DUBAI: Saudi Arabian oil giant Aramco is the world’s richest company, generating higher profits than any other company, including Apple. It generated net income of $111.1 billion last year, according to the prospectus filed with the London Stock Exchange as part of a bond sale programme.
The debt is being raised to fund the acquisition of a majority stake in domestic petrochemical group Sabic, worth about $69 billion. Bloomberg described the deal as a Plan B to generate money for Saudi Arabia’s economic agenda after an IPO of Aramco was postponed. In effect, Crown Prince Mohammed bin Salman is using the firm’s pristine balance sheet to finance his ambitions, the agency said.
Fitch Ratings and Moody’s Investors Service assigned Aramco the fifth-highest investment grade, the same as Saudi sovereign debt, but lower than oil majors Exxon, Shell and Chevron Corp.
The prospectus reveals secrets held close since the company’s nationalization in the late 1970s. It lists several risks faced by the company and discloses that missiles have fallen on Aramco’s installations. The risks include the impact of proposed U.S. antitrust laws on OPEC, the fight against climate change, and even the risk that Saudi Arabia will break the peg between its currency, the riyal, and the U.S dollar. It also revealed the Saudi oil giant was the victim of a cyber attack in 2012 that forced the company to move some operations into “manual” mode.
In 2018, the company produced 13.6 million barrels per day of oil equivalent, including 10.3 million barrels per day of crude oil (including blended condensate). The company’s crude oil production accounted for approximately one in every eight barrels of crude oil produced globally from 2016 to 2018.
As at 31 December 2017, the company’s proved liquids reserves were more than five times the combined proved liquids reserves of the Five Major IOCs. In addition, the company’s net refining capacity as at 31 December 2017 made it the fourth largest integrated refiner in the world based on a comparison with third party refining capacity data provided by the Industry Consultant. As at 31 December 2018, the company had a gross refining capacity of 4.9 million barrels per day and net refining capacity of 3.1 million barrels per day.
The company expects the Jazan integrated petrochemical refinery and the PRefChem integrated refinery and petrochemicals complex to commence operations by the end of 2019, which will increase gross refining capacity to 5.6 million barrels per day and net refining capacity to 3.7 million barrels per day.
The company says it is focussed on maintaining its pre-eminent upstream position and continued strategic integration of its downstream operations to secure demand for its crude oil and to capture value across the hydrocarbon chain.
Aramco’s heritage dates back to 1933 as an upstream venture founded by predecessors to Chevron and ExxonMobil, two of today’s Five Major IOCs. The company’s upstream operations are based in the kingdom and it also operates a global downstream business. Its primary business segments are the upstream segment and the downstream segment, which are supported by the corporate segment.
For the year ended 31 December 2018, the company generated SAR 453.7 billion ($121.0 billion) in net cash provided by operating activities and SAR 321.9 billion ($85.8 billion) of Free Cash Flow