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Saudi Aramco

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The story of the Saudi Arabian Oil Company (Saudi Aramco) dates back 63 years, to May 29, 1933, when the Saudi Arab Government signed the basic concession agreement with Standard Oil of California (Socal), the predecessor of today's Chevron.  Notably, the agreement was signed less than a year after the announcement of the unification of the Kingdom.  Socal soon assigned the concession to a subsidiary, California Arabian Standard Oil Company, or Casoc.

In 1936, the Texas Company, now called Texaco, became half owner of Casoc.   In 1944, Casoc changed its name to the Arabian American Oil Company, or Aramco.   The original concession agreement was revised through negotiations several times.

By 1948, two other major American oil companies had acquired an interest in Aramco:  Standard Oil of New Jersey, today's Exxon, and Socony Vacuum, which is now Mobil.  Socal, Standard Oil of New Jersey and Texaco each held 30 percent, and Socony Vacuum held 10 percent.  Between 1975 and 1979, Mobil increased its holding to 15 percent and the other firms' interest were correspondingly reduced.

In 1973, the Government acquired a 25 percent participation interest in Aramco.   That rose to 60 percent and following year.  In 1980, with retroactive financial effect to 1976, the participation interest rose to 100 percent when the Government paid for substantially all of Aramco's assets.

Saudi Aramco was established by Royal Decree in November 1988 to assume the managerial and operational responsibilities being carried out by Aramco for the Government.  H. E. Ali I. AL-Naimi, Minister of Petroleum and Mineral Resources, is chairman of the company's board of directors.  The board is responsible to the Supreme Council of the Saudi Arabian Oil Company, chaired by the Custodian of the Two Holy Mosques King Fahd ibn 'Abd al-Aziz.

 

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