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ENERGY TO THE WORLD: THE STORY OF SAUDI ARAMCO VOLUME 2

J energy to the world : Volume one

title K

Vo l u m e T W O

Energy to the World The Story of Saudi Aramco

ii energy to the world : Volume one

Vo l u m e T W O

Energy to the World The Story of Saudi Aramco

Supertankers load crude oil at Ras Tanura Sea Island Terminal in 2003.

Contents

First Edition

Volume One

Printed in 2011

Preface

ISBN

All rights reserved. No part of this book may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the written permission of Aramco Services Company, except by a reviewer, who may quote a brief passage for review.

Illustration: Saudi Arabia

Prospects

978-1-882771-23-0 Library of Congress Control Number

200922694 Written by

Volume Two

Illustration: Saudi Arabia

xiv

National Resources 1

Boom Time 27

Negotiations 33

Transformation 67

viii

Reading the Rocks 59

Rising to the Challenge 99

The War Years 93

Achieving the Vision

131

Expansion 123

Appendix

168

Growing Pains

153

A. Upstream

170

The History Factory Chantilly, Virginia, USA

Balancing Act 189

B. Downstream

184

C. Operations Data

194

Project Coordinators

Notes on Sources

216

220

Acknowledgments

206

223

List of Abbreviations

209

Notes on Sources

210

Scott McMurray Produced by

Theodore J. Brockish, Kyle L. Pakka and Mohammad S. Abu Al-Makarem, Saudi Aramco with special thanks to Muhammad A. Tahlawi Published by

Aramco Services Company Houston, Texas, USA www.aramcoservices.com Designed by

Pivot Design, Inc. www.pivotdesign.com Printed by

Altraiki Printing Company Dammam, Saudi Arabia

List of Abbreviations Image Credits

Index

215

Company Leadership

204

Bibliography

214

216

Image Credits

Index

219

viii illustration: saudi arabia

illustration: saudi arabia ix

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Saudi Arabia

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Sakaka al-Jawf

G r e a t

W Hafar al-Batin Qaisumah

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Madinah

Jubail Ras Tanura Qatif Dammam al-Khobar Dhahran Abqaiq al-‘Uqayr Hofuf

n a j d ad-Dir‘iyah

Nariya

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i al-Rum Buraydah al-Zilfi ah ‘Unayzah W Khaybar

a z

al-Kharj

Haradh Wadi a l-Sa hba

saudi arabia

Salwah

Riyadh

ad-Dawadimi

Yanbu‘

al-‘Ula

al-Khafji Safaniya

- h

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kuwait

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Thuwal Jiddah

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scale in kilometers 0

200

national resources 1

Z energy to the world : Volume two

chapter one

National Resources

An exploration camp in the Rub‘ al-Khali, 1966.

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2 energy to the world : Volume two

The 1960s marked a period of accelerated change and development for both Saudi Arabia and Aramco. In step with other oil-producing countries, Saudi Arabia was becoming more assertive in terms of its desire to derive as much wealth as possible from its underground resources. The pace of spending on modernization and development projects in Saudi Arabia quickened as the reform-minded Crown Prince Faysal succeeded his brother King Sa‘ud in 1964. The era marked a significant change in the leadership of Aramco as well, as Thomas C. Barger became chief executive officer of Aramco in 1961. Barger, named president in 1959, had in many ways been training for the role of CEO for 20 years. He joined the oil company in 1937 as a geologist and moved to Government Affairs in 1941. He brought to the CEO post wide-ranging interests and a genuine concern for the welfare of Saudi employees and the country in general. His interests, including improving medical facilities and the employee Home Ownership Program and aiding local businesses, often went beyond his immediate portfolio of responsibilities. As a contemporary of his recalled, “He was always identified with the future. He was always the planner, the idea man … always planning new areas of endeavor.” While driving change at Aramco, Barger never lost sight of the core principles that he felt A helicopter approaches the Aramco Mobile Drilling Platform 2 (AMDP-2) in 1967. The use of AMDPs eliminated the need to construct a fixed drilling platform for every new offshore well.

defined the organization. A list of 12 “Planning Guides” he distributed in 1960 underscored his ability to remain focused on the essential reasons for the company’s existence. The goals topping that list were “to preserve the Concession and optimize the returns to the Shareholders over the term of the Concession; to maximize Saudi participation in the economic support of the enterprise; [and] to ameliorate the impact of the enterprise on Saudi society.” (See “Barger’s Vision,” p. 6.)

Barger reportedly told a friend shortly after being named president, “The day a man

becomes president of a company is the last day he knows what’s going on in that company.” Barger countered this isolation—perhaps an inevitability arising from what a colleague called the “process of management”—by grooming up-and-coming leaders such as Frank Jungers and

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4 energy to the world : Volume two

Crown Prince Faysal meets with Aramco’s Ras Tanura employees in March 1963. In the same month, he concluded negotiations with Aramco to increase government royalties from Tapline and reduce the size of the concession area, both part of his broader plans to stabilize the domestic economy and increase the pace of modernization.

Not all oil companies were happy to see BP cut its posted price. The Middle East was still in the throes of Nasser-era Arab nationalism with its anti-Western, anti–oil company biases. Many executives worried as 1960 wore on that further price cuts would only fuel widespread resentment in the Arab world and might even jeopardize existing business relationships for Aramco in Saudi Arabia and IPC in Iraq. Even some at Jersey, considered among the most chauvinistic of U.S. oil companies, expressed concern that further price cuts should not be made without close consultation with the producing countries’ governments.

Oil in the Arab States One of the most widely read and influential books among the oil producing countries’ decision makers in the late 1950s and early 1960s was Oil in the Arab States, by Iraqi scholar Muhammad Jawad Al-‘Abbusi, an economist who studied at the Sorbonne in Paris and taught at the College of Arts in Baghdad. Published in Cairo in 1956, the book was translated into English in 1958. Oil in the Arab States detailed the economics of the oil industry, and Aramco disputed some of its conclusions in a commentary sent to company executives. However, the underlying theme—a driving force behind the creation of OPEC—argued that oil was of overriding national importance, not just economic importance, to the producing states in the Middle East:

In fact, the oil industry in all its stages, from exploration to marketing, gives rise to

R. W. “Brock” Powers. He remained committed to ensuring the ability of Aramco’s leadership

important economic and political problems bearing closely on the national interest. For

to stay abreast of the challenges thrown at them by a changing industry, an anxious and ambitious

this reason the profit and cost factor is often only of secondary importance. Another

host country and a volatile world. This commitment was sorely tested by the events of the 1960s.

principle takes precedence and exercises almost absolute control over the industry; it is “guaranteeing the regular and continuous supply of oil for the state under easy terms.”

Organization of Petroleum Exporting Countries

By 1960, the world was once again awash

This is the view taken by consumer countries. Producer states, on the other hand, hold to

in oil. The unexpected surge in postwar demand had been more than offset by rapidly increasing

the principle that “all natural underground resources of the state are the property of the

worldwide production. Further, more players were joining the game. As of the mid-1950s, the

state.” An important conclusion may be drawn from this, namely: “That the development

Soviet Union, desperately in need of foreign exchange with which to fund its postwar rebuilding

of oil resources is more a matter of national than of purely economic importance.”

and industrialization programs, began exporting oil in increasing quantities, often significantly below posted prices in the Middle East.

A team of Iranians joins representatives from Kuwait, Iraq, Saudi Arabia and Venezuela for the first conference of the Organization of Petroleum Exporting Countries (OPEC). Held in mid-September 1960, the conference allowed the oil-producing nations to present a united front against oil companies’ attempts to cut the price of crude oil.

In the late 1950s, oil companies held constant the posted price—the basis for their profit split

with the countries—even as the market price was declining. Although most companies still remained

highly profitable, by 1959 the spread between the posted and market prices had widened to the

anyway, assuming the warnings of backlash were overblown. On August 9, 1960, Jersey announced

point that profit margins were noticeably eroding. The Soviet Union’s reentry into the global oil

reductions ranging from 4 to 14 cents a barrel on various classifications of Middle Eastern crude. Other

Jersey Chairman Monroe Rathbone listened to such arguments, then cut the price of Jersey oil

market spurred fears among industry executives that the market would become saturated, lowering

major oil companies followed with similar cuts shortly thereafter.

prices still further. It was only a matter of time before one of the global oil companies cut its posted

Slightly more than a month later, representatives of Saudi Arabia, Venezuela, Kuwait, Iraq and Iran,

price to put it more in line with market realities. The British Petroleum Company (BP) was the first

nations representing more than 80 percent of world crude oil exports, met in Baghdad. Within a week,

to do so, cutting its posted price for crude by 18 cents, or about 10 percent, in early 1959. One of

they had formed an organization—a more representative successor to the Arab Petroleum Congress,

Aramco’s owners, Jersey, followed suit in 1960.

which had been formed in 1959—with which they could present a united front in dealings with the oil

Oil-producing countries protested, as the action cut directly into their national revenues. The

companies: the Organization of Petroleum Exporting Countries, popularly known as OPEC.

move cost the four largest oil-producing countries in the Middle East an estimated $132 million in

OPEC’s presence abruptly halted the trend toward cutting posted prices among global oil companies

income. Abdullah Tariki, Saudi Arabia’s Director General of Petroleum and Mineral Affairs, railed

by creating at least the potential for coordinated, joint action by the governments of oil-producing

against the cuts, as did other Middle Eastern governments. At the 1959 Arab Petroleum Congress in

countries against the oil companies. Indeed, oil prices trended sideways for much of the decade. Beyond

Cairo, held shortly after BP announced the price cuts, Tariki and other government representatives

that, OPEC did not have a dramatic impact on the world oil industry until the early 1970s. With a few

met in secret to produce a “Gentlemen’s Agreement” in response. Among other things, it called for

exceptions, the 1960s saw oil-producing countries and oil companies focusing on the common goal

the establishment of national oil companies and changing the existing 50/50 profit split to 60/40,

of increasing production to boost profits. In the five years from 1957 to 1962, oil production in the

with oil-producing countries getting 60 percent of the profit from their oil. Public action came the

Kingdom increased by more than 50 percent (from 1.02 million barrels per day, or bpd, to 1.64 million

following year.

bpd). Revenue also soared, from $306 million in 1957 to $414 million in 1962.

An Aramco delegation departs Dhahran en route to the sixth Arab Petroleum Congress in March 1967. The Arab Petroleum Congress, OPEC’s predecessor, was formed in April 1959 with members representing Venezuela, Iran, Saudi Arabia, the United Arab Republic (the short-lived union of Egypt and Syria), Kuwait and Iraq.

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Abdullah Tariki, who was named the Kingdom’s first Minister of Petroleum and Mineral Resources

in 1960, was the principal driver of Saudi oil policy. In many ways, his positions were ahead of his time. In various interviews with the Middle Eastern press in early 1961, he advocated converting Aramco into an integrated oil company that included marketing as well as refining. He also declared that Aramco should cease the flaring of any natural gas produced in association with crude oil, a common practice across the Middle East at the time given the minimal local demand for gas. Instead, he favored the development of a petrochemical industry using Saudi natural gas and crude oil as feedstocks. Tariki’s political opinions, however, left him increasingly out of step with the Saudi government. Tariki did not assume ministerial rank until Crown Prince Faysal, in a dispute over the annual budget for the country, relinquished administrative control of the government in late 1960 and King Sa‘ud once again assumed control of the day-to-day governmental operations. For the next

Barger’s Vision While steering Aramco through the tumultuous 1960s, CEO Thomas C. Barger’s clear priorities helped keep Aramco leadership focused. The following are “Planning Guides for Aramco as a Corporation,” which Barger penned in 1960:

year, Tariki was the undisputed voice of Saudi Arabia on all matters relating to oil. By October 1961, however, government radio was broadcasting comments on the oil industry that were noticeably more moderate than Tariki’s during the same period: Under the leadership of His Majesty the King, Saudi Arabia is employing all possible

1. To preserve the Concession and optimize the returns to the Shareholders over

means to derive maximum benefit from its oil resources, and to this end it is cooperating

the term of the Concession. 2. To maximize Saudi participation in the economic support of the enterprise.

with all other states which are working along the same lines. Our method of achieving

3. To ameliorate the impact of the enterprise on Saudi society.

this aim is to base our course of action on the principles of equality and justice within

4. To provide technological and managerial assistance to the society and economy

the framework of voluntary association with the oil companies.

of Saudi Arabia, especially in the Eastern Province. 5. To carefully evaluate side effects of Aramco actions, before they take place, and ensure that expenditures of money or good will do not outweigh returns expected.

Thomas C. Barger in 1961.

Change was in the air. A cabinet shuffle in March 1962 left Crown Prince Faysal once again

playing an active role in the government. This time, Tariki was not included. He had in fact been

6. To spread economic benefits of the enterprise as widely through the local population

removed the previous November and had subsequently moved to Beirut, where he worked as an

as possible even at some extra cost by adoption of policies that direct the purchasing

oil industry consultant. In his place as the new Minister of Petroleum and Mineral Resources was a

power of Aramco employees to the development and support of services generally

young, accomplished Saudi lawyer named Ahmed Zaki Yamani.

available to the public.

