacturing and Final Product manufacturing


Value Chain Mapping Analysis

16

• Saudi Aramco is the main

local supplier of oil-based

feedstock i.e. naphtha, ethane

and propane.

• Opportunity exists for Raw

Material manufacturing of

Fatty Amides Acid and

Esters, or Polyol Ester of

Fatty Acids to increase final

products to meet growing

global demand.

• Opportunity exists to

establish local

manufacturing plants to

produce Ester Based

Lubricant to meet

growing global demand.


establish Logistics

Services businesses in

the kingdom to meet


increase in productions.

Feedstock Raw Material Finished Products Logistics


Kinetic Hydrate InhibitorFebruary 2020





the kingdom for Kinetic

Hydrate Inhibitor

The opportunity



next 10 years



labor costs

The business case

Kinetic Hydrate Inhibitor Manufacturing Represent an Attractive Opportunity




Kinetic Hydrate Inhibitor Usage in Oil and Gas

Kinetic Hydrate inhibitors Prevent formation of Clathrate Hydrates




on Kinetic Hydrate

Inhibitor grow from 8,166

TON in year 2015 and

reached 9,224 TON in

Year 2019

Historical Global Demand on Kinetic Hydrate Inhibitor

8,166

8,419

8,679

8,948

9,224

7,600

7,800

8,000

8,200

8,400

8,600

8,800

9,000

9,200

9,400

2015 2016 2017 2018 2019

Qu

an

tity

in

(T

ON

)

Historical Global Demand of Kinetic Hydrate Inhibitor




Kinetic Hydrate Inhibitor

is expected to grow at 3%

from 9,510 TON in 2020

and will reach 12,780

TON by year 2030

Global Demand on Kinetic Hydrate Inhibitor

3%

9,510 9,795 10,089

10,392 10,703

11,024 11,355

11,696 12,047

12,408 12,780

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Qu

an

tity

in

(T

ON

)

Global Demand of Kinetic Hydrate Inhibitor



Historical Saudi Arabia and GCC’s Demand on Kinetic Hydrate Inhibitor



grow from 841 TON in year

2015 and reached 950 TON

in Year 2019. Total demand

from GCC countries

reached 1,765 TON in year

2019

841 867 894 921 950

722 744

767 791

816 1,563 1,611

1,661 1,712

1,765

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2015 2016 2017 2018 2019

Qu

anti

ty (

TON

)

Historical KSA & GCC Demand of Kinetic Hydrate Inhibitor

KSA Rest of GCC



Saudi Arabia and GCC’s Demand on Kinetic Hydrate Inhibitor

The KSA demand on

Kinetic Hydrate Inhibitor is


from 979 TON in 2020 and

will reach 1,316 TON by

year 2030. Total GCC



2030

3%


979 1,008 1,039 1,070 1,102 1,135 1,169 1,204 1,240 1,277 1,316

841 866 892 919 946 975 1,004 1,034 1,065 1,097

1,130

1,820 1,874 1,931 1,989 2,048 2,110 2,173 2,238 2,305

2,375 2,446

-

500

1,000

1,500

2,000

2,500

3,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Qu

anti

ty (

TON

)

KSA & GCC Demand of Kinetic Hydrate Inhibitor

KSA Rest of GCC


Value Chain of Kinetic Hydrate Inhibitor

24

Key ingredients are available locally and in GCC region.

Examples of polymeric kinetic hydrate inhibitors are shown below:

• Poly(N-methylacrylamide)

• Poly(N,N-dimethylacrylamide)

• Poly(N-ethylacrylamide)

• Poly(N,N-diethylacrylamide)

• Poly(N-methyl-N-vinylacetamide)

• Poly(2-ethyloxazoline)

• Poly(N-vinylpyrrolidone)

• Poly(N-vinylcaprolactam)

Components of Kinetic

Hydrate Inhibitor are polymers

and copolymers (or a mix

thereof). The most common of

which is polyvinylcaprolactam

(PVCap)



Value Chain Mapping

25


region.

Available locally



Polymeric Kinetic

Hydrate

PVCap

oil-based Feedstock


Key ingredients are

available locally and in the

region. Opportunity exists

for Raw Material

processing, intermediate

additives man



26



feedstock i.e. naphtha,

ethane and propane.



Polymeric Kinetic Hydrate

and PVCap to increase final


global demand.


establish local


produce Kinetic Hydrate

Inhibitor to meet growing

global demand.


establish Logistics


the kingdom to meet





Mineral Fiber LCM February 2020





the kingdom for Mineral Fiber

LCM

The opportunity



next 10 years



labor costs

The business case

Mineral Fiber LCM Manufacturing Represent an Attractive Opportunity




Mineral Fiber LCM Usage in Oil and Gas

29

Acid Soluble Spun Mineral Fiber Loss Circulation Material is Used as Additive

for Drilling Fluid, comes in Fiber and Powder Form. Spun Mineral Fiber is

Used for Combating Lost Circulation by Plugging Vugular and Fractured

Formations During Drilling and Workover Operations

Several Usages exist for

Mineral Fiber LCM products




on Mineral Fiber LCM

grow from 2,578 Ton in


2,911 Ton in Year 2019

Historical Global Demand on Mineral Fiber LCM

2,578

2,657

2,739

2,824

2,911

2,400

2,500

2,600

2,700

2,800

2,900

3,000

2015 2016 2017 2018 2019

Qu

an

tity

in

(T

ON

)

Historical Global Demand of Mineral Fiber LCM




Mineral Fiber LCM is




by year 2030

Global Demand on Mineral Fiber LCM

3%

3,002 3,092 3,184

3,280 3,378

3,480 3,584

3,692 3,802

3,916 4,034

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Qu

an

tity

in

(T

ON

)

