Saudi Oil History

Note from Publisher EPRasheed

It is both an honor and privilege to have worked on the Saudi Aramco 75th Year Anniversary supplement divided into 7 sections;

Royal Visits to Saudi Aramco, Pioneer Profiles, Past, Present and Future, Sponsors and this Note.

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Table of Contents

Throughout its 75-year history, Saudi Aramco has always relied upon the judicious guidance of the rulers of Saudi Arabia. In turn, the Kings have placed their trust in Saudi Aramco to derive the maximum benefit from the country’s rich natural resources for the people of Saudi Arabia.

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Reigned 1902 – 1953

The story of Saudi Aramco begins with the vision of King ‘Abd al-‘Aziz who, aware of oil discoveries elsewhere in the region, sought the expertise of an international oil company to explore his kingdom for the natural resources that would allow him to guide the development of his young country. On May 29, 1933, after months of negotiations, the King’s minister of finance signed the Concession Agreement with Standard Oil of California, or Socal, an act that would eventually transform Saudi Arabia and the global petroleum industry.

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Reigned 1953 – 1964

As Crown Prince, King Sa‘ud visited Company operations in December of 1937 and again in 1950, visiting a trade school where he witnessed young Saudis learning the skills needed for the petroleum trade – an early example of the transformation taking place in Saudi society, as the sons of pearl fishermen, merchants, farmers and Bedouin began to climb the ladder that would take them to the top of Aramco within two generations.

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Reigned 1964 – 1975

The eleven years of King Faysal’s rule were marked by big changes in the world, the region, the country and the Company. Both Saudi Arabia and Aramco emerged stronger from these trying times. In 1965, King Faysal inaugurated the College of Petroleum and Minerals in Dhahran. Aramco has been committed to the school’s success since its inception. In 1969, the first Saudi employees of Aramco enrolled in the college. The following year, Aramco contributed millions of dollars to the school’s expansion program and in 1971, the university issued its first degrees.

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Reigned 1975 – 1982

The time of King Khalid saw tremendous economic and industrial growth in the Kingdom, driven in large part by the expansion of Aramco’s oil and, increasingly, natural gas production capacity. This growth was highlighted in 1976 when Aramco became the only Company in the world to produce more than 3 billion barrels of crude oil in a single calendar year.

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Reigned 1982 – 2005

The reign of King Fahd included both boom times and lean times for Aramco, which weathered its gravest challenge and emerged as the world’s leading petroleum enterprise, a position it retains to this day. Early in his rule, King Fahd oversaw the appointment in November 1983 of Ali I. Al-Naimi as the first Saudi president of Aramco, effective January 1984. The rise of His Excellency Al-Naimi through the ranks of Aramco was a testament to the potential of the Saudi people, nurtured by the Company’s world-class training programs.

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Reign 2005 – 2015

As Crown Prince and then as King, ‘Abd Allah guided Saudi Aramco into a higher profile in the global petroleum industry, expanding the Company’s international ventures and extending the Company’s reach into downstream activities, including petrochemicals and associated industries. Under his leadership, Saudi Aramco forged in-Kingdom joint ventures in natural gas, embarked on the largest capital program in its history and took the lead on the creation of a world-class graduate research university.

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Past

‘Put your trust in God and sign!’

King ‘Abd al-‘Aziz Al Sa’ud to Finance Minister ‘Abd Allah al-Sulayman on 29th May 1933’.

The Kingdom of Saudi Arabia was unified in 1932 by King ‘Abd al-‘Aziz Al Sa‘ud. On 29th May 1933, the Kingdom signed an oil exploration concession agreement with Standard Oil Company of California (Socal). is contract marked the beginning of a new era in the Kingdom’s history. Since then, the pace of change in the company and in local communities has been spectacular. e sons of Saudi herdsmen, farmers and fishermen became geologists, engineers and technicians. eir sons are now the managers and executives of an international energy company of more than 52,000 employees.Today, Saudi Aramco manages the world’s largest conventional reserves of crude oil, leads the world in crude oil production and natural gas liquid exports, and is one of the world’s largest producers of natural gas and refined petroleum products.

