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Saudi Aramco

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Saudi Arabian Oil Company
Company typeGovernment-owned corporation of the Kingdom of Saudi Arabia
ISINSA14TG012N13 Edit this on Wikidata
IndustryCrude Oil exploration, production, manufacture, marketing, and shipping
Founded1933
HeadquartersDhahran, Saudi Arabia
Key people
Khalid A. Al-Falih
President & CEO
Ali I. Al-Naimi
Minister of Petroleum
and Mineral Resources
ProductsPetroleum product
RevenueIncrease US$ 233 Billion (2008)
1,144,077,000,000 Saudi riyal (2022) Edit this on Wikidata
604,005,000,000 Saudi riyal (2022) Edit this on Wikidata
Total assets1,494,126,000,000 Saudi riyal (2019) Edit this on Wikidata
Number of employees
55,066 (As of Dec 31, 2009)[1]
Websitesaudiaramco.com
Saudi Aramco headquarters complex

Saudi Aramco (Arabic: ارامكو السعودية ) is the state-owned national oil company of Saudi Arabia. It is the world's most valuable company, estimated at 781 billion US$ in 2006,[2] while more recent estimates of 2010 put its value in the range 2.2 trillion USD [3] to 7 trillion USD.[4] It is also the oil corporation with the largest proven crude oil reserves and production.[5] Headquartered in Dhahran, Saudi Arabia,[6] Saudi Aramco also operates the world's largest single hydrocarbon network, the Master Gas System. It was known as just Aramco between the years of 1933-1988, an acronym for Arabian American Oil Company.

Its yearly production is 3.4 billion barrels and it managed over 100 oil and gas fields in Saudi Arabia totaling at least 264 billion barrels of oil reserves and 253 trillion scf of gas reserves.[7][8]

Among those fields fully owned by the company is the Ghawar Field, the world's largest oil field; the Safaniya Field, the world's largest offshore field; and the Shaybah Field, one of the world's largest of its kind.

History

Saudi Aramco dates back to May 29, 1933, when the Saudi government signed a concessionary agreement with Standard Oil of California (Socal), allowing the company to explore Saudi Arabia for oil. Standard Oil of California assigned this concession to a wholly owned subsidiary called California-Arabian Standard Oil Co. (Casoc). In 1936 with the company having no success at locating oil, the Texas Oil Company purchased a 50% stake of the concession.[9]

After a long search for oil that lasted around four years without success, the first success came with the seventh drill site in Dammam, an area located a few miles north of Dhahran in 1938, a well referred to as Dammam number 7. The development of this well, which immediately produced over 1,500 barrels per day (240 m3/d), gave the company confidence to continue and flourish. The company name was changed in 1944 from California-Arabian Standard Oil Company to Arabian American Oil Company (or Aramco). In 1948, Standard Oil of California and the Texas Oil Company were joined as investors by Standard Oil of New Jersey who purchased 30% of the company, and Socony Vacuum who purchased 10% of the company, leaving Standard Oil of California and the Texas Oil Company with equal 30% shares

In 1950, King Abdul Aziz Ibn Saud threatened to nationalize his country's oil facilities, thus pressuring Aramco to agree to share profits 50/50. A similar process had taken place with American oil companies in Venezuela a few years earlier. The American government granted US Aramco member companies a tax break known as the golden gimmick equivalent to the profits given to Ibn Saud. In the wake of the new arrangement, the company's headquarters was moved from New York to Dhahran.

In 1973, following US support for Israel during the Yom Kippur War the Saudi Arabian government acquired a 25% share of Aramco, increased the share to 60% by 1974, and finally acquired full control of Aramco by 1980. In November 1988, the company changed its name from Arabian American Oil Company to Saudi Arabian Oil Company (or Saudi Aramco).

