Saudi Aramco: The Company and the State

For the past two years, Saudi Arabia has prepared to place its national oil company on the stock market. Officials talked up the Saudi Aramco initial public offering (IPO) with international exchanges and global banks. It seemed like a great idea that the world's largest oil producing company, valued at $2 trillion, would become the world's largest ever traded stock.

There are many companies in the world which move and shake markets but perhaps no other organization essential to running a country. Aramco is unique and it runs no ordinary country. Saudi Arabia plays a key role in moving global oil prices. The oil market affects everyone on the planet directly or indirectly. Oil prices have developed and destroyed economies – Sudan and Venezuela being the most recent examples. So that company shedding its cloak of secrecy and deciding to go public is a huge deal. Specially for Saudi Arabia which is run by a monarchy and its affairs cannot be publicly evaluated or scrutinized.

The proposed listing of the national champion was a central part of the young Crown Prince Mohammed bin Salman's Vision 2030, a reform drive aimed at restructuring the kingdom's economy and reducing its dependence on oil revenue.

"I think there was a strong case for the IPO and there still is for the selling of a stake of Saudi Aramco and there are lots of reasons for it," explains Jim Krane, an energy researcher at Rice University’s Baker Institute for Public Policy. While Saudi Arabia, like other Gulf states have been trying to move away their economies from oil dependency for years, "the specter of climate action has finally made the Saudis get serious about it. And really the only way to diversify is through Aramco and Aramco is the source of revenues that the Saudi state needs to build other economic sectors."

The Kingdom holds about 16 percent of the world’s oil reserves and is the largest exporter of petroleum among OPEC countries. Nearly half of the country's GDP comes from oil and Aramco itself employs 65,000 people.

The concerns about radical changes in strategy put a spanner in the works for Saudi Aramco's public listing. For the first time in its history, an IPO would bring full public disclosure of Aramco's financial details, a feat that has never been made public.

"Probably the biggest downside is the transparency that would have resulted around Saudi oil reserves," says Krane, a number that doesn't move beyond 260 billion barrels. "If Saudi Aramco would have listed shares on the NYSE or the London stock exchange, the regulators would have forced Saudi Arabia to come clean on all of its reserves, how much of that is proven probable or otherwise."

A lot has changed since Mohammed bin Salman's international public relations drive such as the imprisonment of top Saudi businessmen, the murde r of journalist Jamal Khashoggi, the continued wa r on Yemen, and the Saudi-led blockade on neighbouring Qatar. That has resulted in a flight of capital, reduced foreign investment, increased Saudi borrowing and a halt on Saudi Aramco's IPO.

This is not the first time reforms have been promised in Saudi Arabia. "In many ways, Mohammed bin Salman resembles his grandfather Abdul Aziz al-Saud," according to Chas Freeman, former US Ambassador to Saudi Arabia. The late leader united the country "with tribal marriages...conducted a wa r in the Saudi south, which took land from Yemen...suppressed religious uprisings and it worked." Whether his grandson's current ambitions will work is "unknown," says Freeman.

Aramco owns the largest refinery in the US, Motiva, and hundreds of facilities across the globe and funds universities, think-tanks, lobbying firms and controls a vast media empire. That money shapes policy and perceptions while also covering up criticism of the kingdom.

Saudi Aramco's failure to launch and a young leader's stumble from one crisis to another are directly linked. There is an urgency to rush into things but also a lack of experience. "That is really like planning for the growth of a nation, not the exit of an IPO," says Chad Brownstein, a hydrocarbon investment analyst and CEO of Rocky Mountain Resources. "And the growth of a nation takes a lot more planning than a couple of months."

Saudi Aramco: The Company and the State examines the reasons behind the ambitious offering, the politics of Saudi oil, the strategic importance of Aramco, a faulty evaluation, the challenges of transparency and what it means for an ambitious Prince's 'Vision 2030'.

