Saudi Aramco

Saudi Arabian Oil Company
Type Government-owned corporation of the Kingdom of Saudi Arabia
Industry Crude Oil exploration, production, manufacture, marketing, and shipping
Founded 1933
Headquarters Dhahran, Saudi Arabia
Key people Khalid A. Al-Falih:
President, CEO
Ali I. Al-Naimi:
Chairman, Minister of Petroleum & Mineral Resources
Products Petroleum product
Revenue increase US$ 233 Billion (2008)
Employees 54,441 (2008)[1]
Website saudiaramco.com

Saudi Aramco (Arabic: أرامكو السعودية ) is the state-owned national oil company of Saudi Arabia. It is the largest oil corporation in the world with the largest proven crude oil reserves and production.[2] Headquartered in Dhahran, Saudi Arabia,[3] 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 of only crude oil neared 3.4 billion barrels (540,000,000 m3) and it managed over 100 oil and gas fields in Saudi Arabia totaling at least 264 billion barrels (4.20×1010 m3) of oil reserves and 253 quadrillion scf of gas reserves.[4][5]

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.

Contents

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.

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

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)[6] 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.[7] 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 — found that Saudi Aramco is worth an estimated $781 billion USD, dwarfing the $454 billion USD market capitalisation of its rival ExxonMobil (published: December 2006).[8][9]

Financial data (2008):[10]

Footnotes

  1. ↑ Saudi Arabian Oil Company Company Profile - Yahoo! Finance
  2. ↑ SteelGuru - News
  3. ↑ "Contact Us." Saudi Aramco. Retrieved on 5 November 2009.
  4. ↑ crude oil.xls
  5. ↑ gas.xls
  6. ↑ Cray FAQ Part 3: FAQ kind of items
  7. ↑ Company
  8. ↑ Financial Times: Saudi Aramco revealed as biggest group
  9. ↑ FT Non-Public 150
  10. ↑ Saudi Arabian Oil Company Company Profile - Yahoo! Finance

See also

Bibliography

External links