Timeline

  • 1932 Oil is discovered in Bahrain. Socal begins a year-long series of negotiations with the Saudi government.
  • 1933 Saudi Arabia grants oil concession to California Arabian Standard Oil Company (Casoc), affiliate of Standard Oil of California (Socal, today's Chevron). Oil prospecting begins on Kingdom's east coast.
  • 1936 Texas Oil Company (which became Texaco, and now Chevron) acquires 50% interest in Socal's concession. The joint venture became known as the California Texas Oil Company, or Caltex.
  • 1938 Kingdom's first commercial oil field discovered at Dhahran. Crude is exported by barge to Bahrain.
  • 1939 First tanker load of petroleum is exported. (Socal’s D.G. Scofield)
  • 1944 Casoc changes its name to Arabian American Oil Company (Aramco).
  • 1945 Ras Tanura Refinery begins operations (eventually becomes the largest oil-refinery in the world).
  • 1948 Standard Oil of New Jersey (which became Exxon and now ExxonMobil) and Socony-Vacuum Oil (which became Mobil and now ExxonMobil) join Socal (now Chevron) and Texaco (now Chevron) as owners of Aramco.
  • 1950 1,700 km Trans-Arabian Pipe Line (Tapline) is completed, linking Eastern Province oil fields to Lebanon and the Mediterranean.
  • 1950 The US government bestows upon the US member companies a tax break equivalent to 50% of oil profits, a deal known as the Golden gimmick.
  • 1956 Aramco confirms scale of Ghawar and Safaniya, the largest onshore and the largest offshore field in the world, respectively.
  • 1961 Liquefied petroleum gas (LPG) - propane and butane — is first processed at Ras Tanura and shipped to customers.
  • 1966 Tankers begin calling at "Sea Island", new offshore crude oil loading platform off Ras Tanura.
  • 1973 Saudi Government acquires 25 percent interest in Aramco.
  • 1975 Master Gas System project is launched.
  • 1980 Saudi Government acquires 100 percent participation interest in Aramco, purchasing almost all of the company's assets.
  • 1981 East-West Pipelines, built for Aramco natural gas liquids and crude oil, link Eastern Province fields with Yanbu on the Red Sea.
  • 1982 King Fahd visits Saudi Aramco, Dhahran, on Aramco's 50th Anniversary to inaugurate the Exploration and Petroleum Engineering Center (EXPEC), a milestone in the Saudization of the company's operations.
  • 1984 Company acquires its first four supertankers.
  • 1987 East-West Crude Oil Pipeline expansion project is completed, boosting capacity to 3.2 million barrels (510,000 m³) per day.
  • 1988 Saudi Arabian Oil Company, or Saudi Aramco, is established.
  • 1989 High-quality oil and gas are discovered south of Riyadh — the first find outside original operating area.
  • 1991 Company plays major role combating Gulf War oil spill, the world's largest.
  • 1992 East-West Crude Oil Pipeline capacity is boosted to 5 million barrels (800,000 m³) per day. Saudi Aramco affiliate purchases 35% interest in SsangYong Oil Refining Company (S-Oil) in the Republic of Korea.
  • 1993 Saudi Aramco takes charge of Kingdom's domestic refining, marketing, distribution and joint-venture refining interests by buying Jeddah-based Saudi Arabian Marketing and Refining Company (SAMAREC).
  • 1994 Maximum sustained crude-oil production capacity is returned to 10 million barrels (1,600,000 m³) per day. Company acquires a 40% equity interest in Petron, largest refiner in the Philippines.
  • 1995 Company completes a program to build 15 very large crude carriers. Saudi Aramco President and CEO Ali I. Al-Naimi is named the Kingdom's Minister of Petroleum and Mineral Resources, and Chairman of Saudi Aramco. Abdallah S. Jum'ah is named the CEO, President, and Director of Saudi Aramco.
  • 1996 Saudi Aramco acquires 50 percent of Motor Oil (Hellas) Corinth Refineries and Avinoil from the Vardinoyannis family. Company also assumes controlling interest in two Jeddah-based lubricants companies, now known as Saudi Aramco Lubricating Oil Refining Company (Luberef) and Saudi Arabian Lubricating Oil Company (Petrolube).
  • 1998 Saudi Aramco, Texaco and Shell establish Motiva Enterprises LLC, a major refining and marketing joint venture in the southern and eastern United States.
  • 1999 HRH Crown Prince 'Abd Allah inaugurates the Shaybah field in the Rub' al-Khali desert, one of the largest projects of its kind in the world goes on stream. The Dhahran-Riyadh-Qasim multi-product pipeline and the Ras Tanura Upgrade project are completed. The second Saudi Aramco-Mobil lubricating oil refinery (Luberef II) in Yanbu' commences operations.
  • 2000 Petroleum Intelligence Weekly ranks the company the first in the world for the 11th straight year, for the country's crude oil reserves and production. Aramco Gulf Operations Limited is established to administer the government's petroleum interest in the Offshore Neutral Zone between Saudi Arabia and Kuwait. New facilities are under construction in the Haradh and Hawiyah gas plant projects to process gas for delivery to the Master Gas System and to domestic markets.
  • 2001 Hawiyah Gas Plant, capable of processing up to 1.6 billion standard cubic feet per day of non-associated gas, comes on stream.
  • 2003 Haradh Gas Plant completed two and a half months ahead of schedule.
  • 2004 HRH Crown Prince 'Abd Allah ibn 'Abd Al-'Aziz Al Saud, First Deputy Prime Minister and Head of the National Guard, inaugurates the 800,000-barrel-per-day (130,000 m3/d) Qatif-Abu Sa'fah Producing Plants mega project. In addition to the crude, the plants provide 370 million standard cubic feet of associated gas daily.
  • 2005 Saudi Aramco and Sumitomo Chemical Co., Ltd. sign a joint venture agreement for the development of a large, integrated refining and petrochemical complex in the Red Sea town of Rabigh, on Saudi Arabia's west coast.
  • 2006 Saudi Aramco and Sumitomo Chemical break ground on Media:PETRORabigh, an integrated refining/petrochemical project. Haradh III completed, yielding 300,000 bbl/d (48,000 m3/d) of oil. Accords signed for two export refineries—Jubail (with Total) and in Yanbu' (with Conoco-Phillips).
  • 2008 Saudi Aramco celebrates the 75th anniversary of the May 29, 1933, signing of the oil concession between the Kingdom of Saudi Arabia and Standard Oil of California (Socal). King Abdullah visits Dhahran to celebrate the 75th anniversary.