Cool and calculating, the 32-year-old Yamani, armed with a law degree from the University of

7. To set standards of behavior that are in accordance with best industrial practice in the

Cairo and a master’s in comparative jurisprudence from New York University, as well as additional

United States, and standardize conduct of the affairs of the Corporation in respect to

graduate work at Harvard, was well prepared to assume the ministerial role. The native of Makkah

the treatment of employees, and relations with the Government and public that

was no stranger to Aramco, having successfully defended the company in a suit in Shari‘ah court

Corporate actions can be always justified to a reasonable Saudi acquainted with

filed by a merchant in Hofuf. Comparing Yamani with Tariki, a former secretary general of OPEC

business practices elsewhere.

remarked, “He got more out of Aramco because he got on with Aramco.”

8. To ensure the provision in the Corporation of competent technical, managerial, administrative and craft skills. 9. To keep abreast of technological advances in oil fields bearing on the business of the

“Tenacity and Patience”

One of Yamani’s first orders of business was to tackle some of the

long-festering pricing issues that Tariki had not been able to resolve. The most critical matter

Corporation and apply new techniques as they can contribute to the efficient operation

concerned the method Aramco used to calculate Tapline profits. It became known as the Sidon

of the Corporation.

price claim, after the Mediterranean port in Lebanon marking the western terminus of the pipeline.

10. To do what we reasonably can to obtain better mutual understanding between Saudis and Americans. 11. To plan facilities so as to insure reasonable protection against unforeseen contingencies, industrial or political. 12. To be informed and alert to social and political change in order to adapt the

From July 1962 through March 1963, a group of government experts and Aramco officials

and lawyers met repeatedly to settle the matter. At the core of the Sidon price dispute was the Saudi contention that Aramco was treating Tapline as a facility operated for the benefit of the oil company’s shareholders and not part of Aramco itself. The government had alleged for years that Aramco was passing on to its owners the profits on the oil carried by the pipeline

Corporation’s activities, but not to direct or influence other than normal industrial

rather than having those profits accrue to Aramco and, therefore, be subject to taxation by the

necessities will inevitably influence.

Saudi government. As a result, Saudi representatives argued that the company owed the Saudi government $186 million in back payments.

Senior Saudi and Aramco officials sign the March 1963 agreement increasing Saudi royalties on Tapline oil and settling other claims. Around the table, from left to right, are William L. Owen, Aramco’s general counsel; Peter C. Speers of the Government Affairs Department; Ahmed Zaki Yamani, Minister of Petroleum and Mineral Resources; J. M. Curry of the Law Department; Hasan Gazzaz, editor of Al-Bilad newspaper; Robert I. Brougham, senior vice president of Aramco; and Abdul Hady Taher, governor of Petromin.

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In 1962, an all-Saudi crew was assigned the responsibility of managing the complex operations of the Ras Tanura fluid hydroformer during the night shift. The men—Ahmad R. Al-Moqbil, Farraj T. Al-Manasir, Hullayil Aqil, Hilal Y. Al-Huzaim, ‘Abd al-Rahman M. Mubarak, Saleh A. Al-Ajam, ‘Aziz A. Sa‘d and Zaid Abdul ‘Aziz—trained extensively at an Aramco Industrial Training Center before their assignment.

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Oil traveling to the Mediterranean via Tapline, even after accounting for maintenance costs and fees paid to the countries through which the pipeline passed, did so at a lower cost than oil carried by tanker through the Suez Canal. However, Aramco’s owners charged their non-shareholding customers at the Sidon terminal prices roughly equal to the prices posted at the Ras Tanura Terminal in the Gulf plus the cost of tanker transportation through the canal. Aramco sold the oil to its four shareholding oil companies at a lower price, which was equal to the Ras Tanura price plus the cost of pipeline transportation. The shareholders pocketed the difference between the cost of shipping via tanker and the cost of shipping oil through the pipeline. It came to pennies per barrel, but tens of millions of barrels of oil had been shipped under this pricing scheme. The two sides reached an agreement on March 24, 1963. The Saudis rightfully claimed total victory, and the agreement was seen as a vindication of the new approach toward the oil companies adopted by Crown Prince Faysal and implemented by Yamani. The Minister, who had maintained that the government was not about to compromise on the issue of its own tax laws, saluted the “tenacity and patience” of the Saudi negotiators. According to Yamani, “The company recognized what was right, for which it is duly thanked.” He noted that the Tapline issue and other tax claims settled at the time totaled more than $160 million. The Changing Face of the Workforce

Reflecting the worldwide glut in crude oil supplies

and the conclusion of most of the major construction projects it had initiated in the 1950s, Aramco tightened its belt. From a total payroll of nearly 25,000 employees in the mid-1950s, the number steadily diminished for the balance of the decade. In 1960, Aramco cut its total staff again, this time by roughly 10 percent, from 16,257 to 14,834. More than 400 of the cuts came from the 1,505 employees who were neither Saudi nor American, but rather a group that included Indians, Italians, Palestinians and other nationalities. In a related move, the company closed recruiting offices in Pakistan and Aden. The American payroll was also reduced by 12 percent. Only 5 percent of Saudi jobs were cut, leaving Aramco with 11,140 Saudi employees by the end of 1960. While fewer in number, Aramco’s Saudi employees by the start of the 1960s were a much Saudi employees study physics at the Dhahran Industrial Training Center (ITC) in 1964. Students earned the chance to obtain a fully paid scholarship from Aramco by successfully completing the ITC curriculum.

more stable, better trained and better paid workforce than ever before. As of 1960, 46 percent had at least a decade of uninterrupted service with the company. In addition, roughly threequarters of the Saudi workforce held semiskilled, skilled or supervisory jobs at the start of the decade. Since 1955, the average annual income of Saudi employees had soared 86 percent, to 7,830 riyals. The 1960s were marked by continued declines in employment as oil processing facilities became more highly automated and productive. By 1970, the Aramco payroll had been reduced by 28 percent to just 10,606 employees, 80 percent of whom were Saudis. Those employees were producing much more in terms of oil revenue per employee, however. From 1962, when it generated $383 million in taxes, royalties and fees for the government, Aramco’s total annual payments to the Saudi government more than tripled to $1.159 billion in 1970. New Initiatives Enrich Saudi Educ ation

Educational opportunities within the Kingdom

continued to expand dramatically during the 1960s. From elementary schools for girls to a college dedicated to educating Saudis in the oil and mining industries, the pace of change quickened.

led Aramco to agree to extend its commitment to build schools for sons of Saudi employees to

include daughters as well. The company committed to building elementary schools for girls in

By the late 1950s, an increasing number of Saudis advocated public elementary schooling

for girls as well as boys. In 1958, the director of education for the Eastern Province estimated

the Eastern Province at a rate of two schools per year, with a capacity of 300 pupils per school.

that more than 3,000 girls already were being educated at “informal school classes in homes

While negotiations with various government agencies progressed over the next few years,

scattered throughout the Eastern Province,” such as the school run in the al-Khobar family home

Aramco in 1962 donated portable buildings to serve as schools until permanent facilities could

of the mother of future Aramco President and CEO Abdallah S. Jum‘ah.

be constructed. On September 15, 1964, Aramco turned over the first two girls’ schools, built

In October 1959, King Sa‘ud announced over Radio Makkah his support for the creation

of girls’ schools nationwide. This pronouncement set in motion a series of steps that in 1961

in al-Khobar and Rahimah. The company also agreed to pay for recruiting and training female teachers for the girls.

While attending Robert Morris Junior College in Pittsburgh, Pennsylvania, in 1962, Aramco employees, left to right, Omar Bataweel, Muhammad Hasan, Muhammad Sa‘id Al-Ali, ‘Ali Dakheel Aburqubah, Saleh Al-Faleh and ‘Abdal ‘Aziz Al-Abid take time to explore the region.

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Students gather in the courtyard of the Aramco-built Dammam Girls’ School in 1970. Ten years after the establishment of Saudi Arabia’s first girls’ school, enrollment had risen to more than 100,000 nationwide.

By this time, the company also was building intermediate schools for boys. The Aramco

school-building program during the 1960s endured a few setbacks, particularly the difficulty encountered in integrating these schools into the existing public school system, but the program was considered an overall success. A 1967 internal company review noted that Aramco had built 30 schools in the Eastern Province in just 14 years, providing an education for 2,400 girls and 5,700 boys. The cost of construction was $10.5 million, and annual operating costs were estimated at $2.5 million, expenses that Aramco assumed as part of its agreement with the Saudi government. The company paid for the construction, operation and maintenance of the schools until the program ended in January 2007. A total of 139 schools were built, 74 for boys and 65 for girls.

First Professional Woman At roughly the same time Aramco was building its first elementary school for girls in the Eastern Province, it also hired its first Saudi woman with a college degree. Najat Al-Husseini, a graduate of the University of Damascus, joined the company in 1964. When she applied A young Saudi girl rides a tricycle on her school grounds. Girls had previously been able to attend mostly unofficial, home-based schools but were given new opportunities when the first Saudi government girls’ schools opened in 1960.

to Aramco, company officials were not sure how to proceed, as there was no precedent for hiring a Saudi woman college graduate. Al-Husseini’s father, Colonel Ibrahim Al-Husseini, a special adviser to Prince ‘Abd Allah ibn ‘Abd al-‘Aziz, then head of the Saudi National Guard, helped clear the way. He personally approached King Faysal, a staunch advocate of women’s education, and received his approval. With approval from the King, Aramco quickly added Al-Husseini to the staff. Her five brothers, Hassan, Haitham, Ihsan, Moujahed and Sadad, followed in her footsteps and also joined Aramco. Moujahed earned his doctorate in geophysics from Brown University in Providence, Rhode Island, and retired from the company as manager of Exploration and Producing. Sadad, who also graduated from Brown with a doctorate in geology, retired as an executive vice president in 2004.

Aramco continued to hire women in professional positions and set up training

programs for them. Many of the first generation of professional women to join Aramco worked in health care and related fields. Professional women in subsequent decades were hired and trained in virtually all areas of the company, from corporate planning to reservoir management.

College of Petroleu m and Miner als

When he was named Minister of Petroleum and

Mineral Resources in 1962, Yamani inherited plans to form a university to train Saudis in the oil and mining industries. The initial purpose of the college was to serve as a technical institute. However, Yamani had grander plans—he wanted it to adopt a wider curriculum and train the Saudis who would eventually run Aramco. This was one reason the college was kept under the administrative wing of the Ministry of Petroleum and Mineral Resources rather than the Ministry of Education until the mid-1970s, when it was transferred to the control of the new Ministry of Higher Education.

Founded by a Royal Decree on September 23, 1963, the College of Petroleum and

Minerals was to be located near Dhahran. The following year, Aramco released land for the school, including about 50 buildings, originally part of the “Saudi camp,” to be used as student housing. In 1970, the company agreed to donate a combined $11 million to the school in three installments between April 1970 and January 1972.

In 1964, Najat Al-Husseini became the first Saudi woman with a college degree to join Aramco. During her years with the company, she worked to educate the families of Saudi employees about health issues.

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14 energy to the world : Volume two

Students stroll on the campus of the College of Petroleum and Minerals in 1967. The college, adjacent to Aramco’s Dhahran headquarters, offered an English-language curriculum of technical subjects that expanded over the years to include many engineering and scientific disciplines.

The Americans and other expatriates living in the Aramco residential communities developed a strong support system as well. To many of them, their sense of “family” seemed stronger than the ties forged among expatriates working for other Western employers. Frank William “Bill” Tracy, Jr., moved to Ras Tanura from Illinois in 1946 at age 11. His mother brought him, his brother and his sister to join their father, Frank Tracy, Sr., who was working in cost accounting at the new refinery. In 1967, Bill joined a company subsidiary as a writer and editor for Aramco World and other publications. He later worked for the company in Dhahran and Houston, Texas, before retiring in 2000. He had fond memories of the sense of community among Aramco employees:

Administrators and staff, including the first dean, Saleh Ambah, prepared furiously until

September 22, 1964—the night before the school’s first class of 67 students arrived. The institution’s name was changed to the University of Petroleum and Minerals in 1975, and in 1986 it was given its current designation, King Fahd University of Petroleum and Minerals (KFUPM). Today, it enrolls more than 10,000 students. Aramco World

By the mid- to late 1960s, a new generation of Saudis in the Eastern Province was

coming of age in what in many ways was an Aramco world. Khalid Al-Falih, the son of Abdulaziz D. Al-Falih, an Aramco executive who had started working for the company in the early 1950s and retired in 1997 as vice president of Material Supply, grew up in a section of Dammam known as Madinat al-‘Ummal (“Labor City”). The neighborhood had been developed by Aramco as part of its Home Ownership Program. Al-Falih and his friends went to schools built by Aramco. When he wasn’t studying, he was listening to Aramco radio or watching Aramco television.