Global Demand of Mineral Fiber LCM



Historical Saudi Arabia and GCC’s Demand on Mineral Fiber LCM


Mineral Fiber LCM grow

from 265 MM Ton in year

2015 and reached 300 Ton

in Year 2019. Total demand

from GCC countries

reached 557 Ton in year

2019

265 274 282 291 300

228 235

242 250

257 493 509

524 540

557

-

100

200

300

400

500

600

2015 2016 2017 2018 2019

Qu

anti

ty (

TON

)

Historical KSA & GCC Demand of Mineral Fiber LCM

KSA Rest of GCC



Saudi Arabia and GCC’s Demand on Mineral Fiber LCM

The KSA demand on

Mineral Fiber LCM is


from 309 TON in 2020 and

will reach 415 TON year

2030. Total GCC demand is

expected to reach 772 TON

by year 2030

3%


309 318 328 338 348 358 369 380 391 403 415

265 273 282 290 299 308 317 326 336 346

357

574 592 609 628 646 666 686 706 728 749

772

-

100

200

300

400

500

600

700

800

900

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Qu

anti

ty (

TON

)

KSA & GCC Demand of Mineral Fiber LCM

KSA Rest of GCC


Advantages of Mineral Fiber LCM

34

Acid soluble

Easily wetted

Non combustible

Non fermenting

Inorganic

Non polluting

Non corrosive

Non toxic

Temperature stable

Contains no asbestos

Several Advantages exist for

Mineral Fiber LCM products



Value Chain Mapping

35


region. Key ingredients are available

locally and in the region.

Opportunity exists for Raw

Material processing,

intermediate additives

manufacturing and Final

Product manufacturing.

Available locally


Mineral Fiber LCMAcid Soluble Spun

Mineral Fiberoil-based Feedstock




36



feedstock i.e. naphtha,

ethane and propane.



Acid Soluble Spun Mineral

Fiber to increase final


global demand.


establish local


produce Mineral Fiber

LCM to meet growing

global demand.


establish Logistics


the kingdom to meet

Mineral Fiber LCM




Resilient GraphiteFebruary 2020





the kingdom for Resilient

Graphite

The opportunity



next 10 years



labor costs

The business case

Resilient Graphite Manufacturing Represent an Attractive Opportunity




Resilient Graphite Usage in Oil and Gas

39

Additive to Drilling Fluid. Graphite: Gray To Black, Sized Resilient

Graphite Particles Used for Wellbore Strengthening by Bridging and

Plugging the Rock Pores to Stop Fluid Losses and Prevent Stuck Pipe. It

is Chemically Inert, Thermally Stable and can be Used in Oil-Based or

Water-Base Drilling Fluids as a Mechanical Lubricant for Reducing

Torque and Drag.

Several Usages exist for

Resilient Graphite products




on Resilient Graphite

grow from 67,015 TON in


75,699 TON in Year 2019

Historical Global Demand on Resilient Graphite

67,015

69,088

71,225

73,428

75,699

62,000

64,000

66,000

68,000

70,000

72,000

74,000

76,000

78,000

2015 2016 2017 2018 2019

Qu

an

tity

in

(T

ON

)

Historical Global Demand of Resilient Graphite




Resilient Graphite is


from 78,040 TON in 2020

and will reach 104,879

TON by year 2030

Global Demand on Resilient Graphite

3%

78,040 80,381 82,793 85,276 87,835 90,470

93,184 95,979

98,859 101,824

104,879

-

20,000

40,000

60,000

80,000

100,000

120,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Qu

an

tity

in

(T

ON

)

Global Demand of Resilient Graphite



Historical Saudi Arabia and GCC’s Demand on Resilient Graphite


Resilient Graphite grow

from 6,899 TON in year

2015 and reached 7,793

TON in Year 2019. Total

demand from GCC

countries reached 14,486

TON in year 2019

6,899 7,112 7,332 7,559 7,793

5,926 6,109

6,298 6,493

6,693 12,825 13,221

13,630 14,052

14,486

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2015 2016 2017 2018 2019

Qu

anti

ty (

TON

)

Historical KSA & GCC Demand of Resilient Graphite

KSA Rest of GCC



Saudi Arabia and GCC’s Demand on Resilient Graphite

The KSA demand on

Resilient Graphite is




by year 2030. Total GCC



2030

3%


8,034 8,275 8,523 8,779 9,042 9,314 9,593 9,881 10,177 10,483 10,797

6,900 7,107 7,321 7,540 7,766 7,999 8,239 8,487 8,741 9,003 9,274

14,934 15,382 15,844 16,319 16,809 17,313 17,832 18,367 18,918 19,486 20,071

-

5,000

10,000

15,000

20,000

25,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Qu

anti

ty (

TON

)

KSA & GCC Demand of Resilient Graphite

KSA Rest of GCC


Advantages of Resilient Graphite

44

It is an effective bridging and sealing agent for a wide range of

formations.

It reduces torque and drag in all mud systems by increasing the lubricity.

It is an inert material with no adverse effects on mud rheology.

It reduces filter cake permeability.

Several Advantages exist for

Resilient Graphite products



Value Chain Mapping

45


region. Key ingredients are available

locally and in the region.

Opportunity exists for Raw

Material processing,

intermediate additives

manufacturing and Final

Product manufacturing.

Available locally


Graphite Processing Resilient GraphiteGraphite




46



Graphite to increase final


global demand.

• Opportunity exists for

intermediate Graphite

Processing to increase final


global demand.


establish local


produce Resilient

Graphite to meet

growing global demand.


establish Logistics


the kingdom to meet

Resilient Graphite


Raw Material Intermediates Finished Products Logistics



Workshop Outline

Topics Presenter




Mineral Fiber LCM

Resilient Graphite

Shale Stabilizers





Calcium Bromide

Organophilic Clay

Khazi AhmedJeelani


Latex Copolymers

Molecular Sieves




Shale StabilizerFebruary 2020



Shale Stabilizer Manufacturing Represent an Attractive Opportunity Given the

current gaps, expected demand and localization potential

Establish state of the art

manufacturing facilities of

Shale Stabilizer to serve

growing local and

international demand

The opportunity



next 10 years and will reach

1 MM Ton in 2030.

2. New applications are going to

utilize Shale Stabilizer .



labor costs

The business case



Shale Stabilizers

• Clay and shale react with the water phase of a drilling fluid to promote stickiness, increase

swelling, and induce sloughing.

