Welcome to the Saudi Aramco 's half -year 2025 results call. We will be holding a question and answer session following the presentation. If you would like to ask a question, please press star, followed by one, on your telephone keypad at any time. I shall now hand you over to Mr. Peter Hutton to begin.
Hello and welcome to this audio broadcast discussing Saudi Aramco's first half 2025 results. I'm Peter Hutton, Head of Investor Relations at Aramco, and I'm delighted to be joined today by Amin Nasser, President and CEO, and Ziad Al-Murshed, Executive Vice President and CFO. Our broadcast today will include a short presentation and question and answer session, and we expect the call to last up to an hour. Please refer to this cautionary statement on forward-looking information, our regulatory filings, and our website for more details. With that, I'll now hand the call over to Amin.
Thank you, Peter, and welcome everyone, and thank you for joining us on our earnings call today. In the past few months, we have witnessed a lot of volatility in oil markets, and it is during such times that our resilience, competitive advantage, and the ability to capture opportunities stand out. More recently, we are seeing ongoing strength in oil demand. Aramco has continued to demonstrate its low-cost structure and operational discipline, strong financial position, and the ability to deliver, which differentiates our position. This allows us to deliver long-term growth and feasibility in our return to shareholders through dividends, despite headwinds in the macro environment. Let's now take you through the key drivers behind our performance and progress. Over the first half of 2025, our results demonstrated our resilience in times of volatility, with an adjusted net income of $50.9 billion and a free cash flow of $34.4 billion.
With a gearing of 6.5%, our balance sheet is amongst the healthiest in the sector. Ziad will take you through the second quarter financials in more detail. This gives us the ability to deliver world-class projects, to extend and reinvest in our portfolio, and position us in a higher growth market while continuing to focus on cost discipline and cash flow growth. In terms of supply, we have responded quickly and efficiently to increased production volumes. We achieved 100% reliability for the first half of the year on delivery across both crude and products, all of which makes Aramco a partner of choice. We are active in pursuing growth opportunities while maintaining a significant premium in our returns, as shown by our ROACE of around 19%.
We will distribute around $21.1 billion in base dividends for the second quarter, up 4.2% year-on-year, + $220 million for the third payment of performance-linked dividends for the full year 2024 results. Before turning to our business performance, let me focus on the macro environment. Recently, we have seen the range of demand growth forecasts vary and widen, mainly due to uncertainty from global trade tariffs. Despite that, physical market signals have been strong lately from both steady economic performance in China and the U.S., and a strong performance in the oil market fundamentals, supporting demand for our crude and products. Global demand so far this year has been fair, with S&P estimates showing an average of 105.3 MMbpd for January to August, supported by gasoline and jet fuel consumption.
Going from this strong demand so far, we also know that oil demand in the second half is historically over 2% higher on average than the first half due to seasonality, so we are looking at the second half to be more than 2 MMbpd higher than the first half. At the same time, global inventories remain low at 3.6 billion bbl. Indeed, the signals in the physical market are clearer than the range in some analysts' forecasts, and we expect full year 2025 demand to be at the higher end of the range, just as it was in the first half. We continue to execute our growth plan as we leverage our strength to deliver cash flow growth into the future.
In the second quarter, we demonstrated our ability to quickly ramp up production, with total hydrocarbon production of 12.8 million bbl of oil equivalent per day, up by 475,000 bbl of oil equivalent per day versus the first quarter. We continue to make significant progress across our development of advantaged gas and liquid projects. Jafurah phase one and Tanajib gas plant are on track for completion in the fourth quarter this year. In liquids, Dammam phase one is on stream, while Marjan and Berri are also on track for completion later this year, bringing a further 575,000 bbl per day of production capacity. Our Dammam phase one is yet another good example of how our technical expertise creates additional value.