Al-Falih, who earned a bachelor’s degree in mechanical engineering from Texas A&M and

an MBA from KFUPM, was named president and CEO in November 2008 and assumed office on January 1, 2009. He recalled that Aramco employees were known for their work ethic, and they were proud of it:

Aramco’s Home Ownership Program allowed Saudi employees to finance the construction or purchase of homes like this Dammam residence, shown in 1965. The program, established in 1951, offered interest-free loans that gave thousands the opportunity to acquire their own homes.

“All of the neighborhood that I lived in was composed of Aramco. … The Aramco employees

were very industrious, they left their homes at dawn and came back at or after sunset. The

The thing was, because the Americans were so far from home and you couldn‘t

working hours were longer at the time … the men were gone all day to work at Aramco.”

easily make phone calls, you got this sense of family. So if mother wanted to know

Indeed, while every Aramco worker had an identification badge, working at Aramco and

how to cook a turkey she couldn’t call her mother or her aunt or her older sisters,

being able to take advantage of all the company offered was a mark of honor in its own right.

she had to talk to the lady next door. So you got this kind of family relationship

As Sadad Al-Husseini, who retired as an executive vice president in 2004, recollected:

that you wouldn‘t find ordinarily. Also, a lot of people who lived overseas would

“People were happy to have a job. They were happy to have housing. They were happy to

say, ‘Oh yes, my father was with the U.S. Army or Bechtel or my father was with

have an opportunity. There was a lot of pride in being employed with Aramco. The local com-

Halliburton, and we lived three years here and two years there.’ But Aramco people

munities took great pride in their relatives who worked in Aramco. Having a job at the company

would come and stay 20 years. And that was unusual. That also became part of

was considered a real asset for the community and the family.”

this great family thing.

The oil boom of the 1970s spurred construction of additional homes and businesses in the Dammam area. Many of the original owners of the Madinat al-‘Ummal homes retired and sold

Naturally, new expat arrivals tended to identify first with where they came from, not

the homes to new owners looking for a place to start a family. The name of the neighborhood,

where they were. Most employees who stayed with the company, however, soon came to think

however, remains as a testament to the pioneering Aramco homeowners.

of themselves as company people. An important factor in the company’s identity was that top

Margret Tracy, an 11-year veteran of the expatriate life, shops for spices in Rahimah, near Ras Tanura, in 1957. As Aramco prospered, its communities and the adjacent towns also grew, but the common factor was the company. Employees and their families, whether expatriate or Saudi, forged a unique identity as “Aramcons.”

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16 energy to the world : Volume two

management often lived next door to junior-level employees. Socializing often cut across boundaries of rank and past corporate associations. The longer employees were in Saudi Arabia, the more they thought of themselves as Aramcons, as opposed to having come from Socal, Texaco, Jersey, Socony or companies not related to Aramco. Lawrence “Larry” Tanner joined Aramco in 1958 as a maintenance engineer and spent most of his 25-year career with the company in various operations management positions in Ras Tanura and Abqaiq. He recalled: “When I arrived in Ras Tanura I observed several social cliques. … In the early years these cliques were very coherent and reluctant to accept outsiders. In the latter years, we were just all Aramcons.”

An employee watches over the pump control room at Safaniya in 1965. During the year, the production capacity of the field was increased by 150,000 bpd to more than 600,000 bpd, a gain that helped Aramco produce an average of more than 2 million bpd, an all-time high at the time.

Exploration Continues

Although the pace of facilities construction slowed compared with

the previous decade, the 1960s witnessed a number of oil field discoveries, particularly offshore in the Gulf. In 1963, Aramco geologists identified the Abu Sa‘fah offshore field. The following year, they located the Berri field, a portion of which extended under the waters of the Gulf. In 1965, the Zuluf offshore oil field was discovered, and in 1967, Aramco geologists identified three more offshore fields—Marjan, Karan and Jana. Aramco built its first offshore gas-oil separation plant (GOSP) 40 kilometers from Safaniya in the Gulf.

In 1968, Aramco found oil in an even more remote location. After decades of prospecting

amid the towering sand dunes in the Rub‘ al-Khali, beginning with Barger and his fellow geologists in 1938, Aramco geologists found oil. The Shaybah field was located in the northeastern portion of the southern desert, 800 kilometers from Dhahran or more than a week’s drive since there was no road to it. Given the challenges involved in producing and transporting oil in such a harsh environment, and the abundant number of producing fields already online, Aramco officials decided to pursue structure drilling in the area but to delay production indefinitely.

A drilling crew tightens the connection between the drill bit and pipe string on an offshore platform in the Abu Sa‘fah oil field. Discovered in 1963, the same year the photograph was taken, the field is located in the Arabian Gulf.

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18 energy to the world : Volume two

Ironically, some drilling took place to determine where there was not oil. In the late 1940s,

Aramco began relinquishing portions of its concession to the Saudi government as stipulated

a r a m c o ’ s o i l f i e l d e x pa n s i o n

in the 1933 and 1939 concession agreements. The company’s practice was to ascertain which

Successful offshore exploration in the 1960s expanded Aramco’s inventory of offshore oil fields from two—Safaniya and Manifa—to eight. Portions of the Berri and Qatif fields lie offshore. Though smaller than the earlier finds, Abu Sa‘fah, Berri, Zuluf, Marjan, Karan and Jana together represented a significant increase in Aramco’s proven reserves.

portions of its concession had the least likelihood of yielding crude oil and return that territory

marjan zuluf

to the government in varying portions every few years. In the late 1950s and early ’60s, with Aramco’s giant fields producing ever-increasing amounts of oil, a good portion of the company’s

s a fa n i ya

drilling program was devoted to determining the next relinquishment. The process accelerated in 1963, recalled Brock Powers, manager of Exploration in the early 1960s. In March of that year, Aramco agreed to relinquish about two-thirds of its original concession, 588,720 square kilometers, leaving the company with roughly 323,749 square kilometers.

m a n i fa

karan

The company also returned the remaining 108,357 square kilometers of the area where it had preferential concession rights, or the areas outside the original concession where the company had the right to forge additional concession agreements if it chose to do so. The remaining concession

jana

area was divided into six portions, with the largest, concession area No. 1, covering the major fields, residential compounds and facilities in the Eastern Province. The next largest, No. 5, was a

a b u h a d r i ya

k h u r s a n i ya h

horseshoe-shaped region in the Rub‘ al-Khali that included the Shaybah field.

berri fa d h i l i

The establishment of Seismic Camp 3 in 1966 marked the beginning of two years of seismic exploration in the Rub‘ al-Khali, the most inaccessible and inhospitable area explored by Aramco. For the first time, Aramco employed helicopters in exploration work, leasing five Bell helicopters with motors specially adapted to work in the extremely hot air of the region.

‘

a b u s a fa h

known offshore oil fields before 1960

q at i f

known offshore oil fields after 1960 onshore oil fields dammam fa z r a n abqaiq

‘a i n

dar

As Time magazine reported:

Bowing to longstanding Saudi demands earlier this year, Aramco signed a new deal

with reform-minded Prince Faysal, who has replaced ailing King Saud as the nation’s de facto ruler. Aramco agreed to pay the Saudis $160 million in retroactive extra royalties Crew members in Seismic Camp 3 sit down to a meal in a mobile trailer in May 1966. At any one time, about 106 men called the camp home for up to four weeks at a stretch. Their hard work paid off in 1968, when Aramco discovered the Shaybah oil field 800 kilometers southeast of Dhahran.

key

[to settle the Sidon price claims] and to surrender in stages its original 673,000-sq.-mi. concession, until all that will be left in 1992 will be a 20,000-sq.-mi. area. With the money and the land, the Prince intends to set up a nationalized oil company. Aramco keenly regrets losing its concessions but figures to keep its best oil producers and rationalizes that the Saudis, by establishing their own oil company, should be under less pressure from fanatic nationalists to expropriate the American company. Technology Transfer

When King Faysal met with U.S. President John F. Kennedy in October

1962 while still Crown Prince, each appeared to see the other as a pragmatic reformer. Kennedy sent a follow-up letter to the Crown Prince on November 2, stating that “under your firm and wise leadership, I am confident Saudi Arabia will move ahead successfully on the path of modernization and reform which you so clearly desire. In pursuing this course you may be assured of full United States support for the maintenance of Saudi Arabia’s integrity.” During their conversations, King Faysal accepted Kennedy’s offer to help Saudi Arabia establish government television stations. The American president clearly understood the power of mass communication and felt the Crown Prince could use the medium to benefit the Kingdom. The U.S. Army Corps of Engineers took charge of contracting and installing television towers

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20 energy to the world : Volume two

and other support structures on land provided by the Saudi government. On July 17, 1965,

First Saudi Managers

Saudi Arabian television went on the air in Jiddah and Riyadh, with two hours of programming beginning after the sunset prayer. Initially, the programming featured readings from the Quran.

By the 1960s, a handful of talented Saudis were rising rapidly through the ranks. Even

American entertainment programming and cartoons for children were added over time. Within

though Ali Al-Naimi eventually became the first Saudi president and CEO, he was not

a few years, government television stations were operating in the Eastern Province as well.

the first Saudi to be named manager. That distinction belongs to Zafer H. Husseini, who had joined the company in 1952; in 1965, he was named manager of the Products

Roc k Wedn esday

Arab-Israeli tensions concerning Palestinian refugees and other issues

Distribution Department in Dhahran. Mustafa Abuahmad, who joined the oil company

mounted throughout the 1960s. Backed by the Soviet Union, Egypt was rapidly building up

in 1944, became the second Saudi manager when he was put in charge of the Public

military strength in the Sinai Desert. Syria and Jordan were taking similar steps to the north and

Relations Department in 1969.

east. Conflict seemed inevitable, and on June 5, 1967, Israel initiated what became known as Zafer Husseini’s August 1965 appointment to the Products Distribution Department made him Aramco’s first Saudi manager. Husseini, second from right, is shown with, left to right, Paul Arnot, W. Hodgeson, J. P. Lunde, H. C. Kristofferson and Tom Barger.

the Six-Day War.

Arab populations, including those in Saudi Arabia, presumed victory. For years they had

listened to Nasser on Egyptian radio as he described Egypt’s military invincibility, and thus were completely unprepared for the rapid defeat suffered by the Arab armies. Aware of America’s historic support of Israel, Arabs took to the streets across the Middle East, taking out their anger on American government and business facilities. Some crowds were incited to violence by false reports that American planes and ships had participated in the attacks on Arab forces. A contingent of the Saudi National Guard, sent to protect Aramco facilities from crowds angry with America’s support of Israel during what became known as the Six-Day War, drives past the Dhahran school in June 1967.

Fred H. Drucker, an Aramco attorney, met the crowd as he was driving toward the Admin-

istration Building a short while later: By June 7, violence reached Aramco installations in the Eastern Province in the form of a mob,

This was before there was a fence around the Administration Building, when the

made up primarily of students from the nearby College of Petroleum and Minerals. At company

whole camp was pretty much wide open. I saw a crowd of people coming up the

facilities in Ras Tanura, Abqaiq and Dhahran, Arab workers that morning walked off the job en

street toward me. At the same time I saw smoke in a couple of places, and I wondered

masse or simply did not show up for work. With President and CEO Barger out of the country on

what was going on. As the crowd got closer I could see that they were turning over

vacation, Senior Vice President Robert Brougham, who a year later was named president, was

and burning cars on the road that I was taking to the Admin Building. This got my

in charge. Aramco quickly shut down most operations.

attention. So I turned to the right, and passed the house of Bob Brougham. Bob in

Like most Aramco executives in Dhahran, Brock Powers normally went home for lunch. For

those days was the senior vice president of Aramco, and a good friend. There was

whatever reason, he ate his lunch at his desk in the Administration Building that day, giving him

a crowd in front of his house. His big Cadillac convertible was being smashed with

a front-row seat as demonstrations in Dhahran turned violent:

staves and shovels. I thought, “I’d better get back home.” So I turned into another

I was sitting at my desk over lunch time … that’s when ‘Rock Wednesday’ started.

street where I was met by a crowd of demonstrators … they were not going to let

I was in the Main Office, looking out over the parking lot of the Administration

met through. I could see they all had staves and ax handles and I thought that I’d be

Building. Here came this group of people, obviously angry, from the direction of the

in trouble if I stopped. So I just kept on. I had an old Land Rover, and they smashed

college, CPM [College of Petroleum and Minerals]. They broke into the parking lot,

the windshield and tried to hit me through it, but I kept going. That was the only

trashed some of the cars, and kept on going.

violence I experienced in Arabia.

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22 energy to the world : Volume two

Bulldozers tow a drilling rig to a new position on the giant Ghawar field in 1965. Three years later, Aramco became the first oil company to produce a billion barrels of crude oil in less than a year.

crude oil reserves, which had been maintained for just such an occasion. In addition, other oil-producing nations, such as Venezuela, stepped up production. Yamani later estimated Saudi Arabia’s loss for the 24 days of June in which the embargo was in effect at $30.2 million.

