|Industry||Oil and gas|
|Founded||1933 (as California-Arabian Standard Oil Co.)
1944 (as Aramco)
1988 (as Saudi Aramco)
|Headquarters||Dhahran, Saudi Arabia|
|Key people||Khalid A. Al-Falih
(President & CEO)
(Minister of Petroleum
and Mineral resources)
|Products||Petroleum, natural gas and other petrochemicals|
|Revenue||US$ 311 billion (2011)|
|Owner(s)||Saudi Arabian government|
Saudi Aramco (Arabic: أرامكو السعودية ʾArāmkō s-Saʿūdiyyah), officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco's value has been estimated at up to US$10 trillion in the Financial Times, making it the world's most valuable company.
Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels (4.1×1010 m3), and largest daily oil production. Headquartered in Dhahran, Saudi Arabia, Saudi Aramco operates the world's largest single hydrocarbon network, the Master Gas System. Its yearly production is 7.9 billion barrels (1.26×109 m3), and it managed over 100 oil and gas fields in Saudi Arabia, including 279 trillion standard cubic feet (scf) of natural gas reserves. Saudi Aramco owns the Ghawar Field, the world's largest oil field, and the Shaybah Field, one of the world's largest oil fields.
The origins of Saudi Aramco lie in the oil shortages of World War I and the exclusion of American companies from Mesopotamia by the San Remo Petroleum Agreement of 1920. The US Republican administration had popular support for an ‘Open Door’ policy, which Herbert Hoover, secretary of commerce, initiated in 1921. Standard Oil of California (SoCal) was among those US companies actively seeking new sources of oil from abroad.
SoCal through its subsidiary company, the Bahrain Petroleum Company (BAPCO), struck oil on Bahrain in May 1932. This event heightened interest in the oil prospects of the Arabian mainland. On 29 May 1933, the Saudi Arabian government granted a concession to SoCal in preference to a rival bid from the Iraq Petroleum Company. The concession allowed Socal to explore for oil in Saudi Arabia. SoCal assigned this concession to a wholly owned subsidiary called California-Arabian Standard Oil Co. (CASOC). In 1936, with the company having had no success at locating oil, the Texas Oil Company (Texaco) purchased a 50% stake of the concession.
After four years of fruitless exploration, the first success came with the seventh drill site in Dammam, a few miles north of Dhahran in 1938, a well referred to as Dammam No. 7. This well immediately produced over 1,500 barrels per day (240 m3/d), giving the company confidence to continue. On 31 January 1944, the company name was changed from California-Arabian Standard Oil Company to Arabian American Oil Company (or Aramco). In 1948, Socal and Texaco were joined as investors by Standard Oil of New Jersey (Esso) which purchased 30% of the company, and Socony Vacuum (later Mobil) which purchased 10% of the company, leaving Socal and Texaco with 30% each. The newcomers were also shareholders in the Iraq Petroleum Company and had to get the restrictions of the Red Line Agreement lifted in order to be free to enter into this arrangement.
In 1950, King Abdulaziz 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 King Abdulaziz. In the wake of the new arrangement, the company's headquarters were 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% stake in Aramco. It increased its shareholding to 60% by 1974, and finally took full control of Aramco by 1980, by acquiring a 100% percent stake in the company. Aramco partners continued to operate and manage Saudi Arabia's oil fields. In November 1988, a royal decree changed its name from Arabian American Oil Company to Saudi Arabian Oil Company (or Saudi Aramco) and took the management and operations control of Saudi Arabia's oil and gas fields from Aramco and its partners. It officially cut all oil supply to Israel the same year by order of the CEO. Following the events that unfolded in 1988, Saudi Aramco became a fully owned, privately held company. Saudi Aramco was the world's largest company with an estimated market value of $781 billion in 2005. Concerns for monopolization of the world's economy have been raised.
Saudi Aramco is headquartered in Dhahran; and its operations span the globe which include exploration, producing, refining, chemicals, distribution and marketing.
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) in its EXPEC Computer Center (ECC) to assist in processing the colossal quantity of data obtained during exploration and in 2001, ECC decided to use Linux clusters as a replacement for the decommissioned Cray systems. ECC installed a new supercomputing system in late 2009 with a disk storage capacity of 1,050 terabytes (i.e, exceeding one petabyte), the largest storage installation in Saudi Aramco's history to support its exploration in the frontier areas and the Red Sea.
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.
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 1 July 1993, the government issued a royal decree merging Saudi Aramco with Samarec, the country's oil refining company. The following year, a Saudi Aramco subsidiary acquired a 40% equity interest in Petron Corporation, the largest crude oil refiner and marketer in the Philippines. Since then, Saudi Aramco has taken on the responsibility of refining oil and distributing it in the country.