• Shale and clay stabilizers adhere to the borehole wall the surfaces of drill cuttings.

• This encapsulation can effectively seal their surfaces and inhibits their reaction with the fluid,

minimizing sticking, swelling, and sloughing, and increasing borehole stability.



Global Historical Demand on Shale Stabilizers

The Historical demand for

Shale Stabilizers was

623K Ton in 2015 and

reached 762K Ton in year

2019

623649

676705

762

0

100

200

300

400

500

600

700

800

900

2015 2016 2017 2018 2019

Qu

an

tity

in

( K

TO

N)

4%



Global Historical Demand on Shale Stabilizers

The Historical demand for




2019

816 832 849 866 883 901 919 937 956 975 995

0

100

200

300

400

500

600

700

800

900

1,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Qu

an

tity

in

( K

TO

N) The Historical demand for




2019


Shale Stabilizer is

expected to grow at 2 %

from 816K Ton in 2020 and

will reach 995K Ton year

2030

2%



KSA & GCC Demand for Shale Stabilizer

13,472 13,742 14,017 14,297 14,583 14,875 15,172 15,476 15,785 16,101 16,423

13,472 13,877 14,293 14,722 15,163 15,618 16,087 16,56917,066

17,57818,106

26,945 27,618 28,310 29,019 29,746 30,493 31,259 32,04532,851

33,67934,529

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Quanti

ty (

Ton)

KSA Rest of GCC

The GCC/KSA demand for

Shale Stabilizer is expected

to grow at 3 % from 26K

Ton in 2020 and will reach

35K Ton year 2030

3%



Shale Stabilizers Value Chain Mapping

54


region. Opportunity exists to

establish facilities for

Shale Stabilizers

products utilizing one of

the manufacturing

processes:

Available Locally


Reaction

With

Amines Shale Stabilizers

Sillic Acid,

Potassium Salt

Glycerin

Source: Saudi Aramco Internal Analysis © Saudi Arabian Oil Company, 2020



Raw Material Intermediates Final

Products Support Services

• Potential exists to establish Shale Stabilizers producing facility to meet the local, regional and global demand.

• The most commonly used chemicals sillic acid, Potassium Salt and Glycerin are available an opportunity exists to increase the production of these Stabilizers to meet the increasing demand.

• Opportunity exists to establish

facilities for Shale

Stabilizers products utilizing

one of the manufacturing

processes:

- Amine based

• Shale Stabilzers products are used by global services companies

• Opportunity exists to establish R&D centers to test different products based on their applications.


HPHT Corrosion Inhibitor February 2020



HPHT corrosion inhibitors Manufacturing Represent an Attractive Opportunity


The opportunity

Establish multiple state of

the art manufacturing facilities

of HPHT Corrosion Inhibitor

to serve growing local and


The opportunity



next 10 years


utilize HPHT Corrosion

Inhibitor .



labor costs

The business case



High Temperature High Pressure Corrosion Inhibitor

• A drilling fluid additive in liquid form for corrosion inhibition for high temperature high

pressure applications used in fresh ,brackish or brine packer fluid.

• A blend of amines and imidazoline amide, soluble in oil and dispersible in water

• To alleviate corrosion in fresh, brackish or brine packer fluid at high wellbore temperatures up

to 400°F.

• Imidazoline adsorption forms a chemical film on iron and steel surfaces and develops a

passivation layer that provides corrosion protection in sour H2S, sweet CO2 and oxygen

corrosion environment encountered in oil and gas wells

• Chemical and physical Specifications:

Dark amber liquid oil soluble and water Dispersible specific gravity @ 59°f (15°c): 0.8 - 0.9

flash Point (pmcc): >136.4°f (58°c) diluted solution with DI water (3:1) at 68°f( 20°c): 6 - 7.



The global Historical

demand for HPHT

Corrosion Inhibitors was

from 902 K Ton in 2015 and

reached 1,158 K Ton in

year 2019

902929

956

1,1251,158

0

200

400

600

800

1,000

1,200

1,400

2015 2016 2017 2018 2019

Qu

an

tity

in

( K

TO

N)

Global Historical Demand on HPHT Corrosion Inhibitors



Global Demand on HPHT Corrosion Inhibitors


HPHT is expected to grow

at 2 % from 1,181K Ton in

2020 and will reach 1,440K

Ton year 2030

1,181 1,205 1,229 1,253 1,279 1,304 1,330 1,357 1,384 1,412 1,440

0

200

400

600

800

1,000

1,200

1,400

1,600

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Qu

an

tity

in

( K

TO

N)



Historical Demand for HPHT Corrosion Inhibitor

Historical demand for

HPHT corrosion inhibitor

was 50K Ton in 2015 and

reached 60K Ton year in

201925 26 27

29 30

2526

27

2930

5052

54

5860

0

10

20

30

40

50

60

70

2015 2016 2017 2018 2019

Qu

anti

ty (

K T

on

)

Historical KSA & GCC Demand of Product HPHT Corrosion Inhibitor

KSA Rest of GCC




HPHT corrosion inhibitor

is expected to grow at 3 %


will reach 80K M Ton year

2030

KSA & GCC Demand for HPHT Corrosion Inhibitor

30.90 31.52 32.15 32.79 33.45 34.12 34.80 35.49 36.20 36.93 37.67

30.90 31.83 32.78 33.77 34.78 35.82 36.90 38.00 39.14 40.32 41.53

61.80 63.35 64.93 66.56 68.23 69.94 71.69 73.50 75.35 77.25 79.19

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Qu

anti

ty (

To

n)

KSA & GCC Demand of Product HPHT Corrosion inhibitor

KSA Rest of GCC



HPHT Corrosion Inhibitors Value Chain Mapping


region. • Potential exists to establish HPHT Corrosion Inhibitor producing facility to meet the local, regional and global demand.

