The Aramco Hit

The Aramco IPO

When Prince Mohammed bin Salman, or MBS, decided to list the world’s largest oil company, Aramco, the resulting frenzy within international banking circles was unprecedented. This decision was made in 2016. MBS wanted to diversify the Saudi economy and reduce the economy’s reliance on oil income.

 The big question within investment banking circles was the valuation of Aramco. Aramco has confirmed reserves of 260 Billion barrels of oil. Unconfirmed reserves take this figure close onto 700 billion barrels of oil. In addition, there are huge natural gas reserves within the country. This excludes the above ground infrastructure in place, which includes all the extraction, pipeline, refinery, and export infrastructure that has been built over the decades. Just this infrastructure is worth more than $500 billion, if one were to value it in today’s costs.  The company’s scale dwarfs every other corporation in the world.

Saudi Arabia’s state oil company has emerged as the most profitable business in the world, racking up profits of $111.1bn.  Saudi Aramco made the profit on revenues of $355.9bn last year, as it produced 10.3m barrels per day of crude oil. It means the company made more than four times the profits of other oil industry rivals last year, including the Anglo-Dutch company Royal Dutch Shell, which made $23bn, and the US firm Exxon Mobil, which made $21bn.

The scale of Aramco dwarfs every other corporation in the world, but it is also among the most secretive, under the ownership of the Saudi state. It is the largest oil supplier on the planet and has exclusive access to nearly all of Saudi Arabia’s vast hydrocarbon reserves, which are among the world’s largest reserves.

The Gulf state had previously prepared the company for a stock market flotation that would have valued it at roughly $2tn, twice the value of Apple, but it then put the plan on hold last year. London had been a potential listing destination, although not without controversy as UK regulators said they would waive some corporate governance rules.

The details of Aramco’s profits were disclosed as it  raised about $10bn from selling bonds to international investors to help fund the acquisition of its rival Sabic in a deal worth $69.1bn, and which was successfully done about 2 months ago.

The world’s dependence on oil and gas is increasing as global economies and infrastructure continue to rely heavily on petroleum-based products. Discussions of when world oil and gas production will peak seem to be on the periphery, even amid a weakened global economy and the shrinking availability of oil.  Indeed, the oil and gas industry continues to wield incredible influence in international economics and politics – especially in consideration of employment levels in the sector, with the U.S. oil and gas industry supporting at least 10 million jobs.

There are over 200 oil and gas companies in the world. In recent years the traditional supermajors have seen stiff competition from the growing number of National Oil Companies – state-owned entities that are increasingly seizing sole rights to major oil reserves.

Who are the key players in the oil sector industry and what companies are able to have the biggest effect on international markets?

In this list, we count down the biggest oil and gas companies in the world ranked by annual revenue.

1. Sinopec

2018 Revenue: $377 billion 

Ownership: State-owned 

Nationality: China

2018 Net Income: $9.1 billion 

2018 Barrels per day: 4.88 million Established in 1998 from the former China Petrochemical Corporation, the super-large petroleum and petrochemical enterprise group is primarily focused on exploration and production, refining, marketing and distribution.
The largest company on this list with an annual revenue of $377 billion, Sinopec, is a state-owned Chinese oil company based in Beijing.

2. Saudi Aramco

2018 Revenue: $355.9 bn

Ownership: State-owned

Nationality: Saudi Arabia 

2018 Net Income: $111.1 bn

2018 barrels per day: 13.6 million 

Saudi Aramco is Saudi Arabia’s national oil company. Operating in both upstream and downstream segments, the company has extensive operations in production, exploration, petrochemicals, refining, marketing and international shipping. 

Not only is Saudi Aramco the most profitable oil company in the world, but it is also the most profitable company in the world by a large margin. In 2018, the company generated $111.1 billion in net income – far exceeding the second most profitable company in 2018, Apple ($59 billion).  Aramco’s history goes back to 1933 when an oil concession agreement was signed between Saudi Arabia and the Standard Oil Company. Over the years the Saudi government gained increasing shareholding stakes until 1988 when it took full control of the company and rebranded from Aramco (Arabian American Oil Company) to Saudi Aramco (Saudi Arabian Oil Company). From its first export of crude oil in 1939, Saudi Aramco says it now produces one out of every eight barrels of oil in the world, or about 12% of global production.

