Ryad (AFP)

Since the discovery of the first oil deposit in Saudi Arabia in 1938, called the "well of prosperity", the oil giant Aramco, which confirmed Sunday its intention to enter the Ryad Stock Exchange, has generated a colossal wealth for the kingdom desert.

The Saudi financial market regulator announced Sunday that it has approved the state company's IPO application, kicking off this offer, which could be the largest ever in the world.

The company was born from a concession agreement signed in 1933 by the Saudi government with the Standard Oil Company of California. Prospecting began in 1935 and three years later, oil began to flow.

In 1949, oil production reached a record level of 500,000 barrels a day and continues to increase after the discovery of large oil fields including Ghawar, the largest in the world, with about 60 billion barrels of reserves.

In 1973, in the midst of soaring prices linked to the Arab oil embargo, imposed on the United States because of their support for Israel, the Saudi government acquired 25% of Aramco, increasing its share to 60% and becoming majority shareholder.

In 1980, the company was nationalized and, eight years later, renamed Saudi Arabian Oil Company, or Saudi Aramco.

Since the 1990s, Aramco has invested hundreds of billions of dollars in expansion projects, raising its production capacity to more than 12 million barrels a day.

Currently, Aramco has some 260 billion barrels of proven oil reserves, putting Saudi Arabia behind Venezuela, which holds the world's largest reserves.

Based in Dhahran, the company also operates internationally, where it has multiplied acquisitions and joint ventures. Aramco has also built a national and international network of pipelines and refineries and expanded its presence in the petrochemical industry.

In April, the group opened its accounts for the first time, announcing a net profit of $ 111.1 billion in 2018, up 46% over the previous year, and an annual income of $ 356 billion. .

This opening of accounts was intended to increase its transparency before an IPO.

This is the cornerstone of a reform plan called "Vision 2030", launched by the crown prince to diversify the economy of the kingdom highly dependent on oil.

The announcement of the introduction has been delayed several times due in particular to adverse market conditions.

In September, draconian attacks on Aramco's facilities led to the suspension of half of its production, or about 6 percent of global supply, raising fears of a loss of investor confidence. Ryad accused Iran of having at least "sponsored" the attack, claimed by Yemeni rebels Houthis, backed by Tehran.

According to sources familiar with the matter, Aramco should sell a total of 5% of its capital, including 2% at its stock market baptism at Ryad.

The IPO could give the company a total valuation of between $ 1,500 and 1,700 billion. Aramco would have the largest capitalization in the world.

© 2019 AFP