'' struck oil in 1938, becoming the first commercial oil well in
Saudi Arabia Saudi Aramco's origins trace to the oil shortages of
World War I and the exclusion of American companies from
Mesopotamia by the United Kingdom and France under the
San Remo Petroleum Agreement of 1920. The US administration had popular support for an "
Open Door policy", which
Herbert Hoover, secretary of commerce, initiated in 1921.
Standard Oil of California (SoCal) was among those US companies seeking new sources of oil from abroad. In 1932 the
Bahrain Petroleum Company, a wholly owned SoCal subsidiary, discovered the first oil field in the Persian Gulf outside of Iran. The Saudi Arabian government granted a concession to SoCal in preference to a rival bid from the
Iraq Petroleum Company. The concession allowed SoCal to explore for oil in Saudi Arabia. SoCal assigned this concession to a wholly owned
subsidiary, California-Arabian Standard Oil Company (CASOC). In 1936, with the company having had no success at locating oil, the
Texas Company (Texaco) purchased a 50% stake of the concession. After four years of fruitless exploration, the first success came with the seventh drill site in
Dhahran in 1938, a well referred to as
Dammam No. 7. This well immediately produced over , giving the company confidence to continue. On 31 January 1944, the company name was changed from California-Arabian Standard Oil Co. to Arabian American Oil Co. (or Aramco). On 17 March 1947,
Standard Oil of New Jersey (later known as Exxon) purchased 30% and
Socony Vacuum (later Mobil) purchased 10% of the company, with SoCal and Texaco retaining 30% each. The newcomers were also shareholders in the Iraq Petroleum Co. and had to get the restrictions of the
Red Line Agreement lifted in order to be free to enter into this arrangement. In 1949, Aramco had made incursions into the
Emirate of Abu Dhabi, leading to a
border dispute between Abu Dhabi and Saudi Arabia. In 1950,
King Abdulaziz threatened to
nationalise his country's oil facilities, thus pressuring Aramco to agree to share profits 50/50. A similar process had taken place with American oil companies in
Venezuela a few years earlier. The American government granted US Aramco member companies a
tax break known as the
golden gimmick equivalent to the profits given to King Abdulaziz. In the wake of the new arrangement, the company's headquarters were moved from New York to Dhahran. In 1951, the company discovered the
Safaniya Oil Field, the world's largest offshore field. In 1957, the discovery of smaller connected oil fields confirmed the
Ghawar Field as the world's largest onshore field. Aramco continued to operate and manage the former Aramco assets, including its concessionary interest in certain Saudi Arab oil fields, on behalf of the Saudi Arab Government until 1988. In November 1988, a
royal decree created a new Saudi Arab company, the Saudi Arabian Oil Company, to take control of the former Aramco assets (or Saudi Aramco) and took the management and operations control of Saudi Arabia's oil and gas fields from Aramco and its partners. In 1989–90, high-quality oil and gas were discovered in three areas south of Riyadh.
Persian Gulf War In September 1990, after the start of the
Persian Gulf War, Aramco was expected to replace much of the oil production removed from the global market due to the embargo of Iraq and occupied Kuwait. This amounted to producing an extra 4.8 million barrels per day (Mbpd) to keep the global oil market stable. In addition, Aramco was expected to provide all of the
coalition aviation and diesel needs. Aramco recommissioned 146 Harmaliyah,
Khurais, and Ghawar oil wells with associated
gas oil separation plants, and saltwater treatment pipeline, that had been
mothballed during the 1980s oil price collapse. Daily production increased from 5.4 Mbpd in July to 8.5 Mbpd in December 1990 after a three-month de-mothball effort. In June 2008, in response to crude oil prices exceeding US$130 a barrel, Aramco announced it would increase production to 9.7 million barrels per day (mbpd). Then as prices plummeted, Aramco stated in January 2009, that it would reduce production to 7.7 mbpd. In January 2016, the Deputy Crown Prince of Saudi Arabia,
Mohammad bin Salman Al Saud, announced he was considering listing shares of the state-owned company, and selling around 5% of them in order to build a large
sovereign wealth fund. On 26 April 2017, Saudi security forces thwarted an attempted attack on an Aramco oil distribution centre involving an unmanned boat from Yemen.
