Aramco Expats

About Saudi Aramco

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Author: Press Release Saudi Aramco
Released 27 May 2008

Introduction

The Saudi Arabian Oil Company (Saudi Aramco), the state-owned oil company of the Kingdom of Saudi Arabia, is the largest petroleum corporation in the world. The Kingdom has the world’s largest recoverable oil reserves and the fourth-largest natural gas reserves. Saudi Aramco ranks first among oil companies worldwide in terms of crude oil production and exports as well as natural gas liquids (NGL) exports, and is among the leading producers of natural gas. The company is a fully integrated energy company with operations in exploration, production, refining, petrochemicals, distribution, marketing and international shipping.

Saudi Aramco headquarters in Dhahran.
Photo by Saudi Aramco

Saudi Aramco employs more than 51,000 people and is headquartered in Dhahran in Saudi Arabia’s Eastern Province, which borders the Arabian Gulf. Operations span the Kingdom, with production and product distribution facilities linking all market areas. Major export shipping terminals are located at ports on the Arabian Gulf and Red Sea, while domestic demand for automotive and aviation products is met through a Kingdom-wide network of strategically situated refineries.

Internationally, Saudi Aramco holds substantial joint-venture and investment interests in refining and marketing activities in the United States, the Philippines, the Republic of Korea, Japan and China. Key market service support offices are located in major cities in North America, Europe and the Far East. Saudi Aramco, through its international shipping affiliate Vela International Marine Limited, also operates a sizeable fleet of supertankers for shipping crude oil and product vessels serving customer bases.

Saudi Aramco stands committed to providing a reliable supply of petroleum and petroleum products to communities and consumers around the globe. Throughout its history, Saudi Aramco has never failed due to operational reasons to meet a delivery commitment to a customer. The company’s ability to bring its spare capacity on-stream in response to market needs has been repeatedly proven over the years.

Operations

The foundation for the company’s success lies deep underground, with the Kingdom’s extensive oil and gas reserves. Saudi Arabia has stewardship over the world’s largest conventional crude-oil reserves, approximately 260 billion barrels, and the planet’s fourth-largest natural-gas reserves, approximately 248.5 trillion standard cubic feet. Given their immense size, prudent stewardship of these reserves is vital to the world’s energy future. Saudi Aramco’s reservoir management practices are designed to maximize recovery from its fields, ensuring that petroleum resources will be available to the world for many decades to come. The company operates an extensive system of crude oil producing and processing facilities, which supply normal customer demand while maintaining 1.5 million to 2 million barrels per day of valuable spare capacity to meet unexpected international demands.

The sun sets on Ras Tanura.
Photo by Saudi Aramco

Domestically, Saudi Aramco owns and operates, or is a partner in, seven refineries with a combined refining capacity of 1.7 million bpd and maintains a Kingdom-wide refined product distribution system. The company also operates eight marine terminals on the Red Sea and Arabian Gulf coasts, exporting crude oil products and natural gas liquids to overseas markets.

Saudi Aramco's oil operations encompass the Kingdom of Saudi Arabia, including territorial waters in the Arabian Gulf and the Red Sea. Totaling more than 579,100 square miles (1.5 million square kilometers), this area is larger than the combined areas of Texas, California, Oklahoma and Utah, or of France, Spain and Germany. Most production comes from fields in the coastal plains of the Eastern Province in an area extending 300 kilometers north and south of Dhahran.

Worldwide, gas is the fastest-growing energy source. Over the last decade, world gas consumption has grown 1.7 percent per year and is expected to accelerate at a rate of 3.2 percent per year over the next 20 years. Saudi Arabia discovered the merits of gas as a valuable resource in the 1970s, well before any other hydrocarbon-rich nation in the Middle East, and its Master Gas System was launched in the 1980s to capture and utilize, rather than flare, this important energy resource.