Ironically, one reason the industrial countries were able to weather the 1967 embargo as

effectively as they did was a direct consequence of the 1956 Suez Canal Crisis, which involved what was essentially a transportation embargo. The need for tankers to make even longer voyages, highlighted by the Suez Crisis, sent shipbuilders to their drawing boards in the late 1950s. By the mid-1960s, a new generation of supertankers, which were seven times as large as the typical tanker in 1956, was afloat. Six Japanese supertankers, each with a 300,000 deadweight-ton capacity, were ready for use in 1967 to ferry crude oil around the world. Oil Glut

The oversupply of oil by the end of the 1960s appeared to be bad and getting worse.

Major oil finds in Alaska and Libya and the likelihood of significant oil production eventually in the North Sea were weighing on world markets. Baldo Marinovic, who had worked for Aramco in the Treasurer’s Department in Dhahran from 1959 to 1961, returned in the fall of 1968 as assistant treasurer to find a ghost town in the making: “I arrived in Arabia in September of 1968, which was very close to the bottom of the oil cycle. There was a glut of crude oil, our production was stagnating, the government was at the company’s neck to produce more to increase the government revenues, the owner companies were telling us, ‘No, we can’t sell it,’ [and] we had reduced the workforce down to almost a minimum.” For example, when he left Arabia in 1961, there were 1,808 American employees in Saudi Arabia. By 1969, that number had fallen to fewer than 1,000. Small fish picked up in shrimp nets are returned to the sea by a crewman aboard a trawler in 1966, a year in which the firm he worked for increased its capacity to clean and freeze shrimp for export to the United States. Aramco had provided technical assistance and a loan guarantee to help launch this Saudi business three years earlier.

A seismic exploration team sets off an underground explosion and records the shock waves in the 1960s. The data were used to create a diagram of subsurface rock structures.

Eventually, the crowd left the oil compound at Dhahran and marched on the nearby U.S. Consulate. There they caused some minor property damage before being dispersed by the Dammam director of Public Security and a small group of policemen. There was no loss of life among the targets of the protestors or the protestors themselves, and the only injury on record occurred when an Algerian student broke his leg while attempting to tear down an American flag at the consulate. Still, many American families were severely shaken by the incident and were temporarily evacuated to various sites in Europe at company expense over the next several days. The Middle Eastern oil-producing states rushed to show their solidarity with Egypt, Syria and Jordan. Even before the Six-Day War was over, Saudi Minister Yamani had instructed Aramco not to ship oil to the United States or the United Kingdom due to their support of Israel. By June 8, the total flow of Arab oil from the Middle East had been reduced by 60 percent, with no oil moving through the Suez Canal, Tapline or other pipelines stretching from the Gulf region to the Mediterranean. Aramco’s oil production stopped completely from June 7–13, and the vast majority of the company’s Saudi employees stopped going to work. The selective embargo failed to do any significant damage, except to the income of the oil-producing states themselves. U.S. and European officials worked closely, with a few exceptions, to reroute tankers and otherwise allocate supplies. Production by American oil companies, including Aramco’s owners, increased by nearly 1 million bpd, partly compensating for the 1.5-million-bpd decrease in Saudi oil exports. The United States also tapped government

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24 energy to the world : Volume two

End of an Era

The Tom Barger era at Aramco came to an end in 1969, when he stepped down

as CEO. Despite the convulsions around the world and in the Middle East, the government and Aramco continued to maintain fairly strong relations throughout the 1960s. Their comity was due at least partially to Barger’s close adherence to the guiding principles he elucidated in 1960, the bedrock of which was his belief that strong relationships would keep the partnership stable and allow both the Kingdom and the company to persevere. Aramco President and CEO Tom Barger and Minister of Petroleum and Mineral Resources Ahmed Zaki Yamani examine a model gas injection plant in Aramco’s Dhahran offices circa 1963. The two worked closely together from Yamani’s appointment in 1962 to Barger’s retirement in 1969.

Throughout his tenure, Barger distinguished himself as an oilman and as a skilled diplomat and friend to the Saudi people. From his earliest days in Saudi Arabia, he understood that extracting and moving oil was only part of the business. Most significant, his leadership was driven by one powerful insight: Production is hard, but partnering is harder. As he rose to lead Aramco, Barger was convinced that the people side of the business would determine its eventual success or failure.

Barger was succeeded as CEO by Brougham (1969–1970) and Liston F. Hills (1971–1973).

Neither served in the post long enough to have a dramatic impact on the company. It was not until Frank Jungers’s term (1973–1978) that another leader put his stamp on Aramco’s development.

As the 1960s drew to a close, the government pushed for more control over the oil business

and additional income from it to fuel development. But it also realized the importance of retaining oil company expertise and ready access to Western markets. The relationship between the Kingdom and Aramco was about to be dramatically transformed, reflecting those two goals.

Employees head home after a day’s work in 1966. The large gateway was built to commemorate an earlier royal visit.

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26 energy to the world : Volume two

chapter t wo

Boom Time

Ras Tanura, North Pier, 1970.

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28 energy to the world : Volume two

The 1970s proved to be a time when Aramco’s ability to serve the interests of both its shareholders and the Saudi government was strained almost to the breaking point. A booming oil market put more money in the hands of both entities, yet left both eager for more. Saudi Arabia sought to use its bounty to intensify development plans for the country. The boom also prompted every Middle Eastern oil-producing country to seek ways to shift control of global oil markets from Western oil companies to the countries that owned the commodity. Both of these movements severely tested Aramco’s ability to deliver on its promises to its shareholders as well as the government.

Frank Jungers, Aramco’s CEO from 1973 to 1978, was intimately involved in some of the most

dramatic events to shape Aramco as well as Saudi Arabia. Jungers was at the center of the decisionmaking and implementation process, from the Saudi government’s push to obtain an ownership stake in the oil company to operations during the oil embargo stemming from the October 1973 Arab-Israeli war. Jungers was also at the helm during the development of a system to capture, rather than flare off, the natural gas produced with crude oil and use it to fuel domestic industrialization, as well as the drive to integrate and enhance electric power generation in the Eastern Province. In fact, he was so deeply imbedded in the integration of Aramco and Saudi Arabia that at times his actions were at odds with the wishes of Aramco’s American shareholders. The mounting tension between the CEO and the shareholder-controlled board of directors played a major part in his decision to resign at the relatively young age of 51. Yet, despite his role in many events with a truly global impact, Jungers saw his tenure at the top of Aramco in more personal terms. “The development of Saudis was my major accomplishment,” he said, “because that had a lasting impact.” ”Right Through the Roof”

Brock Powers was sure he had made a mistake. He was in Aramco’s

New York office in late 1969, serving as liaison with the four shareholding companies. Occasionally, The early 1970s saw global oil demand turn sharply upward, prompting Aramco to increase its crude oil processing capacity, including that of Abqaiq, shown here.

Powers must have felt his full-time job was tracking the shareholders’ changing monikers, as The Texas Oil Company was renamed Texaco (1959), Socony Vacuum started calling itself Mobil (1966) and Standard Oil of New Jersey became Exxon (1972). If he had stayed long enough, he could have been on hand for the creation of Chevron (1984), formerly Standard Oil of California. But part of his actual job was to gather the advanced two-year “nominations,” or projections of the amount of crude oil each company required per calendar quarter. For U.S. antitrust reasons, each shareholder had to submit its sealed numbers directly to Aramco. When Powers totaled the 1969 numbers, the result was astonishing: “I couldn’t believe it. The nominations were right through the roof. They were astronomical, compared to the base we were operating on … so I called everybody back and they all confirmed them, and that’s what they wanted.”

One of Aramco’s most influential executives, Frank Jungers served as board chairman and CEO from 1973 to 1978. Throughout his 30 years with the company, he was a staunch advocate for development of the Saudi workforce, and the policies he implemented reflected those beliefs.

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30 energy to the world : Volume two

For the previous few years, Aramco’s annual capital budget (spending on equipment and

In 1970, U.S. oil production reached a level never to be attained again, peaking at 9.63

construction projects) had been roughly $40 million. Powers was among the first of Aramco’s

million bpd (nearly three times Aramco’s average daily production of 3.5 million bpd). At the

executives to realize that the company was about to enter a new boom era. But he knew that

same time, U.S. oil consumption was 14.7 million bpd, accounting for 31.4 percent of global oil

an extraordinary increase in demand could not be met by a few simple turns of the global oil

consumption. In response to the domestic supply-demand gap, U.S. President Richard M. Nixon

spigot. This would not be a spike, a mere hiccup along an otherwise comfortably modest incline

relaxed import controls. Nixon’s advisers determined that the need for additional oil trumped

in demand. If the news on Powers’s desk was right, this “spike” might last for decades. And long

concerns about political instability in the Middle East, despite mounting Israeli-Palestinian tensions

before Aramco could enjoy its swelling coffers, there would be more immediate consequences,

and the administration’s widely perceived pro-Israel slant.

and they would be painful. He made his case at the next Aramco executive committee meeting:

I laid out what it meant in terms of [the] cost that was going to come about as a

Expansion Mode

The company shifted into expansion mode in a manner of months, marking its

result of this, and do you guys really want us to gear up to do this? It means hiring lots

most dramatic commitment of resources since the end of World War II. In 1971, Aramco produc-

of people. It means building lots of facilities that we don’t have on the ground now.

tion jumped 27 percent from the previous year, to 4.5 million bpd. Adding or expanding GOSPs

It means a capital budget of billions of dollars a year. And they all agreed they were

increased production capacity by 700,000 bpd. Two GOSPs were completed in the Shedgum

going to go ahead with it, because they were very parsimonious, and they weren’t

area and one in the ‘Ain Dar area. The second million-barrel crude oil storage tank was completed

going to build anything that they didn’t need.

in Ras Tanura. And delivery capacity at the Ras Tanura Terminal increased 18 percent with the installation of another loading system between the tank farm and Sea Island. Walter Dell’Oro, a superintendent in Exploration and Operations at the time, recalled that

As the 1970s began, Aramco’s administration buildings and adjoining residential areas in Dhahran rapidly filled to bursting with workers and their families as an oil production and building boom gathered momentum. In 1975, the year this photo of the company’s headquarters in Dhahran was taken, the workforce had expanded more than 21 percent over the previous year.

the crash building program of the 1970s led directly to Saudi Arabia’s serving as the “swing producer” in world oil markets from that period onward:

Just how unexpected was the demand surge represented by the shareholder nominations

can be seen by comparing them to corporate studies prepared for Aramco management. The 1970 forecasts estimated a rise in production, albeit a gradual one—gradual enough, in fact, to be easily handled while continuing the company’s plans to reduce its in-country payroll. These forecasts predicted that over the next 10 to 15 years, Aramco could cut its workforce by at least 40 percent, due mainly to automation and better training. The report predicted the number of workers would fall from the already low level of nearly 11,000 in 1970 to just 6,000 a decade later, with a mere 400 Americans on the payroll.

Powers was right: The corporate studies were, for the most part, wrong. Global demand

for crude oil in the early 1970s was triggered by relatively robust economic growth in the United States, Europe and Japan following years of limited investment or even underinvestment by Aramco and most other oil companies. That combination resulted in the biggest oil boom since the postwar surge in the late 1940s. A Gulf Oil memo written in March 1970 noted that Gulf’s 1968 estimates of oil demand in the West were running 8 percent below actual consumption. The memo warned, “If once again our estimates of future free world demand prove low, then a strain on productive capacity may be approached before 1980.”

A supertanker loads crude oil at Ras Tanura’s offshore Sea Island Terminal in 1967. The terminal began operations with two berths in 1966, opened two more berths the following year and added another two berths in 1969.

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32 energy to the world : Volume two

Since Aramco had a superabundance of oil in the ground with more than adequate

Farewell to Tapline

oil pressure, the bottleneck was in the surface facilities. If someday Aramco wanted to double production for a month or two to offset a disruption in the world oil supply

Tapline once played a critical role in Aramco’s oil infrastructure, transporting half a

in some other part of the world, it could be done in a matter of days if the surface

million barrels of oil a day from the oil fields of Saudi Arabia’s Eastern Province to

facilities were in place.

the shores of the Mediterranean, thus avoiding both the circuitous route around the Cape of Good Hope and the expense of the Suez Canal. Advances in technology

A company with enough spare capacity to dramatically increase production to meet a

in the 1950s and ‘60s made possible the construction of larger ships capable of

shortfall is called a “swing producer.” The extra investment in surface oil facilities can be paid

carrying substantially more oil, however, making the seaways more economical

off rapidly as oil prices tend to skyrocket when there is a shortage.

and causing Tapline to fall out of favor.

Oil industry experts estimated in 1972 that there was a “cushion” of only a scant half-million

Tapline’s use further declined as repeated conflicts wracked the region and left

barrels of oil between global supply and demand. Over the next few years, Saudi Arabia assumed

the pipeline vulnerable to sabotage and jeopardized its reliability. In addition to these

the de facto role once held by the United States as the world’s swing producer of oil—a position

problems, Tapline also had to contend with the Syrian government, which occasionally

the country retains to this day. The Saudi share of world oil exports rose from 13 percent in 1970

demanded higher fees to allow oil to flow through the pipeline within its territories.

to 21 percent by 1973.