The reservoirs are in an area which is difficult to access, and our precision drilling of a 5 km extended horizontal well helps capture around 850 million bbl of reserves in the Dammam complex, further supporting our low cost, low depletion, and lower upstream carbon intensity operating model. In the first half of this year, 54% of our crude oil production was utilized by our captive Downstream system, slightly lower than the first quarter as our production base increases. In Downstream, we continue to pursue initiatives that drive incremental operating cash flow. This includes upgrading our portfolio, growing our liquid to chemical business, and making performance improvements across the business. In new energies, so far this year, we have signed agreements to invest in five solar and two wind projects in the Kingdom, holding a 30% equity stake in each.
This strong progress brings our cumulative renewable equity capacity that is operational and under development to 7.4 GW to date. This represents more than half of our 12 GW 2030 target having been achieved in just three years. Meanwhile, in the area of Blue Hydrogen, we continue to exercise discipline and rigor, assessing potential offtake agreements. Aramco's integrated business model remains a key strength as we drive synergies across various business lines, and we are actively progressing this integration to unlock more value. For example, our 100% supply reliability is reinforced by the resilience of our operation, the flexibility of our global assets, and our trading capabilities. In addition to the flexibility of our upstream operation in the Kingdom, we have multiple supply points serving global markets, especially Asia. We also operate significant storage and supply facilities in Europe, the Mediterranean, Asia, and U.S., at scale and at a low cost.
Our trading business has expanded profitably into new geographies and product opportunities, and our investment in MidOcean Energy and announced offtake agreements enhance the trading platform. In chemicals, our investment in liquid-to-chemicals also positions us in higher growth areas and enhances our portfolio with three key elements: equity-like positions in projects with high conversion rates, with a high share of feedstock offtake. Meanwhile, we have already achieved $3.5 billion of targeted $3 billion- $4 billion recurring SABIC synergies by the end of 2025 in areas including procurement, feedstock optimization, stream integration, and operations. We are capturing value further down the value chain as 250 Aramco-branded retail stations have been launched globally since 2024. The expanding global network in high-growth regions will enable us to further increase our products' offerings. Finally, we are continuing to progress our new energy strategy, leveraging the Kingdom's advantaged solar and wind resources.
In short, the progress we are making across the multiple elements of our portfolio integration will generate higher value and deliver increased cash flows. On that note, I will now hand over to Ziad to provide more details on our second quarter performance.
Thank you, Amin, and welcome everyone. We continue to deliver a robust financial performance in the second quarter of 2025, despite market volatilities. From this quarter onwards, we have started to report adjusted earnings. We previously shared certain specific items to aid investors' understanding of our underlying performance, and now we are formalizing the process to identify one-off non-operating and non-recurring items to further enhance our disclosures and visibility. With that clarification, let me drill down into the financial performance for Q2. Our adjusted net income in Q2 was $24.5 billion, down 7%, mainly due to crude oil prices. Upstream adjusted EBIT was $44.7 billion, and Downstream adjusted EBIT was $2.6 billion. Downstream EBIT was up more than double quarter on quarter, mainly due to improving refining margins, partially offset by continued weakness in chemicals margins.
Our capital investments were $12.4 billion in Q2, taking the total for the first half to $25.5 billion. Our full-year capital investment guidance remains unchanged at $52 billion- $58 billion, and we expect to provide a further update with our Q3 results. Free cash flow was $15.2 billion in Q2, and our financial position remains strong, with balance sheet gearing at 6.5% at the end of June, which remains peer-leading. Our 12-month rolling ROACE was 18.7%, which is around twice the average of our peers. Zooming in on our distributions, our resilience and ability to continue to deliver value to our shareholders in any macro environment underscores the strategy of our dividend policy. As we have noted before, our progressive and sustainable base dividend offers comfort on the downside, while our performance-l inked dividend shares any further upside.
