Saudi Aramco: From 'Prosperity Well' to Energy Giant

The founder of Saudi Arabia King Abdulaziz speaks to the general manager of Aramco N. Devins during the opening ceremony of the Riyadh-Dammam train link in October 1951. (AFP)
The founder of Saudi Arabia King Abdulaziz speaks to the general manager of Aramco N. Devins during the opening ceremony of the Riyadh-Dammam train link in October 1951. (AFP)
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Saudi Aramco: From 'Prosperity Well' to Energy Giant

The founder of Saudi Arabia King Abdulaziz speaks to the general manager of Aramco N. Devins during the opening ceremony of the Riyadh-Dammam train link in October 1951. (AFP)
The founder of Saudi Arabia King Abdulaziz speaks to the general manager of Aramco N. Devins during the opening ceremony of the Riyadh-Dammam train link in October 1951. (AFP)

From its beginnings in 1938 when it first struck oil with the aptly named "Prosperity Well", Saudi Arabia's energy giant Aramco has delivered unimaginable riches to the kingdom.

Over the decades, the firm has grown into the world's largest and most profitable energy company, generating some 10 percent of global crude supplies and trillions of dollars in income.

Aramco shares hit the domestic bourse on Wednesday after the world's largest initial public offering in which 1.5 percent of its shares were sold to raise $25.6 billion.

After hitting its upper limit on the stock market debut, the company is now valued at a massive $1.88 trillion.

The listing came despite Aramco being hit by a string of attacks on its facilities, the latest and most serious on September 14 when drone and missile strikes halted the flow of 5.7 million barrels of oil per day -- more than half of its output, reported AFP.

The attack had threatened to undermine the IPO plans but the company quickly said it had restored production and output capacity to pre-strike levels.

Striking gold

Aramco has its origins in a 1933 concession agreement signed by the Saudi government with the Standard Oil Company of California. Drilling began in 1935 and the first oil began flowing three years later.

It gained its current name from the subsidiary created to manage the agreement that was called the Arabia American Oil Company in the late 1940s.

In 1949, oil production hit a milestone 500,000 barrels per day and the following year Aramco built the 1,212-kilometer (753-mile) Trans-Arabian Pipeline to export Saudi oil to Europe across the Mediterranean.

Production rose rapidly after the discovery of large offshore and onshore oilfields including Ghawar, the world's largest with some 60 billion barrels of oil, and Safaniya, the biggest offshore field with 35 billion barrels.

In 1973, with prices spiking at the peak of the Arab oil embargo the Saudi government acquired 25 percent of Aramco to increase its stake to 60 percent and become a majority stakeholder.

Seven years later, it was nationalized, and in 1988 it became the Saudi Arabian Oil Company, or Saudi Aramco.

From the 1990s, Aramco invested hundreds of billions of dollars in massive expansion projects, raising its oil output capacity to more than 12 million bpd, alongside making bold international acquisitions and pursuing joint ventures.

In mid-September, Aramco maintained some 260 billion barrels in proven oil reserves, the second largest in the world after Venezuela, in addition to 300 trillion cubic feet of gas.

Based in Dhahran in the country's east, the firm has key oil operations in the United States, China, India, South Korea and several European and Asian nations.

Aramco has also built a network of pipelines and refineries inside and outside the Kingdom and expanded its presence in the petrochemicals industry.

Earlier this year, it opened its account books for the first time, announcing a $111.1 billion net profit for 2018, up 46 percent on the previous year, and saying it had generated $356 billion in revenue.



Iran-Israel War: A Lifeline for Netanyahu?

FILE - Israeli Prime Minister Benjamin Netanyahu attends a ceremony on the eve of Israel's Remembrance Day for fallen soldiers at the Yad LaBanim Memorial in Jerusalem, on April 29, 2025. (Abir Sultan/Pool Photo via AP, File)
FILE - Israeli Prime Minister Benjamin Netanyahu attends a ceremony on the eve of Israel's Remembrance Day for fallen soldiers at the Yad LaBanim Memorial in Jerusalem, on April 29, 2025. (Abir Sultan/Pool Photo via AP, File)
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Iran-Israel War: A Lifeline for Netanyahu?

