Aramco

Aramco, officially the Saudi Arabian Oil Company, is a Saudi multinational integrated oil and gas company and the world's largest oil producer. Headquartered in Dhahran, it possesses the world's second-largest proven crude oil reserves and is a primary driver of the Saudi economy. The company operates a vast integrated network of upstream and downstream activities, from exploration to petrochemicals manufacturing, and completed a landmark initial public offering on the Tadawul in 2019.

History

The company's origins trace to 1933 when the Saudi government granted a concession to Standard Oil of California (SOCAL), which later formed the California-Arabian Standard Oil Company. Significant oil reserves were discovered at the Dammam No. 7 well in 1938, leading to the first commercial production. In 1944, the venture was renamed the Arabian American Oil Company (Aramco), with Texaco, Standard Oil of New Jersey (later Exxon), and Standard Oil of New York (later Mobil) joining as partners. The 1948 discovery of the Ghawar Field, the world's largest conventional oil field, cemented its global importance. Following years of increasing Saudi control, the government completed its nationalization of the company in 1980, and it was renamed the Saudi Arabian Oil Company in 1988.

Operations

The company's core operations are centered in Saudi Arabia, managing a portfolio of massive oil fields including Ghawar and Safaniya, the world's largest offshore field. Its upstream activities involve extensive exploration, drilling, and production, supported by major facilities like the Abqaiq oil processing plant. The downstream and chemicals business includes refining operations through joint ventures such as SATORP with TotalEnergies and Motiva Enterprises in the United States, alongside a global network of petrochemicals plants, significantly bolstered by its acquisition of a majority stake in SABIC. It also operates a global tanker fleet and invests heavily in research and development at centers like the EXPEC Advanced Research Center.

Corporate structure

The company is a joint-stock company owned primarily by the Government of Saudi Arabia and public shareholders following its 2019 IPO on the Saudi Stock Exchange (Tadawul). It is governed by a Board of directors chaired by Yasir Al-Rumayyan, who also leads the Public Investment Fund. Day-to-day operations are managed by President and Chief Executive Officer Amin H. Nasser. Its major subsidiaries and affiliates include SABIC, the SATORP refinery, and Motiva Enterprises. The company maintains a significant corporate venture capital arm, Aramco Ventures, to invest in technology.

Economic impact

As the cornerstone of the Saudi economy, the company is a primary source of government revenue and foreign exchange earnings for the Kingdom of Saudi Arabia. Its financial performance directly influences the state's fiscal policy and funds major infrastructure and Vision 2030 projects led by Crown Prince Mohammed bin Salman. The 2019 IPO, which raised $29.4 billion, was a central pillar of Vision 2030's economic diversification plans. The company's dividends are a critical revenue stream for the Public Investment Fund, which invests in sectors like tourism, entertainment, and renewable energy to reduce the kingdom's dependence on oil.

Environmental record and sustainability

Facing global pressure over climate change, the company has announced a target to achieve net-zero Scope 1 and Scope 2 emissions from its operations by 2050. It is investing in carbon capture, utilization and storage (CCUS) projects, such as at the Uthmaniyah field, and in blue hydrogen production. The company is a founding member of the Oil and Gas Climate Initiative and is developing large-scale renewable energy projects, including through its involvement in the Saudi Power Procurement Company. However, its core business remains the extraction and sale of hydrocarbons, and its long-term sustainability strategy is closely scrutinized by environmental groups.

Controversies

The company has faced significant international criticism, particularly regarding its environmental impact and the role of fossil fuels in global warming. Its facilities have been targeted by Houthi drone strikes and missile attacks, such as the 2019 attacks on Abqaiq and Khurais which temporarily halved its production. The initial public offering was overshadowed by concerns over corporate governance, transparency, and the assassination of Jamal Khashoggi. The company and the Saudi government have also been accused of using oil diplomacy and the OPEC+ alliance for geopolitical leverage, influencing global oil prices and relations with major consumers like the United States and China. Category:Oil and gas companies of Saudi Arabia Category:Companies listed on the Saudi Stock Exchange Category:State-owned companies of Saudi Arabia Category:Companies established in 1933