By Tyler Losier, Energy Reporter, Oil & Gas 360


The staggering size of Aramco: Saudi Arabia’s state-owned oil company

In 1933, the government of Saudi Arabia signed a concession agreement with the Standard Oil Company of California, creating an entity known as the California Arabian Standard Oil Company. Two years later, drilling began, and in 1938, famed geologist Max Steineke discovered commercial volumes of oil from Dammam No. 7 – appropriately nicknamed “the prosperity well.”

By 1980, the Saudi government owned a 100% interest in the California Arabian Standard Oil Company, which had since been renamed as the Arabia American Oil Company, or Aramco for short. In the years that followed, Aramco grew to become one of the single largest producers of oil in the world, helping to establish Saudi Arabia as a major player in the global geopolitical landscape as a result.

Recently, Aramco released its 2017-2018 summary financial results, revealing staggering levels of revenue, income, production and reserves. But just how big is the world’s biggest oil company in comparison to other prominent supermajors and independents?

 

Revenue

How Big is Saudi Aramco? - Oil & Gas 360

ConocoPhillips has the largest market cap of any independent American E&P, and last year alone, it boasted a revenue of $36.42 billion. Aramco, on the other hand, raked in $315.24 billion, meaning it surpassed ConocoPhillips’ yearly revenue within about 42 days.

Even if you added up the collective revenues from EOG, Occidental, Anadarko, Devon, and ConocoPhillips, it would only make up about 30% of Aramco’s reported revenue from last year.

Some supermajors, such as Royal Dutch Shell, outpace Aramco slightly. In 2018, Shell’s revenue was approximately $388.4 billion.

On the other hand, smaller independents like Occidental only had a revenue of $17.82 billion. Looking at it another way, the $73.2 billion that separated the revenues of Shell and Aramco in 2018 equates to the revenue of about four Occidentals.

 

Net Income

How Big is Saudi Aramco? - Oil & Gas 360

While some supermajors, such as BP and ExxonMobil, come close to Aramco in terms of revenue, when it comes to net income, the disparity is staggering. Last year, Aramco reported a total net income of $111.07 billion.

Collectively, the supermajors – BP, Royal Dutch Shell, ExxonMobil, Chevron, Total, and ENI – had a combined total net income of only $88.39 billion. In order to close that gap, you’d need to tack on an additional 4.26 ConocoPhillips’ worth of net income to bring the other supermajors up to speed.

On the independent side of the equation, the collective net income of EOG, Occidental, Anadarko, Devon, and ConocoPhillips is $13.94 billion. That’s only about 12.6% of the reported profit generated by Aramco in 2018.

This means that theoretically, it only takes Aramco approximately 46 days to accumulate more net income than all five of the U.S.’s largest E&Ps combined.

 

Production

How Big is Saudi Aramco? - Oil & Gas 360

For 2018, Fitch Ratings estimates that Aramco’s average production was approximately 13.60 million BOEPD. In comparison, the EIA estimates that in June 2019, the average daily production for the entire Permian Basin was about half of that.

When it comes to less prolific basins such as the Anadarko, Aramco’s daily average production is roughly 7.25x greater.

In terms of companies, ExxonMobil leads the way when it comes to supermajors with an average daily production of 3.83 million BOEPD. To reach this volume, it would take Aramco only 6.77 hours.

Even if ExxonMobil joined forces with the next two largest supermajors – BP and Royal Dutch Shell – the three companies would still fall short of Aramco with only 11.18 million BOEPD in collective production.

For independent E&Ps, the gap is even wider.

ConocoPhillips leads its peers, with an average daily production of 1.28 million BOEPD. Aramco, however, would surpass this volume in approximately 2.26 hours.

Even if you combined ConocoPhillips with EOG, Occidental, Anadarko and Devon, their cumulative average daily production is about 3.86 million BOEPD, a feat achieved by Aramco in 6.81 hours.

 

Reserves

How Big is Saudi Aramco? - Oil & Gas 360

Aramco’s claimed proved reserves, at least according to Fitch Ratings, is in the neighborhood of 257 billion BOE.

To put that in perspective, ExxonMobil, which has the largest reserves of any of the supermajors, only possesses about 24.29 billion BOE. That’s just under 10% of Aramco’s total stockpile of hydrocarbons.

For the independent companies, as with the other categories, ConocoPhillips is in the lead for most proved reserves at 5.30 billion BOE. This represents only about 2% of ARAMCO’s total reserves, which at its current production rate, would take approximately 389.71 days for the company to exhaust.

Even if you took every company mentioned so far – BP, Royal Dutch Shell, ExxonMobil, Chevron, Total, ENI, EOG, Occidental, Anadarko, Devon and ConocoPhillips – and added up all their proved reserves, the total would be 101.22 billion BOE. That’s less than 40% of what ARAMCO claims to own.

In short, no matter how you cut it, when it comes to size, Saudi Aramco is in a league of its own.


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