Company History

The Saudi Aramco story began in May 1933 with the signing of a concession agreement between the government of Saudi Arabia and Standard Oil Company of California (Socal), predecessor of Chevron. The agreement was signed in Jiddah by Shaikh Abdullah Al-Sulaiman, the Saudi Arabian Minister of Finance, and lawyer and land-lease expert Lloyd N. Hamilton, acting on behalf of Socal.

Signing of 1933 concession agreement by Shaikh Abdullah Al-Sulaiman and Lloyd N. Hamilton.
Photo by Saudi Aramco

Socal passed this concession to a wholly owned subsidiary named the California-Arabian Standard Oil Co. (Casoc). In 1936, The Texas Company (later known as Texaco) purchased a 50- percent stake in the concession.

The first commercial oil discovery came in 1938 with the seventh well drilled in Dammam, an area located a few miles north of Dhahran. The well, referred to as Dammam No. 7 (and now known as “Prosperity Well”), immediately produced more than 1,500 barrels per day, giving the company the confidence to continue and flourish.

The company name was changed in 1944 to the Arabian American Oil Company (Aramco). In 1948, Socal and The Texas Company were joined as investors by Standard Oil of New Jersey (the predecessor of Exxon), which purchased 30 percent of the company, and Socony Vacuum (the predecessor of Mobil), which purchased 10 percent, leaving Socal and The Texas Company with equal 30 percent shares each.

Between 1973 and 1980, the Saudi Arabian government acquired an economic interest in Aramco’s operations in stages. In 1980, essentially all of Aramco’s assets were transferred to the government. From that time until 1988, Aramco operated the assets on behalf of and for the benefit of the government. In November 1988, the Saudi Arabian Oil Company was created by Royal Decree, and the company formally changed its name to Saudi Aramco.

Selected Company Locations

One of Saudi Aramco's desert oil rigs.
Photo by Saudi Aramco

• Dhahran, site of the largest of Saudi Aramco’s residential communities, is the company’s administrative and technical headquarters.
• Ras Tanura, lies 43 miles (70 km) north of Dhahran on the Arabian Gulf and is the site of Saudi Aramco’s first refinery and its largest oil-shipping terminal.
• Ju‘aymah, site of Saudi Aramco’s second terminal, is located a few kilometers northwest of Ras Tanura.
• Abqaiq, the main oil-processing center, lies about 43 miles (70 km) southwest of Dhahran.
• ‘Udhailiyah, 118 miles (190 km) southwest of Dhahran, is the residential community for Southern Area Producing and the ‘Uthmaniyah Gas Plant.
• Tanajib, about 155 miles (250 km) northwest of Dhahran, is the hub for activities associated with Northern Area offshore operations.
• Abu ‘Ali, about 106 miles (170 km) northwest of Dhahran, is the site of gas-oil separation and gas-gathering facilities for the Berri oil field.
• At Yanbu‘ on the Red Sea, Saudi Aramco-operated facilities include a refinery, a crude oil export terminal and a natural gas liquids (NGL) fractionation plant and export terminal.
• The company also owns a refinery at Rabigh, about 93 miles (150 km) north of Jiddah. Petrochemical production facilities are being built there by Petro Rabigh, a joint venture between Saudi Aramco and Sumitomo Chemical Co. of Japan, and are scheduled for completion in the fourth quarter of 2008.
• At Jubail on the Arabian Gulf, 47 miles (75 km) northwest of Ras Tanura, Saudi Aramco operates one of the world’s largest sulfur-pelletizing plants and export facilities.
• Saudi Aramco maintains offices and operates a refinery in Riyadh, Saudi Arabia’s capital city.
• Jiddah, the Kingdom’s chief seaport on the Red Sea, also hosts company offices and a refinery.
• Shaybah, located in the Rub’ al-Khali desert about 500 miles (800 km) southeast of Dhahran, is the company’s most remote oil field and currently produces approximately 500,000 bpd of valuable Arabian Extra Light oil. A current expansion project at Shaybah will be completed in late 2008 and will increase production at this field by an additional 250,000 bpd.