FILE - Israeli Prime Minister Benjamin Netanyahu attends a ceremony on the eve of Israel's Remembrance Day for fallen soldiers at the Yad LaBanim Memorial in Jerusalem, on April 29, 2025. (Abir Sultan/Pool Photo via AP, File)
FILE - Israeli Prime Minister Benjamin Netanyahu attends a ceremony on the eve of Israel's Remembrance Day for fallen soldiers at the Yad LaBanim Memorial in Jerusalem, on April 29, 2025. (Abir Sultan/Pool Photo via AP, File)

The Iran-Israel war has helped strengthen Israeli Prime Minister Benjamin Netanyahu domestically and overseas, just as his grip on power looked vulnerable.

On the eve of launching strikes on Iran, his government looked to be on the verge of collapse, with a drive to conscript ultra-Orthodox Jews threatening to scupper his fragile coalition.

Nearly two years on from Hamas's unprecedented attack in 2023, Netanyahu was under growing domestic criticism for his handling of the war in Gaza, where dozens of hostages remain unaccounted for, said AFP.

Internationally too, he was coming under pressure including from longstanding allies, who since the war with Iran began have gone back to expressing support.

Just days ago, polls were predicting Netanyahu would lose his majority if new elections were held, but now, his fortunes appear to have reversed, and Israelis are seeing in "Bibi" the man of the moment.

– 'Reshape the Middle East' –

For decades, Netanyahu has warned of the risk of a nuclear attack on Israel by Iran -- a fear shared by most Israelis.

Yonatan Freeman, a geopolitics expert at the Hebrew University of Jerusalem, said Netanyahu's argument that the pre-emptive strike on Iran was necessary draws "a lot of public support" and that the prime minister has been "greatly strengthened".

Even the opposition has rallied behind him.

"Prime Minister Benjamin Netanyahu is my political rival, but his decision to strike Iran at this moment in time is the right one," opposition leader Yair Lapid wrote in a Jerusalem Post op-ed.

A poll published Saturday by a conservative Israeli channel showed that 54 percent of respondents expressed confidence in the prime minister.

The public had had time to prepare for the possibility of an offensive against Iran, with Netanyahu repeatedly warning that Israel was fighting for its survival and had an opportunity to "reshape the Middle East."

During tit-for-tat military exchanges last year, Israel launched air raids on targets in Iran in October that are thought to have severely damaged Iranian air defenses.

Israel's then-defense minister Yoav Gallant said the strikes had shifted "the balance of power" and had "weakened" Iran.

"In fact, for the past 20 months, Israelis have been thinking about this (a war with Iran)," said Denis Charbit, a political scientist at Israel's Open University.

Since Hamas's October 7, 2023 attack on Israel, Netanyahu has ordered military action in Gaza, against the Iran-backed Hezbollah group in Lebanon and the Houthis in Yemen, as well as targets in Syria where long-time leader Bashar al-Assad fell in December last year.

"Netanyahu always wants to dominate the agenda, to be the one who reshuffles the deck himself -- not the one who reacts -- and here he is clearly asserting his Churchillian side, which is, incidentally, his model," Charbit said.

"But depending on the outcome and the duration (of the war), everything could change, and Israelis might turn against Bibi and demand answers."

– Silencing critics –

For now, however, people in Israel see the conflict with Iran as a "necessary war," according to Nitzan Perelman, a researcher specialized in Israel at the National Center for Scientific Research (CNRS) in France.

"Public opinion supports this war, just as it has supported previous ones," she added.

"It's very useful for Netanyahu because it silences criticism, both inside the country and abroad."

In the weeks ahead of the Iran strikes, international criticism of Netanyahu and Israel's military had reached unprecedented levels.

After more than 55,000 deaths in Gaza, according to the health ministry in the Hamas-run territory, and a blockade that has produced famine-like conditions there, Israel has faced growing isolation and the risk of sanctions, while Netanyahu himself is the subject of an international arrest warrant for alleged war crimes.

But on Sunday, two days into the war with Iran, the Israeli leader received a phone call from European Commission President Ursula von der Leyen, while Foreign Minister Gideon Saar has held talks with numerous counterparts.

"There's more consensus in Europe in how they see Iran, which is more equal to how Israel sees Iran," explained Freeman from the Hebrew University of Jerusalem.

German Chancellor Friedrich Merz said Tuesday that Israel was doing "the dirty work... for all of us."

The idea that a weakened Iran could lead to regional peace and the emergence of a new Middle East is appealing to the United States and some European countries, according to Freeman.

But for Perelman, "Netanyahu is exploiting the Iranian threat, as he always has."