Study of the Saudi Aramco Value Chain

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Study of the Saudi Aramco Value Chain Study of the Saudi Aramco Value Chain October 2010 Company overview: The Saudi Arabian Oil Company (Saudi Aramco) is a government-owned entity (since 1988 fully government-owned) and the world’s largest oil company in terms of output and managed natural crude oil resources. The company specializes in the exploration, production and distribution of crude oil, petrochemicals and natural gas. Saudi Aramco was established 1933 when Saudi Arabia signed a concession agreement with Standard Oil of California to explore for oil in the country. The group has more than 55,000 employees, circa 500 of which are Canadians. The company is headquartered in Dhahran. Plants are established in Abqiq (near Jeddah),…show more content…
Saudi Aramco’s sales and marketing activities are handled by three departments: crude, product and logistics. These are responsible for global export sales of crude oil, refined products, NGL and sulfur, as well as import of refined products to meet possible shortfalls in the domestic market. The sales and marketing headquarters are located in Dhahran; through subsidiaries, the company has 3 Study of the Saudi Aramco Value Chain established offices around the world. The Asian region is a focal point of Aramco’s international business, being the No.1 supplier of crude oil to China, Japan, Korea and Japan. Market information: Saudi Arabia is the world’s largest producer and exporter of petroleum liquids and the second largest producer of crude oil behind Russia. As Saudi Aramco is wholly responsible for the oil production in the country the company has a market share of 100%. Saudi Aramco not only controls the oil production but also the refining market in Saudi Arabia. In the refining business, however, Saudi Aramco also maintains Joint Ventures with other international companies (see above). Saudi Aramco markets its products internationally (largest importer to the US), but also distributes oil and gas domestically, supplying 100% of the local market, local demand was at 2.4 million bpd in 2009. Saudi Aramco is supplying all of its domestic refineries crude oil needs and most of its international ones. Table 6: Estimated worldwide crude oil (in billion

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