Saudi Aramco .. The journey of an oil giant moaning under the weight of attacks

Saudi Aramco launched its first oil production in commercial quantities in 1938 and later became the world's largest oil company, but recent attacks on some of its facilities have cut production by more than half, moving Saudi Arabia from the world's largest exporter to an importer.

From a huge supplier to a large buyer:
Saudi Arabia is poised to become a major buyer of refined products after Saturday's attacks that forced it to halt more than half its crude and some gas production, energy consultancy Energy Aspects said in a note on Monday.

Saudi Aramco is likely to buy large quantities of gasoline, diesel and possibly fuel oil, while reducing its exports of liquefied petroleum gas, according to Energy Aspects.

Houthi attacks
The Houthi group has described the attack on the facilities of Abqaiq and Khurais in the Eastern Province as one of the largest attacks carried out by the group in the Saudi depth.

This is the third attack in 2019 targeting oil installations, as the first attack targeted two Saudi oil tankers off the coast of the UAE in May.

A few days later, drones belonging to the Houthi group targeted two oil pumping stations in Afif and Dawadmi governorates in the central Riyadh region, but supplies did not stop.

Impact of attacks
According to Energy, last Saturday's attacks on Aramco facilities led to:

- Stop production of about 5.7 million barrels per day of Saudi crude.

- Attacks disrupted 18% of natural gas production.

- Disrupted 50% of the production of ethane and gas liquids.

- The quality of light Arabian crude and very light Arabian crude were affected by the high hydrogen sulfide content, which reduced the appetite of refineries.

Production and export
Saudi Aramco is the world's largest oil producer, producing 10 million barrels per day (bpd) in the first half of this year, before falling more than half after the attacks on oil facilities last Saturday.

The company's production of hydrocarbons reached the level of 13.2 million barrels of oil per day, according to previous estimates.

But Saudi Arabia is now the world's third largest producer behind the United States and Russia.

Saudi crude oil exports averaged around 7 million barrels per day (bpd) in 2017, but this level is out of reach following the attacks that will push Saudi Arabia to withdraw from its strategic reserves.

Strategic reserve
Aramco manages proven reserves of 332.9 billion barrels of oil equivalent, according to the company's 2017 annual report.

Crude oil reserves alone amount to about 257 billion barrels, compared with 37 billion barrels of oil equivalent as gas reserves.

But a statistical review of the world's energy sector by BP said that Saudi proven reserves amounted to 297.7 billion barrels at the end of 2018, bringing the country closer to Venezuela, which has 303 billion barrels.

Saudi Arabia has strategic reserves of 188 million barrels, equivalent to the Abqaiq processing capacity for only 37 days, while the US holds about 645 million barrels of oil, the largest in the world.

Company profits
Aramco made a net profit of $ 111 billion last year, surpassing the top five global oil companies, while earning $ 356 billion.

But the company's profits fell in the first half of this year due to lower oil prices, and the company made a profit of $ 46.9 billion in the first six months, compared to $ 53 billion for the same period last year.

Major Oil Stations
Saudi Arabia has about 100 large oil and gas fields that produce up to 10 million barrels of oil per day. These are the most important fields and oil stations in the Kingdom:

Abqaiq: It is the largest oil processing facility and the largest crude oil concentration plant in the world. Abqaiq, the target of Houthi attacks, is the main processing center for Arab light crude with a production capacity of more than seven million barrels per day.

Abqaiq is processing crude oil from the giant Ghawar field before transporting it to Ras Tanura, the world's largest oil loading facility.

Ghawar: The largest onshore oil field in the world in terms of production and total reserves remaining.

The field, which was discovered in 1948, produces about five million barrels of oil per day, while it contains reserves estimated at 58 billion barrels of oil equivalent.

Safaniyah: The largest offshore field in the world with a production capacity exceeding one million barrels of oil per day, was discovered in 1951.

Khurais: Khurais field is the second largest field in Saudi Arabia with a production capacity of 1.5 million barrels per day, estimated in 2018. The field is located 150 kilometers southeast of the capital Riyadh.

Shaybah: The Shaybah field in the Rub al-Khali desert was discovered in 1968. The field is 13 kilometers wide and 64 kilometers long.

The total production capacity of the field rose to one million barrels per day of light Arab oil, and proven reserves of the field reached 14.86 billion barrels of oil equivalent in December 2018.

Al-Dhalouf: Al-Dhalouf field is located in the west bay, 240 km from Dhahran city.

The field's proven reserves stood at 31.31 billion barrels of oil equivalent in December 2018, Aramco said on its website.

Initial Public Offering
Saudi Arabia hopes to raise $ 100 billion from a 5% stake in Aramco for an initial public offering, based on the company's $ 2 trillion valuation.

The launch of Aramco's shares is the cornerstone of Crown Prince Mohammed bin Salman's economic plan 2030, and the project has been delayed more than once.

Saturday's attacks on Aramco's oil facilities, the backbone of the Saudi economy, appear to delay the offer again.

The Wall Street Journal quoted sources as saying that Saudi officials are considering postponing Aramco's IPO following the attacks.

Notable dates
- March 4, 1938, Dammam No. 7 well starts producing 1.585 barrels per day at a depth of 1.5 kilometers.

- May 1939 Saudi Arabia celebrates the export of the first shipment of crude oil from the port of Ras Tanura on the Arabian Gulf coast.

1949 - Aramco's crude oil production averages 500,000 barrels per day.

- 1952 Aramco management decides to move company headquarters from New York to Dhahran.

- May 1954 oil production exceeds one million barrels per day for the first time.

1961 - The company starts loading the first shipment of LPG on a tanker in Ras Tanura.

1968 - Aramco becomes the first company to produce 1 billion barrels of crude oil annually.

1973 - The Saudi government buys a 25% stake in Aramco, then raised it to 60% in 1974, and in 1980 completed 100% ownership of the company with a financial retroactive effect dating back to 1976.

- The end of 1990 Aramco's average daily production reached 8.5 million barrels per day, from 5.4 million barrels per day in July of the same year.

- 2009 completed the project to increase production capacity of crude oil to 12 million barrels per day, or about 15% of the total global demand for oil.