The construction and production surge continued unabated. Aramco laid nearly 1,300

its corporate headquarters in Beirut. With no sign of stability in Lebanon on the

In 1975, the Lebanese civil war forced the evacuation of Tapline personnel from

kilometers of pipeline, drilled roughly 1,000 wells and built 24 GOSPs, and by 1974, average

horizon, Tapline decided to close down. In 1978, Tapline officials began negotiating

crude oil production had soared to 8.2 million bpd.

the termination of its operating conventions with Lebanon, Syria, Jordan and Saudi Arabia. By 1983, oil no longer flowed through the pipeline to Sidon. A small

A gas-oil separation plant (GOSP) is lifted into position in the Marjan offshore oil field in 1973, part of Aramco’s capital projects program that increased offshore oil processing capacity by 1 million bpd. In addition, eight onshore GOSPs, with a combined capacity of more than 2 million bpd, were constructed in the first nine months of the year.

amount of oil continued to flow to a refinery in Zarka, Jordan, but with the advent of the Gulf War in 1990, that, too, was stopped. That was, in effect, the end of Tapline. Today, all of Saudi Aramco’s oil exports flow through marine terminals on the Arabian Gulf and the Red Sea to tankers that travel either east to Asian markets or west through the Suez Canal or around the Cape.

Help Wanted

To support this increase in production, Aramco’s employment effort shifted into

overdrive. The company opened employment offices across Saudi Arabia and in several other countries. Mustafa Abuahmad, director of the Employee Relations Department during the early 1970s, was exaggerating only slightly when he said, “We were hiring everybody, everywhere. Americans, Filipinos, Indians, many Saudis.” The demand for qualified labor can be seen in the company’s size and demographics from the period. In 1971, Aramco had 10,107 employees, 82 percent (8,324) of whom were Saudis; five years later, the number of employees had almost doubled to 20,067, but only 74 percent (14,837) were nationals. With the oil boom, working for Aramco suddenly took on greater prestige among ambitious high school and college-aged Saudis. When he was entering high school in Dammam in the late 1960s, Abdulaziz F. Al-Khayyal, Saudi Aramco’s senior vice president of Industrial Relations since September 2007, assumed he would follow in his father’s footsteps and pursue a career in government service. That was where the prestigious jobs were for ambitious Saudis, he reasoned. By the time he was in college at the University of California, Irvine, where he earned a bachelor’s degree in mechanical engineering in 1977 and a master’s degree in business administration in 1979, that notion was beginning to change: The transformation happened in about ’73 or ’74 with the first energy crisis and then the expansion, the big expansion. … Aramco went out trying to recruit and the story began to change. But up to that point Aramco was viewed as having limited employment opportunities. They were not viewed as terribly excited about paying professional salaries. They had a program for professional Saudis, but it was limited in scope and most of the people said that Aramco was not the place to go work.

A combined crew of Tapline and oil tanker personnel hoist submarine crude oil loading lines aboard ship in July 1961, an action repeated thousands of times over the life of the Tapline terminal at Sidon, Lebanon.

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34 energy to the world : Volume two

Aramco’s computers, such as the Project Management Department’s IBM shown in this 1970 photograph, were used for numerous tasks, from processing complex seismic data to tracking basic payroll information.

Project Management With capital budgets soaring in the early 1970s, Aramco management saw the need for greater coordination among departments working on major projects. Project design was being done in The Hague in the Netherlands, or London in the United Kingdom, for example, while construction was going on in Saudi Arabia. Officials involved in each activity tended to blame the other when a project slipped behind schedule or over budget or both. Ed Zinola, senior vice president of Engineering Services, embraced the concept of centralized project management, which was becoming increasingly popular in the United States. In 1972, he named Henry “Hank” Barracano, supervisor of the Electric Power Unit, Aramco’s first project manager.

Additional training programs were put in place for Aramco and its ancillary contractors,

but both struggled to keep up with the flood of new hires. From 1970 to 1975, the number of trainees in Aramco’s Industrial Training Centers jumped from 1,000 to 5,500, although the number of instructors merely doubled. Some locations ran double shifts of classes, and teachers found themselves on their feet for 10 hours a day without relief. Ali Dialdin, then staff adviser for Aramco’s out-of-Kingdom training and later general manager of Training and Career Development, opened two temporary training centers in Egypt, historically one of the Middle East’s biggest exporters of educators. But Dialdin soon discovered that even in other countries Aramco’s demand for teachers could not be met. Unimaginable Scale

The scale of Aramco oil operations, already enormous by any measure,

The appointment of a project manager did not stop the arguing, “but they would

increased almost exponentially. Frank Fugate, who oversaw company construction projects in the

go through me … then I could kick these guys” to get them to take corrective action

early 1970s and eventually rose to become a senior vice president in the company, recalled that

when necessary to keep projects on track, Barracano said. The first project completed

“the capital program went from $40 million to $450 million, and it got up to about $5 billion a

on his watch was the 600,000-bpd Berri crude project in 1970. “I moved to London,

year with a backlog, as I recollect, of about $7 billion. We had to get the people in and get the

where the design was being done by Fluor, to oversee design and procurement. Then

construction camps going. We went to suppliers and bought space in their shops for a year. We

when that was fairly well done, I moved back to Arabia. Even though that was the first

went to pump shops and bought their entire capacity for a year.”

one, it came in on time and in the money. I’ve always been proud of that,” Barracano

To take just one example, the production capacity of the giant Safaniya offshore field grew

added. Project management played an increasingly vital role in the ensuing decades

dramatically, from 200,000 bpd to 1.5 million bpd. On this and similar jobs, everything the engineers

as the company took on and successfully completed construction of several oil and gas

and construction crews thought they knew about the scale of oil industry work was tossed out

facilities that set new standards for the industry.

Aramco’s implementation of centralized project management in the 1970s allowed it to more efficiently complete numerous capital improvement projects, including the Qurayyah Seawater Treatment Plant, shown here in 1979.

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36 energy to the world : Volume two

the window. Barges were laying pipelines to the offshore field at the same time offshore rigs were drilling new wells. Giant pumps were installed to move the oil onshore for processing. The installation was bigger than anything ever done in the oil business. For economies of scale, two giant pumps took the place of 10. To avoid maintenance shutdowns, a third giant pump was ordered and kept on standby.

Aramco was redefining the state of the art in oil field facilities on a real-time basis. In most

cases, the only limitation on the company was availability of materials in the market—what it could find and whether manufacturers were willing to rethink their production processes to

King Khalid, left, cuts the ribbon on October 29, 1977, to open the Berri NGL Center while Minister of Petroleum and Mineral Resources Ahmed Zaki Yamani and Aramco CEO Frank Jungers look on. The first of the Master Gas System plants to open, the Berri NGL Center supplied treated gases as fuel and chemical feedstock to the industrial complex at Jubail and natural gas liquids for export.

accommodate Aramco’s specifications regarding size and/or quantity. The company also kept several computers busy running “what if” scenarios to ensure that construction stayed on schedule if, for example, the shipment of a particular component was delayed. The limited capacity of Dammam Port became a bottleneck for the inflow of additional equipment and supplies, especially as the revenue generated by the oil boom spurred rapid development of other Saudi industrial and construction projects. To avoid congestion, Aramco adapted by lightering in material from outside the existing port areas and using heavy cranes to lift the equipment onto waiting trucks for delivery.

The F. A. Davies Aramco had discovered the Marjan and Zuluf offshore fields prior to the oil boom of the early 1970s, but the company had not fully determined the fields’ size. Rather than commit to building an expensive offshore pipeline or wait until additional survey work helped delineate the fields, Aramco engineers decided to adapt an approach that one of the company’s shareholders, Exxon, had used in the offshore oil fields of Nigeria. In this system, as adapted by Aramco, oil from the new offshore Zuluf GOSP would move through underwater lines to a floating storage vessel 64 kilometers offshore, where tankers could then take on crude oil. Robert Luttrell, superintendent of the Safaniya Producing Division, was put in charge of the project, which, as was typical of such large-scale affairs, involved Aramco staff and contractors around the world. He visited the Exxon facility in Nigeria, huddled with Aramco’s With the Zuluf offshore field entering production in 1973, the F. A. Davies, a converted oil tanker, served as a floating storage vessel.

engineering and design staff in The Hague and then flew to Japan with an Exxon maritime captain to purchase a tanker. The vessel they bought in Nagasaki had a capacity of 1.8 million barrels of oil—far larger than the tanker Exxon had used in Nigeria. The ship had to be modified for its new role, and its living quarters were enlarged. The project also required two single-point moorings: one to deliver oil to the floating storage vessel and another, 1.6 kilometers distant, for tankers taking on oil. (Single-point moorings were also used at Ju‘aymah Offshore Terminal, which opened in 1974 north of Ras Tanura with an initial capacity of 1 million bpd.)

Finding a crew to operate such a novel craft proved to be more difficult than Aramco

officials had expected. They eventually retained a British crew from well-regarded providers Common Brothers to run the vessel but not without having to modify the typical Aramco operating contract. The crew demanded an “out” clause after a certain period in case Aramco’s creation proved to be a failure. “They didn’t want to ruin their reputation [by] being involved in something that didn’t work,” Luttrell recalled with a chuckle. The Common Brothers need not have worried. The F. A. Davies (named after Fred Davies, Aramco’s influential early CEO) worked flawlessly. In 1976, Aramco began building a second offshore GOSP in the Zuluf field to process increased production. By the 1980s, Aramco decided the size of the Marjan and Zuluf fields warranted the construction of a pipeline connecting them to onshore oil processing facilities. The F. A. Davies was then reconfigured and added to Aramco’s tanker fleet.

Barge 136, nicknamed the “Queen Mary,” supplies a drilling platform in the Safaniya field with power and drilling mud in 1971. Between 1970 and 1971, crude oil production rose 27 percent, propelling Saudi Arabia into third place among oil-producing nations behind the United States and Russia. The following year, crude oil production increased another 27.5 percent.

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38 energy to the world : Volume two

“The Buyer’s Market for Oil Is Over”

Strings of drill pipe stand ready on a drilling rig at Tamayshah in the Rub‘ al-Khali in March 1979. This was a test well in the Khuff zone at 3,471 meters and part of Aramco’s accelerated gas exploration program in the 1970s.

As the 1970s began, Aramco’s shareholders and the

other major global oil companies held to the position that they remained in control of oil prices. OPEC had been in existence for a decade, and had little to show for its speeches and conferences. Saudi Minister Yamani was frustrated with OPEC’s lack of cohesion and in 1968 led the formation of the Organization of Arab Petroleum Exporting Countries (OAPEC), which initially included Saudi Arabia, Kuwait and Libya. The purpose of OAPEC was to give leading Arab oil producers more control over their fate.

Jungers, Aramco’s chief negotiator with the government since 1965, recalled riding on a plane

with Yamani in early 1970. The price of oil was $1.80 a barrel, almost the exact price it had been a decade earlier. However, when adjusted for a decade of inflation (which averaged 2.75 percent annually), the $1.80 barrel of crude in 1970 was worth much less than its 1960 equivalent. For members of OPEC, Yamani complained, real income had actually declined over that period. With the demand for oil rising sharply, Yamani argued for a 9-cent-a-barrel increase, saying that he could get the rest of OPEC to hold prices at that level if Aramco’s shareholders went Japanese brokers signal “buy” at the Tokyo Stock Exchange on December 27, 1973, as reports circulate that the Arab oil supply cutbacks against Japan will ease.

along. If the other countries raised prices first, there might be no controlling the rate of increase, Yamani warned. Jungers personally agreed with him but had to pass along the request to the shareholding companies. The Aramco shareholders refused, and months of meetings followed. Nerves frayed and tempers flared occasionally on both sides as the standoff continued.

Petroleum Company had agreed to higher prices, breaking the oil industry’s united front. Other independent oil companies and the major producers followed suit, raising the posted price of Libyan crude 30 cents a barrel to $2.53 a barrel and paying higher taxes as well. The Aramco shareholders and other international oil companies felt the world shifting beneath their feet. They began meeting in groups (joined by a U.S. government representative to avoid antitrust concerns) to discuss options and hammer out common policies. Meanwhile, the Shah of Iran hosted a showdown of sorts between oil-producing countries and the oil companies themselves in early 1971. Representing the Arab producer states were Yamani of Saudi Arabia, Iraqi Oil Minister Sa‘doun Hammadi and Iran’s Finance Minister Jamshid Amouzegar. Representing The first OPEC country to initiate a price hike was Libya, which began pressing for higher

the other side was the Group of 23, consisting of 16 U.S. companies, six Western European firms

prices in early 1970. It argued these were justified because of the low sulfur content of its oil,

and one Japanese concern. Speaking for the Group of 23 was George Piercy, Exxon’s director

which made it easier and less expensive to refine than many other grades of crude oil. A further

responsible for the Middle East, and William Fraser, a BP director and attorney.

argument was its proximity to Europe, a factor that became all the more pertinent when, in May

1970, Aramco was forced to halt all shipments of oil through Tapline after it was damaged in

Agreement on February 14, 1971. It stipulated an increase of 35 cents a barrel for light crude

After weeks of negotiations, representatives from the two sides finally signed the Tehran

Syria, thus increasing European reliance on Libyan oil. In June and August of 1970, Libya imposed

and 40 cents a barrel for heavy crude from the Arabian Gulf. (Crude oil is classified according to

output restrictions on foreign oil producers, and by September, American-owned Occidental

density, or specific gravity. The lighter the crude oil, the more valuable products it yields when

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40 energy to the world : Volume two

refined.) Furthermore, to account for inflation, the price of a barrel of oil would increase by 5

Japanese-made cars bound for world markets crowd a pier in the port of Yokohama in March 1975. One aftereffect of the 1973 oil embargo was the rise of smaller, more fuelefficient cars. The United States set fuel efficiency standards for new cars, mandating a doubling of average mileage from 13 miles per gallon to 27.5 within a 10-year period.