This is once again demonstrated by our Q2 base dividend, which is $21.1 billion, as declared by the board, and which represents a 4.2% increase year-on-year. In addition, a performance-linked dividend of $220 million has been declared, aligned with our previously communicated mechanism. Both of these dividends will be distributed to shareholders later this month. In conclusion, before we take your questions, I will recap our investment proposition. With our industry-leading competitive advantages and unrivaled financial strength, we are focused on maximizing returns and growing operating cash flow, further underpinning our world-class distributions. This is why we believe we offer a very attractive investment proposition. With that, thank you for your attention. Amin, Peter, and I are pleased to now take your questions.
To ask a question, please press star, followed by one, on your telephone keypad. To withdraw your question, please press star, followed by two. When asking a question, please ensure you are muted locally. I shall now hand back over to Mr. Hutton.
Thank you very much. Our first question is from Iyad Ghulam at SNB Capital. Go ahead, Iyad.
[Foreign language] . Thank you for the opportunity. I have two questions. One is about the impact of tariffs on Aramco's business, and the second is about the increasing production as announced by OPEC+. Will that increase your CapEx and overall OpEx? Thank you.
Can you hear us?
Yeah, now I can hear you.
Okay. You didn't hear us from the beginning, or what?
No, no, I just now.
Okay, sorry about that. As I said, I repeat what I said. You know, with regard to tariffs, it has an impact, some sort of an impact on the global economy. However, as you've seen in the tariffs, in terms of hydrocarbon, it's exempted in terms of, from these tariffs in a lot of, when it was applied to different countries. If you look at China, for example, and even with the tariffs implication on China, China's demand continues to be at 17.5 million bbl, with a growth of about 200,000 bbl this year. The market is healthy in terms of demand for production, and for that, it has a limited impact on demand, and it will continue to see growth. What we have seen this year, significant growth. We're reaching, based on S&P, 105.8 million bbl for the full year of 2025.
We expect the second half a growth additional of around 2%. If you think about, we are looking at more than 100 million bbl, so that's more than 2 million bbl of additional demand. With regard to your questions, since from April through September, we, as Aramco, have seen closed approximately 1 million bbl of additional production. That is part of our spare capacity, with some with no or minimal additional costs for Saudi Aramco.
Thank you.
Just to add maybe one item is that if you want to use the rule of thumb, each 100,000 bbl of increase in production is expected to generate an annual additional cash flow of about $1.1 billion at $70 per barrel. That's an additional information.
Thank you, Iyad. Apologies for the unusual technical delay there, but glad we're back with you now. The next question comes from Biraj Borkhataria of RBC. Go ahead, Biraj.
Hi, thanks for taking my questions. I had two, please. The first one's just on your ambitions in the LNG space. You've obviously increased your stake in MidOcean recently. Can you just give a sense of your ambitions in that space over the next five to 10 years? Do you want to be a top portfolio player? I noticed one of your peers in the GCC has made some very significant moves in the last few months. It suggests the market for assets remains very competitive there. The second question is just on your efforts in hydrogen. Noticed you reference it on your slides. Haven't seen much in that space, and I think one of your peers in the U.S. is also facing similar challenges and struggling to find buyers who will sign an offtake. Could we get a quick status update there?
Have you had any more fruitful discussions or any commitments from buyers on that front? Thank you.
Thank you, Biraj. With regard to LNG, yeah, we had agreements and we signed with MidOcean , and we are looking at, we also signed some agreements with NextDecade for about 1.2 million t. We are in discussion on certain also agreements that we are currently evaluating that will give us close to 2 million t. We are in the space right now, not fully completed. We're looking at something in the range of about 4.5 million t, some of it offtake, some of it equity. Our long-term ambition is to have 20 million t of LNG capacity, and we continue to evaluate a lot of opportunities currently in our pipeline. With regard to hydrogen, we are still looking in discussion with some customers in Korea and Japan.
We know our feedstock, our position when it comes to advantage position and carbon capture and storage in the Kingdom to produce blue ammonia, we are very competitive. We know that from the numbers and the bids that are happening. However, until we sign an offtake agreement, we will not proceed with construction. When we sign the offtake agreement, we are ready to start constructing the facilities. Everything from an engineering point of view is available and ready. It is just signing the offtake agreement, and the discussions still continue until that materializes. We will not proceed with construction.
