Comparing Middle East NOCs to Supermajors through Benchmarking

Upstream businesses in the Middle East are making waves with their size, quality, and longevity, according to a recent report. The region’s National Oil Companies (NOCs) are showing strong growth in oil and gas capacity, with Saudi Aramco leading the pack in terms of production.

The quality of resources owned by these NOCs is also impressive, with low-cost assets providing high-margin barrels and molecules. This translates to over US$200 billion in combined upstream free cash flow per year, a figure that rivals the market cap of Shell.

While the focus of these companies is primarily on their home countries, efforts are being made to diversify their portfolios. ADNOC and Saudi Aramco are looking to expand internationally, while QatarEnergy is focusing on global exploration.

In terms of downstream profits, the NOCs are lagging behind the supermajors, with cash margins typically lower. Saudi Aramco is focusing on expanding its downstream portfolio through international mergers and acquisitions, while ADNOC and QatarEnergy are expanding into chemicals and specialty products.

When it comes to emissions intensity, ADNOC and Saudi Aramco are leading the sector with their low carbon emissions. Both companies are focusing on decarbonization as part of their energy transition strategies, positioning themselves well for the future.

In terms of low-carbon investments, ADNOC and Saudi Aramco are on par with energy transition leaders like BP and TotalEnergies. While progress in developing low-carbon portfolios is slower, all three NOCs have the platform and resources to step up their efforts in this area.

Overall, the Middle East NOCs are showing strength in the upstream sector, with room for growth and improvement in downstream profits and emissions intensity. With a focus on diversification and decarbonization, these companies are poised to meet the challenges of the future.