The giant faces risks from terrorism, an economically shaky government and uncertain oil demand. It says it has a plan
of the world’s most profitable company, past its heavily guarded perimeter, down a road, through another security gate, out of the blazing sun and into a cool office building sit box after box of rocks. They are samples of anhydrite, shale, dolomite and grainstone, retrieved from kilometres below ground. A block of grainstone looks perfectly ordinary, its dark surface dotted with pores.
Aramco maintains that, regardless of the oil market’s broader troubles, it will outcompete its rivals. Recently the company has used deals and new business units to secure customers, diversify its revenue and maximise the value of its oil. Its boosters like to say that the world’s last barrel of oil will come from Saudi Arabia. But it is unclear what value investors will ascribe to such a distant possibility.
Such astonishing scale has ensured that Saudi Arabia remains the de facto leader of the Organisation of the Petroleum Exporting Countries . American frackers may collectively produce more oil, but they operate independently. Saudi Arabia alone can ramp production up and down quickly in the attempt to tame volatile oil markets.
Since then, however, Aramco has announced a $69bn deal to buy Sabic. To raise money for the transaction, in April Aramco issued $12bn in bonds, which investors lapped up. The publication of a 469-page bond prospectus eased anxiety about letting the world pore over Aramco’s books. Meanwhile, the rationale for pursuing a listing—to raise money to diversify the economy—remains as urgent as ever.accelerated after the bond offering. Aramco held its first earnings call with investors in August .
Aramco has also used its deep pockets to bolster its standing in Asia. In August Reliance, an Indian conglomerate, said that Aramco had taken a 20% stake in its refining unit, for roughly $15bn. Aramco has announced other investments in Asia, including projects in South Korea, Malaysia and China. Joint ventures in refineries and petrochemical plants help Aramco hedge against low oil prices. They also include agreements to be the projects’ long-term supplier of crude.
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