Saudi Armaco is the abbreviated name of Saudi Arabian Oil Company. It is the state owned National Oil Company of Saudi Arabia and likely the world’s most valuable privately held corporation. In 2010 it was estimated to be worth 2.2 and 7 trillion USD. Saudi Aramco is not only the world’s largest oil company, but is also ranked by Petroleum Intelligence Weekly as the top oil company in terms of operating characteristics. It is headquartered in Dhahran, Saudi Arabia.
Though Saudi Aramco is currently nationally owned, its origins can be traced back to concessions granted to Standard Oil of California in 1933. In 1936, the joint venture between Standard Oil of California and the government of Saudi Arabia was joined by the Texas Oil Company (Texaco). Four years later, the company drilled its first highly productive oil well. The name was changed in 1944 to the Arabian American Oil Company or Aramco.
In 1950, King Abdul Aziz Ibn Saud pressured Aramco into a 50/50 profit sharing agreement by threatening to nationalize the country’s oil fields. In order to offset the loss in revenue, the United States government granted the U.S. branch of Aramco a tax break known as the “golden gimmick.”
In 1973, as a result of United States support for Israel during the Yom Kippur War, Saudi Arabia acquired an additional 25% share of Aramco. By 1980, the Saudi government and gained full control of the company and in 1988 to change the name to Saudi Arabian Oil Company or Saudi Aramco.
Holdings and Industry Segment
Saudi Aramco has reserves estimated at between 260 billion and 303 billion barrels of oil as well as over 279 trillion scf (standard cubic feet) of natural gas reserves. The company owns Ghawar Field, the largest light crude oil field in the world. As of 2010, Ghawar had produced over 65 billion barrels of oil from the estimated 100 billion barrels it is thought to contain. The field produces 5 million barrels of oil per day, which is about 60% of the total Saudi oil production of 8.3 million barrels per day. A little over 2 million barrels of this is produced through international joint and equity ventures with companies like ExxonMobil.
Saudi Aramco is involved in all segments of the oil production industry. It has 8 domestic refineries and 5 foreign refineries. The company employs over 54,000 people in 66 different nations, including 500 engineers and scientists.
Revenue for Saudi Aramco is not released. However, based on its production capacity and holdings, it can be estimated at well above that of ExxonMobil, the world’s largest publicly traded oil company. Exxon had annual profits between 19 and 40 billion USD over the last six years. An estimate of finances in 2008 put the company’s total revenue at $233 billion per year.
Oil produced by Saudi Aramco is heavier and somewhat more contaminated by sulfur than oil from other parts of the world. Their gasoline also has a higher amount of lead than gasoline refined from other types of oil. The company is attempting to reduce lead in their gasoline and has succeeded in doing so by 50 percent since 1998. The company is considered a leader in the Middle East in terms of reducing sulfur and CO2 emissions from refineries.