Operation

Saudi Aramco has begun performing tasks that were previously conducted by the American companies in the region. The company has attempted to produce an independent environment; it has begun to perform critical tasks itself, while contracting secondary tasks to companies in the region.

Exploration

A significant portion of the Saudi Aramco workforce consists of geophysicists and geologists. Saudi Aramco has been exploring for oil and gas reservoirs since 1982. Most of this process takes place at the Exploration and Petroleum Engineering Center (EXPEC). Originally, Saudi Aramco used Cray Supercomputers (CRAY-1M)[10] to assist in processing the colossal quantity of data obtained during exploration. In 2001, Saudi Aramco decided to use Linux clusters as a replacement for the decommissioned Cray systems.

Drilling

This is the most crucial process and as such accounts for the largest segment of the Saudi Aramco workforce. Drilling new wells efficiently and then maintaining them requires the company to employ a large number of engineers. With the increasing global demand for oil, Saudi Aramco seeks to expand its oil production. To do this the company seeks to expand the number of engineers and geo-scientists it employs.

Refining and distribution

While the company did not originally plan on refining oil, the Saudi government wished to have only one company dealing with oil production. Therefore, on July 1, 1993, the government issued a royal decree merging Saudi Aramco with Samarec, the country's oil refining company.[11] Since then, Saudi Aramco has taken on the responsibility of refining oil and distributing it in the country.

Shipping

Saudi Aramco has employed several tankers to ship crude oil, refined oil and gas to various countries. It has created a wholly owned subsidiary company, Vela International Marine Limited, to handle shipping to North America, Europe and Asia.