Filmmaker: Osama bin Javaid
Camera: Sherein Emam, Bobby Gunawan
Editor: George Joseph

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100+ komentarze:

Phenomenal Female
Phenomenal Female:
Saudi Aramco went public with the world's largest-ever IPO on Wednesday morning, with shares surging more than 15% in two days of trading & giving the state oil giant a valuation of $2 trillion.Dec 11, 2019
Mohammad Rafiqul Islam
Mohammad Rafiqul Islam:
Proud to have worked for the prestigious Saudi Aramco for almost twenty seven years since 1979 in Dhahran. Amongst the ups and downs, tricks and treacheries, Saudi Aramco maintained it's very own style of administration and operation fair and board. Serious challenges were there and the Company steered through to maintain the Saudi finance and economy afloat being the most important and dependable partner of the government. Their planned Saudization of human resources and contribution to the country's overall education, health and business deserve a recognition with high note. Wish them continuous success in all the sectors and develop the 'all local workforce' for future challenges.
Dany S.
Dany S.:
It's hard to say that the company belongs to the public when the whole state is owned by one family.
David Renwick
David Renwick:
Thank you AJ - excellent points to ponder, particularly vigorous Due Diligence. I see down-voters still haven't welcomed or grasped the idea of modern business practices and anything other than oligarchic and corrupt leaders grovelling to absolute monarchies . "Accountability is uncertain" typically modest understatement of a former diplomat.
I had no idea how complex the economic model is for the House of Saud. If Aramco is owned and operated by the government, what distinguishes the Saudi model from an SOE such as would be common to the PRC? Also if there's a decision by consensus, can one hold out impede a particular initiative? Thank you
Manny Espinola
Manny Espinola:
Thank you for this excellent documentary, very enlightening and informative
I worked in the hospital for employees of ARAMCO so lived in the ARAMCO compound for 2 yrs when it was an Arabian American Oil Company it is now an Arabian Oil Company worked 1 year during that time.
denzel gregoire
denzel gregoire:
It's hard to say that the company belongs to the public when the whole state is owned by one family.
Anthony Lo
Anthony Lo:
If such company can run a country and its economy, then a 2trillion dollar valuation means that the company is actually undervalued.
When western businessmen wants a huge slice of the nation's wealth, they often speaks of reforms. What a shame.
Moinuddin Saheb
Moinuddin Saheb:
Proud to be a part of Saudi Aramco.
May Allah bless the country & company ❤️❤️❤️❤️❤️
Stanley Joe
Stanley Joe:
Thank you for this informative documentary.
Kristopher Driver
Kristopher Driver:
The only reason aramco is waiting for is China to overtake the nyse or a USD crisis. Since oil is priced in USD its more a currency play than a commodity play, given that its an extracted resource
Hasan Ali
Hasan Ali:
I work for Saudi Aramco and i love my company. Its like my 2nd family.
M. Saad
M. Saad:
If Unemployment remains High despite there being jobs then u got a significant problem.. Whole story of Saudia arabia described in few words..
grace O
grace O:
wow.... they are really rich... big development.. I have been living in that place... the government really doing good job by education and to the people ... i dont see poor people on the street.. they have even allowances for the student which other country cant even afford even free education..
Peter Ernst
Peter Ernst:
Aramco has to diversify its revenue base away from oil to green technology by buying companies that are successful in these new technology areas. For ex, by buying air taxi drone service companies. You see this happening in places like Singapore and Dubai.
David Lanham
David Lanham:
"...when it comes to relations between the United States and Saudi Arabia, Washington has all of the leverage. American policymakers shouldn’t forget that." Ellen Wald, NY Times Oct. 18, 2018.
Arvind Aggarwal
Arvind Aggarwal:
In my humble opinion Oil will be replaced by other forms of energy making oil obsolete. Therefore it makes sense for Saudi Arabia to cash out of oil.
pete kid
pete kid:
It's hard to say that the company belongs to the public when the whole state is owned by one family.
K N:
the guy at 5:02 spoke facts; pretty much summarized the whole deal
gladstone rayen
gladstone rayen:
To reverse the previous moves or actions, decisions will be the only key to reverse the economic decline and make positive progress.
dexter ian abragan
dexter ian abragan:
thank you for this docu!
Francis Freyre
Francis Freyre:
Very Interesting Documentary! Thank you Al Jazeera.
Petroula Terzaki
Petroula Terzaki:
What good information source about Saudi Arabia. Thanks for care !
Need oil to stabilize for a decade to increase evaluation of Aramco above 2 trillion, while destabilize global reserves
Andy Tan
Andy Tan:
Something must be wrong, if it really makes that much money and really still had that much reserves, they wouldn’t need to IPO.
A S:
It’s interesting how the attack happened right when they’re trying to do an IPO which is dependent on oil price... nice chess move, blame Iran while boosting their IPO value.