Since the late 1960s, Yamani in particular had advocated the Saudi government’s position

cents a year for the following four years, as well as another increase of 2.5 percent a year for the

of participation, with producing nations acquiring ownership while preserving the oil trading

four years after that. Finally, the oil-producing countries’ percentage of company profits would

and marketing structures. That stance enabled him to better resist calls for nationalization by

increase from 50 percent to 55 percent. The accord raised the price of Arabian Light to $2.17 a

aggressive oil-producing states. Jungers recalled: “Participation was Yamani’s avowed idea

barrel and the price of Arabian Heavy to $2.125 a barrel.

that the government would buy into Aramco and become a true participant and thereby get to

This agreement has been interpreted in many ways over the years, but one thing is certain:

know the shareholders’ problems intimately. Through this method, the Saudis would become

Oil-producing countries gave the oil companies a very fair deal. The oil-producing countries

a shareholder and fight off the rest of the producing governments, who were hell-bent to

needed this hefty adjustment to counter years of rapidly increasing inflation, which averaged

nationalize.”

5.92 percent in 1970. Furthermore, even setting inflation aside, these countries simply needed

Aramco tried to control the participation debate, with Jungers at one point in 1971 floating

to play catch-up with price developments elsewhere in the world. For example, the price of a

the idea that the Saudi government could participate in 50 percent of the profits from new fields

barrel of American domestic crude, which was protected from cheaper foreign oil by U.S. import

developed after that point, rather than take an ownership stake in the entire company. Yet while

quotas, increased by 45 cents in 1969–1970 alone.

Aramco was dragging its heels on participation, varied forms of nationalization were gaining traction

While the Shah of Iran and others hailed the agreement as ushering in a new era of price

elsewhere. In 1971, Algeria dispensed with further negotiations and took 51 percent ownership

stability, few oil company executives shared their enthusiasm. As Shell Oil Company Chairman

of the French oil operations in its country. The following year, Libya nationalized BP’s holdings and

David Barran remarked following the Tehran meetings, “There is no doubt that the buyer’s market

later took 51 percent control of other foreign operators, including Occidental. Iraq also nationalized the Kirkuk concession, the last remaining holding of IPC.

for oil is over.”

Yamani seemed to despair, feeling that the Aramco shareholders were not getting the Even while negotiating with the oil-producing states over raising prices, the oil

message. “There is a worldwide trend toward nationalization and Saudis cannot stand against

companies in 1971 continued to resist discussing an even more daunting matter: the groundswell

it alone,” he warned. “The industry should realize this and come to terms so that they can save

Participation

among producing nations in favor of direct participation in the ownership of the oil companies

as much as possible under the circ*mstances.”

themselves, if not outright nationalization.

By 1972, the Saudi Minister had finally convinced some members of OPEC to push for a

united front on participation. Yamani described it as the best way to give oil-producing countries ownership interests while maintaining a strong pricing structure for OPEC. He argued that widespread nationalization would inevitably lead to cutthroat price competition, as countries gave in to domestic pressures to maximize oil revenues as soon as possible. As early as 1969, he had argued that nationalization would trigger a “dramatic collapse in the pricing structure” as producing nations pumped more oil to meet revenue targets in the face of declining prices. The major foreign oil companies operating in the Arabian Gulf, seeing no alternative by early 1972, reluctantly agreed to engage in serious participation talks with governments in the region. Aramco’s legal staff decided to get out in front of other companies and draft a participation agreement. Aramco General Counsel Bill Owen turned to one of his assistants who specialized in tax law, Leslie Lewis, with what would be one of the biggest assignments of his life. “Les,” Owen said as he walked into Lewis’s Dhahran office one day in early 1972, “I’ve chosen you to be my right arm, and you and I are going to produce the first draft of the agreement relating to participation. … At the first meeting with the shareholder company counsel we will table the first draft, and you’re going to write it.” The negotiations took place during the spring and summer of 1972. A group of 100 to 150 attorneys, accountants and oil industry experts followed the globe-trotting Yamani as he convened meetings at hotels and conference centers around the world to thrash out the details of participation. The longest sustained set of negotiations occurred at Beit Meri, a summer resort in the mountains of Lebanon.

By October 1972, the negotiations had borne fruit. The General Agreement on Participation,

which was based on Lewis’s draft, granted 25 percent participation to the countries. The pact was agreed to by the oil companies and signed by Saudi Arabia and Abu Dhabi in Riyadh on December 20, 1972 (with Saudi television capturing the moment), effective January 1, 1973. Kuwait and Qatar signed the agreement the following month.

Saudi ownership reduced the percentage held by the four existing shareholders, with Exxon,

Texaco and Chevron now owning 22.5 percent and Mobil 7.5 percent. Ownership participation was supposed to incrementally increase to 51 percent by 1982, in what both sides anticipated would be a relatively stable process in terms of maintaining prices and transferring ownership. That, at least, was the plan.

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42 energy to the world : Volume two

The Producers Take Control

Arab-Israeli antagonism seemed to intensify week by week in

amicable price negotiations were inflamed by war fever. OPEC was demanding a 100 percent

the early months of 1973. Arab spokesmen—particularly Palestinians—pressed Israel to relin-

increase, from roughly $3 to $6 a barrel, in the posted price of crude oil. The companies were

quish territory gained in the 1967 war. Ever-tighter supplies in the West drove oil prices higher,

offering what, until the outbreak of war, had sounded to them like a more than fair 15 percent

highlighting Western reliance on imported oil, especially Middle Eastern oil. Understanding

increase of 45 cents a barrel.

their obvious advantage, some oil-producing countries increasingly threatened to use the “oil

weapon”—an embargo. The Saudi government made it clear to Aramco officials and American

Arab OPEC countries and Iran reconvened in Kuwait City on October 16. There, they unilaterally

politicians that the situation was making it increasingly difficult to moderate the influence of

raised the posted price 70 percent to $5.11, which was roughly in line with the panicked spot

After no acceptable counteroffers came out of the Vienna meeting, negotiators from

other regional governments indefinitely. As spring gave way to summer, the situation grew

market prices. Despite the ongoing war, the significance of the OPEC price hike—and the bold

progressively worse, as recounted by noted Arab authors M. S. Daoudi and M. S. Dajani in their

unilateralism reflected in the manner in which it was presented—were felt around the world.

book, Economic Diplomacy: Embargo Leverage and World Politics:

The oil producers were clearly in control.

On May 3 [King] Faisal confided to Aramco president Jungers that only in Saudi Arabia were US interests relatively safe, but that even in his Kingdom it would be more and more difficult to hold off the tide of opinion. And in August meetings with Aramco executives, the King began requesting that the US government pressure the Israelis to withdraw from the bulk of Arab territories occupied in the 1967 war.

In the meantime, the participation agreement was already looking shaky, as the more radical

Arab governments began to scoff at the 25 percent participation rate championed by Yamani. Libya, true to form, acted first and in early September 1973 nationalized 51 percent of Exxon’s Esso Libya operations. More uncertainty meant higher prices in the spot market for immediate delivery of crude oil. (The spot market at the time reflected the small amount of oil trading that existed outside the long-term agreements between oil producers and oil distributors.) On September 11, 1973, a barrel of Arabian Light was $3.06 a barrel, up from the $2.17 per-barrel price set by the Tehran Agreement the previous February.

Jungers, with the blessing of Aramco’s four shareholding companies, made a whirlwind tour

of the United States to promote a more balanced approach by America to the Arab-Israeli crisis. The conflict continued to fuel hostility toward America and American companies in the region. Jungers’s focus was the broader U.S. business community, not just those industries directly tied to energy. Crisscrossing the country in a matter of days to press his case, he met with 38 CEOs of major U.S. companies. After hearing his argument, a number of major companies backed his position.

Several oil company executives spoke out against American and Western support for Israel.

At an address before the Independent Natural Gas Association of America in Scottsdale, Arizona, Maurice Granville, chairman and CEO of Texaco, called for a “more even-handed policy” regarding the Arab-Israeli dispute: “We must feel concern when those who have been so close to us urge us to review our policies. When such long-time friends assert that we are not being fair and even-handed, it seems only sensible to pause and examine the actions about which they express concern. … To dismiss without some concern the viewpoint of those who feel wronged is to neglect a significant aspect of the nation’s energy policy.” Granville was not alone; Mobil Oil took out a series of advertisem*nts in The New York Times to press the matter. Otto N. Miller, Socal’s chairman, had denounced America’s stance six weeks earlier in his July 26, 1973, letter to shareholders, calling for a greater understanding of “… the aspirations of the Arab people, and more positive support of

The following day, the oil-producer representatives rejected a call from the Iraqi representa-

their efforts toward peace in the Middle East.” Miller and his company received a lot of flack from

tive to nationalize all American businesses in the Arab world. After Iraq’s representative stormed

the American media, and protests took place outside Socal’s headquarters, with some protestors

out in protest, those remaining agreed to an embargo, the first since the 1967 war. They agreed

even attempting to storm the building. But Socal stood its ground.

to cut production 5 percent from September levels and to continue to cut output by 5 percent a

month until major oil-consuming countries stopped supporting Israel. Some countries immediately

Jungers returned to Saudi Arabia after his trip and was debriefed by King Faysal. The King

wanted to know every detail, especially the response from the American business leaders. Both

doubled their first month’s cut to 10 percent.

of them expected the issue to be taken up again at the next OPEC meeting, scheduled for early

October in Vienna, Austria.

19, following resupply shipments by the Soviets to Egypt and Syria, led the Arab oil producers and

As oil company executives arrived there on October 6, 1973, they heard the news: Egypt

Iran to declare a total embargo on oil shipments to the United States. The Netherlands, also an

and Syria had launched a coordinated surprise attack on Israel during the Jewish holiday of Yom

active supporter of Israel, received the same treatment. Shipments to other countries in Western

Kippur and had scored impressive early gains. What the oil executives had hoped might be

Europe and to Japan were also reduced in response to their support for Israel.

President Nixon’s announcement of a $2.2 billion military aid package to Israel on October

Drivers in the United States, such as this motorist in Connecticut, faced shortages of gasoline in the wake of the OPEC oil embargo. The embargo also impacted consumers in Western Europe and Japan, and was a pivotal moment in the relationship between oil companies and producing nations.

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44 energy to the world : Volume two

Students gather in the courtyard of the women’s campus of Jiddah’s King Abdulaziz University in 1973. Founded in 1967 by a group of businessmen, the university was absorbed into the Kingdom’s university system in 1971. The school opened with a handful of students, but by the time this photo was taken, total student enrollment was around 2,500.

As the embargo took effect, Jungers and other Americans working for Aramco faced the

most crucial decision of their professional lives. Critics in the United States were calling them traitors for complying with the embargo that was contrary to the interests of their country. Several members of the U.S. Senate Subcommittee on Multinational Corporations blasted Aramco. Senator Henry M. Jackson of Washington state claimed Aramco’s adherence to the embargo was a “flagrant case of corporate disloyalty.”

Senator Jacob K. Javits of New York accused the oil company of cooperating with the

Saudis to increase the profits of its shareholder companies: “Obviously, it is to their [the Arabs’] interest to raise prices. They determine even your profit. They determine how much of the deal you may own. And yet what they are doing imperils this country and this world. … The only persons talking to these governments are companies who have their own profits, their own stockholders and their own private interests to protect. That is an impossible situation.”

Aramco denied all the charges. The company declared that its actions were motivated by

expected reprisals by King Faysal. Aramco was obviously worried that it would be cut off from its only source of crude oil. According to its statement, Aramco “had no choice but to follow instructions regarding cutoff on deliveries to the U.S. military of products manufactured from Saudi Arabian crude. … The embargo action was taken by a sovereign state and Aramco’s compliance came as the result of a direct order and had nothing to do with ‘patriotism.’” As its payroll grew to fill the manpower needs of the Master Gas System, Aramco built new communities and revived older ones, such as ‘Udhailiyah. Shown here in February 1977, the isolated camp, located 100 kilometers southwest of Abqaiq, had been mothballed since 1959.