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1940 – Crude production totals 3,933,903 barrels for year.

1940 – May, 11. The first company school opens in al-Khobar. Classes in English and arithmetic are open to everyone, employee or not. The company provides teachers, desks, benches, blackboards, chalk and lamps.

1941 – 3,000-bpd refinery opens in Ras Tanura and is closed six months later due to shortages caused by World War II.

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1940 – Crude production totals 3,933,903 barrels for year.

1940 – May, 11. The first company school opens in al-Khobar. Classes in English and arithmetic are open to everyone, employee or not. The company provides teachers, desks, benches, blackboards, chalk and lamps.

1941 – 3,000-bpd refinery opens in Ras Tanura and is closed six months later due to shortages caused by World War II.

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1950 – The Trans-Arabian Pipeline, the world’s longest oil pipeline, is completed so oil can travel 1,719 kilometers (1,068 miles) from the Abqaiq oil field to the Mediterranean Sea port at Sidon, Lebanon.

1951 – Safaniya field, the world’s largest offshore oil field, is discovered. The company completes the 357-mi (575 km) Saudi Government Railroad from Dammam to Riyadh.

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1961 – Aramco’s first shipment of liquefied petroleum gas (LPG), the equivalent of 75 million cubic feet of gas, is loaded onto a specially designed tanker at Ras Tanura.

1962 – Cumulative crude oil production reaches 5 billion barrels.

1963 – Crude oil reserves total 57.8 billion barrels; gas reserves total 24.1 trillion scf.

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1970 – Company’s first 1 million barrel crude storage tank is completed at Ras Tanura.

1971 – Crude oil production increases by more than 25 percent over 1970, averaging 4.5 million bpd.

1971 – Saudi Arabia is recognized by the international petroleum press as the leading oil-exporting nation in the world.

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1980 – Government increases its participation interest in Aramco’s crude-oil concession rights, production and facilities to 100 percent, with retroactive financial effect to 1976.

1981 – Key parts of Master Gas System fully or nearly finished. Data processing begins at the Exploration and Petroleum Engineering Center (EXPEC) Computer Center, one of the world’s largest geoscience computing facilities.

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1990 – Oil production increased dramatically to stabilize world market in response to Gulf crisis. Exploration extended to include the Red Sea coastal plain and territorial waters.

1991 – Company helps successfully combat Gulf oil spill. Saudi Aramco subsidiary buys 35 percent of Ssang Yong Oil Refining Co. Ltd. (now S-Oil Corp.) in Republic of Korea.

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Present

2000 – Aramco Gulf Operations Company, a fully owned subsidiary of Saudi Aramco, is established to manage the Government’s petroleum interest in the Offshore Partitioned Zone between Saudi Arabia and Kuwait.

2000 – April. Saudi Aramco launches new logo and corporate identity campaign.

2001 – Hawiyah Gas Plant, capable of processing up to 1.6 billion standard cubic feet per day of non-associated gas, comes on stream

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Two Saudi drilling rig employees guide the drilling pipe and bit down through the rotary table on the platform of their rig near Abqaiq, 1949.

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Saudi Aramco heightened its profile as a world-class engineering and construction organization with a presentation before the prestigious Construction Industry Institute recently. The presentation, entitled The Shaybah story: Oil From Deep in the Desert, was given at the organization’s annual conference in Minneapolis.

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Under the patronage of King Abdullah ibn Abdulaziz Al Saud, Custodian of the Two Holy Mosques, and the leaders of Gulf Cooperation Council (GCC) countries, Saudi Aramco kicked off its 75th Anniversary celebration May 20 as government officials, company executives, employees and invited guests gathered to welcome the King and GCC leaders at enormous tents near the Saudi Aramco Exhibit in Dhahran.

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Future

In a global project environment where many large projects struggle to meet their cost and schedule targets, Saudi Aramco has been successfully executing its world class mega projects with ever shorter schedules, and well within budget.