• The most commonly used chemicals are available opportunity exists to increase the production of these Amines to meet the increasing demand.

Available Locally


Reaction HTTP Corrosion InhibitorsAmines

Imidazoline






• Potential exists to establish HPHT Corrosion Inhibitor producing facility to meet the local, regional and global demand.



facilities for HPHT Corrosion

Inhibitor products utilizing


processes:

- Amine based

• HPHT Corrosion Inhibitorproducts are used by global services companies



Secondary Emulsifier February 2020



Secondary Emulsifier Manufacturing Represent an Attractive Opportunity


Establish multiple factories

with state of the art

manufacturing facilities of

Secondary Emulsifier to

serve growing local and


The opportunity



next 10 years


utilize Secondary Emulsifier .



labor costs

The business case



Secondary Emulsifier Applications

• Improves oil-wetting and prevents water-wet solids filtrate

• Maintains stable water-in-oil emulsion and helps prevent water in HPHT

• Improves thermal stability, rheological stability, filtration control and

contamination-resistance of oil-base muds

• Effective at counteracting the adverse effects of water contamination such as

high viscosity, low-emulsion stability and water-wet solids



Global Demand on Secondary Emulsifier


Secondary Emulsifier is




2030

82,40084,872

87,41890,041

92,74295,524

98,390101,342

104,382107,513

110,739

0

20,000

40,000

60,000

80,000

100,000

120,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Qu

an

tity

in

(T

ON

)



GCC KSA demand for Secondary Emulsifier

The GCC/KSA demand on

Secondary is expected to

grow at 4 % from 13K Ton

in 2020 and will reach 20K

Ton year 2030

6,381 6,573 6,770 6,973 7,182 7,398 7,620 7,848 8,084 8,326 8,576

7,280 7,5717,874

8,1898,517

8,8579,212

9,5809,963

10,36210,776

13,661 14,14414,644

15,16215,699

16,25516,831

17,42818,047

18,68819,352

0

5,000

10,000

15,000

20,000

25,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Quanti

ty (

Ton)

KSA Rest of GCC



Secondary Emulsifiers Value Chain Mapping

70

70Source: Saudi Aramco Internal Analysis


region.

Available Locally


Reactions Secondary EmulsifierGlycerides &

Fatty acids

• The most commonly used chemicals are available opportunity exists to increase the production of these emulsifiers to meet the increasing demand.

• Potential exists to establish

SecondaryEmulsifier

producing facility to meet the

local, regional and global

demand.






• Potential exists to establish Secondary Emulsifierproducing facility to meet the local, regional and global demand.

• The most commonly used chemicals are available opportunity exists to increase the production of these emulsifiers to meet the increasing demand.


facilities for Secondary

Emulsifier products utilizing


processes:

- Amine based

• Secondary Emulsifiers products are manufactured by companies in KSA

-



OBM Primary Emulsifier February 2020



OBM Primary Emulsifier Manufacturing Represent an Attractive Opportunity Given

the current gaps, expected demand and localization potential

The opportunity



of OBM Primary Emulsifier



The opportunity



next 10 years


utilize OBM Primary

Emulsifier .



labor costs

The business case



Oil Based Mud (OBM) Primary Emulsifier

• It is essentially a polyaminated fatty acid and is used to emulsify Water into Oil in Oil /Diesel

based drilling fluids .

• It provides excellent emulsion stability, acts as a wetting agent, gelling agent and fluid

stabilizer in a oil base mud.

• It is also used for filtration control and for temperature stability.

• Works effectively over a wide range of temperatures

• It is multipurpose product which may be used in a wide variety of oil mud system.



Global Demand on Oil Based Mud (OBM) Primary Emulsifier


The global demand for

OBM Primary emulsifier is




2030

96,900 98,838 100,815 102,831 104,888 106,985 109,125 111,308 113,534 115,804 118,121

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Qu

an

tity

in

( K

TO

N)



KSA & GCC Demand for Oil Based Mud (OBM) Primary Emulsifier



OBM Primary Emulsifier is




20304,435 4,524 4,614 4,707 4,801 4,897 4,995 5,095 5,197 5,300 5,406

4,120 4,2444,371

4,5024,637

4,7764,919

5,0675,219

5,3765,537

8,5558,767

8,9859,209

9,4389,673

9,91410,162

10,41610,676

10,943

0

2,000

4,000

6,000

8,000

10,000

12,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Quanti

ty (

TO

N)

KSA Rest of GCC



Primary Emulsifier (OBM) acid Value Chain Mapping

77



region.


OBM Primary Emulsifier is

expected to grow at 3 % from 8K

Ton in 2020 and will reach 10K

M Ton year 2030

Available Locally


Amines Primary Emulsifier (OBM)Polyaminated fatty acid






• Potential exists to establish OBM Primary Emulsifiers producing facility to meet the local, regional and global demand.



facilities for OBM Primary

Emulsifiers products utilizing


processes:

- Amine based

• OBM Primary Emulsifiersproducts are used by global services companies:




Workshop Outline

Topics Presenter




Mineral Fiber LCM

Resilient Graphite

Shale Stabilizers





Calcium Bromide

Organophilic Clay

Khazi AhmedJeelani


Latex Copolymers

Molecular Sieves




Calcium BromideFebruary 2020



Calcium bromide Represent an Attractive Opportunity Given the current gaps,

expected demand and localization potential

Establish a factory with

state of the art manufacturing

facilities for Calcium bromide



The opportunity



next 10 years


utilize Calcium Bromide .



labor costs

The business case



Calcium Bromide

Calcium Bromide CaBr2(H2O)x

Color and form: white powders that dissolve in water,

Use: The hydrated form is mainly used in drilling fluids

Main Application of Calcium bromide

• Calcium bromide is used in two main applications – clear brine fluids in oil & gas and as an

oxidizer for mercury emissions control.

