RIYADH – From its beginnings in 1938 when it first struck oil with theaptly named “Prosperity Well”, Saudi Arabia’s national energy giant Aramcohas delivered unimaginable riches to the desert kingdom.
It has since grown into the world’s largest and most profitable energyconcern, generating 10 per cent of global crude supplies and trillions ofdollars in income.
However, it has been hit in recent months by a string of serious attacks onits oil facilities, the latest on Saturday halting the flow of 5.7 millionbarrels of oil per day, over half of its output, in drone strikes.
The strikes threaten to undermine plans for Aramco to make its stock marketdebut, in a listing that could generate $100 billion based on a $2 trillionvaluation of the company.
Aramco has its origins in a 1933 concession agreement signed by the Saudigovernment with the Standard Oil Company of California. Drilling began in1935 and the first oil began flowing three years later.
It gained its current name from the subsidiary created to manage theagreement that was called the Arabia American Oil Company in the late 1940s.
In 1949, oil production hit a milestone 500,000 barrels per day and thefollowing year Aramco built the 1,212-kilometre (753-mile) Trans-ArabianPipeline to export Saudi oil to Europe across the Mediterranean Sea.
Production rose rapidly after the discovery of large offshore and onshoreoilfields including Ghawar, the world’s largest with some 60 billionbarrels of oil, and Safaniya, the biggest offshore oilfield with 35 billionbarrels.
In 1973, with prices spiking at the peak of the Arab oil embargo — imposedagainst the US over its policy on Israel — the Saudi government acquired25pc of Aramco to increase its share to 60pc and become a majoritystakeholder.
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Seven years later, it was nationalised, and in 1988 it became the SaudiArabian Oil Company, or Saudi Aramco.
From the 1990s, Aramco invested hundreds of billions of dollars in massiveexpansion projects, raising its oil output capacity to over 12 million bpd,besides making bold international acquisitions and joint ventures.Currently, Aramco has some 260 billion barrels in proven oil reserves, thesecond largest in the world after Venezuela, in addition to 300 trillioncubic feet of gas.
Based in Dhahran in the country’s east, the firm has key oil operations inthe United States, China, India, South Korea and several European and Asiannations.
Aramco has also built a network of domestic pipelines and refineries insideand outside the kingdom and expanded its presence in the petrochemicalsindustry.
In April, it opened its account books for the first time, announcing itposted $111.1 billion in net profit in 2018, up 46pc on the previous year,and generating $356 billion in revenues.
The opening of its secretive accounts was designed to increase transparencyahead of the IPO which is the cornerstone of de facto leader Crown PrinceMohammed bin Salman’s “Vision 2030” reform plans for the country.
However, the listing has been repeatedly delayed, with analysts citing lowoil prices as well as squeamishness over disclosing facts and figures aboutthe firm which have traditionally been viewed as state secrets. -APP/AFP
