ENVIRONMENTAL CHALLENGES AND OPPORTUNITIES AT SAUDI ARAMCO

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1 ENVIRONMENTAL CHALLENGES AND OPPORTUNITIES AT SAUDI ARAMCO RAMZI HEJAZI Saudi Aramco October 2010 Copyright 2010, Saudi Aramco. All Rights Reserved.

2 Saudi Aramco Facilities

3 The Beginning of Oil in Saudi Arabia May 29,1933

4 Saudi Aramco Milestone Dates Saudi Arabia grants oil concession to California Arabian Standard Oil Company*. Oil prospecting begins Kingdom's first commercial oil field discovered at Dhahran. Crude is exported by barge to Bahrain Ras Tanura Refinery begins operations Saudi Government acquires 100 percent participation interest in Aramco. * Affiliate of Standard Oil of California, today's Chevron

5 Upstream Operations 96 oil and gas fields 320 reservoir accumulations 260 billion barrels, one- fourth of the world s proven oil reserves 12 million bbl/d oil production capacity 5 Grades of Crude Oil 275 trillion SCF of gas reserves Miles 300

6 Downstream Operations 7 in-kingdom refineries (3 JVs) 3 new Joint Ventures under development (plus Export) Refining and Petrochemical Complex Development 9.4 BSCFD gas processing capacity 70 MM barrels of crude oil storage 24,000 km hydrocarbon pipelines 2 GW in-house power generation capacity Fleet of 23 VLCCs and 5 products tankers

7 History of Environmental Protection at Saudi Aramco 1963: Issue First Corporate Environmental Policy Statement 1982: First Landfarm at RT Refinery 1986: First Inventory of Industrial Solid Waste 1993: First Contractor Waste Disposal Facility 1993: Waste Minimization Program 1998: Establishment of EPD 1999: Launch Industrial Waste Management Program 2001: Develop Environmental Master Plan 2001: Create Environmental Technology Focus Team 2004: Proactive Approach: 10 Years Strategy

8 Distribution Control No. 067 POLICY MANUAL

9 History of Environmental Protection at Saudi Aramco 1963: Issue First Corporate Environmental Policy Statement 1982: From Storage to Treatment: First Landfarm 1986: First Inventory of Industrial Solid Waste 1993: First Contractor Waste Disposal Facility 1993: Waste Minimization Program 1998: Establishment of EPD 1999: Launch Industrial Waste Management Program 2001: Develop Environmental Master Plan 2001: Create Environmental Technology Focus Team 2004: Proactive Approach: 10 Years Strategy

10 Typical Saudi Aramco Nonhazardous Waste Office trash and garbage Empty drums/containers Construction debris (concrete, rubble, glass) Scrap (metal, wood) Discarded equipment and furniture (non- contaminated) Industrial and sanitary wastewater

11 Typical Saudi Aramco Hazardous Waste Spent catalysts Cleaning chemicals Contaminated soils and equipment Laboratory wastes Oily liquids Oily sludges Oil contaminated solids Asbestos waste Infectious/Medical wastes Radioactive wastes (e.g., NORM)

12 2008 Industrial Waste Inventory Type of Waste Quantity (cu.m) Percentage (%) Oily sludge 11, Oily Water 10, Nonhazardous 5, Hazardous 2,803 8 Asbestos-Contaminated 1,715 5 Oily Waste 1, Medical Hydrocarbon Product Slop Oil PCB-Contaminated TOTAL 34,

13 History of Environmental Protection at Saudi Aramco 1963: Issue First Corporate Environmental Policy Statement 1982: First Landfarm at RT Refinery 1986: First Inventory of Industrial Solid Waste 1993: First Contractor Waste Disposal Facility 1993: Waste Minimization Program 1998: Establishment of EPD 1999: Launch Industrial Waste Management Program 2001: Develop Environmental Master Plan 2001: Create Environmental Technology Focus Team 2004: Proactive Approach: 10 Years Strategy

14 EPD Organization Environmental Protection Department Environmental Environmental Engineering Engineering Division Division Environmental Environmental Compliance Compliance Division Division Environmental Environmental Coordination Coordination Division Division Land & Groundwater Protection Unit Air Air Quality & Meteorology Unit Wastewater Management & Marine Protection Unit CA CA Env Compliance Unit NA NA Env Compliance Unit SA SA Env Compliance Unit Western Region Env Unit Radiation Protection Unit Awareness Group Government Correspondence Group Climate Change Group

15 Saudi Aramco Master Program for Industrial Waste Management (International Award 1999) Characterize waste streams Determine proper disposal methods Identify acceptable sites Improve existing facilities Initiate a manifest system Modify contract requirements Implement waste minimization Encourage the private sector Contract for disposal where possible Monitor compliance

16 History of Environmental Protection at Saudi Aramco 1963: Issue First Corporate Environmental Policy Statement 1982: First Landfarm at RT Refinery 1986: First Inventory of Industrial Solid Waste 1993: First Contractor Waste Disposal Facility 1993: Waste Minimization Program 1998: Establishment of EPD 1999: Launch Industrial Waste Management Program 2001: Develop Environmental Master Plan 2001: Create Environmental Technology Focus Team 2004: Proactive Approach: 10 Years Strategy

17 Environmental Master Plan Objective: To bring Saudi Aramco facilities into compliance with current regulations. Plan endorsed in Identifies capital program requirements for Saudi Aramco facilities. Prioritizes environmental projects based on the potential for harm to human health and the environment. Plan deals mainly with wastewater, air emission and clean fuel issues. 40 projects to be completed over 10 years.