Jungers was convinced that if Aramco did not cooperate with the Saudi government,

nationalization of the oil company was a foregone conclusion. Furthermore, he feared nationalization would remove any American influence on Saudi oil policies, putting American security on

A science lab experiment commands the attention of students at King Abdulaziz University in 1973. A donation in 1973 from Aramco helped finance the construction of a library on the women’s campus.

even shakier ground: “We knew exactly where every barrel of oil that was exported went, and monitored it. This was under threat of complete nationalization. There was no doubt about this. And we did it in lieu of being nationalized. We had no choice.”

Majority Stakes

The embargo also sounded the death knell for the participation agreement,

even though it was less than a year old. In December 1973, Kuwait, whose parliament had never While some in the United States raised the possibility of military intervention if the embargo

ratified the 25 percent participation agreement, announced plans to assume 60 percent ownership

turned into a stranglehold on the U.S. economy, cooler heads prevailed behind the scenes. The

of Kuwait Oil Company, which was jointly owned by Gulf Oil and BP. That same month, Yamani,

embargo, while relatively short-lived, reverberated through world economies and politics for years

at a meeting in New York, was quoted in BusinessWeek as saying that 51 percent participation

to come. From October 1, 1973, to January 1, 1974, the price of a barrel of Arabian Light crude

was “not satisfactory.” The magazine added, “In London, the center for Middle East oil watchers,

soared from $3.01 to $11.65. That previously unimaginable $8 jump in oil prices followed three

the betting is that Faisal will eventually demand 100 percent ownership.”

decades of oil price fluctuations in a relatively narrow band above or below $2 a barrel. The U.S.

Saudi government participation in Aramco under an OPEC agreement went to 60 percent

role in brokering peace talks among Israel, Egypt and Syria contributed to the decision to lift the

the following year, in 1974. The government thought it was a reasonable compromise under the

embargo in January 1974.

circ*mstances, as other OPEC members were pressing for complete nationalization immediately.

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46 energy to the world : Volume two

The Saudi government’s majority stake in Aramco as of 1974 made little if any immediately

Sharing Success

noticeable impact on the lives or careers of expatriate workers. Despite false scare stories that cropped up periodically in the U.S. media during the next few years warning that mass firings of Americans

Khalid Ali Alturki, back row, far right, departed Saudi Arabia in July 1960 on an Aramco scholarship to an out-of-Kingdom college. The 10 other students pictured are, front row, left to right, Ibrahim A. Al-‘Afaleq, Salah A. W. Ghanim, ‘Abdal-‘Aziz Al-‘Abid, Saleh A. Al-Tu‘aimi and ‘Abd Allah Al-Faisal, and back row, left to right, Nassir M. Ajmi, Abdul Rahim Framarzi, Ni‘mah S. M. Al-‘Awwami, ‘Abd al-Rahman Al-Bubshait and ‘Abd Al-‘Aziz D. Al-Falih.

by Aramco were imminent, the expatriate communities worked and lived much as they had before. The government, and Yamani in particular, made it clear Saudi Arabia valued the expertise that expatriate workers brought to Aramco and that they were a key ingredient in the company’s success. “True Saudization”

When Jungers was named chairman and CEO in late 1973, he quickly realized

the pace of training Saudis for progressively more senior positions at the company had fallen behind expectations he and others had set at the departmental level in the 1960s. A 1972 study delivered to Aramco management concluded that at the then-current rate, just 28 percent of Aramco executive and department-head positions would be held by Saudis by 1990. The study also predicted that unless something changed, Saudis, who held a mere 12 percent of management jobs in 1972, would hold only 54 percent of the managerial and professional jobs at Aramco by 1990. As of 1972, only four of the company’s 44 departments were led by Saudis: Mustafa Abuahmad, director of Employee Relations; Faysal M. Al-Bassam, manager of Public Relations; Ali Al-Naimi, manager of Southern Area Producing; and Sa‘id M. Tahir, manager of Local Industrial Development. This rate of advancement was unacceptable, Jungers reasoned, especially in light of the participation agreement giving the Saudi government a direct ownership stake in Aramco: “This was not so much In 1974, Faysal M. Al-Bassam became the first Saudi to be named a vice president of Aramco.

because percentage increases in Saudi government ownership demanded automatic corresponding increases in Saudi management. … We wanted to be sure that Saudis would be ready to move up. Realistically, we had to expect that participation could accelerate demands for Saudi management.” One of the biggest bottlenecks preventing Saudis from advancing to senior positions was the Saudi Development Committee, which as of 1973 seemed to be a contradiction in terms. Saudis attending colleges or universities were divided into two groups. The A-group members were in their junior or senior year and working toward a four-year degree. The B-group students were in their first two years of studies and came up for review after their second year. Whether they would be allowed to continue with their college educations at the company’s expense was usually left up to the managers who had sponsored them.

Today, Khalid Ali Alturki is one of the most successful businessmen in Saudi Arabia, but when

he grew up in al-Khobar it was in a family of only modest means. He joined Aramco as an office

In the early 1970s, the unsettling fact was that these managers denied permission to as

many as 60 to 70 percent of the B-group students to continue their schooling and earn a degree. It

boy in 1948 because it was, he explained, “the only place in Dhahran to get any schooling. …

was a simple but shortsighted decision: The managers benefited most by getting their employees

But you had to be an Aramco employee.” When he showed promise in his part-time classes,

back on the job. Dialdin, the general manager of Training and Career Development, termed the

Aramco sent him to the International College in Beirut. From there, he went to the United

B-group students “victims, because without a four-year degree they had no hope of advancing

States, where in 1965 he earned undergraduate and graduate degrees in international

into management positions.”

relations from American University in Washington, D.C. In 1968, he returned to the United

States and received an MBA from Stanford University.

Jungers demanded that the committee act in the company’s best interest and support the

deserving B-group students. As a first step, the Saudi Development Committee set about finding

After three more years at Aramco, Alturki left the company and went into business for

sponsors from its major departments who understood the long-term objectives of the program:

himself. In 1973, this was an unusual choice. As he recalled, “I think I was the first and only

to build the next generation of Aramco leaders. As a result, word quickly spread throughout the

one in my generation, with my education at Aramco, that left … just at the time when all

company that Jungers was serious about promoting capable Saudis to management positions.

the Saudis were starting to take big positions in executive management.”

By the end of Jungers’s first full year at the Aramco helm, the number of Saudis holding

Although he did not rise through Aramco’s ranks with his former Saudi colleagues,

supervisor positions—the starting rung on the management ladder—had jumped by 23 percent

Alturki shared in their success. His first business was an electrical contracting company,

to 366 out of 820 positions. In August 1974, Faysal Al-Bassam was named vice president of Public

but he expanded into the construction, construction materials and oil and gas sectors

Affairs, the first Saudi to be appointed vice president. “The foresight was not there until Jungers

during the 1970s and early 1980s in time to benefit from the oil boom. Alturki, and many

became chairman,” said Dialdin. “True Saudization began to take place after that.”

Saudis like him, were beneficiaries of Aramco’s training and support.

Pressure for change came from the Saudi workforce too. Ali Al-Baluchi, who had been a

B-group student and had fought successfully to continue his education, recalled: “In the mid1970s, a group of senior Saudis met with Shaikh Ahmed Zaki Yamani in House 17 in Dhahran and discussed with him the unjustified slowness in promoting Saudis to higher positions. Soon after that, more actions began taking place.”

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48 energy to the world : Volume two

Ambitious Saudis found that by the mid-1970s new career opportunities were open to

them, and that more and more expatriates were willing to act as mentors. While still a student at the College of Petroleum and Minerals in Dhahran in the early 1970s, Hamed T. Al-Saadoun worked for nine months in the Inspection Division at Ras Tanura Refinery. His supervisor, Ralph Echezuria, who was fluent in Arabic, took the young Saudi in tow and gave him a solid grounding in the business. He invited Al-Saadoun to his home after hours. “He was like a father figure to me,” said Al-Saadoun. After graduation, Al-Saadoun joined Aramco and progressed quickly through the management ranks at the refinery. “All you needed to be was a Saudi with a college degree and a love to work and take charge of things,” said Al-Saadoun, who served as vice president for four company organizations before retiring in 2009.

As Saudis rose through the ranks, they also felt the responsibility to help promote other

qualified Saudis to follow in their footsteps. Sa‘ud Abdulrahman Al-Ashgar, who retired as senior vice president of International Operations in 1997, was a plant superintendent in Ras Tanura in the early 1970s. “I saw part of my role was to look at potential shift coordinators and potential replacements for myself. Because we had three additional LPG [liquefied petroleum gas] plants and a new reformer, and each one needed a foreman … I would plan ahead and say, ‘OK, we’ll take shift coordinators and make them foremen and then develop some supervising operators to be shift coordinators.” One of the early Saudis he helped promote to management roles was Ibrahim M. Al-Rebdi, who became the superintendent of a newly created Refinery NGL (natural gas liquids) Division in 1977 and then left the company to start his own business in the Eastern Province. The “Greening of Aramco”

Over the years Aramco developed a succession planning system for

Saudi and expatriate employees. Every management job—supervisor through senior vice president— had to have three candidates listed as having the potential to fill the job. The charts specified the training or experience each candidate needed, and how much time that would require. The government generally avoided interfering in company personnel matters. Minister Yamani, however, as the person with responsibility for overseeing the development of the Saudi

”Most Ambitious Energy Project in History”

A few years before the 1973–74 oil price rise

petroleum industry, monitored the trend of senior Saudis progressing through the management

brought unprecedented wealth to Saudi Arabia, King Faysal had implemented a program to

ranks. As Baldo Marinovic, appointed head of the Management Development Department in

achieve the Kingdom’s First Five-Year Development Plan in 1970. It was created when annual

1978, recalled, Yamani requested that the department develop a highly confidential chart for

oil-related revenue topped $1 billion for the first time. The plan predicted a modest 9.5 percent

tracking Saudi candidates at the general manager level and above. On what came to be known

annual increase in oil revenue. Drawn up with the help of the Stanford Research Institute, the

as the “greening of Aramco” chart, a box representing an executive position held by a Saudi

plan amounted to a somewhat cautious listing of projects, reflecting the relatively slack oil market

was colored green; a box where a Saudi candidate was considered ready to assume the position

conditions in 1968 and 1969 when the plan was formulated. In two years, surging oil revenue,

within two years was striped green; and boxes representing the positions for which there were

which hit $2.7 billion in 1972, poured into government accounts, even before the spike in oil

potential Saudi candidates but no specific time frame for their promotions were outlined in green.

prices triggered by the 1973–74 embargo.

Only a handful of department executives ever saw the chart, which was carried by hand

to and from meetings in Riyadh and otherwise kept locked in an Aramco safe. Given the high

as the 1970s began. Government experts and outside advisers had been debating for years the

visibility and prestige attached to Saudis who reached senior positions in the company, the chart

best way to spur further industrialization in the country. Their goal was to diversify the economy

“was dynamite,” said Marinovic.

Aramco and its oil-processing facilities provided roughly 90 percent of Saudi Arabia’s revenue

and provide employment opportunities for Saudis coming of age, including the increasing number

One of the most closely tracked candidates was Al-Naimi. When Jungers asked him to go

of college graduates. An obvious solution was to tap the huge amount of natural gas, produced

for a ride around Dhahran on May 1, 1975, Al-Naimi did not think anything special was in store.

along with crude oil, and use it as a low-cost fuel for industrialization. With the oil boom well under

Jungers often sought Al-Naimi’s opinion on a variety of topics. The 40-year-old Saudi had been

way, the country could afford such a massive undertaking.

promoted just the previous fall to manager of Northern Area Producing, which gave him oversight

responsibility for 11 of the company’s 15 producing oil fields. He would not be in line for another

gas separated from crude oil back into oil fields to maintain reservoir pressure, starting with

promotion for years. Or so he thought.

a plant in Abqaiq. Al-Naimi, who had been named a superintendent of operations in 1969,

recalled that this plant was used to inject about 200 million standard cubic feet per day (scfd)

Jungers pulled to a stop in front of the Administration Building and turned toward Al-Naimi.

At the time, most but not all natural gas was flared. Since 1955, Aramco had been reinjecting

“Ali, I want to congratulate you. The board just elected you a vice president of the corporation.”

of gas “to maintain the reservoir pressure at Abqaiq field. In [the] late fifties and early sixties,

Al-Naimi had high hopes for his career, but he was completely taken by surprise when he was

another plant was constructed at ‘Ain Dar for similar purposes, the injection of 200 million

named to the new post of vice president of Producing and Water Injection, making him just the

cubic feet approximately of associated gas to maintain the pressure at ‘Ain Dar and Shedgum

second Saudi vice president.

[in the Ghawar field].”

Ali Al-Naimi, right, vice president of Producing and Water Injection, chats with Manager of Public Relations Abdallah S. Jum‘ah, center, and filmmaker and photographer John Feeney, left, in Dhahran in 1976. As the company workforce expanded, greater numbers of Saudis rose higher in the ranks. By 1976, Saudis held 46 percent of Aramco’s supervisory positions.