Currently, Saudi Aramco's refining capacity is more than 4 million barrels per day (640,000 m3/d) (International joint and equity ventures: 2,060 Mbbl/d (328,000,000 m3/d), domestic joint ventures: 1,108 mpbd, and wholly owned domestic operations: 995 Mbbl/d (158,200,000 m3/d).) This figure is set to increase as more projects go online.
Additionally, Saudi Aramco's downstream operations are shifting its emphasis to integrate refineries with petrochemical facilities. Their first venture into it is with Petro Rabigh, which is a joint venture with Sumitomo Chemical Co. that began in 2005 on the coast of the Red Sea.
List of domestic refineries:
List of domestic refining ventures:
List of international refining ventures:
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.
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) Exploration and Petroleum Engineering Center Advanced Research Center (EXPEC ARC) which is solely managed by Exploration & Producing and focuses on upstream research, and 2) The Research and Development Center (R&DC), which focuses on downstream research and includes bio-research. Leading research undertaken at these two major facilities provides Saudi Aramco with competitive technology solutions throughout the vast range of its petroleum-related activities.
Saudi Aramco patents:
In 2010, Saudi Aramco was granted its 100th patent.
Notable patents that Saudi Aramco holds are:
1. GigaPOWERS™ The EXPEC ARC debuted GigaPOWERS™ on 23 January 2010 to a live audience at their auditorium. GigaPOWERS™ is a second generation innovation of POWERS (Parallel Oil, Water and Gas Enhanced Reservoir Simulator) that was created in 1997 and is a high-resolution reservoir simulator to model and predict the performance of super-giant reservoirs. (See reservoir simulation for more information).GigaPOWERS™ did that job with giga-cell reservoir simulation technology, which meant that the models could hold more information and produce better reservoir simulations.
GigaPOWERS™ set a new industry record for being able to simulate reservoirs at seismic or near-seismic resolution. Previously, scientists simulated this by averaging the simulation model cells in order to reduce their number, thus reducing the amount of information in the model. However, with the innovation of GigaPOWERS™, models of more than one-billion cells were simulated. This makes it easier to study the performance and predict the behavior of oil fields, so that engineers and scientists can create better strategies when producing those fields.
Saudi Aramco provides various services to its employees, the community, government agencies and private companies which it interfaces with. It maintains several large "high-tech" hospitals and provides health insurance for its employees worldwide. It also maintains multiple fire stations, both industrial and residential, a western-style educational system, and provides employees with various recreational facilities such as golf, movie theaters, bowling alleys, multipurpose buildings and so on. Saudi Aramco introduced its Elite Security over two decades ago. This security force has been militarily trained abroad and primarily ensures the safety of the company's industrial and residential areas as well as the families of senior management officials.
Saudi Aramco has operations all over the world. It often needs to transport employees between operations. To do this, it owns and operates a fleet of 79 airplanes and 15 helicopters, and two airports in the United States (the only private organization allowed by the FAA to own and operate its own airports), as well as aviation facilities at five international airports in Saudi Arabia. Saudi Aramco has intensive career development programs under its Career Development Department. These includes PDP (Professional Development Program) for fresh graduates and ADP (Advanced Degree Program) for Master and PhD studies. This program played a central part in transfer of jobs from expatriates to Saudi Arab nationals. To maintain relations with the Saudi Arab government, the company's Government Affairs Organization was set up. It handles nearly all correspondence between Saudi Aramco and others, performs official translations and distribution of correspondence for company action and information, and coordinates meetings between company staff, government officials, private and corporate visitors.
The Supreme Council for Petroleum and Minerals Affairs sets the company's broadest policy and objectives. The council's executive management members are drawn from the Saudi Arabian government and the private sector.
The company has an "Environmental Master Plan" to reduce the emissions provided by Capital Programs, some of which has already 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 (2011):
Aramco computers were attacked by a virus on 15 August 2012, the day before the Lailat al Qadr, or the Night of Power, in the Islamic calendar. The following day Aramco announced that none of the infected computers were part of the network directly tied to oil production, and that the company would soon resume full operations. Hackers claimed responsibility for the spread of the computer virus. The virus hit companies within the oil and energy sectors. A group named "Cutting Sword of Justice" claimed responsibility for an attack on 30,000 Saudi Aramco workstations, causing the company to spend a week restoring their services. The group later indicated that the Shamoon virus had been used in the attack. Due to this attack, the main site of Aramco went down and a message came to the home page apologizing to customers. Computer security specialists said that "The attack, known as Shamoon, is said to have hit "at least one organization" in the sector. Shamoon is capable of wiping files and rendering several computers on a network unusable."
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