• In upstream oil and gas, calcium bromide is used to control wellbore pressures during

completion and workover operations.

• It is also used in neuroses medication, freezing mixtures, food preservatives, photography

and fire retardants



Bromine derivatives

Bromine derivatives are mainly categorized into two segments

1. Inorganic bromine derivative

A. CalciumBromide,

B. Potassium Bromide and

C. Sodium Bromide

2. Organic bromine derivatives.

A. Ethylenedibromide ,

B. MethylBromide ,

C. HydrobromicAcid (HydrogenBromide),

D. Tetra bromo bisphenolA,

E. Deca bromodiphenyl Oxide and

F. Octa bromo diphenyloxid

World Reserves of Bromine - 2016

Country Thousands of metric tons

Jordan

United States

1,000,000

11,000

China 3,500

France 1,600

Spain 1,400

Rest of the World 2,400

Source: IHS © Saudi Arabian Oil Company, 2020


Calcium Bromide Process

An improved method for producing calcium bromide

by reacting hydrogen bromide with calcium hydroxide

in the presence of water and carbonate ions.

The improvement comprises maintaining a sufficient

pH in the reaction mixture to convert at least a

portion of the carbonate ions to a gaseous carbon-

oxygen compound thereby removing the carbonate

ions from the reaction mixture.

Brine Preheater

Tower

Chlorine

Steam

Decanter Blo

win

g

ou

t T

ow

er

Treatin

g

tow

er

Debrominated brine to Salt recovery units

Bromine Crude

Waste

Air

Ab

sorp

tio

n

tow

er

Settler

Colu

m

Bromine Refined

Chlorine

Ferrous Chloride

EffluentVapors Water

vent

Crude bromine



Global Historical Demand on Calcium Bromide



Calcium Bromide grew at

4 % from 519K Ton in 2015

and reached 638K Ton year

2019

519,654547,000

575,000606,000

638,000

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2015 2016 2017 2018 2019

Qu

an

tity

in

( K

TO

N)



Global Demand on Calcium Bromide


Calcium Bromide is


from 663K Ton in 2020

and will reach 982K Ton

year 2030

663,520690,061

717,663746,370

776,225807,274

839,564873,147

908,073944,396

982,172

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Qu

an

tity

in

(K

TO

N)



GCC KSA Historical demand for Calcium Bromide


calcium Bromide grew at



201913,230

12,65612,000

16,787 16,900

8,145 8,573 9,025

9,50010,000

21,375 21,229 21,025

26,28726,900

0

5,000

10,000

15,000

20,000

25,000

30,000

2015 2016 2017 2018 2019

Quanti

ty (

TO

N)

KSA Rest of GCC



GCC KSA demand for Calcium Bromide


Calcium Bromide is




203017,576 18,279 19,010 19,771 20,561 21,384

22,23923,129

24,05425,016

26,01710,400

10,81611,249

11,69912,167

12,65313,159

13,68614,233

14,80215,395

27,97629,095

30,25931,469

32,72834,037

35,39936,815

38,28739,819

41,411

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Quanti

ty (

TO

N)

KSA Rest of GCC


Calcium Chloride February 2020



Calcium Chloride Manufacturing Represent an Attractive Opportunity Given

the current gaps, expected demand and localization potential



facilities for Calcium

Chloride to serve growing

local and international

demand

The opportunity



next 10 years


utilize Calcium Chloride .



labor costs

The business case



Introduction and Applications

• Calcium Chloride is used as part of drilling fluids, or drilling muds.

• Integral to drilling operations as aid or agent chemical

• suspending and releasing cuttings, corrosion control, and maintaining wellbore

stability.

• Calcium Chloride is an important component of drilling fluids, where it inhibits clay and

shale hydration.

• It is also used in completion operations to flush the well hole clean.



Calcium Chloride Process



Global Historical Demand on Calcium Chloride



Calcium Chloride grew at

4% from 2.68MM Ton in

2015 and reached 3.47MM

Ton year 2019

2.682.82

2.97

3.293.47

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2015 2016 2017 2018 2019

Qu

an

tity

in

( M

M T

ON

)



Global Demand on Calcium Chloride



Calcium Chloride is


from 3.6MM Ton in 2020

and will reach 5.3MM Ton

year 2030

3.603.74

3.894.05

4.214.38

4.564.74

4.935.12

5.33

0

1

2

3

4

5

6

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Qu

an

tity

in

( M

M T

ON

)



GCC KSA Historical demand for Calcium Chloride


calcium Chloride grew at 4

% from 162K Ton in 2015


2019

81,450 85,737 90,25095,000

100,000

81,45085,737

90,25095,000

100,000

162,900171,474

180,500190,000

200,000

0

50,000

100,000

150,000

200,000

250,000

2015 2016 2017 2018 2019

Quanti

ty (

Ton)

KSA Rest of GCC



GCC KSA demand for Calcium Chloride



calcium chloride is




2030

104,000 108,160 112,486 116,986 121,665 126,532 131,593 136,857 142,331 148,024 153,945

104,000108,160

112,486116,986

121,665126,532

131,593136,857

142,331148,024

153,945

208,000216,320

224,973233,972

243,331253,064

263,186273,714

284,662296,049

307,891

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Quanti

ty (

Ton)

KSA Rest of GCC



Calcium Chloride Value Chain Mapping

97



region. • The most commonly used chemicals are available opportunity exists to increase the production of these Chemicals to meet the increasing demand.