3. China National Petroleum

2018 Revenue: $324 billion

Ownership: State-owned 

Nationality: China

2018 Net Income: $5.4 billion

2018 Barrels per day: 1.9 million

Established in 1988 and the predecessor of the Ministry of Petroleum Industry of the People’s Republic of China, the China National Petroleum Corporation is a state-owned oil and gas company with governmental administrative functions.

With the liberalization of trade in China and the resulting economic boom, CNPC first started to export oil and engage in the development of overseas oil fields in 1993. It has come a very long way since then, with much of its operations organized under its subsidiary, PetroChina, and it is now the world’s 4th largest publically listed company and currently accounts for around two-thirds of China’s oil and gas output.

4. Royal Dutch Shell

2018 Revenue: $322 billion 

Ownership: Public Limited Company

Nationality: UK-Netherlands

2018 Net Income: $23.9 billion

2018 Barrels per day: 3.7 million

The supermajor more commonly known as Shell was founded in 1907 following the merger of the Royal Dutch Petroleum Company and the “Shell” Transport and Trading Company Ltd of the United Kingdom.

Thanks to its distinctive logo and subsidiary Shell Oil Company’s many service stations, Shell is one of the most well-known oil and gas companies in the world. The Shell name and logo is tied to the “Shell” Transport and Trading Company – its founder’s father had originally created a business selling seashells to collectors.

An Anglo-Dutch company, Royal Dutch Shell’s revenue is equivalent to 84% of the Netherlands’s GDP at the time. In 2012 Shell took the top spot as the biggest company on the FTSE, with a 140.9 billion market capitalisation. In 2017 the company took the number seven spot in Fortune 500’s Global 500 – their annual ranking of the world’s largest corporations.

5. BP

2018 Revenue: $303.7 billion

Ownership: Public Limited Company 

Nationality: UK

2018 Net Income: $9.58 billion

2018 Barrels per day: 4.1 million

The Anglo-Persian Oil Company was formed in 1909, itself an offshoot of the Burmah Oil Company. It later rebranded to the Anglo-Iranian Oil Company and then finally to BP. 11 years later the company became the first to strike oil in the North Sea. Thanks to its 20,000 plus service stations, BP is one of the most recognizable oil and gas companies. Other notable mergers and acquisitions following its privatization in 1979 / 1987 include Amoco in 1998 and ARCO and Burmah Castrol in 2000, becoming one of the largest petroleum companies in the world .

6. ExxonMobil

2018 Revenue: $241 billion 

Ownership: Private Limited Company

Nationality: U.S.

2018 Net Income: $20.84 billion

2018 Barrels per day: 4.91 million 

Formed in 1999 after the merger of Exxon and Mobil, the US multinational oil and gas company is one of the largest refiners in the world.  The world’s seventh largest company by revenue, ExxonMobil holds an industry-leading inventory of resources and is one of the largest integrated refiners, marketer of petroleum products and chemical manufacturers in the world.

A descendant of Standard Oil, established by John D. Rockefeller in 1870, ExxonMobil has evolved over the last 140 years from a regional marketer of kerosene in the U.S. to the largest publicly traded oil and gas company in the world.  

7. Total

2018 Revenue: $156 billion 

Ownership: Public

Nationality: France

2018 Net Income: $13.6 billion

2018 Barrels per day: 2.8 million

Founded in1924, Total’s activities cover the entire oil and gas chain. Total has a very diverse portfolio across difference resource themes with a strong presence in LNG, particularly due to exposure to Australian LNG. Total has produced oil and gas for almost a century and has also branched into renewable energies and electric power. 

MBS has put a valuation of $2 trillion on Aramco. A 5 % stake would be worth %100 billion. But, Wall Street’s greed knows no bounds. Citing lack of figures for reserves and production capacity, they are trying to talk the value down to $1 trillion to $1.5 trillion.