The Wall Street Journal reported in September 2018, Aramco was considering a US$1 billion venture-capital fund to invest in international technology firms. In June 2019, a report by
Financial Times claimed that Aramco had been bearing the ministry-related expenses; boosting the finance ministry budget allocation. It also included Energy Minister
Khalid Al Falih’s company-related and diplomatic trips, as well as his stays in luxurious hotels. However, an ally mentioned that Falih’s policies have delivered additional oil revenues that far exceeded his expenses. In September 2019, Saudi Arabia appointed
Yasir Al-Rumayyan as the Chairman of Aramco. Al-Rumayyan became head of the country’s sovereign wealth fund by replacing
Khalid Al-Falih, who was holding the position since 2015.
2012 cyber attack Aramco computers were attacked by a virus on 15 August 2012. The following day Aramco announced that none of the infected computers were part of the network directly tied to oil production and that the company would soon resume full operations. Hackers claimed responsibility for the spread of the computer virus. The virus hit companies within the oil and energy sectors. Due to this attack, the main site of Aramco went down and a message came to the home page apologising to customers. Computer security specialists said that "The attack, known as Shamoon, is said to have hit at least one organisation in the sector. Shamoon is capable of wiping files and rendering several computers on a network unusable."
Richard Clarke suggests the attack was part of Iran's retaliation for the US involvement in
Stuxnet. Security researcher
Chris Kubecka, who helped the company establish security after the attack, detailed the level of sophistication in her Black Hat USA 2015 presentation and episode 30 of Darknet Diaries.
2019 drone attack On 14 September 2019, there was a drone attack on two Saudi Aramco plants: the
Abqaiq oil processing facility and
Khurais oil field.
Houthi rebels claimed responsibility for the attack. The attack cut 5.7 million barrels per day (bpd) of Saudi crude output, over 5% of the world's supply. There were discussions by Saudi Arabian officials on postponing Aramco's IPO, because the attacks "sidelined more than half of the kingdom's output" of oil.
2019 initial public offering (IPO) Since around 2018, Saudi Arabia had been considering to put a portion of Saudi Aramco's ownership, up to 5%, onto public trading via a staged
initial public offering (IPO), as to reduce the cost to the government of running the company. While the IPO had been vetted by major banks, the IPO was delayed over concerns of Aramco's corporate structure through 2018 into 2019. The September 2019 drone attacks on Aramco's facilities also delayed the onset of the IPO. On 9 April 2019, Aramco issued bonds collectively valued at US$12 billion. Its first international bond issue received more than US$100 billion in orders from foreign investors, which breaks all records for a bond issue by an emerging market entity. On 9 November 2019, Saudi Aramco released a 600-page prospectus giving details of the IPO. According to the specifications provided, up to 0.5% of the shares were locked for individual retail investors. On 4 December 2019, Saudi Aramco priced its offering at 32
Saudi riyals (approximately US$8.53 at the time) per share. The company generated subscriptions of total amount equals US$119 billion representing 456% of total offer shares. It raised US$25.6 billion in its IPO, making it the world's largest IPO, succeeding that of the
Alibaba Group in 2014. The company commenced trading on Tadawul on 11 December 2019, with shares rising 10% to 35.2 riyals, giving the company a market capitalisation of about US$1.88 trillion, and making Saudi Aramco the world's largest listed company. The entire Tadawul has a market capitalisation of US$2.22 trillion.
Global Medium Term Note Programme According to a bourse filing made by Aramco, the likes of
Goldman Sachs,
HSBC,
Morgan Stanley,
JPMorgan, and NCB Capital were hired by the company for organising investor calls prior to the planned transaction. The document published by one of the other banks said to be involved in the deal showed that the deal included BNP Paribas, MUFG, BofA Securities, SMBC Nikko, First Abu Dhabi Bank, Societe Generale, and BOC International. The company has reported a fall in the net profit of its third-quarter for November 2020, due to increased crude prices and a drop in its demand following the COVID-19 pandemic.