• Potential exists to establish

Calcium Chloride

producing facility to meet the

local, regional and global

demand.

Available Locally


Sodium carbonateCalcium Chloride

Limestone

sodium chloride






• Limestone with sodium chloride

• Raw materials are available in

KSA

• Sodium carbonate • Calcium chloride

• Potential for players to set up

manufacturing facilities to

produce Calcium Chloride

• Trucks

• Shipping in containers



Workshop Outline

Topics Presenter




Mineral Fiber LCM

Resilient Graphite

Shale Stabilizers




Calcium ChlorideHassan Aqeel

Calcium Bromide

Organophilic Clay

Khazi AhmedJeelaniOrganophilic Lignite

Latex Copolymers

Molecular Sieves


Closing Khazi AhmedJeelani


Oraganophillic Lignite February 2020



Organophilic Lignite Manufacturing Represent an Attractive Opportunity Given the




of Organophilic Lignite to



The opportunity



next 10 years


utilize Organophilic Lignite .



labor costs

The business case



Organophilic Lignite Applications

• Organophilic lignite is amine treated lignite that has been coated with a chemical

that renders it dispersible in oil.

• The treatment is usually accomplished with a type of quaternary amine

compound.

• Organophilic lignite (amine treated lignite) is a filtration‐control additive designed

for use in all oil‐base systems, as well as synthetic‐base systems.

• It is an effective alternative to asphalt or gilsonite where their use is undesirable.

• Amine treated lignite effective and applicable in all oil‐ and synthetic‐base drilling

fluids, and is compatible with other additives



Organophilic Lignite manufacturing process

ReactionChamber

Humic Acid withH2O

Humate Solution an Amine

Storage

Oil Burner

Heat Exchanger

Air Cooling Evaporator

Fan

Boiler

Blenders

Inventory

Production Control



Global Demand on Organophilic Lignite1

40,800 41,616 42,448 43,297 44,163 45,046 45,947 46,866 47,804 48,760 49,735

0

10,000

20,000

30,000

40,000

50,000

60,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Qu

an

tity

in

( K

TO

N)


Organophilic Lignite is




2030



Global Demand on Organophilic Lignite

The GCC/KSA demand on

Organophilic Lignite is




2030

6,240 6,365 6,492 6,622 6,754 6,889 7,027 7,168 7,311 7,457 7,607

7,2807,571

7,8748,189

8,5178,857

9,2129,580

9,96310,362

10,776

13,52013,936

14,36614,811

15,27115,747

16,23916,748

17,27417,819

18,383

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Quanti

ty (

K T

on)

KSA Rest of GCC



Organophilic Lignite Value Chain Mapping


region. • Potential exists to establish Organophilic Lignite producing facility to meet the local, regional and global demand.

• The most commonly used Humic Acid and Sodium hydroxide are available opportunity exists to increase the production of these Amines to meet the increasing demand.

Available Locally


Reaction with Lignite Organophilic LigniteHumic Acid

Sodium Hydroxide






• Potential exists to establish Organophilic Lignite producing facility to meet the local, regional and global demand.

• The most commonly used Humic Acid and Sodium hydroxide are available opportunity exists to increase the production of these Amines to meet the increasing demand.


facilities for Organophilic

Lignite products utilizing one

of the manufacturing

processes:

- Amine based

• Oraganophillic Lignite products are used by global services companies



Latex Copolymers February 2020



Latex Copolymers Manufacturing Represent an Attractive Opportunity Given the




of Latex Copolymers to



The opportunity



next 10 years


utilize Latex Copolymers .



labor costs

The business case



High Temperature Latex Copolymers

• To enhance inhibition properties and provide wellbore stability when drilling

micro-fractured and dispersive shales.

• Provide proper inhibition level; monitor and adjust inhibitor concentrations

while drilling based on depletion rate, hole and cuttings condition

• Insure Gas Hydrates suppression during each and every operational situation

(static and dynamic condition)

• Adjust fluid rheology to provide proper hole cleaning without exceeding

formation fracture pressure

• Avoid drilling fluid related problems (hole instability, stuck pipe, circulation

losses)



KSA & GCC Historical Demand for Latex Copolymers


Latex Copolymers grew at



2019

35 36 38 39 40

3536

3839

407072

7678

80

0

10

20

30

40

50

60

70

80

90

2015 2016 2017 2018 2019

Quanti

ty (

Ton)

KSA Rest of GCC



KSA /GCC Demand for Latex Copolymers


Latex Copolymers is




2030


41.60 42.43 43.28 44.15 45.03 45.93 46.85 47.79 48.74 49.72 50.71

41.6043.26

44.9946.79

48.6750.61

52.6454.74

56.9359.21

61.58

83.2085.70

88.2890.94

93.7096.54

99.49102.53

105.67108.93

112.29

0.00

20.00

40.00

60.00

80.00

100.00

120.00

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Qu

anti

ty T

on

)

KSA Rest of GCC


Latex Copolymer Value Chain Mapping

113



region. • Potential exists to establish Latex CoPolymersproducing facility to meet the local, regional and global demand.

• The most commonly used chemicals MEG & Polyamines are available an opportunity exists to increase the production of these product to meet the increasing demand.

Available Locally


Reaction Latex CopolymerMEG

Polyamines


114Saudi Aramco: PublicSaudi Aramco: Public




• Potential exists to establish Latex CoPolymers producing facility to meet the local, regional and global demand.

