In 2018, SABIC had total sales of $45 billion, with a net profit of $8.5 billion on total assets of $85 billion and equity of $59 billion. SABIC was tasked with using natural gas to produce chemicals, thus adding value to the kingdom’s main basic product: crude oil. The kingdom soon realized that the natural gas should be collected and used to provide industrial opportunities as well as benefit citizens by providing low-cost electricity and desalinated seawater. At the time, natural gas produced in the kingdom was associated with the extraction of crude oil and, in fact, was an impediment to oil exports, since natural gas must be removed before oil can be shipped. SABIC was established by royal decree in 1976 and its aim was to help diversify Saudi Arabia’s dependence on crude oil. Saudi Energy Minister Prince Abdulaziz bin Salman speaks during a news conference in Jeddah, Saudi Arabia September 17, 2019. However, the shifts in leadership will have lasting implications for Aramco’s future strategy and direction, and they throw the tensions between Saudi technocrats and MBS into sharp relief, highlighting the importance of understanding the dynamics between SABIC, Aramco, and the PIF. On the other hand, these developments should not directly affect the Aramco-SABIC merger. In spite of these significant events, the new leaderships at Aramco and the ministry have proceeded with the IPO of Aramco, albeit on a diminished scale. Al-Falih was replaced at the ministry by Prince Abdulaziz bin Salman, and at Aramco by Governor of the PIF Yasir Al-Rumayyan.
#ARAMCO SALARY SCALE PDF DRAWINGS SERIES#
The attack occurred almost two weeks after a series of decrees issued by Saudi Crown Prince Mohammad bin Salman (MBS) removing Saudi Minister of Energy Khalid Al-Falih from his position at the head of the Ministry of Energy, which was previously the Ministry of Energy, Industry, and Mineral Resources, as well as from the board and chairmanship of Aramco. The damage from the attack cut Aramco’s production capacity by two to three million barrels/day (b/d) for a few days. On September 14, 2019, Iran attacked Aramco’s oil-processing facilities at Abqaiq.
Finally, it analyses the relationship between Aramco and SABIC, and what the merger’s implications will be for the intricate relationship between the various bureaucracies and the leadership in Saudi Arabia. This issue brief studies SABIC’s importance to energy and chemical businesses worldwide, and it raises questions about whether the merger with Aramco will require a substantial reorganization of SABIC-along with accompanying concerns about both the workforce and jobs. Its acquisition of SABIC, a highly respected chemical company, represents a move towards diversification. Aramco has made great strides towards transparency through the release of two prospectuses: one in April 2019, prior to the issuance of $12 billion in bonds, and another on November 8, 2019, prior to the floating of its shares. If Aramco is to join the ranks of publicly traded international oil companies (IOCs), it must be transparently managed and must diversify in order to resemble other IOCs in word and deed. Aramco has, meanwhile, ramped up its efforts to privatize through an initial private offering (IPO) on the Tadawul stock exchange in Riyadh on December 4, 2019.
On March 27, 2019, Aramco, Saudi Arabia’s state-owned oil company, signed a formal agreement that stated a purchase price of $69.1 billion.
In August 2018, Saudi Aramco announced that it would merge with Saudi Arabian Basic Industries Company (SABIC) by purchasing 70 percent of the company from the Public Investment Fund (PIF) of Saudi Arabia, the kingdom’s sovereign wealth fund (SWF).
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