"Houston is an oil town." How about mega-city in the United States. Fourth largest city by population in the U.S in fact if I'm not mistaken.
pl topper
pl topper:
I cant help it but i love Saudi Arabia...and i never ever been there
Sameer Halawani
Sameer Halawani:
The share is trading in Saudi making it the biggest ever public offering 👍👍✌️✌️
Robert Joseph
Robert Joseph:
Respect to Al Jazeera and the State of Qatar. This is a clear provocation and a humiliation of the Saudi decision to float ARAMCO, it's clear this is a piece to hit them but it does so well - it shows that the Sauds and Americans are in agreement to keep prices down via OPEC. Russia and Iran need higher $bbl. Also, all the western non-Arab persons in this video will NEVER have a job in any Saudi company or NGO ever.
T. Essakki Raja
T. Essakki Raja:
I'm very proud💪 to be a son of a worker of Saudi Aramco.
Ruman Khan
Ruman Khan:
I come to saudi Arabia on the 2 nd of march a fter landing at the airport I am still fascinated by the way the people of saudi arabia have been using it I am really impressed with the fact that the people of saudi arabia are much better there is on comparison all over the world there are many people who have salman bin abdul aziz sir and mohammad bin salman sir because fo these two great people of saudi arabia We have chosen millions of bengalis to day so I always pray to allah later I prag in the name of salman bin abdul aziz sir and mohammad bin salman sir may allah know who has chosen them for thousands of years and may zeno come to the side of poor and miserab people like us all his life and I pray to allah after the prayer that o allah you make me the owner of 500 crore real estate I will open a huge establishment in our bangladesh in the name of saudi salman bin abdul aziz sir and mohammad bin salman sir tsar name dimu salman bin abdul aziz sir and mohammad is the name of bin salman sir and I do this prayer to allah may allah know me once In a lifetime but give me the suzuk to meet salman bin abdul aziz sir and mohammad bin salman sir once in a lifetime I will teel very blessed with the money... I love saudi arabia
Well explained!!!!
Alexander Aquino
Alexander Aquino:
The Market will devour it for sure..
Its valuation will go roller coaster.
Short Sellers will ride in this, count on that
The Market is the one who dictates the price
Wayne Roland
Wayne Roland:
Aramco was founded with the Americans and Arabians (AraMcompany). The IPO was announced last year and they were deciding whether to go to NYSE (NASDAQ/NYC:AMCO) or LSE:/LSE.AMCO. They then pulled out and said they are not comfortable yet transitioning to the public phase, maybe it was just a testing between who would give them better concessions. Ultimately, the British did but they pulled out anyway.
Niqui Navarrete
Niqui Navarrete:
I love you Saudi Arabian prince. Thank you for changing a nation we once were so terrified with. 🙏
Like many, I hope alternative energy sources make this oil nation back to what they were prior to this wealth. I hope I live long enough to see that.
GroVera Christiansen
GroVera Christiansen:
The Petrolindustry is very profitable and vulnerable as well dependant on the merket and the stockmarket.
April Jeddah Lyn Bacud
April Jeddah Lyn Bacud:
My father works here. I am so proud of him. I miss him so much!!
Curtis Carpenter
Curtis Carpenter:
Considering the price of oil at the time of the IPO listing it on the London Stock exchange might be a good plan B. The 2030 plan could be a reality with UK cooperation through UK ingenuity - Hint only. They can create a less state run economy by selling to UK businesses and investors by offering a negotiable tax rate for operating in the country. Plug the money into their infrastructure too. How is that?
This is the first Saudi Diplomat who seems to sound sane , polished and clearly admits mistakes a very sensible interview
OwlNation Legal
OwlNation Legal:
The path forward for the Saudis is clear, as are the consequences of their decision; a sustainable, profitable future driving the transformation of the planet we all share, or a backwater worse off than Libya.
They’re going to need an army of accountants to go public.
Hey Jay
Hey Jay:
They are well protected and know how dictate and get the world to submit! They won't fall anytime soon but it doesn't mean they will never fall!
Andrew Lambert
Andrew Lambert:
Why do nations with minerals and/or oil have no industrial manufacturing capability despite having capital to invest in industry.
Charles Abernathy
Charles Abernathy:
An informative report on Saudi Arabia.
christopher adamson
christopher adamson:
In my opinion the Al Saud have done well for the Saudi people and as the custodians of the Holy Places they have had to defend the faith and state from radicals within and enemies without, it remains a herculean task. Against that backdrop and the catastrophe that was the Arab Spring i can look past some of their excesses. That being said i think it would be a bad idea to put Saudi Aramco in the hands of foreigners don't trust the Globalists.
Atlantic Falcon
Atlantic Falcon:
Very nice Documentary 😍😍😍
Miko Santos
Miko Santos:
MBS is awesome Crown Prince....His plan for Saudi is for benefit for all
The storyline comparison of investment/taxation used by Mr Freeman 37:35 to describe the US system vs the Saudi system... actually, in reality they mirror one another, such that neither group of "merchants" wanna pay taxes.
Mla KA
Mla KA:
Profit in 2018:

Saudi Aramco: $111 billion

Apple: $59.5 billion

Samsung: $39.9 billion

JPMorgan: $32.5 billion

Alphabet: $30.7 billion

Shell: $23.4 billion
My grandfather worked for Aramco in the 60s and 70s. He may be in some of the historical footage shown. By the time he died at the turn of the century, he said that the company and the country had changed a lot and wasn't the same by then. He probably wouldn't even recognize it at all by now.
Md karim
Md karim:
Im also work in a Saudi Aramco Related Company in Dammam Saudi Arabia.
Laurent De Decker
Laurent De Decker:
the float of aramco would only have been 2% of the shares
Suzana Stuber
Suzana Stuber:
Jānis Mačukāns
Jānis Mačukāns:
2:13 and there is already misinformation. The film states that Analysts have never followed Aramco.

Analysts have always followed Aramco. Everyone was looking at their output to forecast oil prices. It was not being evaluated for true value calculations.
With all the current dropping in stock markets, it might be better not to be on the exchanges. There is no such thing as infinite growth that shareholders expect. What goes up, must come down. That just is like that.
Angie Jeffrey
Angie Jeffrey:
A 10% interest in a Saudi company on Saudi soil, where the Saudi regime owns 90%, is an interest of no actual value. No control. It’s whatever they want it to be.... a money grab for sure to diversify and give up little or nothing
besides the documentary reading the comments becomes equally enjoyable lol
Ron Budd
Ron Budd:
Tousif Rahman
Tousif Rahman:
An inclusive government that do not share the wealth & prosperity with people that actually create it (wether foreign or local) can not possibly attract foreign Investment, they should actually look into other nations like Australia or Singapore to see how they treat their foreign workers, there is a lot of things goes into a be considered a developed country.
jonathan vladov
jonathan vladov:
18:15 she says that Aramco not listing in the NYSE limits their access to capital ? how much capital would they need? why would it limit it?
jjumba maurice
jjumba maurice:
An IPO at 2trillion dollars is more like a sweet worm for bait. The Saudi govt is simply seeking to hear the economist view well knowing that the sum is a pure under value of its oil reserves!!
Thank you Qatar for this documentary!
Abdullahi Ahmed
Abdullahi Ahmed:
Just do it already I would love to buy shares in Aramco, and I would encourage people to do the same, oil is one of the best investments like gold or real estate even if oil is selling at 20 dollars a barrel it's not a worry because you would still be making a profit, so just do it Saudi Arabia !
Ladders & Snakes
Ladders & Snakes:
The mighty ghawar oilfield which has been giving 6mbpd for last 50 years is actually in the shia eastern province, together with khurais also in the shia province, the production is 8.6mbpd ie 80% of saud crude oil wealth.
Ilsur м
Ilsur м:
Компания топ
Cheeto Cheeto
Cheeto Cheeto:
"100 billion dollars is a large amount but not that much 😳
gail handschuh
gail handschuh:
The US needs to let the Saudis deal with their own IPO we don’t need to finance their government or lifestyle.
Kamal Ashraf
Kamal Ashraf:
When you hear the word sovereign wealth fund, run.
Saudi Arabia needs a Sovereign fund similar to Norway, be a financial hub like Singapore and boost tourism for middle class foreigners.