• The most commonly used chemicals MEG & Polyamines are available an opportunity exists to increase the production of these product to meet the increasing demand.


facilities for Latex

Copolymers products

utilizing one of the

manufacturing processes:

- Amine based

• Latex Copolymers products are used by global services companies



Molecular Sieves February 2020



Molecular Sieves Represent an Attractive Opportunity Given the current gaps,

expected demand and localization potential



facilities for Molecular Sieves



The opportunity



next 10 years


utilize Molecular Sieves .



labor costs

The business case



Molecular Sieves Applications

• Zeolite Molecular Sieves are adsorbents with a crystalline aluminosilicate

composition and have a number of different applications across a broad range of

industries

• Zeolite Molecular Sieves come in various forms containing different metal

compositions, including sodium, potassium, and calcium, which impact their

chemical structure and ultimately their application.

• Zeolite Molecular Sieves also have a broad number of applications across multiple

industries including:

1. Petrochemicals

2. Construction

3. Automotive



Molecular Sieves Applications

Adsorption – Natural gas passes through the Zeolite Molecular Sieves and contaminants are extracted, until the Zeolite Molecular Sieves have been saturated.

Regeneration – Saturated Zeolite Molecular Sieves are regenerated by heating and flowing through a purge gas.

The two towers operate alternating cycles of adsorption and regeneration.



Global Demand on Molecular Sieves



Molecular Sieves is




2030

197,600205,504

213,724222,273

231,164240,411

250,027260,028

270,429281,246

292,496

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Qu

an

tity

in

(T

ON

)



GCC KSA demand for Molecular Sieves



Molecular Sieves is




2030

8,320 8,653 8,999 9,359 9,733 10,123 10,527 10,949 11,386 11,842 12,316

18,72019,469

20,24821,057

21,90022,776

23,68724,634

25,62026,644

27,710

27,04028,122

29,24630,416

31,63332,898

34,21435,583

37,00638,486

40,026

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Quanti

ty (

TO

N)

KSA Rest of GCC



Molecular Sieves Value Chain Mapping



region.

Opportunity exists to establish


products utilizing one of the

manufacturing processes:

Available Locally


Reaction

Sodium Silicate

Sodium Hydroxide Molecular Sieves

Bauxite,

Kaoline






• Potential exists to establish Molecular Sieves producing facility to meet the local, regional and global demand.

• The most commonly used chemicals Bauxite, Kaoline, Sodium Silicate & Sodium Hydroxide are available opportunity exists to increase the production of these products to meet the increasing demand.



products utilizing one of the

manufacturing processes

• Molecular Sieves products are used by global companies .




Workshop Outline

Topics Presenter




Mineral Fiber LCM

Resilient Graphite

Shale Stabilizers




Calcium ChlorideHassan Aqeel

Calcium Bromide

Organophilic Clay


Latex Copolymers

Molecular Sieves




Nano Silica February 2020



Nano Silica Manufacturing Represent an Attractive Opportunity Given the




of Nano Silica to serve

growing local and


The opportunity


grow very high annually for

the next 10 years


utilize Nano Silica .



labor costs

The business case



Nanosilica Applications

What is Nanosilica?

• Silicon dioxide (SiO2)

• Environmentally friendly Low toxicity

• Stable

• Particle diameter: 2 – 100 nm

• Surface Area: 30 – 1,100 m2/g

• Ability to be functionalized


Functions Applications

Abrasion &

Scratch

Resistance

Coatings

Anti-blocking Coatings, plastic films, textiles

Binding Precision Investment Casting (PIC),

refractory materials, coatings, catalyst,

plastic films

Dispersing Pigments, inks, resins

Flocculation Paper, beverage, water treatment,

refractory materials

Fractionizing Paper, plastic films, textiles

Gelling Batteries, ground consolidation, water

shut-off

Strength &

Stability

Concrete, well cementing


Nanosilica Applications


Water Treatment

Enhance the removal of

organic substances

Industrial Processing

Surface polishing

Foundry

Construction

Cementing operations

Ground consolidation

Oil Field Services

Cementing

Drilling fluids

Water shutoff

Batteries

• Gel Cell (VRLA)

• Absorbed Glass

Mat (AGM)

Human Use

Beverage

Health care & Medicine

Cosmetics

Global nanosilica market volume, by

application, 2015 (%)(1)

Rubber & Plastics

Used as filler to

improve the

mechanical & thermal

properties

House HoldCoating

Cleaning

Textile

Adhesives

Agriculture

Productivity enhancer

Fertilizers

Pesticides

NanoSilica Market Analysis, By Product (P Type, S Type, and

Type III), By Application (Rubber, Healthcare, Food, Coatings,

Plastics, Concrete, Gypsum, Battery, Electronics, Cosmetics),

And Segment Forecasts, 2018 - 2025

(1)


Applications – Oil & Gas

OIL & GAS

DRILLING FLUID

CEMENTING

Nanosilica based gel can be utilized as a solution to leaks in valves, pipes, lines, wellheads,

and Christmas trees for both surface and downhole applications

MECHANICAL SEALANT

CO2 FOAMING FOR EOR

Using Nanosilica as an additive in slurry composition improves rheological properties,

increases compressive strength and reduces permeability by acting as an accelerator and

mechanical properties enhancer

Silica nanoparticles can be used as a drilling fluid additive to lead to improved stability of the

mud at elevated temperature and pressures; additionally silica nanoparticles can physically

plug shale and reduce fluid invasion in the water-base mud

Silica nanoparticles greatly enhance thermodynamic stability of CO2 foam compared to other

foam stabilizers at elevated temperatures and salinities



Applications – Nano Silica

OTHER APPLICATIONS

Nanosilica based gel can be used to shape reservoirs and control subsurface flow by targeted

permeability modification in order to enhance heat extraction for geothermal heating and

power applications

GEOTHERMAL

Nanosilica based gel can be used to close off water leaks from surrounding rock into mines,

protecting mines from flooding and reducing financial and environmental costs of pumping

water out of mine shafts

MINING

CO2 SEQUESTRATION

WATER MANAGEMENT

In the process of CO2 sequestration – whereby CO2 is injected underground to remain in long-

term storage – the Nanosilica based gel can be used to control the influx of water and the

degree of water saturation in the blended reservoir

Silica nanoparticles may be applicable to three distinct water management use cases: (1) as a

coagulant in the water purification process; (2) in groundwater management, a Nanosilica

based gel can be used to isolate contaminant areas, enabling water treatment chemicals to be

applied to the contaminated water; and (3) water management in water drilling© Saudi Arabian Oil Company, 2020


