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These Secretive Oil Companies Control $3 Trillion In Wealth

These Secretive Oil Companies Control $3 Trillion In Wealth

Kashagan

They control the vast majority of the world’s oil and gas assets, yet the average person has never even heard of them, outside of those that are famous for things like getting attacked by missiles or becoming embroiled in a high-profile corruption scandal. 

State-owned oil and gas companies (aka, the national oil companies, or NOCs) control at least US$3 trillion in oil and gas assets, compared to around $2.5 trillion as of 2017, and hold an estimated 90% of all known reserves–considerably more than publicly listed companies such as BPExxonMobil and Shell. Meanwhile, Saudi Aramco leads the pack as the world’s most profitable company. 

That means that NOCs control about as much wealth as all U.S. billionaires or roughly twice the assets of global multilateral development banks. 

If we go by annual revenue alone, China’s state-run Sinopec—explorer, producer, refiner, marketer and distributor—was the biggest oil and gas company in the world at the end of 2018. By net income, that title goes to Saudi Aramco, which reported net income in 2018 of $111.1 billion, compared to Sinopec’s $9.1 billion. 

These numbers may seem a bit wild, but no one really ever knows where they come from or how they are derived. 

By annual revenue metrics, by year-end 2018, four of the top 10 oil and gas companies in the world were state-owned: Sinopec, Aramco, China National Petroleum Corporation (CNPC) and Russian Gazprom. The other six Top 10 titles went to Shell (4th), BP (5th), Exxon (6th), Total (7Th) Valero (8th) and Phillips 66 (10th). Related: The Best And Worst Oil Majors Of 2019

Despite their economic importance, most of these 71 NOCs are notoriously secretive–Norway’s Equinor being one of the few exceptions. For the remainder of the NOCs, their opacity poses a significant fiscal and governance risk, especially when they carry huge debts.

…click on the above link to read the rest of the article…

Oil Set To Spike After Report Saudi Repairs At Abqaiq May Take “Up To Eight Months”

Oil Set To Spike After Report Saudi Repairs At Abqaiq May Take “Up To Eight Months”

While S&P futures may spike at the open following Saturday’s news from the NYT that the “the delegation of Chinese agriculture officials that had planned to travel to Montana and Nebraska in the coming week didn’t cancel the trip because of any new difficulty in the trade talks” but “instead, the trip was canceled out of concern that it would turn into a media circus and give the misimpression that China was trying to meddle in American domestic politics”, oil too is likely to catch a bid after the WSJ reported that it may take “up to eight month”, rather than 10 weeks company executives had previously promised, to fully restore operations at Aramco damaged Abqaiq facility, suggesting the crude oil shortfall will last far longer than originally expected.


Saudi officials say there is little sense of calm at the highest levels of the company and the Saudi government, however. It could take some contractors up to a year to manufacture, deliver and install made-to-measure parts and equipment, the Saudi officials said. #OOTT https://twitter.com/summer_said/status/1175859119061909506 …https://www.os-repairs-could-take-months-longer-than-company-anticipates-contractors-say-11569180194 243:52 PM – Sep 22, 2019


The official reason for the delay: the supply-chain is unable to respond to the Saudi needs. Specifically, Aramco is” in emergency talks with equipment makers and service providers, offering to pay premium rates for parts and repair work as it attempts a speedy recovery from missile attacks on its largest oil-processing facilities.” 

Following a devastating attack on its largest oil-processing facility more than a week ago, Aramco is asking contractors to name their price for patch-ups and restorations. In recent days, company executives have bombarded contractors, including General Electric , with phone calls, faxes and emails seeking emergency assistance, according to Saudi officials and oil-services suppliers in the kingdom.

 …click on the above link to read the rest of the article…

The Oil Crisis Saudi Arabia Can’t Solve

The Oil Crisis Saudi Arabia Can’t Solve

Middle East

Saudi Arabia’s CEO Amin Nasr’s message to the press that oil flows to the market are guaranteed, should be taken with a pinch of salt.

Looking at the current volatility in the Persian/Arabian Gulf and the possibility of a temporary closure of the Strait of Hormuz, the Aramco CEO’s message might be a bit overoptimistic. In reality, Aramco will not be able to keep the necessary crude oil and products volumes flowing to Asian and European markets in the case of a full Strait of Hormuz blockade. Even that Aramco owns and operates a crude oil pipeline with a capacity of 5 million bpd, carrying crude 1,200 kilometers between the Arabian Gulf and Red Sea, much more is needed to keep the oil market stable.  