2020s On 10 March 2020 Saudi Aramco announced a global partnership with
Formula One landing a multi-year deal. On 17 June 2020, Saudi Aramco acquired a 70% share in
SABIC, a chemicals manufacturing company. In June 2020, Saudi Aramco laid off nearly 500 of its more than 70,000 employees, as global energy firms reduced their workforce due to the
COVID-19 pandemic. Most of the workers who lost their job at Aramco were foreigners. On 31 July 2020, Saudi Aramco lost its title as the world's largest listed company by market capitalisation to
Apple. On 9 August 2020, Saudi Aramco reported a 50% fall in net income for the first half of its financial year, as demand for oil and prices continued to fall due to the
coronavirus crisis. On 3 November 2020, Saudi Aramco reported a 44.6% drop in third-quarter net profit amid the COVID-19 pandemic. On 14 December 2020, Saudi state TV announced that an oil tanker carrying over 60,000 metric tons of unleaded gasoline from an Aramco refinery at Yanbu, had been attacked by a smaller boat rigged with explosives. In March 2021, Saudi Aramco announced that earnings in 2020 fell by nearly 45% compared with 2019, as lockdowns around the world following the
COVID-19 pandemic curbed demand for oil. On 19 March 2021, an Aramco refinery was attacked by six bomb-laden drones. The attack, which was claimed by Houthi rebels, started a fire but caused no injuries or damage, according to the official Saudi Press Agency. On 21 March 2021, Saudi Aramco signed an agreement to secure China's energy supplies for the next 50 years, and also to develop new technologies to combat climate change. More recently, they signed a deal with a consortium led by EIG. In July 2021, Saudi Aramco appointed former
HSBC Holdings Plc Chief Executive Officer
Stuart Gulliver to the company's board of directors. In October 2021, Saudi Aramco announced plans to achieve net-zero carbon emissions from its wholly owned operations by 2060. On 20 November 2021, Houthi fighters took credit for launching 14 drones at military targets in Riyadh, Abha, Jizan, Najran, and Jeddah, and Aramco's refineries in Jeddah. In 2021,
The Guardian reported that Aramco was not trying to diversify at the same rate as other oil companies, such as Shell and BP. Rather, Aramco announced in 2021 that the company intended to increase crude capacity from 12m barrels a day to 13m barrels by 2027. In March 2022, Houthi fighters attacked an Aramco storage site in Jeddah causing a fire in two storage tanks. The incident occurred during the closing part of the first practice session for the
2022 Saudi Arabian Grand Prix, with first reports coming just after 17:40 local time. After closed-door discussions between Formula One officials, all ten teams, and local officials, the remaining sessions went ahead as planned. On 11 May 2022, Saudi Aramco became the largest (most valuable) company in the world by market cap, surpassing
Apple Inc. In August 2022, Saudi Aramco announced that it would acquire
Valvoline's petroleum unit for $2.65 billion. In March 2023, Saudi Aramco announced that they had seen record profits of $161 billion as prices of petrol soared following the COVID-19 pandemic. The figures eclipsed the numbers posted by ExxonMobil and Shell, who reported $55.7 and $39.9 billion in profit respectively. In March 2023, Saudi Aramco announced it was going to acquire a 10% stake in China's Rongsheng Petrochemical Co. Ltd, with an estimated purchase price of $3.6 billion, and plans to build a new refining and petrochemical complex in northeast China through a joint venture. In September 2023, it was announced that Saudi Aramco had reached an agreement with the
Latin American
private equity fund, Southern Cross Group to acquire the
Santiago-headquartered fuel retailer, Esmax Distribución SPA, operator of
Petrobras-branded service stations in Chile. The acquisition marks Saudi Aramco's entry into the
South American fuel retailing market, and beginning in May 2024, the 300 Petrobras service stations in Chile will be gradually converted to Aramco service stations. In September 2023, Indian engineering and construction giant Larsen & Toubro (L&T) signed a contract with Saudi Aramco. The Jafoor unconventional gas development expansion project in Saudi Arabia where L&T will build a gas processing plant and major processing facilities is worth $2.9 billion. In December 2023, Saudi Aramco acquired 40% shares in Gas & Oil Pakistan for an undisclosed amount. Today, based on Yahoo Finance, Aramco's market cap is SAR 6.279T. Aramco is deemed to be the most profitable firm in history. It costs the firm $3.75 to produce each barrel, which is among the lowest of all oil/gas firms. Along with other Middle East countries where oil reserves are easy to extract, Saudi Arabia has relatively low production costs around $10 per barrel, making most oil sales prices profitable. By comparison, Canada and United States have production costs around $40 to $60 per barrel. In early 2026, Saudi Aramco signed a 20-year deal to receive 1 million tonnes of
liquefied natural gas per year from USA. ==Operation==