Open Water ZoneFlow Behind Pipe &

Casing LeaksChanneling from

InjectorsConing or CuspingAge Geology

Causes of Water Production

When the cost associated with removing excess water outweighs the cost of water shutoff solutions, customers

employ water shutoff considering several solutions:

WATER SHUTOFF

MECHANICAL CHEMICAL

POLYMERS INORGANIC GELS RESINS

Devices that are inserted into the well (e.g., packers, plugs) or adjustments to well casing (e.g., cement squeezes) that

physically block water from enteringOrganic substances that can be in gel form or dissolved into a

liquid

Largely consists of gels based on silicate, aluminum ions, or

hydroxides

Organic, polymer-based, solid plastic material

Nanosilica Based Gel© Saudi Arabian Oil Company, 2020

Water Shutoff Solutions


Water Shutoff Market Size

$-

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Billions

Mechanical Mechanical + Chemical

Other Chemical Nanosilica Gel

Global Water Shutoff Market by Solution ($B)

$-

$5.0

$10.0

$15.0

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Other Chemical Nanosilica Gel

Chemical Solution Water Shutoff Market ($B)

• Chemical Solution Growth: The market share of chemical solutions

for water shutoff is expected to grow over the forecast period as

more end users require robust water shutoff solutions, with a global

market size of $8.2B expected by 2030

• Nanosilica Market Size: Following a market entry in 2022 through

pilot programs within KSA, the market size for Nanosilica gel

solutions is expected to reach $1.9B by 2030

• Nanosilica Adoption: forecasts a high adoption rate for Nanosilica

gel solutions in high pressure, high temperature wells, particularly in

GCC countries, as well as in Aramco countries of interest in Asia and

Africa



Regional Water Shutoff Market Size

State-Owned O&G Companies International E&P Companies Oilfield Services Companies

Aramco should leverage its relationships with GCC

partners to sell its Nanosilica gel to field operators

Similar well environments and reduced business development costs from geographic proximity provides growth

opportunity for Nanosilica gel in the Middle East

$-

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Billions

Mechanical Mechanical + Chemical Other Chemical Nanosilica Gel

Regional Market Outlook ($B)

OVERALL

ASSESSMENT

• Chemical Treatment Precedent: Several fields in Oman (e.g.,

Marmul) have undergone chemical water shutoff treatment and UAE

has developed HPHT chemicals, suggesting lower adoption barriers

• Increasing Local Content: Countries are increasingly inserting local

content requirements into law to bolster domestic capabilities

Potential Customers and Partnerships

Pursuit Rationale

State-Owned Companies• Leverage Aramco: Similar environmental conditions and

close relationships suggests that successful field tests of

the Nanosilica gel at Aramco fields would provide

credibility to other GCC operators

• Enhance Output: Production mandates and increased

emphasis on EOR from national operators (e.g., ADNOC)

may drive int’l firms to seek stimulants such as a water

shutoff gel

• Local Labor and Content: Due to proximity, Aramco

could build a service offering with a regional OFS firm

for less BD investment, appealing to domestic labor

content laws

Int’l O&G Companies

Regional OFS Firms

1

3

2

Customer Archetypes © Saudi Arabian Oil Company, 2020


Reduce Water Consumption

By preventing excess water from entering the well, Nanosilica reduces water consumption in drilling and

protects the water table

2

Manage Well Profitability

Excess water production reduces the profitability of wells, requiring mitigating treatments like pumping

out waste water

1

Reduce Environmental Impacts3

As a naturally occurring substance, Nanosilica is non-toxic to the reservoir environment

Investment in Nanosilica for water shutoff mitigates financial impacts of waste water

in drilling operations, as well as supports Aramco environment stewardship goals by

leveraging non-toxic solutions


Oilfield Industry Considerations



CHEMICAL PRODUCTIONTREATMENT &

FORMULATIONASSESSMENT SERVICES INJECTION SERVICES

OPERATIONS &

MONITORING

Manufacturing of the

underlying chemical

feedstock and/or

polymers

Processing chemicals to

create proprietary

products for applications

Inspection and

evaluation of assets to

identify solution type

and volume

Oversee procedures to

implement the

chemical solution (e.g.,

well injection)

Testing and monitoring

of gel properties and

solution integrity

during well production

Firms that play across these segments perform complementary and non-

competitive activities and represent potential service partners or

customers

GELS VALUE CHAIN

Supplier

Partnerships

Production

Partnerships or

Direct Competitors

Defi

nit

ion

Mark

et

Posi

tion


Thank you



Workshop Outline

Topics Presenter




Mineral Fiber LCM

Resilient Graphite

Shale Stabilizers




Calcium ChlorideAqeel Hassan

Calcium Bromide

Organophilic Clay


Latex Copolymers

Molecular Sieves





For further information, please contact:

Key messages

Chemicals market is growing and requires a local manufacturing presence

Engage with us to begin the localization journey. Provide expressions of interest on:

iktva.sa/opportunities

Please plan to attend additional sessions to learn more about KSA opportunities

Please Complete Expressions of Interest and direct all inquiries to:

KhaziSyed AhmedJeelani

Industrial Development & Strategic Supply

Saudi Aramco

[email protected]

Mohammed Al-Twaijri

Industrial Development & Strategic Supply

Saudi Aramco

[email protected]

Thank you


Chemicals Value Proposition Workshop - Saudi Aramco · Value Chain Mapping Analysis 16 • Saudi...

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