That's very clear. Appreciate the disciplined approach. Thank you.
Thank you, Biraj. The next question comes from Michele Del la Vigna of Goldman Sachs. Go ahead, Michele.
Thank you very much, and congratulations on the strong results, but also on being the only oil company that called correctly the strength in oil demand that we're seeing at the moment. Two questions, if I may. The first one, I wanted to come back to your comment on the Jafurah start-up, and was wondering when you think that it could lead to an end of crude burning in Saudi Arabia for power generation in the summer. Secondly, in Downstream, we're seeing an exceptionally strong refining environment, but also at the same time a bit of weakness in chemicals. I was just wondering if that changes in any way your longer-term growth strategies in Downstream. Thank you.
Thank you, Michele. With regard to Jafurah, it's on track for the end of this year for phase one and for the full potential of Jafurah, 2 billion scf per day by 2030. You know the interest in Jafurah is not because of gas only, it's because of the liquid. As we said before, 630,000 bbl of gas liquids and approximately 430 million scf of ethane that will come with these 2 billion scf of gas. Growth in gas will continue. We still have our production by 2030 compared to our 2021 production will grow by more than 60%. The whole purpose is on track to eliminate liquid burning in the Kingdom, which is close to approximately 1 million bbl. Between the additional gas and the renewable projects that are currently on, we are expected to eliminate that liquid burning by 2030.
The plan is still ongoing. No changes to our plan with regard to construction. Ziad will answer the part about the Downstream refining and chemical margins.
Yeah, hi Michele. On Downstream, you're correct, we're seeing improvements in refining margins while chemical margins remain weak. However, as you very well know, these are cyclical businesses, including chemicals. We expect longer-term or mid to long-term the chemical margins to also improve as demand increases to catch up to what has been overinvestment in chemicals capacity. Our long-term strategy remains the same. We're looking at integration of refining and chemicals and integrating the refining and chemicals with our upstream position. Our objective, as you know, is to convert liquids into chemicals, and we still have our target of placing up to 4 million bbl of liquids into petrochemical producing complexes at high conversion rates.
So far, this goal of maximizing liquids to chemicals throughput, we've achieved approximately 45% of our long-term target through our onstream projects, and we expect to see further progress in the coming three years through the start-up of four major projects. We have S-OIL expansion in Korea, which we call Project Shaheen. We have Huajin Aramco Petrochemicals in China. We have the Amiral project in SATORP in Jubail of Saudi Arabia. We have a project in Fujian, which SABIC is doing in Fujian in China. To us, this strategy of liquids to chemicals is a natural hedge and provides not only growth but a hedge for our upstream position. The focus, of course, remains on priority markets. China, elsewhere in Asia, and in the rest of the world, we're being opportunistic.
Thank you.
Thank you, Michele. The next question comes from Sashank Lanka of Bank of America. Go ahead, Sashank.
Yes, thank you very much for the presentation. I think most of my questions have been answered, but I just have one question on your Downstream expansion. I think last year you did announce quite a flurry of deals, but this year we haven't really seen any new announcement on the Downstream side, especially in China. I am just wondering if this is more of you trying to integrate what you've done so far and complete those transactions before you go ahead with more transactions. We'd like some clarity around the framework of your Downstream expansions. Thank you.
Yeah, thank you, Sashank. We still have a good number of deals in the pipeline, and you know until we close these deals, we cannot announce them. We still are reviewing some of the deals in China and elsewhere with regard to investment, depending on the opportunities that exist. We do have a number of deals, and the announcement will come when we close these deals.
All right. That's very clear. Thank you so much.
Thank you, Sashank. The next question is from Kim Fustier of HSBC. Go ahead, Kim.