Research and development

Saudi Aramco has taken a keen interest in optimizing its processes over the last decade. To this end, it has employed about 500 engineers and scientists specializing in different aspects of the hydrocarbon industry.

There are two R&D entities in Saudi Aramco: 1) The Upstream (EXPEC ARC) which is solely managed by Exploration & Producing, and 2) the Downstream which includes bio-research and many others which is managed by a different entity. Leading research undertaken at these two major facilities provides Saudi Aramco with competitive technology solutions throughout the vast range of its petroleum-related activities.

Other services

Saudi Aramco also provides several services to its employees. It maintains a large hospital and provides health insurance for its employees. It also maintains several fire stations, both industrial and residential. Saudi Aramco introduced its Industrial Security over two decades ago. This security force primarily ensures the safety of the company's industrial and residential areas.

Saudi Aramco has operations all over the kingdom and therefore, it often needs to transport employees between operations. It currently maintains and operates a fleet of 39 aircraft (18 fixed wing and 21 rotor-wing) to provide this support function.

Also, Saudi Aramco has intensive career development programs under the Career Development Department. These includes PDP (Professional Development Program) for fresh graduates and ADP (Advanced Degree Program) for Master and PHDs studies.

Associated companies/subsidiaries

Environmental record

Saudi Aramco issued a statement in 1998 stating that the company is trying to reduce the amount of lead in their gasoline and has already done so by about 50 percent.

The company has an "Environmental Master Plan" to reduce the emissions provided by Capital Programs which already some of them have been completed. Saudi Aramco is a leading company in the region in reducing sulfur emissions, CO2, and flaring. Also, a CEO Dashboard complemented by an annual Environmental Report shows the exact Environmental statistics and Key Performance Indicators in terms of air and sea water pollutions.

Financial data

The "FT's Non-Public 150" by the Financial Times and McKinsey - the study of the world’s largest unlisted companies — foundember 2006).[12][13]

Financial data (2008):[14]

  • Fiscal Year End: December
  • Revenue: $233.3 billion USD
  • Revenue Growth (1 yr): 43.70%
  • Employees: 75,441
  • Employee Growth (1 yr): 4.50%
  • Oil reserves: 259.9 billion barrels (4.132×1010 m3)
  • Production: 8.5 million barrels per day (1,350,000 m3/d)

See also

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References

  1. ^ Saudi Aramco by the Numbers
  2. ^ FT Non-Public 150 - the full list
  3. ^ Sheridan Titman, McCombs School of Business, March 1, 2010. More Thoughts on the Value of Saudi Aramco http://blogs.mccombs.utexas.edu/titman/2010/03/01/more-thoughts-on-the-value-of-saudi-aramco/
  4. ^ Financial Times, February 4, 2010. Big Oil, bigger oil: http://www.ft.com/cms/s/c5b32636-116f-11df-9195-00144feab49a,_i_email=y,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F3%2Fc5b32636-116f-11df-9195-00144feab49a%2C_i_email%3Dy.html&_i_referer=http%3A%2F%2Ftexasenterprise.org%2Farticle%2Fwhats-value-saudi-aramco
  5. ^ SteelGuru - News
  6. ^ "Contact Us." Saudi Aramco. Retrieved on 5 November 2009. "Headquarters: Dhahran, Saudi Arabia Address: Saudi Aramco P.O. Box 5000 Dhahran 31311 Saudi Arabia"
  7. ^ crude oil.xls
  8. ^ gas.xls
  9. ^ http://www.virginia.edu/igpr/APAG/apagoilhistory.html
  10. ^ Cray FAQ Part 3: FAQ kind of items
  11. ^ Company
  12. ^ Financial Times: Saudi Aramco revealed as biggest group
  13. ^ FT Non-Public 150
  14. ^ Saudi Arabian Oil Company Company Profile - Yahoo! Finance

Bibliography

  • Vitalis, Robert (2006). America's Kingdom: Mythmaking on the Saudi Oil Frontier. Stanford: Stanford University Press. ISBN 0804754462. {{cite book}}: Cite has empty unknown parameter: |coauthors= (help)
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