By John Palmer & Timir Mukherjee 

Of the five mega projects executed in the last 10 years, two were recipients of the Project Management Institute’s prestigious Project of the Year Award, and one was honored at the 2005 International Petroleum Technology Conference.

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Community Cornerstones
Saudi Aramco is no stranger to mega-projects, but in 2007, the company undertook a building program of a different kind: a $10 billion, world-class research university that is the brainchild of King Abdullah.

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Saudi Aramco is committed to minimizing our footprint on the environment. We’re focusing research and development on cleaner, more efficient operations, processes and products. Our good stewardship is reflected in environmental awareness programs to encourage conservation and other environmentally responsible actions. And of course, it is reflected in our operating record. A shining example is our shipping subsidiary, Vela, which in 2007 completed more than 1,000 voyages, transporting nearly 2 million bpd of crude oil to customers in the United States, Europe, India and the Far East, without a significant environmental incident.

Research and Development In another technological development, Saudi Aramco is developing new pre-refining processes to desulfurize whole crude oil and produce sweetened oil. This step anticipates that less sweet crude will be available to global markets, and refiners will increasingly need to meet market requirements for lower sulfur content clean fuels.

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Saudi Aramco is continuously seeking new oil resources, as well as expanding production through efforts including the two largest single increments in its history (Khurais and Manifa), and expertly managing its existing portfolio of some 100 fields to maximize recovery. And as the world’s oil supplies become more challenging to produce, Saudi Aramco is taking the lead in developing technologies to produce conventional oil reserves more efficiently.

Not long ago, Saudi Aramco President and CEO Abdallah S. Jum’ah issued a challenge to the wider oil industry: Find enough new resources to add 1 trillion barrels to world reserves over the next 25 years. That challenge began at home. Saudi Aramco is leading the strategic development charge to help ensure reliable energy supplies far into the future.

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According to the International Energy Agency, global demand for energy is projected to grow by more than 50 percent over the next 25 years, exceeding 325 million barrels of oil equivalent per day Why?

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SPONSORS

Honored to be Celebrating 75 Years with Saudi Aramco

As Baker Hughes celebrates 101 years of innovation and service in the oil and gas industry, we congratulate Saudi Aramco on its 75th anniversary. Today’s Baker Hughes carries on the tradition of R.C. Baker, Howard Hughes, Sr. and many other oil service pioneers.

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Congratulations, Saudi Aramco, from Halliburton. For decades, we’ve been proud to help the world’s leading oil producer meet global energy needs. And we continue to stand ready to support you in supplying energy for future generations.

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Since our first wireline log for Saudi Aramco in 1941 we have  collaborated to deliver innovative products, services, and solutions that optimize reservoir performance throughout Saudi Arabia. We look forward to supporting Saudi Aramco’s future endeavors to provide “Energy for Generations.”

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Seismic Analysis Center New technologies for seismic data processing Technology Alliance
In SAC’s efforts to enhance its capabilities and services we have forged a strategic alliance with CosmoSeis to provide a large range of tools that will exceedingly …

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It is the vision of the leaders of the Kingdom of Saudi Arabia that has allowed the Oil and Gas industry in Saudi Arabia to flourish. This vision was channelled through the Ministry of Petroleum and Minerals and Saudi Aramco and has developed the wider national industry.

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King_Fahd_University

At KFUPM we are mindful of our strong ties with Saudi Aramco. Since our founding as the College of Petroleum & Minerals in 1963 we have prospered alongside Saudi Aramco as a neighbor on Jebel Dhahran and as partners in progress. Many of our more than 21,000 alumni have followed career paths with Saudi Aramco.

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Research_Institute_Saudi_Aramco

Saudi Aramco has supported the KFUPM Research Institute as our largest client from the time of our founding 28 years ago.

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It is both an honor and privilege to have worked on the Saudi Aramco 75th Year Anniversary supplement which is divided into 7 sections; Royal Visits, Pioneer Profiles, ‘Past, Present and Future’, Sponsors and this Note.

See the Table of Contents below or scroll down for an overview of each article.

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