Aramco Pumps Oil at Fraction of Rivals' Costs and Way More of It

(Bloomberg) -- Saudi Aramco can pump oil at a fraction of the cost of rivals and extracts more from beneath the Arabian Peninsula’s deserts and seas than the output of the five biggest international producers combined, helping clinch its spot as the world’s most profitable company.

The government-owned producer in Saudi Arabia extracts crude for $2.80 a barrel, less than half the costs of nearest rival Equinor ASA of Norway and a fifth of Exxon Mobil Corp.’s. The information comes from the prospectus for Saudi Aramco’s debut dollar bond and a person with knowledge of a presentation to investors.

Aramco Pumps Oil at Fraction of Rivals' Costs and Way More of It

Key Insights

  • The abundance of cheap crude makes for a raft of superlatives: crude production that’s exceeded 10 million barrels a day on average every year since 2015 makes it the world’s largest oil producing company; profit of $111 billion last year exceeds that of the world’s biggest companies.
  • Aramco’s low cost of production creates world-beating profit but cash flow lags rivals
  • Aramco is seeking to expand refining capacity and chemical production to better balance its business and sustain profit when oil prices slide.
  • Company’s 3.1 million barrels a day of net refining capacity make it world’s fourth-largest integrated refiner. Capacity will rise to 3.7 million barrels a day when two plants start later this year.

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  • Aramco pumped 10.3 million barrels of crude a day in 2018.
  • Total liquids production of 11.6 million barrels a day last year was more than 20 percent greater than the combined production of Exxon, Chevron Corp., Total SA, Royal Dutch Shell Plc. and BP Plc.
  • Aramco’s also its own power utility: the company plans to nearly double electricity generating capacity to 12.2 gigawatts by 2020 from 6.54 gigawatts now.
  • Link to bond prospectus:

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