Hi, good morning. Thanks for taking my questions. I had two, please. The first one is on your crude oil production. The OPEC monthly oil market report for July showed that Aramco's production surged in June to more than 9.7 million bbl a day, but supply to market was lower than that. I just wondered what you included in your 2Q production figures. Was it supply to market or actual production? Any color you can share about your domestic oil inventories would be quite useful as well. My second question is on Jafurah. I'm on the phase one. I seem to remember that guidance from a year ago was for a 3Q start-up, and now you're talking about 4Q. I just wondered if there had been a small delay there. Thank you.
Jafurah, I'll answer the second question with regard to Jafurah. We're still looking at the fourth quarter to start- up Jafurah, and it's progressing very well. To me, it just continues to be on track for delivery to the market, and activities there are very strong. We don't comment on our production, but you know you need to take into consideration this. We go by targets that we receive and always stick to these targets that we receive from the Ministry of Energy with regard to our production that we receive every month. As I highlighted earlier, from April through September, the expected approximately growth in our production is close to 1 million bbl. This comes with no or minimal additional costs to Saudi Aramco as we have spare capacity, and our maximum sustained capacity today is 12 million bbl.
That gives us a huge opportunity for growth in the future.
Thank you.
Thanks, Kim. The next question is from Henri Patricot of UBS. If you would like to go ahead, Henri.
Yes, thank you, Peter. Hello, everyone. Two questions from me, please. The first one on the CapEx guidance for 2025, which you didn't change today, but in the first half, you're tracking below that guidance range. You know that CapEx tends to be higher in the second half of the year, would it be fair to expect CapEx to end up towards the lower end of the range in 2025? Secondly, I wanted to ask about AI. I think, I mean, you made some comments recently about $4 billion of savings so far, thanks to AI. I was wondering if you can elaborate on where the bulk of these savings have been coming from and how much more you think there is to come from applying AI more broadly in your business. Thank you.
Thank you, Henri. You know we continue to maintain the same guidance from $52 billion- $56 billion. I understand the first half is around $50 billion. However, we will update on the third quarter. It is a question of timing when you look at the $50 billion for the first half and calendarization. The guidance will give a more narrow guidance on the third quarter with regard to the full year. With regard to AI, we are heavily investing on digitalization and AI, and we have developed Aramco's large language model, which is a cutting-edge generative AI model to unleash the potential of AI application and also to optimize the company's financial performance and fortify climate leadership and enhance safety and productivity. This is also capitalizing on our venture capital program, which was expanded by $4 billion to reach a total of $7.5 billion, focusing on testing new technologies.
Now, when I talk about total realized value as a result of capitalizing, almost in 2024, we achieved $4 billion. Almost half of that is a result of AI. In 2025, we are looking at $2 billion - $4 billion in total realized value. Areas where we have really benefited big time, you can look at productivity in terms of geosteering, in terms of exploration, seismic interpretation, everything related to our business, preventive maintenance of our plants, and increasing the efficiency of our plants, reducing carbon emissions by better monitoring. AI is immersed in everything that we are doing in Saudi Aramco, and we are seeing the full benefits of that. We see it in the productivity of the world that we are able to increase the productivity in certain areas by two times and sometimes three times, capitalizing on AI technology.
The benefits will only increase as we build on our capability. We are benefiting not only by our infrastructure that we have done over the years, because you need for AI to materialize, you need the data quality, which means that is harnessed over the years. We have data from inceptions that are kept for good use, and we are using it big time right now. We have strong infrastructure and computing capability and digitalization, inferencing, and all of these things. We have the talents. I mean, other than the data scientists, the couple of hundred data scientists that we have, we benefited a lot from our subject matter experts that are trained on AI, that are identifying opportunities. So far, we carry close to 500 use cases. Each use case is a project in itself. It has a timeline, savings, and delivery expectation.
We are monitoring all of these use cases, and each has a group of subject matter with data scientists behind it to deliver on these things. We are seeing the full benefit of AI. When people talk about AI and the cost for building the data center and the energy requirement, I always say the benefits far exceed the costs associated with all of this AI infrastructure that we're building over the foreseeable future.
