Saudi Aramco: the giant of the oil industry

SAUDI ARABIA (OBSERVATORY NEWS) — Saudi Aramco will add to the list of unique qualities among companies globally – the highest value of a listed company.

The state-owned giant announced on Sunday its intention to float its shares on the Riyadh stock exchange and said the percentage of shares to be sold would be determined at the end of the IPO building period.

Aramco will float between one and two percent of its shares on the local bourse, raising $ 20 billion to $ 40 billion, sources said.

Aramco, the world’s largest oil producer, pumps 10 percent of global supplies and is the world’s most profitable company.

Weak oil prices cut the company’s first-half profit by 12 percent to $ 46.9 billion, but the figure far outstripped Apple, the world’s most profitable listed company, with $ 31.5 billion.

Last year, Aramco made a net profit of $ 111 billion, a third more than the combined net profit of the five major oil companies: Exxon Mobil, Royal Dutch Shell, BP, Chevron and Total.

To diversify its oil activities, Aramco has expanded its refining and petrochemicals industry to nearly triple its chemical production to 34 million tonnes per year by 2030 and increase its global refining capacity to between 8 and 10 million barrels per day from about five million barrels per day.

Here are some key facts about Aramco’s history, reserves and operations.

History

Explorers from the Standard Oil Company of the Rockefeller family discovered oil in Saudi Arabia in 1938. The Arab American Oil Company was named after the company that would extract it, and crude oil production reached 500,000 barrels per day in 1949.

By 1980, Saudi Arabia had bought all the shares from all the original shareholders and became 100 percent owned. Eight years later, Saudi Aramco was formally established.

Aramco has fueled an economic boom in Saudi Arabia for decades.

The Kingdom is the most prominent member of the Organization of Petroleum Exporting Countries (OPEC) and has a role in shaping the movements of oil prices in world markets.

Crown Prince Mohammed bin Salman is seeking to diversify the resources of the Saudi economy so that it does not depend on oil. In 2016, announcing plans for Aramco’s initial public offering, the prince said the kingdom should end its “oil addiction” to ensure it was not at the mercy of price volatility.

Oil reserves

Aramco’s oil reserves are 260.2 billion barrels of oil equivalent, which is larger than the combined reserves of Exxon Mobil, Chevron, Royal Dutch Shell, BP and Total. The reserve life of these reserves is estimated at 54 years.

Oil production

The company produced 10.3 million barrels of crude oil per day last year, taking advantage of the cheapest cost of production in the world with a cost of producing a barrel of $ 2.80 per barrel, according to the company documents.

Oil exports

About three-quarters of Aramco’s crude oil exports, or about 5.2 million barrels per day, were shipped to customers in Asia last year as the company believes demand in Asia will grow faster than anywhere else in the world. Countries that buy oil from Aramco in Asia include China, India, South Korea, Japan and Taiwan.

The company’s shipments of crude oil to North America exceeded one million barrels per day and shipments to Europe amounted to 864 thousand barrels per day.

Oil refining

The company produces, refines and exports crude oil from Saudi Arabia but has refining activities around the world.

Motiva Enterprises, Aramco’s US refiner, owns the 607,000 barrels per day Port Arthur, Texas refinery, the largest in the United States, and in 2017 announced plans to invest $ 18 billion in its operations in the Americas over five years. Years.

Aramco is expanding its refining capacity and downstream activities, especially in fast-growing countries such as China and India. In 2018, Aramco had a net refining capacity of 3.1 million barrels per day.

Staff and offices

Aramco has 76,000 employees in 2018 and has operations in the energy industry, research facilities and offices around the world in Asia, Europe and the Americas.

The company has offices in Beijing, New Delhi, Singapore, New York, London, Houston and others.

Online:

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