What You Don't Know About Saudi Aramco: The Oil Giant and Maker of the Saudi Economy.

What You Don't Know About Saudi Aramco: The Oil Giant and Maker of the Saudi Economy

Saudi Aramco, one of the largest oil companies in the world, is more than just an oil company; it is a fundamental pillar of the economy of the Kingdom of Saudi Arabia and the world. Founded in 1933, it has since achieved a long history of success and development, becoming the economic force upon which the Saudi economy relies. Let's learn more about Aramco's history, its figures, and how it became the largest company in the world.

History of Saudi Aramco

Aramco was founded in 1933 when the Kingdom of Saudi Arabia granted a concession to the American Standard Oil Company to explore for oil in Saudi Arabia. Initially, it was controlled by American companies, but over time, the Kingdom began to take larger shares in the company. In 1980, Saudi Arabia acquired a 100% stake in Aramco, making it a fully Saudi-owned company.

Capital and Company Development

At its inception, Aramco was a very small company, but it began to expand and grow significantly thanks to the Kingdom's massive oil discoveries, particularly the Ghawar Field, the largest onshore oil field in the world. Beginning in the 1970s, Aramco started to control most of Saudi Arabia's oil production and gradually became the world's largest oil company.

The company's initial capital was not very large, but it grew rapidly due to the massive revenues generated from oil exports. In 2019, Aramco floated a portion of its shares on the Saudi stock market, raising the company's valuation to nearly $2 trillion. This valuation made Aramco the world's largest company by market capitalization, surpassing companies such as Apple and Microsoft.

Aramco and the Saudi Economy

Aramco is the cornerstone of the Saudi economy, accounting for approximately 90% of total Saudi government revenue and contributing 40% of the Kingdom's GDP. Thanks to Aramco, Saudi Arabia has become one of the world's largest oil producers, helping the Kingdom build massive infrastructure and implement mega projects in diverse sectors such as health, education, and transportation.

Aramco: From Oil Giant to Multi-Industry Company

Although Aramco began in the oil sector, it has expanded significantly into other industries. Today, Aramco is considered an integrated energy company, with activities spanning exploration, production, refining, transportation, and marketing of oil and gas. It also operates in the petrochemical industry through its subsidiaries, such as SABIC, one of the world's largest petrochemical companies.

In addition, Aramco has invested in new renewable energy technologies, such as solar and hydrogen, and aims to reduce its dependence on oil as a primary energy source while continuing to expand into other sectors.

Was Aramco Being Sold?

Aramco has never been solely owned by Saudi Arabia, but many Western companies held portions of its shares for a long time. In 2019, Aramco, for the first time in its history, offered 1.5% of its shares in an initial public offering (IPO), allowing investors from around the world to buy shares, while the majority stake remained with the Kingdom.

Does Aramco's Future Depend on Oil?

Although oil remains Aramco's primary source of revenue, the company has begun diversifying its investments. As part of Saudi Vision 2030, launched by Crown Prince Mohammed bin Salman, the Kingdom seeks to reduce its dependence on oil and diversify the Saudi economy. Aramco has invested a portion of its funds in renewable energy projects and modern technologies and has begun establishing major solar energy projects, in addition to working on hydrogen development projects.

Aramco's Most Important Projects

Aramco is involved in several mega-projects involving refining and petrochemicals. Among its most important projects are:

Jazan Industrial Complex: This refining and petrochemical complex, located in the south of the Kingdom, is one of the largest projects in this field.

Khurais Project: A massive project to increase oil production capacity.

Investment in Gas Fields: Including the Jafurah Field project, one of the largest gas extraction projects in the Kingdom.

Aramco's Advantages

Aramco is unique in several aspects, including:

Immense Production Capacity: Aramco is one of the largest oil companies in terms of daily production capacity, producing approximately 10 million barrels of oil per day.

Advanced Technology: Aramco invests heavily in research and development and has advanced technologies in drilling, exploration, and increasing production efficiency.

Industrial Expansion: Aramco operates in many sectors, such as renewable energy and petrochemicals.

Aramco is not just an oil company; it is a symbol of Saudi economic stability and global success. Despite the future challenges associated with reducing dependence on oil, Aramco seeks to expand into other industries. As it continues to expand into new areas, Aramco will remain a major player in the global economy for many years to come.