Study of the Saudi Aramco Value Chain

Topics: Petroleum, Saudi Arabia, Saudi Aramco Pages: 17 (4842 words) Published: June 5, 2011
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), Juaymah (near Dammam) and Yanbu (Arabian Gulf); the solely owned refineries are located in Jeddah, Ras Tanura (Arabian Gulf, near Dammam), Riyadh and Yanbu. Major export shipping terminals are located at ports on the Arabian Gulf and Red Sea, while domestic demand for automotive and aviation products is met through a Kingdom-wide network of strategically situated refineries. Saudi Aramco holds substantial joint venture and investment interests in refining and marketing activities in the USA, South Korea, Japan and China. Representative offices exist in Kuala Lumpur, Malaysia and Shanghai, China for marketing and sales. Through its affiliate, Vela International Marine Ltd. Saudi Aramco owns and operates one of the world’s largest oil tanker fleets. Organizational structure: Saudi Aramco reports to its owner, the Saudi Arabian government, through the Supreme Council of Petroleum and Minerals Affairs. The Supreme Council sets the company’s broader policy and objectives. Saudi Aramco’s Board of Directors is responsible for highlevel planning, budgeting and project decisions. The company’s President is their CEO. President & CEO


Management Services

Corporate Planning Exploration & Producing SVP Refining, Marketing & International Engineering & Project Management SVP Operations Services SVP Industrial Relations SVP

Finance SVP

Northern Area Oil Operations

Refining & NGL Fractionation

Engineering Services

Industrial Services


Community Services Employee Relations & Training

Southern Area Oil Operations

Marketing, Supply & JV Coordination

Project Management

Materials Supply



Pipelines, Distribution & Terminals

New Business Development

Information Technology

Medical Services

Drilling & Workover Petroleum Engineering & Development

KAUST Development

Safety & Industrial Security

KAUST Project Management RT Integrated Refining & Petrochemicals

Saudi Aramco Affairs

Gas Operations

Table 1: Saudi Aramco’s organizational structure


Study of the Saudi Aramco Value Chain Saudi Aramco is divided into six business lines: Exploration & Producing; Refining, Marketing & International; Engineering & Project Management; Operations Services; Finance; and Industrial Relations. They are directly reporting to the President and CEO. The main business is oil operations, refining & distribution as well as shipping. The company has several domestic and international subsidiaries and pursues projects mainly in the home market, but also in the US, China, Korea and Japan. In a joint venture with the Japanese company Sumitomo, Saudi Aramco completed its first petrochemical plant (fully integrated refining and petrochemical complex) in Rabigh in 2009. Products and market positioning: Saudi Aramco is wholly responsible for oil and liquids production in Saudi Arabia. The five largest refineries (will) have capacities of 550,000 bpd (barrel per day; Ras Tanura), 400,000 bpd (Rabigh, JV with Sumitomo), 400,000 bpd (Saudi Aramco Mobil Refinery Co., JV with ExxonMobil), 400,000 bpd (Jubail refinery operational in 2013, JV with Total) and 400,000 bpd (Yanbu refinery operational in 2014, JV with partner TBD)....
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