Great. Thank you.
Thank you, Henri. The next question comes from Matt Lofting of JP Morgan. Matt, go ahead.
Hi, all. Thanks for taking the questions. I think you mentioned earlier that Aramco's cash flow sensitivity or benefit to higher production in that context and the recent OPEC+ update to further increase quotas from September. I just wondered if you could confirm the operational readiness of the asset base to deliver on rising quotas in the Kingdom as we look forward and the extent to which the growth increments, which I think are on track for later this year, further support that. Secondly, I wanted to ask you about capital efficiency. You talked about 2025 CapEx earlier, but the question is more medium term. I think you've indicated previously that you expect current levels of CapEx to remain around the prevailing level through to mid-decade. When you look beyond that, to what extent does the business continue to see rising flexibility to bring CapEx down?
It strikes me that that's an important part of delivering rising underlying free cash flow expansion as you move into the second half of the decade. Thank you.
Thank you, Matt. You know, with regard to our readiness, we always say MSC, the 12 million bbl is readily available within weeks. At full blast, we have done this in the past. If you remember in 2020, we brought it on in three weeks. Actually, I had a little bit more than 12 million bbl. The MSC is something that we maintain very well, and you've seen the increments and the maintained potential is on track, and it is readily available, let me put it that way, to come on stream when we have to bring additional production. With regard to capital efficiency, we know we will continue to exercise governance and be disciplined about spending, but we also want to be able to capture opportunities as they arise for us. It's value over volume and efficiency over spending while ensuring creating shareholder value.
We will continue to do that and exercise prudence when we look at our capital, but we will not ignore opportunities because it's always opportunities that arise in a down cycle, and Aramco has always captured these opportunities for growth. If you look at our total execution, project under execution today is around $100 billion, and this project will materialize on completion dates and will add a huge value for Saudi Aramco. Ziad, if you want to add anything.
Yeah, Matt, I just want to remind you that a couple of years ago, we demonstrated our ability to flex down significantly our CapEx and to flex it back up as appropriate for the company. The flexibility is certainly there. Like Amin said, you know we have some unique investment opportunities that we want to take advantage of through the cycle. I just want to emphasize what Amin said on the $100 billion of assets under construction. These are assets that are expected to come on stream, and this is why we talk about an incremental increase to our operating cash flow. We talked about gas bringing in $9 billion- $10 billion of incremental operating cash flow by 2030. We talked about Downstream bringing $8 billion- $10 billion of incremental operating cash flow by 2030.
Although Downstream is kind of a combination of growth, but also significant transformation and cost cutting across the assets. Flexible, but also a set of unique investment opportunities that we want to create shareholder value.
Okay, thanks, Matt. The next question is from Guilherme Levy at Morgan Stanley. Go ahead.
Hi, hello everyone. Thank you for taking my questions. I have two, please. Firstly, you have one of the strongest balance sheets in the industry, and during this uncertain period of time, that can certainly be a strong tool. How are you thinking about gearing vis-à-vis the M&A market environment at the moment? How much that can be an opportunity to you? Also, secondly, how are you thinking about China's anti-involution initiatives to reduce older capacity both on refining and chemicals in the country? Thank you.
Thank you, Guilherme. Now, I will take the second part. All what we see from China, and this is where our investment is more growth, and they are needing the liquid mainly in the liquid to chemical. That's where you see huge growth, and this is where our investment is going. In transportation and in jet fuel, we're seeing also growth in China. Our investment in China and our position in China, China is one of our main markets for supply. A placement through our integrated investment that we are placing in China and liquid to chemical will ensure that that market will continue to be healthy. We are seeing a healthy demand coming out from China, even with the tariffs and everything, and everybody talks about the impact on China.
China is still today 17.5 MMbpd in the full year 2025 when you look at the total demand and a growth of 200,000 this year. Even in a tough market, China is still growing with significant demand. With regard to the gearing, Ziad answered that.
