Factbox: Saudi Aramco: the oil colossus

Valvoline

30/05/2024 11:55

By Yousef Saba
       DUBAI, May 30 (Reuters) - Saudi Arabia may announce a
landmark secondary share offering in oil giant Aramco  2222.SE 
later on Thursday, pending final approval from Crown Prince
Mohammed bin Salman, people with knowledge of the matter said.
    The landmark sale follows Aramco's record IPO nearly five
years ago, as the kingdom pushes ahead plans to diversify its
economy away from oil.
    
    Below are key facts about Aramco:
    
    HISTORY
    Explorers from the Rockefeller family's Standard Oil Company
struck oil in Saudi Arabia in 1938. The venture became known as
the Arabia American Oil Company and crude oil production hit
500,000 barrels per day in 1949.
    By 1980, the Saudi government had bought out all the
original shareholders and owned 100% of the company. Eight years
later, the Saudi Arabian Oil Company (Saudi Aramco) was
officially established.
    Aramco has fuelled decades of prosperity in Saudi Arabia.
The kingdom is the de facto leader of the Organization of the
Petroleum Exporting Countries, or OPEC, helping engineer price
moves on world oil markets.
    The crown prince, known as MbS, wants to diversify the Saudi
economy away from oil. Announcing plans for an Aramco IPO in
2016, he said the kingdom must end its "oil addiction" to ensure
it was no longer at the mercy of commodity price volatility.

    OIL RESERVES AND OUTPUT
    Aramco had 251.2 billion barrels of oil equivalent (boe) in
2023, larger than the combined reserves of ExxonMobil, Chevron,
Shell, BP and TotalEnergies. That includes, as of end-December
2023, 191.35 billion barrels of crude and condensate and 33.8
billion boe of natural gas.
    The oil giant produced just over 9 million barrels per day
(mbpd) in April, according to secondary sources used by OPEC,
down from an average of 9.6 mbpd in 2023. Its average upstream
lifting cost was $3.19 per boe in 2023, with upstream capital
expenditure averaging $6.3 per boe.
    Just over two thirds of Aramco's crude oil was exported last
year, as it shipped 6.6 mbpd, down from 7.1 mbpd in 2022. Asian
customers bought 82% of Aramco's crude exports last year, up
from 79% in 2022.
    
    DOWNSTREAM
    To diversify its oil business - and secure offtake of its
crude - Aramco is expanding in refining and petrochemicals. 
    Last year, Aramco bought Valvoline Inc's global products
business for $2.76 billion. It also began construction of
several petrochemical complexes: a $7 billion one in South Korea
with S-Oil, an $11.8 billion project in China, via HAPCO, a
joint venture with North Huajin and Xincheng, and an $11 billion
one through its joint venture with TotalEnergies in the kingdom.
    It also bought a 10% stake in Chinese refiner Rongsheng
Petrochemical for $3.4 billion. In 2020, it bought a majority
stake in Saudi Basic Industries Corp (SABIC), one of the world's
biggest petrochemical firms.
    Aramco produces, refines and exports oil from Saudi Arabia,
but also has refining operations across the globe. Aramco's U.S.
oil refining subsidiary Motiva Enterprises owns the 640,000 bpd
Port Arthur refinery in Texas, the largest in the United States.
        It is looking to further expand its downstream business
in "key high-growth geographies such as China, India and
Southeast Asia," as well as other markets, it said in its annual
report. Aramco had a net refining capacity of 4.1 mbpd last
year.
    
    GAS
    Aramco aims to boost its gas production by 60% by 2030 from
2021 levels.
    Last year, it brought online an expansion to its Hawiyah Gas
Plant and began producing at its unconventional field in South
Ghawar. It also continues work on its giant Jafurah field,
expected to begin producing gas next year.
    It also made its first investment abroad in liquefied
natural gas, buying a minority stake in MidOcean Energy for $500
million, subject to approvals.
    Aramco also discovered two new natural gas fields in the
kingdom's Empty Quarter.
    The company had 207.5 trillion cubic feet of gas reserves at
the end of 2023. It produced 10.67 billion cubic feet of gas
last year.
    
        SCALE
    The state-owned firm is one of the world's largest oil
producers and top exporter, pumping nearly 10% of the world's
supply. It is also among the globe's most profitable companies,
raking in $27.3 billion in net profit in the first quarter,
slightly more than oil majors ExxonMobil, Shell, Chevron and
TotalEnergies made combined in the same quarter.
    Last year, Aramco made an annual net profit of $121.3
billion, its second-highest on record after it hauled $161.1
billion in 2022.
    In late 2019, Aramco raised $25.6 billion from its initial
public offering, the world's biggest ever. It then sold more
shares through an over-allotment option in January 2020 that
boosted the IPO further to a total of $29.4 billion.
    With more than 73,000 employees in 2023, Aramco has energy
industry operations, research facilities and offices scattered
across the globe, in Asia, Europe and the Americas. It has
offices in Beijing, Houston, London, New Delhi, New York, Seoul,
Shanghai, Singapore, Tokyo, and elsewhere.
    

 (Reporting by Yousef Saba; Editing by Michael Georgy)
 ((Yousef.Saba@thomsonreuters.com; +971562166204; Reuters
Messaging: https://twitter.com/YousefSaba))