18 Environmental Master Plan Status (By Category) Wastewater 37% Others 4% Air Emission 25% Total plan is $ 3.3 Billion 95% completion by 2011 Clean Fuels 34%

19 Environmental Technology Enhance Environmental Performance Through Technology Comply with Environmental Standards Reduce Release of Pollutants Enhance Environmental Monitoring Enhance Remediation Effectiveness Enhance Waste Management Target Environmental Areas

20 Comply with Environmental Standards Enhance Environmental Monitoring Reduce Air Pollutants Technology Initiatives Polymeric Adsorbents (JRD) Membranes for oily wastewater (RRD) Predictive Emission Monitoring (RTR) Laser-based Oil Fingerprinting Passive Soil Gas Survey Alkaline Flue Gas Desulfurization E-Beam FG Treatment (RRD&YRD) Completed Completed Active (05) Active Active Completed Active Enhance Waste Management Petrozyme Bioreactor (JGP) NORM Waste Disposal (ANL) Completed Active (06) Enhance Remediation Effectiveness HC Soil Remediation by LTO Phyto-Remediation of Heavy Metals Novel technique for MTBE remediation Active Active (05) Active

21 Strategic Elements In Line with Corporate Imperatives Enhance Environmental Performance Protect Natural Resources Assure Environmental Compliance Promote Environmental Awareness Promote Worker & Community Health Provide Innovative Environmental Solutions Reduce Environmental Pollutants from Products Reduce Air Pollution Enhance Environmental Monitoring Enhance Wastewater Management Protect Land & Groundwater Resources Mutilnational Environment and Trade Policy Promote Cost - Effectiveness Protect Marine Environment Manage & Minimize Solid & Hazardous Waste Develop Environmental Coordinators Enhance Radiation Protection Promote Local Environmental Services Partner with Government & Industry Promote Local Industry Awareness Develop Employees Enhance Environmental Health Enhance Workplace Environment Promote Environmental Awareness Promote Community Awareness Partner with Facilities & Projects

22 Opportunities Waste Stream Reuse Oily Waste (lubricating oil, crude and slop oil) Empty Drums Tires Spent Catalyst E-Waste, Batteries, Lighting Spent Caustic

23 Opportunities Waste Management Services Waste management facilities Recycling facilities Mobile treatment systems Laboratories Environmental consulting Transportation, hauling Monitoring Composting and garbage recycling

24 Groundwater Site Investigation and Monitoring Risk Assessment Studies Opportunities Groundwater Protection Remedial Investigation and Feasibility Studies Remedial Technology Development GIS and Data Base Creation and Management Groundwater Remediation (floating and dissolved phase issues)

25 Opportunities (Marine Environmental Services) Marine Hydrodynamics and Circulation Marine Studies with Local Capabilities Dredging and Landfilling Impact Environmental Impact Assessment Marine Monitoring in Coastal and Offshore Oil Spill Detection

26 Opportunities Air Quality and Meteorology Sector Odor elimination (wastewater treatment plants, evaporation ponds, etc.) NOx reduction from boilers and gas turbines VOC reduction from loading operations Emissions monitoring (both ambient and stacks) Minimize/eliminate flaring (both upstream and downstream) Fugitive emissions monitoring Air monitoring stations

27 Opportunities Industrial and Municipal Wastewater Treatment Innovative Wastewater Treatment and Reuse/Reclamation Technologies Biological, Physical and Chemical Treatments Small Flow and Decentralized WW Treatment Systems Wastewater Treatment and Aquifer Recharge Produced Water Treatment and Reuse Industrial Wastewater Reuse Sludge Treatment and Recycling Operation and Maintenance of WWTPs Proven Wastewater Treatment Equipment

28 Current and Future Challenges Continuous reduction in waste generation. Recover maximum value from waste. Promote viable environmental services in the Kingdom. Apply the most cost-effective solutions.

29 Current and Future Challenges Anticipate stricter Environmental regulations. Enhance environmental awareness. Availability of qualified environmental professionals. Overcome resistance to change. Encourage innovative thinking.

30 Saudi Aramco Canadian Partnerships Memorial University,, Risk Based Corrective Action Model. University of Calgary,, Low Temperature Oxidation, experimental and field modeling work (Won an award from ASCE). University of Regina,, Capture CO 2 using Solvents. University of Toronto,, Compound Specific ISOTOPE Analysis.

31 Saudi Aramco Canadian Partnerships Vertex Solutions,, Groundwater Studies Petrozyme, Oily Sludge Treatment STANTEC (and Jacques Whitford), EIAs SNC-Lavlin (Morrow Environmental,) EIAs Golder Associates (and Gartner Lee), EIAs Terralog Technologies, Contractor RWDI Inc.

32 Thank you Together we can create a better tomorrow.

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