Yeah, Guilherme, we obviously have a very low balance sheet gearing. It's industry-leading. We use our balance sheet across the cycle. During the good times, you saw us delivering from 2022 to 2024. We started levering up again. We're optimizing our cost of capital in order to generate more shareholder value. That is the end. We have a very high credit rating. That is the base case. Of course, this low gearing and strength of the balance sheet not only helps us push through our investment and growth program, but also helps us take advantage of these growth opportunities countercyclical. When prices are down, are we trying to increase our gearing? I would say we're targeting an optimum capital structure that minimizes or optimizes our cost of capital so that the economic value generated to our shareholders is higher.
Thank you.
Thanks, Guilherme. The next question is from Lydia Rainforth at Barclays. Go ahead, Lydia.
Thank you, and good afternoon. A couple of questions, if I could. I think probably just all linked back to some of the digital side. When you talk about your sort of growth plans being on track and the strong execution, I've also seen some headlines that the oil recap has declined to 20-year lows. I know that data is often sort of difficult to track, but is that reflecting actually the productivity in the world that you were talking about and just that sense of optimization? Secondly, just to come back to Henri's question on that sort of the AI deployment side, how, when you think about the workforce, do you do that? It's an area that I'm trying to do more on in terms of my own learning, but it feels quite difficult to make systematic changes around the AI.
It's just that kind of culture of being able to deploy it and just your thoughts on the challenges of getting that done or the ease of it. Thank you.
Thank you, Lydia. You were asking about also rig drop?
Rig count.
Rig count, yeah. No, I think at rig counts, it was as a result of completing certain projects and reducing the MSC. Remember when we had 13 million, and then that 13 million was dropped to 12 million. That came with the association of laying off certain rigs. As we complete projects from our increments, we will definitely look at the rig counts and ensure that what we have is what we need to meet our maintained potential and gas growth. Most of the growth that we are seeing is in gas because our MSC is fixed at 12 million. However, gas is growing significantly. Production from 2021 level to 2030 will grow by much more than 60%. That will require a good number of rigs to maintain that growth capacity. We are on track for our increments in oil and gas to complete them as per the schedule.
With regard to your question about AI and deployment, I think for AI, you know, AI is not about buying chips or GPUs. AI is also, we need to make sure you have the right infrastructure that exists within your facilities. AI also requires that you need to have the talents, not only the data scientists that understand AI, that they are available, but what you need is the subject matter experts, the mechanical, the chemical, the electric engineers that are trained on AI because they are the ones who will identify the opportunities. With their learning about AI, they will be able to execute these use cases that they are coming with. Most of our use cases, the 500 I talked about earlier, is coming from our subject matter experts in the fields who were trained on AI.
We trained more than 6,000 on AI, other than our data scientists, which are a couple of hundreds, and they are capturing all of these opportunities. You need to do a lot of training to capture the opportunity. Infrastructure, you need to have the talent, and you need to have the data quality. We benefited a lot by keeping our data since 1933. Since we started Aramco, we kept everything, data, core samples, test samples that we did over the years, and now we are taking them back. Our seismics, when we started with 1D and 2D, we're going back to them because we can now, through better imaging and through AI, have much better reading on the data and the seismic. It requires data quality, it requires talents, it requires having the right infrastructure to deliver.
In 2024, we talk about total realized value for Saudi Aramco $4 billion, and the target going forward, we put it $2 billion- $4 billion a year in capitalizing on the strength and the AI capabilities I talked about.
Super helpful. Thank you.
Thank you, Lydia. The next question is from Irene Himona of Bernstein SocGen. Go ahead.
Thank you very much. Thank you very much. My first question is on SABIC, where it seems you have delivered the integration synergies you were planning. You were looking for $3 billion- $4 billion by 2025. You've achieved $3.5 billion. I wanted to understand how much of that is flowing through to the bottom line. Related to that, in terms of cost inflation, clearly you're in a very intense investment phase. I wanted to ask, I realize inflation in Saudi Arabia is lower than elsewhere, but I wanted to understand if you are facing some inflationary pressures on your CapEx and whether some of your overall cost-cutting efforts in the Downstream may be, let's say, offset by that inflation. Thank you.
