Saudi Arabian Oil - $ARAMCO.AB

What’s Saudi Arabian Oil Business Model?

Saudi Arabian Oil Co., doing business as Saudi Aramco, operates as an oil exploration company. The Company focuses on hydrocarbons exploration, production, refining, distribution, and shipping, as well as provides crude oil marketing services. Saudi Aramco serves customers worldwide.

What Saudi Arabian Oil is doing in more details?

Saudi Aramco is engaged in prospecting, exploring, drilling, extracting, processing, manufacturing, refining and marketing hydrocarbon substances within the Kingdom and has interests in refining, petrochemical, distribution, marketing and storage facilities outside the Kingdom.

Saudi Aramco’s average hydrocarbon production was 12.4 mmboed, including 9.2 mmbpd of crude oil. Saudi Aramco’s reserves stood at 255.2 billion boe, including 198.8 billion barrels of crude oil and condensate, 25.2 billion barrels of NGL and 191.6 tscf of natural gas.

In addition, Saudi Aramco had a gross refining capacity of 6.4 mmbpd and net chemicals production capacity of 53.1 million tonnes per year.

Where Saudi Arabian Oil is Operating?

Saudi Aramco classifies operations under Upstream and Downstream segments.

The Upstream segment’s activities consist of exploring for, developing and producing crude oil, condensate, natural gas and NGL.

Aramco is the exclusive supplier of natural gas in the Kingdom and its gas portfolio is rich in liquids, demonstrated by the production of 1.0 mmbpd of NGL and 0.2 mmbpd of unblended condensate in 2020.

Aramco owns and operates the Master Gas System (MGS), which is an extensive network of pipelines that connects its key gas production and processing sites throughout the Kingdom. The segment accounts for about 55% of total revenue.

The Downstream segment’s activities consist primarily of refining and petrochemical manufacturing, supply and trading, distribution and power generation. The Downstream segment’s other business activities include base oils, lubricants and retail operations.

Saudi Aramco’s Downstream segment includes its crude oil and product sales, distribution and trading operations.

These operations support Aramco’s upstream and downstream activities by enabling it to optimize crude oil sales and product placement through its significant infrastructure network of pipelines and terminals and access to shipping and logistics resources. The Downstream segment accounts for about 55% of total revenue.

Where is the geographical reach of Saudi Arabian Oil?

Saudi Aramco has offices in Baku, Beijing, Dhahran, Houston, Kuala Lumpur, New Delhi, London, New York, Seoul, Singapore, Shanghai, The Hague, Tokyo, and Xiamen.

Saudi Aramco maintains research centers and technology offices in Aberdeen, Scotland; Beijing, China; Houston, Texas; Daejeon, South Korea; Delft, the Netherlands; Detroit, Michigan; Moscow, Russia; Paris, France; Dhahran and Thuwal, Saudi Arabia.

In terms of revenue, in-Kingdom generates some 70% of total revenue, while the remaining some 30% from outside of the Kingdom.

What is Saudi Arabian Oil Financial Performance?

The company had a consolidated revenue of SAR768.1 billion in 2020, a 31% decrease from the previous year’s consolidated revenue of SAR1.1 trillion. This was mainly due to a lower sales volume in the company’s upstream business.

In 2020, the company had a net income of SAR183.8 billion, a 44% decrease from the previous year’s net income of SAR330.7 billion.

The company’s cash at the end of 2020 was SAR207.2 billion. Operating activities generated SAR285.3 billion, while investing activities used SAR20.9 billion, primarily for capital expenditures. Financing activities used another SAR234.9 billion, mainly for dividends paid to shareholders.

What is Saudi Arabian OilFuture Strategy?

Aramco’s strategy aims to reinforce its competitive positions across its upstream and downstream operations. It consists of:

Maintaining its position as the world’s largest crude oil producer by production volume and one of the lowest cost producers, while providing reliable, low carbon intensity crude oil supply to customers;

Capturing value from further strategic integration and diversification of its operations;

Expanding global recognition of Aramco’s brands;

Efficiently allocating capital and maintaining a prudent and flexible balance sheet;

Delivering sustainable dividends through crude oil price cycles; as well as

Operating sustainably by leveraging technology and innovation.

What is Saudi Arabian Oil’s Background?

Saudi Aramco dates back to 1933 when Saudi Arabia agreed to open up a large area for exploration by Standard Oil of California (now Chevron).

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