Now, if one compares Exxon’s (with oil reserves of 24 billion) market value of $250 billion, and Shell’s (with reserves of 20 billion) market value of $140 billion, and compare it to Aramco’s reserves, infrastructure and production, one can see that Aramco is worth more than $2 trillion. It made a net profit of $111 last year (2018). There are 7 companies on this list. Besides Aramco, the other 6 made a combined net profit last year of $78 billion. The market value of these 6 companies is nearly $1.2 trillion. They hold a combined oil reserve book of some 60 billion barrels. Aramco holds more than 4 times as much.

 In summary, Aramco holds 4 times more oil reserves. Its production costs are the lowest in the world ($1 vs $10-$30), and its profits are some 40% larger than the other 6 oil majors COMBINED!

However, because Crown Prince Mohammed bin Salman (Mbs) has staked his personal reputation – and his political future – on the Aramco IPO going ahead in some form, he and his bankers are currently rooting around for at least one international bourse upon which to execute the foreign listing part of Aramco.

The New York Stock Exchange (NYSE) was one of the original top-two favored candidates, alongside the London Stock Exchange (LSE), as these two bourses are rightly seen as the most liquid, most traded, and most prestigious stock exchanges in the world. Early on, though, a number of major problems began to bubble up for a listing of any Saudi company and particularly Aramco in the U.S. Aside from the usual   Saudi spin about oil reserves, spare capacity, tax rates, concessions, non-hydrocarbons activities and so on with which investors have now become familiar, a key early sticking point was Saudi Arabia’s perceived links with the ‘9/11’ terrorist attacks.

Of the 19 terrorists who hijacked planes on ‘9/11’, no less than 15 were Saudi nationals. Following the overriding by the U.S. Congress of former President Barack Obama’s veto of the ‘Justice Against Sponsors of Terrorism Act’, making it possible for victims’ families to sue the government of Saudi Arabia, at least seven major lawsuits alleging Saudi government support and funding for the ‘9/11’ terrorist attack have so far landed in federal courts.

Making matters even worse was Saudi’s decision to threaten the U.S. shale industry if Washington passed into law the ‘No Oil Producing and Exporting Cartels Act’ (NOPEC). This bill was founded upon the supposition – which still hangs in the air like a Damoclean Sword above the Saudis’ heads – that OPEC is a cartel and that, as such, Aramco – as the principal vehicle of the leading member of OPEC, Saudi Arabia – violates the U.S. (and U.K.’s) stringent anti-trust laws.

Given this, Saudi for a time looked at the U.K.’s LSE as an option, following a trip to Saudi Arabia some time ago by LSE chief executive officer, Xavier Rolet, and then-UK Prime Minister, Theresa May, and indeed, this remains an option for MbS. The problem with this from the U.K.’s side – which was conveyed to the Aramco IPO banking team – centres on the creation of a new category of listings for large international companies, in order to accommodate Aramco and its lack of information transparency. More specifically, historically, companies looking to list on the LSE could opt for either a ‘premium’ (formerly ‘primary’) or ‘standard’ (formerly ‘secondary’) listing.

The Hong Kong Option

At that point, MbS toyed with the idea of doing a private placement of the whole amount – as then, 5 percent to be floated – with China. This would have been extremely advantageous to him for two key reasons. Firstly, it would have required absolutely no divulging of any information whatsoever on Aramco’s – or Saudi’s – dealings, except to the Chinese who, as one senior oil trader put it “Don’t care, all it wants is to get control over a favourite toy in the U.S.’s Middle East toy box.” The second reason why MbS was very keen on the idea is that the price for the 5 percent private placement would never had been made public to anyone, even many senior Saudis, so he could not be accused of having not attained the US$100 billion for the 5 per cent that meant an overall valuation for Aramco of US$2 trillion.  This option also remains on the table but – principally because the bankers working on the IPO would lose too much money if the IPO did not go ahead, MbS is not being encouraged to pursue this line.