I'll let Ziad answer the questions about SABIC. However, we do have a very competitive market and strong partners in the Kingdom to execute our projects. We benefit a lot from our in-Kingdom total value add, what we call our IKTVA program. 67% of our goods and services were sourced from within the Kingdom. That helped us actually to much lower the inflation rates. The aim is hopefully by the end of this year to reach 70%. Building that local capability helped us to really mitigate the inflation rates that we are seeing elsewhere in the world. Ziad, with regard to SABIC?
Yeah, on the SABIC synergies, the three to four, we're not done, by the way. We promised we would be done by the end of 2025. We're still working. There's a bit more value to synergies to capture. These are mainly, if you look at the $3.5 billion that was captured already, it's mainly coming from procurement, sales and marketing, where we have one face to the market. We have the supply chain synergies, a lot of stream integration synergies because our assets between Aramco and SABIC are next to each other in both Jubail and Yanbu. A lot of stream integration, a lot of feedstock optimization. We have achieved $3.5 billion. We're not done yet. Now, this $3.5 billion is flowing to the bottom line in the sense that it is $3.5 billion recurring synergies. This is annual recurring EBITDA impact.
In that sense, they are flowing to the bottom line.
Thank you very much.
Thank you. Our next question is from Alastair Syme of Citi. Go ahead, Alastair.
Thanks, Peter. Hi, Amin and Ziad. Can I ask on the oil demand outlook? I noted in this presentation you were showing third-party estimates. I think if I remember at 1Q, when you talked about 1.7 million bbl a day of growth, I was under the impression you were using an Aramco internal estimate. I guess my question is, are the Aramco internal estimates higher than what you were showing? My second question is on Jafurah phase two . I think we saw some packages awarded last year, but I perhaps expected to see the results of a few more tenders and packages coming through this year. Perhaps you could update us on the timing of that project.
Thank you. Thank you, Alastair. With regard to Jafurah, as I said, phase one is on track for completion this year, and phase two is also on track. What our commitment is to deliver, you were talking about 23 contracts that were awarded for phase two. Our completion day for the full capacity of Jafurah of 2 billion is still the same, which we are committed to have it by 2030. Of course, as I said, the importance and the question is always about Jafurah because of the liquid that is coming with Jafurah, the 630,000 bbl of liquid and the 430 million scf of ethane, which is significant. With regard, it is on track for phase one, and it is on track for phase two as planned earlier and as we have discussed before. No change to our plan.
With regard to demand, as I said earlier, we still see a healthy demand. We always use third-party forecasts, and the range that you see from different forecasts goes from [1.1 MMbpd - 1.3 MMbpd]. We, and based on what we see and what we expect, to be on the higher end of that range. This is what we are seeing from the physical market that we are dealing with, that we are expecting the higher end of that range to materialize, especially knowing what happened in the first half. Usually, based on all the years past, the second half, you see a 2% increase due to seasonality. If you think about it, there will be 2 million bbl of additional demand that we will be seeing in the second half. When we look at the global inventory, we are still continuing to be below the five-year average.
We see strong supply-demand fundamental, and our expectations will be at the higher end of the range of the 1.1 MMbpd - 1.3 MMbpd, more likely to be around the 1.3 MMbpd.
Thank you very much.
Thanks, Alastair. That's the end of the questions that we have for the moment. I'll pass you back to the operator.
Just as a reminder, if there is one to ask a question, we have no further questions. Back to the management team.
Thank you, everybody, for joining us this morning. I know it's busy days all around. Appreciate it. As ever, if there are any follow-up questions or comments, please get in contact with investor relations. You know, that's why we're there. Please get in touch with us if there's anything we can help. Thank you very much indeed. Goodbye.
Thank you, everyone. This concludes today's call. You may now disconnect.