Saudi Aramco facts for kids
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Headquarters in Dhahran, Eastern Province, Saudi Arabia
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Trade name
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Saudi Aramco |
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Native name
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شركة الزيت العربية السعودية
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| Public (mostly state-owned) | |
| Traded as | Tadawul: 2222 |
| Industry | Oil and gas |
| Founded | 29 May 1933 (as California-Arabian Standard Oil) |
| Founders | Lloyd N. Hamilton Abdullah Suleiman |
| Headquarters | Dhahran, Saudi Arabia |
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Area served
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Worldwide |
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Key people
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| Products | |
| Revenue |  US$535.188 billion (2022) |
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Operating income
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US$305.087 billion (2022) |
| US$161.068 billion (2022) |
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| Total assets | US$664.780 billion (2022) |
| Total equity | US$444.306 billion (2022) |
| Owner | Government of Saudi Arabia (90.19%) Public Investment Fund (4%) Sanabil (4%) |
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Number of employees
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70,496 (2022) |
| Subsidiaries | SABIC (70%), Petro Rabigh, SATORP, Aramco Trading, Yanbu, Yasref, SASREF, S-Oil, Luberef, Aro Drilling, South Rub al-Khali, Pengerang Refining Company, The International Maritime Industries |
Saudi Aramco (Arabic: أرامكو السعودية ʾArāmkū as-Suʿūdiyyah), also known as the Saudi Arabian Oil Group or just Aramco, is a huge company owned by the government of Saudi Arabia. It specializes in finding and producing petroleum (oil) and natural gas.
As of 2022, Aramco was the second-largest company in the world based on how much money it made. Its main office is in Dhahran, Saudi Arabia. The company has often made the biggest yearly profits of any company globally. Saudi Aramco also has the world's second-largest proven oil reserves and produces more oil each day than any other company.
Aramco runs the world's biggest network for moving oil and gas, called the Master Gas System. In 2013, it produced about 3.4 billion barrels (540 million cubic metres) of crude oil. It manages over 100 oil and gas fields in Saudi Arabia. These include the Ghawar Field, which is the world's largest oil field on land, and the Safaniya Field, the largest oil field under the sea.
In December 2019, Aramco's shares started trading on the Tadawul stock exchange. Its value quickly grew to about US$1.88 trillion, making it one of the most valuable companies. In 2023, Forbes magazine ranked Saudi Aramco as the second-largest public company in the world.
Contents
History of Saudi Aramco
Saudi Aramco's story began after World War I. American companies wanted to find new oil sources abroad. In 1933, the Saudi Arabian government allowed an American company called Standard Oil of California (SoCal) to look for oil. SoCal created a new company for this, called California-Arabian Standard Oil (CASOC).
For a few years, they didn't find any oil. In 1936, another company, Texaco, bought half of CASOC. Finally, in 1938, they struck oil at the seventh drill site in Dhahran. This well, called Dammam No. 7, produced a lot of oil, giving them hope.
In 1944, the company's name changed to Arabian American Oil Co., or Aramco. Later, in 1948, other big oil companies like Standard Oil of New Jersey (Exxon) and Socony Vacuum (Mobil) also bought parts of Aramco.
In 1950, King Abdulaziz of Saudi Arabia wanted a fairer share of the oil profits. He pressured Aramco to agree to split profits 50/50. This led to Aramco moving its main office from New York to Dhahran. In the 1950s, Aramco discovered the world's largest offshore oil field (Safaniya) and confirmed the Ghawar Field as the largest onshore field.
In 1975, Saudi Arabia started a plan to use natural gas for power instead of just burning it off. This plan helped Aramco grow its gas operations.
Changes During Conflicts
In 1973, after the Yom Kippur War, the Saudi Arabian government started taking ownership of Aramco's assets. By 1976, the government owned all of Aramco. In 1988, a new Saudi company, the Saudi Arabian Oil Company (Saudi Aramco), was created to fully manage Saudi Arabia's oil and gas fields.
During the Gulf War in 1990, Aramco had to quickly increase its oil production. This was to make up for oil that was no longer available from Iraq and Kuwait. Aramco managed to greatly increase its daily oil output in just three months.
From 1990 onwards, Aramco focused on selling more crude oil to countries in Asia, like South Korea, the Philippines, and China. By 2016, most of Aramco's oil sales were to Asia.