All of which rather narrows the options available right now for MbS.  Hong Kong, meanwhile, was for a time a front-runner, given its close links to Chinese money and Chinese oil and gas buyers. To forestall the Aramco listing in Hong Kong, the CIA went into action, and took over   the burgeoning protest movement against Chinese rule by Hong Kong, and increased its violence and disorder in Hong Kong. These riots in Hong Kong have subsequently marginalized its appeal.

The Tokyo Option

So, as it stands, MbS has trimmed everything back to try to limit the negative personal and political fallout for himself. According to sources in London, Abu Dhabi, and Tokyo, the sovereign wealth funds of Saudi’s allies in the region have been ‘vigorously encouraged to bid high for big lots’.  Tokyo has been pitching aggressively in the last few weeks as the Asia alternative to Hong Kong, and has sought to leverage the involvement of many of its financial institutions in several of MbS’s ‘Vision 2030’ projects to bolster its pitch. Underlying all of these bids will be the bookrunners, of course, who will take up any slack from the huge amounts of money that they stand to make not just from the IPO but also from all related work for Saudi. These include future IPOs, bond offerings, syndicated loans (known for their unerring ability to provide summer houses and matching yachts in the Hamptons for U.S. senior bankers), and other long-term rolling financing facilities.

What was the impact on the Abqaiq refinery?

Analysts have identified at least 17 hits.

An unnamed senior US official told ABC News the attacks on the Abqaiq refinery had involved a dozen cruise missiles and more than 20 drones.

A number of “spheroids” used to process crude oil were hit, apparently with pinpoint accuracy, and fires from blasts at other parts of the facility can also be seen.

Analyst Anthony Cordesman from the Center for Strategic and International Studies suggests the attacks could have been carried out using relatively unsophisticated drones operating as “weapons of mass effectiveness”.

“It is virtually impossible to secure civilian facilities from a worker or visitor’s capability to use a cell phone to get precise GPS coordinates, commercial satellite coverage is now very good, and there are many ways to produce the kind of image needed for terminal guidance from ordinary photos,” he writes.

US officials say the images show damage consistent with coming from a west-north-west direction, not Houthi-controlled territory which lies to the south-west of the refinery.

Abqaiq is the world’s largest oil processing facility, and about two-thirds of Saudi Arabia’s total output is refined there.

Some seven million barrels of oil are processed each day.

The facility refines crude oil pumped from the Ghawar field, and is connected to both the Shaybah oil field through a 636-km (395-mile) pipeline and an export terminal in Yanbu.

What was the impact on the Khurais oilfield?

Infrastructure at the site, which is about 180km south-west of Abqaiq, also sustained damage.

Satellite images show two significant hits to two towers, with scorch marks visible on the ground from a significant fire.

The Khurais oil field is believed to produce more than one million barrels of crude oil a day.

It has estimated reserves of more than 20 billion barrels of oil, according to Saudi oil company Aramco.

Since the Rockefeller Empire did not desire this, they couldn’t replicate in Japan, what the CIA is currently doing in Hong Kong. So, they conducted a false flag operation, on Saudi Arabia.  New York gave the order, and this hit was contracted out to Israel. On September 14, 2019, drones hit the Abqaiq refinery complex, as well as an adjoining oil field, Al Khurais. This shut down 6 million bpd of production. The Abqaiq complex is the largest of its kind in the world and is capable of processing close to 12 million bpd.  Like we said earlier, the Rockefellers know the oil business cold. They also know the strategic points in an oil refining and processing complex, more than anyone else does. They went for maximum damage per missile and drone attack.

This was a clear message from the Rockefellers to MBS.  Play ball – or else.

Why was Iran Blamed?

The region of the Persian Gulf – from the Hormuz Straits to the Bab el Mandab, to the Suez Canal and the coastline of the Eastern Mediterranean, is one of the most heavily surveilled airspaces in the world. Especially Iran and its close neighbours.  An attack like this would have to be monitored by multiple early-warning systems. Nothing moves in the air without, at the least, American, Israeli, Russian, and Iranian early-warning systems in place. If Iran was responsible for this attack, there would have been ample proof.