In the case of Aramco divide it into 2 companies would make sense. 1 side goes public and 1 side stays private as well as moving to make public some parts of the value chain.
Stay strong saudi 😞💔💪💪🕋🇸🇦🇸🇦🇸🇦 you guys keep dividing the ummah
The great king . The Sublime Mohamed bin salman al saud ❤
Rafat Parveen
Rafat Parveen:
Aramco is a backbone Saudi kingdom
travel vlogs UH
travel vlogs UH:
Saudi Arabia, can expand its economy by many times, although they must not make big mistakes such as have western culture etc... only western which is compatible with Islam should be allowed.
Lena's Grand-daughter
Lena's Grand-daughter:
Is having a global economy really good for America? It seems like its only good for the very wealthy to me. we lost many of our manufacturers and jobs. Sure stocks are high but the majority of Americans dont have stocks. What is other countries screw up. Will that take us down too?
I think that a good decision made by the prince... The future belongs to clean energy... Diversifying resources of the saudian gouvernement is the best way to fight the future fall of the dollar.....saudi arabia.!!! Keep moving !!! Luck and destiny are with u ^^
Richard Cory
Richard Cory:
The Saudis are mostly too idle to work and non one much in Saudi Arabia does a stroke. They look down on work and having once been traders and now recipients of oil revenues, can't get their heads around it.
Matt Grunner
Matt Grunner:
IPO is too risky for KSA..
shemsedin leja
shemsedin leja:
Mohammed salman great man, keep going ahead your kingdom will be the strongest state in the world.
Its easy to count how much they sell give or take ... Im sure USA counts the super tankers, im sure there is a way to calculate the pipe lines as well. How much is in the ground ? That would most likely require insisde information. Or some super stealthy geologists.
Abdulaziz Alshareef
Abdulaziz Alshareef:
Its a purely family company
Alex K
Alex K:
“Saudi aramco” is an American company
Ahmed dakhil
Ahmed dakhil:
ARAMCO is probably the most respected company world wide. its run by high caliber Saudis and has a proven unmatched success record. Qatar, in a bid to tarnish that record, deploys its propaganda arm AJ to cast doubt, insert half truths and if nothing, at least sough the seed of doubt within its viewership . Facr remains ....Intl cos trample over each other to get ARAMCO contracts
Jack Kessler
Jack Kessler:
ironically, the object is to turn liquid oil into liquid cash. The Saudi monarchy is at no risk of running out of oil. If they run out of cash, they will be gone the next day.
Evan Wondoseen
Evan Wondoseen:
MBS is getting credit for all of King Abdullah's reforms, many couldn't get passed because the Sudairi faction was blocking it and that included Prince Sultan, Prince Abdul Rahman,
Som Guy
Som Guy:
I love the idea of the house of Saud running for their lives in the dessert. They squandered the majority of that ocean of oil.
I would like to hear what the family's vision is on how the planet is to be saved.
Bernard Zupan
Bernard Zupan:
Could have damaged there own facility. Things dont look that positive actually very negative. Blow up your own instillation and cause a rise in price.
Ali Akba
Ali Akba:
They dont have anymore reserves thats why MBS is tryin to market other avenues for currency
travel vlogs UH
travel vlogs UH:
Few hundred billion pounds of investment required to bring about improvements to expand economy of Saudi Arabia & neighbouring countries.
Respect to Saudi Arabia 🇸🇦 Aramco from Iran 🇮🇷 ... ARAMCO is way better investment than Apple!
Would Love to see an Arab Audit of USA's Oil industry in full disclosure. Not happening
Muhammad Fatkhurrozi
Muhammad Fatkhurrozi:
The company valuation seems big enough to buy white house policy. I hope Saudi give their hands to help set Palestina free.
Phenomenal Female
Phenomenal Female:
So what is the best Oil stock/ETF to buy now March 2021? Should an investor buy an ETF that has Saudi Aramco as the largest holding w/ a 5 star Morningstar rating? Most say oil is going up in 2021.
Safeer Khan
Safeer Khan:
رب اجعل ھذا بلدا امنا وارزق اھلہ من الثمرات من امن
38:54 to 39:03

Jim Krane mentioned Dubai, Abu Dhabi and Bahrain but some how missed Doha... :D But Doha was added later.
Omer Khan
Omer Khan:
MBS we are gonna take to another level together