Aramco in the 2000s
In 2001, Saudi Arabia launched a "Gas Initiative" to find more gas. Aramco partnered with other international oil companies for this. By 2004, Aramco was producing a lot of oil, and in 2005, it planned to invest US$50 billion to increase its daily oil production capacity even more.
In 2005, Saudi Aramco was valued at US$781 billion, making it the world's largest company at that time. In 2008, Aramco increased oil production when prices were high, but then reduced it when prices fell in 2009.
In 2011, Aramco started producing gas from the Karan Gas Field. In 2016, Saudi Arabia's Deputy Crown Prince, Mohammad bin Salman Al Saud, suggested selling a small part of Aramco to the public.
In 2017, Saudi security forces stopped an attack on an Aramco oil center. In 2019, Yasir Al-Rumayyan became the Chairman of Aramco.
Cyber Attack in 2012
On August 15, 2012, Aramco's computers were hit by a computer virus. The company quickly announced that the virus did not affect the systems directly linked to oil production. A group called "Cutting Sword of Justice" said they were responsible. They used a virus called Shamoon, which could erase files and make computers unusable. This attack caused Aramco to spend months fixing its systems.
Drone Attack in 2019
On September 14, 2019, drones attacked two Saudi Aramco facilities: the Abqaiq oil processing plant and the Khurais oil field. Houthi rebels claimed they did the attack. This attack cut Saudi Arabia's oil production by 5.7 million barrels per day, which was over 5% of the world's total supply.
Going Public: The IPO in 2019
For a while, Saudi Arabia thought about selling a small part of Saudi Aramco to the public. This is called an initial public offering (IPO). The drone attacks in September 2019 caused a delay.
However, on November 3, 2019, Aramco announced its plan to list 1.5% of its shares on the Tadawul stock exchange. On December 4, 2019, Aramco set its share price at 32 Saudi riyals (about US$8.53). The company raised US$25.6 billion, making it the largest IPO in the world at that time. When trading began on December 11, 2019, shares rose, making Aramco the world's most valuable listed company with a market value of about US$1.88 trillion.
Aramco in the 2020s
In March 2020, Saudi Aramco announced a partnership with Formula One. In June 2020, Aramco bought 70% of SABIC, a chemicals company. Also in June 2020, Aramco laid off about 500 employees due to the COVID-19 pandemic affecting energy demand.
In July 2020, Apple became the world's largest listed company by market value, surpassing Aramco. In August and November 2020, Aramco reported lower profits because oil demand and prices fell during the pandemic.
In December 2020, a Saudi oil tanker carrying gasoline from an Aramco refinery was attacked by a small boat with explosives. In March 2021, Aramco's earnings fell by almost 45% compared to 2019 due to the pandemic. Another drone attack, claimed by Houthi rebels, hit an Aramco refinery in March 2021, but caused no injuries.
In March 2021, Saudi Aramco signed a deal to provide China with energy for the next 50 years and to work on new technologies to fight climate change. In October 2021, Aramco announced it aims to have zero carbon emissions from its own operations by 2060.
In 2021, Aramco said it plans to increase its crude oil production capacity to 13 million barrels per day by 2027. In March 2022, Houthi fighters attacked an Aramco storage site in Jeddah, causing a fire.
On May 11, 2022, Saudi Aramco again became the most valuable company in the world by market value, passing Apple Inc.. In August 2022, Aramco announced it would buy Valvoline's petroleum unit for $2.65 billion.
In March 2023, Saudi Aramco announced record profits of $161 billion, as petrol prices soared after the COVID-19 pandemic. In September 2023, Aramco bought a fuel retailer in Chile, marking its entry into the South American fuel market. Also in September 2023, an Indian company signed a $2.9 billion contract with Aramco to build a gas processing plant in Saudi Arabia. In December 2023, Aramco bought 40% of Gas & Oil Pakistan.
How Saudi Aramco Operates
Saudi Aramco's main office is in Dhahran, Saudi Arabia. But its work happens all over the world. This includes:
- Finding new oil and gas (exploration)
- Getting oil and gas out of the ground (production)
- Turning crude oil into useful products (refining)
- Making chemicals
- Moving and selling oil and gas (distribution and marketing)
The Saudi Arabian Ministry of Petroleum and Mineral Resources watches over all these activities.