Nasr’s move to stabilize the market is praiseworthy but should be seen as an attempt to quell fears of traders and financial analysts, especially just before the OPEC+ meeting in Viennanext week. Nasr reiterated that Aramco (aka the Kingdom) is able to supply sufficient crude through the Red Sea, reiterating that the necessary pipeline and terminal infrastructure is there. However, what analysts tend to forget, Nasr’s statement is only linked to Saudi’s oil export volumes, which will likely be not higher this summer than around the level this pipeline can support. The real issue, if it comes to a full-blown conflict, is that not only Saudi oil is being threatened.

At present, between 20-21 million bpd of crude and petroleum products are transported via the Strait of Hormuz. Saudi exports are a vast part of it, but also the UAE, Iraq, Kuwait, Bahrain, Qatar and Iran, will have to look at additional routes.

 …click on the above link to read the rest of the article…

Aramco’s Mythical Ghawar Field Could Be Its Weak Spot

Aramco’s Mythical Ghawar Field Could Be Its Weak Spot

Ghawar oil field

Some of the most secretive, highly-anticipated details about the Saudi oil industry have just been released.

Saudi Aramco is preparing to launch a major bond issuance to purchase the Saudi petrochemical company Sabic, a process that required a detailed prospectus on the company. As part of that review, Aramco released on Monday some closely-guarded state secrets that have been kept under wraps for decades and have been the subject of endless and wild speculation.

With little fanfare, Aramco released some details …and they are somewhat damning. For instance, the Ghawar oil field, which has at times held an almost mythical status both because of its massive size and also because of the complete opaqueness on its inner workings, can’t produce as much as previously thought. Ghawar is the core of Aramco’s oil production, and is of vital national security importance to the Saudi state.

The prospectus says that the Ghawar field can only produce 3.8 million barrels per day (mb/d), not the widely thought 5 mb/d that has floated around for years as a rough estimate. “As Saudi’s largest field, a surprisingly low production capacity figure from Ghawar is the stand-out of the report,” said Virendra Chauhan, head of upstream at consultant Energy Aspects Ltd., according to Bloomberg.

There was little other detail offered on that figure, why it declined, or whether it would continue to decline. But it is a very significant downward revision.

Nevertheless, the Aramco prospectus confirmed some more impressive figures that have also been the subject of speculation. The document says the company can produce 12 mb/d, a rate of output that has been criticized and questioned. With current production at about 10 mb/d, that implies a current 2 mb/d of spare capacity, which is a comfortable buffer that could plug some hypothetical supply gaps. In addition, there is about 500,000 bpd lying dormant in the Neutral Zone on the border with Kuwait.

 …click on the above link to read the rest of the article…

America’s Subservience to Saud Family

America’s Subservience to Saud Family

The Saud royal family are by far the world’s largest buyers of US weapons. The King of Saudi Arabia is by far the world’s richest person, with a net worth well over a trillion dollars; and, when his (Aramco’s) 260 billion barrels of oil reserves were valued at $100 per barrel, his net worth was over $15 trillion. The King has total control over the world’s largest (in terms of dollar-value) company: Aramco. Since 1980, the Saudi government has owned 100% of it; the Saudi government is totally under the King’s exclusive control. The King owns all that oil. Forbes and Bloomberg decline to estimate his wealth, because kings don’t want them to; but, clearly, it dwarfs that of anyone such as Bill Gates or Warren Buffett. And Gates and Buffett don’t possess the power to keep their wealth from becoming published, but the Saudi King does.

On 13 September 2010, Britain’s Telegraph headlined «US secures record $60 billion arms sale to Saudi Arabia». On 28 January 2012, Dayton Business Journal bannered «Top 10 foreign buyers of US weapons», and Saudi Arabia was #1 that year, with $13.8 billion. #2 was UAE, with 10.4 billion. UAE is run by six royal families, all friends of the Saud family; and, like the Sauds, they follow the strictest, Wahhabist-Salafist, form of Islam, the type of Sunni Islam that’s preached by ISIS and by Al-Qaeda. Current ‘defense’ expenditure figures aren’t available; but, clearly, the Sauds are now fully embroiled in slaughtering Shiites both in Yemen and in Syria, and are buying far more US weapons today than they were before – the sum probably dwarfs any previous sales-volume.

It’s good business for the owners of US ‘Defense’ contractors. On 15 May 2015, Alex Kane at Alternet headlined «4 US Companies Getting Rich Off Gulf Arab Conflict With Iran», and the companies were: Boeing, Raytheon, Lockheed Martin, and United Technologies. In 2015, lobbying for the «Defense» sector amounted to $96 million. $56 million of that was specifically on «Defense Aerospace».

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