Immediately after the attack, and for days after, Iran denied any responsibility for this. It means highly sophisticated means, using the latest stealth technology, was used in this attack. This would mean only the US or Israel would have the means.  And the main question is –“who benefits?”. The answer to this is obvious.

 Furthermore, 3 weeks later, directly opposite the Jeddah coastline, an Iranian tanker was hit by missiles or sea mines. Blame was put on Saudi Arabia. This doesn’t make sense, as not long after the hit on the Aramco complex, MBS reached out to Teheran for peace talks.

 Clearly, someone wants to stroke up tensions in the region between Saudi Arabia and Iran. Nut, it seems this plan has backfired on both the US and Israel. The readers of this site know the American game-plan is to blow up the region, in order for the “Fortress America” plan to proceed. This plan only benefits the US. All other nations, including Israel, would be in the firing line, either through an escalation of war in the region, and/or a cut-off of the oil supplies to Europe and East Asia.

 America’s withdrawal from the region is deliberate. Other regional and international powers will rush into this vacuum. An example is the Turkish invasion of northern Syria, and the rush of Iranian forces, and its proxies, into Iraq, and Syria, in order to secure its land-bridge to the Mediterranean. The geopolitical equation in the region is being re-mixed- to the benefit of America, and to the detriment of all the other players.

New York’s Lust for Aramco


The Rockefeller Empire has been in the oil business since 1865. Oil has been the foundation for the family’s wealth and power. Nearly 154 years have passed since then. This family knows the oil business cold. And its vital ally in dominating the global oil industry since 1945 has been Saudi Arabia.

 There have been many disagreements between the Rockefeller and Saudi families since the 1960s, and many times these were patched up. To maintain its hold on global empire, New York has to make sure that the Aramco listing would be done on its terms. This, MBS, would not allow. Thus, MBS has, to date, survived 3 assassination attempts on his life, as well as two attempted coups against him.

In the eyes of the Rockefeller Empire, they do know for a fact that Aramco’s oil reserves exceeds 500 billion barrels-conservatively worth $20 a barrel –equal to the finding costs of oil today. This would give a value of $10 trillion for the oil in the ground- not even counting the value of the gas in Saudi Arabia- another 400 cubic meters worth another $100 billion. Then add the minimum replacement value of the infrastructure at $500 billion. Add it all up, and one gets a total value of $10.6 trillion.

 By placing a value of $2 trillion- MBS is listing Aramco at a discount of 80%! And, still the Rockefellers are not satisfied, unless the valuation is pegged at $1 trillion, and the listing is done in New York.

Aramco Goes for a Domestic Listing

The latest reports out of Riyadh confirm that Aramco will be listed in Saudi Arabia, as an initial IPO. A secondary listing in Tokyo would follow this. It was a wise decision by MBS, as it would ensure a full valuation of $2 trillion. Meanwhile, investors in the West are trying to dampen the excitement, enthusiasm, and demand for the IPO, by citing negative sentiment- the latest being the safety of Aramco’s infrastructure and the “Greta Effect” regarding the climate change hoax. But, it is the East that is coming to the rescue of MBS.

In recent weeks, reports emerged that the IPO will be supported by several large sovereign wealth funds, such as Abu Dhabi Investment Authority (ADIA), Singapore’s GIC, Abu Dhabi’s Mubadala and others, investing in the domestic leg of the Aramco listing. Sources even indicated that these SWFs had already ordered banks to start preparing for the IPO. Chinese parties have also indicated they are on board. Russian investors, present during Putin’s state visit to the Kingdom, indicated a clear willingness to be a part of the IPO adventure. Inside Saudi Arabia, the support of local bankers, investment groups and family offices has been all but ensured by the Saudi government.

So, in short, investors from Russia, China, Japan, Singapore, Abu Dhabi, and the local Saudi elite are all queuing up to invest in this IPO. They are grateful that the western financial powers are NOT involved, as this would ensure that they do not get left out. It would not be surprising to find that many in the West would also be investing- but quietly!

 It gives the world great hope that a young leader- MBS- has the guts to stand up to the threats and bullying by New York. Stay tuned, folks.

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