Finding Oil and Gas
Many geophysicists and geologists work for Saudi Aramco. They have been looking for oil and gas since 1982. Much of this work happens at the EXPEC Advanced Research Center. This center uses powerful supercomputing systems to process the huge amounts of data they collect when exploring for oil.
Refining Oil and Making Chemicals
Saudi Aramco also refines oil and makes chemicals. In 1993, the Saudi government combined Aramco with the country's oil refining company, Samarec. This made Aramco responsible for refining and distributing oil within Saudi Arabia.
Today, Saudi Aramco refines a huge amount of oil every day. The company is also focusing on combining its refineries with chemical plants. One example is Petro Rabigh, a joint project with Sumitomo Chemical Co.
Aramco's Refineries
Here are some of the refineries Aramco owns or has a share in:
- Jazan Refinery and terminal projects (JRTP) in Jazan
- Ras Tanura Refinery
- The Saudi Aramco Jubail Refinery Co. (SASREF) in Jubail
- Riyadh Refinery
- Yanbu Refinery
- The Saudi Aramco Mobil Refinery Co. Ltd. (SAMREF) in Yanbu
- Petro Rabigh in Rabigh
- Saudi Aramco Total Refining and Petrochemical Co. (SATORP) in Jubail
- Yanbu Aramco Sinopec Refinery (YASREF) in Yanbu
- Motiva Enterprises LLC in the United States
- S-Oil in Republic of Korea
Shipping Oil and Gas
Saudi Aramco uses many tankers to ship crude oil, refined oil, and natural gas to different countries. It used to have its own shipping company, Vela International Marine, which later joined with another company called Bahri. Aramco is also involved in building the King Salman Global Maritime Industries Complex, which will be the largest shipyard in the world.
Global Investments
Saudi Aramco has grown its business around the world, including in Asia, Europe, and North America. For example, in April 2019, Aramco bought a share in a South Korean oil refiner called Hyundai Oilbank. It also signed a deal to supply crude oil to Poland’s main oil refiner, PKN Orlen.
Liquefied Natural Gas (LNG)
Aramco plans to become a major producer of LNG in the world. It has already sold its first cargo of LNG from Singapore to a buyer in India. The company is looking for more partnerships globally to reach its goal in the LNG market.
Saudization: Training Saudi Workers
From the very beginning, Aramco focused on training Saudi citizens for jobs. The company started its first school in 1940. In 1950, Aramco built schools for 2,400 students. Later, it sent Saudi students to college in the United States and offered college scholarships.
This effort to train and promote Saudi workers is called "Saudization." By 1987, nearly two-thirds of Aramco's 43,500 employees were Saudis. In 1983, Ali Al-Naimi became the first Saudi president of Aramco. The company still employs some international workers to ensure it uses the latest ideas and technology.
Aramco and the Environment
Environmental groups say that Aramco is responsible for more than 4% of global greenhouse gas emissions since 1965. Most of these emissions come from people using the oil Aramco sells, like burning gasoline in car engines. Aramco does not have a plan to limit these emissions from the use of its products.
However, the Saudi government says it will have net zero carbon emissions within the country by 2060. In October 2023, Saudi Aramco announced a project to test technology that can remove carbon dioxide directly from the air.
Research and Development
Saudi Aramco has funded many studies on energy issues. It has also worked with the United States Department of Energy on projects to improve oil production. These projects include developing more efficient gasoline and finding ways to get more oil from wells.
Aramco is also working on new technologies to make gasoline cars more environmentally friendly. For example, they are developing a device that could capture some carbon dioxide from cars running on gasoline. Saudi Aramco has also partnered with Hyundai to create a special fuel for gas-electric vehicles.
Images for kids
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Dammam No. 7 struck oil in 1938, becoming the first commercial oil well in Saudi Arabia.
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Aramco compound in Saudi Arabia, 1954
- Ghawar
- Max Steineke
- Shamoon
- List of oil fields: All of those located in Saudi Arabia are owned by Saudi Aramco.
- Abqaiq
- Aramco Financial Services Company
- Aramco Training Services Company
- Golden gimmick
- Thomas Barger
- Discovery! The Search for Arabian Oil
- Saudi Aramco Residential Camp in Dhahran
- List of largest companies of Saudi Arabia
- List of corporations by market capitalization
- Shaybah
- Ras Tanura
- Yanbu
- Udhailiyah
- Hui-Hai Liu
- AMR GP (a Formula 1 team with Aramco as its main sponsor)
