Saudi Aramco is the national oil company of Saudi Arabia and the largest oil producer and oil resource owner of the world. The latest BP Statistical Review of World Energy estimates that the country´s oil resources (2P/50%) are in the region of 290 billion barrels.
Aramco recently published its financial numbers for 2018. They dwarf even the largest Western and Chinese oil majors in some respects:
- Net income 2018: $111.1bn (+46% year on year)
- Revenues 2018: $355.9bn (+35% year on year)
Aramco is clearly an extremely profitable company, thanks to a successful oil cartel (OPEC+) and low costs. Aramco more or less sponsors the entire country single-handedly.
For comparison: ExxonMobil has comparable revenues ($279bn in 2018) but its net income is “just” $31bn before and $21bn after taxes in 2018.
Riyadh was pursuing plans to float a small part of the company in New York or London to raise money. But after lengthy debates about the long-term value of the company and oil resources in general, Riyadh preferred a less complicated way to raise cash through company bonds instead of selling shares.
The capital is needed to diversify and secure future revenues. This happens mainly through downstream integration in petrochemicals and refining in key markets (India, China), and through expanding its natural gas business worldwide.
Sources and more details:
Image: Courtesy Saudi Aramco (Berri Gas Plant)
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