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50 energy to the world : Volume two

“Bulldozers Were Going Twenty-Four Hours a Day” Before the 1930s, Saudi Arabia was virtually unknown in non-Muslim countries. The discovery of oil both brought the country greater international attention and increased the pace of modernization. At the time of discovery, most of the population resided along the coasts or in oases in villages of mud-brick huts. Riyadh had only 30,000 residents. Today, as oil wealth continues to drive growth, more than 88 percent of the population lives in cities, and Riyadh has blossomed into a metropolis of more than 4 million. Hospitals, universities, paved roads and suburban communities, developed by a combination of Saudi and foreign labor, now stand in what once was empty desert.

Baldo Marinovic, former assistant to the chairman of the board, recalled the rapid

growth of the 1970s: “That boom was something incredible. Roads were being built, bridges, ports, hospitals, oil facilities, gas facilities—I mean, bulldozers were going twenty-four hours a day, cement mixers. Every big construction company in the world was there. ... And they all had to work with local partners, of course, which made the local partners very rich.”

Aramco played a key role in this surge of development, providing technical and

financial assistance to a host of services and industries, from health and dental care to a soft-drink bottle factory. In al-Khobar, Aramco paved streets and constructed curbs and sidewalks, while in neighborhoods where Saudi employees built homes under the company’s Home Ownership Program, Aramco did site preparation; paved streets; and built curbs, sidewalks and playgrounds. The company’s local Industrial Development organization supported a variety of businesses, including paper, plastics and paint manufacturing; cold storage and meat processing; a hollow-glass factory; and service shops for valve repair, electronic maintenance, air conditioning, water well drilling, heavy equipment overhaul and others. On an experimental farm in al-Hasa and at other venues, company agricultural experts transferred knowledge and technology to Saudi farmers and agricultural technicians about the dairy and poultry industries, vegetable and fruit production, weed control, mechanization, modern packing and beekeeping. One of Aramco’s most significant contributions was its support behind the creation of the Kingdom’s industrial standards for safety, the environment, materials, design and construction. The company’s scholarship and training programs supplemented government efforts to provide every interested citizen with a free education through a constantly expanding school system. Today, 85 percent of Saudi children complete their primary education in government schools, and 28 percent go on to college. Many of these students will Aramco’s technical assistance to Saudi farmers helped 25 farms produce more than 18 million eggs in 1966. Saudi farmers in turn helped Aramco, supplying vegetables and other vital foodstuffs to its dining halls and commissaries that the company would otherwise have needed to import from abroad.

eventually apply their skills at Saudi Aramco, the largest employer in the Kingdom today behind the government.

The Aluminum Products Company, or ALUPCO, began operations in Dammam in 1975. As the Saudi economy expanded in the 1970s, Aramco increasingly turned to domestic enterprises for goods and services. In 1975, Aramco awarded some 400 major contracts, worth roughly $250 million, to Saudi businesses for construction and other services, and purchased more than $700 million worth of goods from local suppliers.

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52 energy to the world : Volume two

“Lest We Forget”

build sites fast enough on land, the company towed in five-story accommodation barges from Singapore and Japan, each with its own generators, desalination facilities, air conditioning, dining

A lot of new employees among the expatriates in the 1970s did not work directly in the oil

halls and recreation areas. These “floating hotels,” as the company called them, were anchored

fields or in the processing plants, which were more than 90 percent Saudi-operated by that

offshore at Ju‘aymah and near Dhahran and housed another 4,500 workers.

point. Thorn Snyder, Aramco’s chief economist for many years, was known for an orientation

The MGS had a dramatic impact on Saudi contractors as well as on industries and businesses

talk he gave to new expatriate hires. William Laney Littlejohn, who joined the company as

ranging from earth moving to construction, steel, cement and welding. In 1975, Aramco awarded

an economist in 1972, recalled:

roughly 400 contracts for MGS work valued at $250 million to Saudi firms. The following year,

Thorn … explained to the new employees what the world energy market

the amount of gas-related construction business directed toward Saudi firms jumped to 620

looked like, what the oil market looked like, what Saudi Arabia’s role was

major contracts valued at $1.7 billion, and in 1977, the value of 730 gas-system contracts for

and what Aramco’s role was in the international oil markets. He recognized

Saudi firms reached nearly $2 billion.

that after a little while, wherever you worked in Aramco you could forget what it was you were really over there doing—say if you worked in data

Many of the thousands of expatriate professionals who joined Aramco in the 1970s found themselves living in somewhat less than ideal conditions, such as these trailers in Dhahran in 1976, as the company expanded its ranks of employees faster than it could build permanent housing.

processing, or accounting, or in the hospital. Thorn would wind up this talk holding a lab jar of Arabian Light crude oil and say, ‘Lest we forget.’

Since the early 1960s, Aramco had also been capturing a modest amount of heavier natural

gas liquids, or NGL—propane and butane—while processing oil at Abqaiq. This by-product was shipped by pipeline to Ras Tanura. There, the NGL was processed and stored in refrigerated tanks. Some NGL was sold locally, and some was shipped to overseas buyers, mostly in Japan. That left the lighter natural gas, methane, to power the industrialization of the country.

In 1962, the government created the General Petroleum and Minerals Organization, better

known as Petromin, which between 1964 and 1968 purchased all of Aramco’s product distribution facilities in the Kingdom. Petromin had been studying industrial applications for the country’s natural gas even before the government acquired a 60 percent stake in Aramco in 1974. Petromin hired Texas Eastern Engineering Ltd. to do a feasibility study. As Aramco economist William Laney Littlejohn recalled, Petromin delivered the multivolume study to Aramco in 1975 and said, “Build it.” The Master Gas plan was one of the cornerstones of the Kingdom’s Second Five-Year Development Plan, which was unveiled in February 1975. Its release marked one of the last official acts of King Faysal, who was tragically assassinated a few months later. He was succeeded by Crown Prince Khalid. The Master Gas plan was unprecedented in scope, as well as cost. The government asked Aramco to design, develop and operate a gas-gathering and -processing system to fuel the industrial network that was being developed on a parallel track. In June 1976, after conducting its own feasibility studies, Aramco estimated the Master Gas System (MGS) would cost between $12 billion and $14 billion. The company described it as “the most ambitious energy project in history.”

By 1975, even before the hiring tied to the MGS project started, the Aramco workforce

had nearly doubled in five years to 19,500 workers. That demand for workers was driven by two Aramco projects that in and of themselves were the largest of their kind in the world: the offshore Zuluf GOSP-2 and the Qurayyah Seawater Treatment Plant.

Aramco scrambled to build and operate construction-worker camps at eight sites in the

Eastern Province to support the crude oil expansion projects as well as the MGS. By 1977, the camps had the capacity to house 37,900 bachelors and 875 families. When it could not find or

In 1980, five years after the government requested Aramco to design, build and operate the Master Gas System (MGS), the massive project was 75 percent complete. Key components of the MGS began operations or were completed that year, including the Shedgum Gas Plant, shown here.

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54 energy to the world : Volume two

Aramco’s American shareholders were ambivalent at best about the gas program. From

their perspective, there was little profit in selling Saudi gas. Committing Aramco to the MGS was a distraction, even if it did not directly divert Aramco resources from the oil business.

Jungers seized on the gas initiative as a new vehicle for making Aramco, and its American

shareholders and management, increasingly important to the Kingdom’s development. Other Aramco employees concluded that Jungers was not about to let any other company elbow its way into the Kingdom and run the gas program if he could avoid it. The shareholders acquiesced, especially since the Saudi government was paying the bills out of its oil revenues, not Aramco profits. A residential barge was moored near Half Moon Bay, down the coast from Dhahran, evidence of the housing crunch Aramco faced in the mid- and late 1970s. By 1978, the year after this photo was taken, Aramco was using six such vessels to house contractor employees.

The MGS was designed to provide fuel or feedstock for domestic electrical power, cement, and desalination plants and for petrochemical, fertilizer and steel-making facilities. Two of the largest proposed users for the gas were the sprawling industrial cities being constructed at Yanbu‘ on the Red Sea and Jubail on the Gulf. Aramco also used the gas to power many of its own facilities.

At the heart of the system were gas-gathering facilities in four oil fields in the Eastern

Province, gas-processing plants in the Eastern Province and on the Red Sea coast, and export terminals at Ras Tanura, Ju‘aymah and Yanbu‘. By the time the initial system was completed in 1982, it could process about 3.5 billion scfd of gas—the energy equivalent of 750,000 barrels of crude oil.

Aramco had used associated gas to maintain pressure in oil reservoirs, but that gas was

now slated for industrial use. The company turned to a more efficient alternative for maintaining reservoir pressure: injecting treated seawater. In 1978, the Qurayyah Seawater Treatment Plant began pumping 3.7 million bpd of seawater from the Gulf. The plant removed impurities (but not The Port of Jubail, shown here in 1978, grew rapidly following a 1975 Royal Decree to create two industrial cities, Jubail and Yanbu‘, linked by pipeline to Aramco’s Master Gas System for a ready and low-cost supply of fuel and feedstock.

salt) and huge pipelines carried the water to injection facilities in the Ghawar field. It was a massive undertaking and involved several technical hurdles, including engineering the metallurgy of the pipes to withstand the corrosive effect of the extremely salty water from the Gulf. The seawater injection system also replaced the use of water drawn from onshore saline aquifers for reservoir pressure maintenance.

Operators in the control room of the Qurayyah Seawater Treatment Plant in 1979 monitor the processing and delivery of 4.2 million bpd of seawater for injection into oil fields to maintain reservoir pressure.

56 energy to the world : Volume two

Construction of the East-West NGL Pipeline reached Banban, a small town near Riyadh, in September 1979. The pipeline linked Aramco’s Shedgum Gas Plant to the industrial city of Yanbu‘, 1,170 kilometers across the Arabian Peninsula on the Red Sea coast. Aramco also built an NGL fractionation plant and a marine terminal at Yanbu‘.

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58 energy to the world : Volume two

As work on Qurayyah was wrapping up in 1978, Aramco embarked on another major aspect of

Modest Beginnings

the MGS: building an NGL pipeline across the country from the Shedgum Gas Plant in the Eastern Province to Yanbu‘ on the Red Sea. It ran parallel to Petroline, a crude oil pipeline Petromin was

Although it was not the first time Aramco had hired Saudi women, the worsening personnel

building, and went into service in July 1981.

shortage at Aramco by the mid-1970s prompted the company to seek government

The 1,170-kilometer pipeline crossed some of the roughest terrain on the Arabian Peninsula,

approval to train Saudi women for office and clerical jobs that until then had been filled

from sand dunes to lava fields and mountains. As Saleh Al-Redaini, the senior engineer on the project,

by men. After five years of on-again, off-again planning and negotiations, Aramco

recalled, “Going across Saudi Arabia we had to drill our own wells for water supplies and build our

opened the Special Clerical Training Center, its first training facility for Saudi women, on

own roads for transportation, especially in the west.” The NGL pipeline represented state-of-the-art

January 24, 1976. The center was located in a one-story building across the street from

technology unimaginable a generation earlier. “The electronic survey work was unique and the

the Administration Building in Dhahran. It opened with 10 young women as students.

pipeline design too had many unique features, such as electronic welding,” said Al-Redaini. Electronic welding involved suspending two 12-meter lengths of pipe over the pipeline trench by side loaders, where they were joined by automatic welders: one moving through the pipes and the other along the outside. In the course of the project, these remarkable machines made 45,000 welds. On July 28, 1980, the final section was lowered into a shallow trench 1,082 meters high in the Hijaz Mountains. Power Play

Despite the country’s increasing public and private wealth, the electrical power

grid in the Eastern Province, and the power systems covering most of Saudi Arabia, remained inadequate, restricting business development and limiting the opportunities for average Saudis to improve their quality of life. The Zuluf gas-oil separation plant (GOSP) 2 came on-stream in July 1977 with a design capacity of 540,000 bpd, making it Aramco’s largest offshore GOSP to date and one of the largest in the world. The main platform was connected by a 46-meter bridge to the auxiliary platform with living quarters for 80 men topped by a helipad.

The staff, comprising Arab and American women, included three instructors and a supervisor, who also was a part-time instructor. The only Saudi on the original teaching staff was Khalidah Al-Khayyal, the daughter of a Saudi diplomat who had a college degree in psychology. In 1977, another Saudi woman, Samia Al-Edrisi, was named to run the center. She had been a translation specialist in Government Affairs, and had graduated from the American University in Cairo with a major in political science and economics. The center trained Saudi women to take over jobs from a list of 231 clerical positions, such as correspondence classifier, typist, receptionist, medical clerk and library assistant. Within a few years, the program expanded to include chemistry and science courses. Additional subjects were added later. In 1980, the company provided scholarships to attend colleges in the United States to three of the program’s highest achievers: Nadia Al-Shihabi, Badria AlSindi and Haifa Al-Taifi. By the early 1980s, the women’s program had outgrown its original location and a new two-story women’s training center was completed in May 1982.

Since that time, women have gradually assumed increasingly complex and sophisticated

responsibilities at Saudi Aramco, including positions in petroleum engineering, reservoir management, information technology and human resources administration.

Samia Al-Edrisi, front row, third from left and in the center of the group, was the first Saudi director of the Special Clerical Training Center. Shown here with the center’s teachers and staff, including Masha‘el Mo‘ammar, back row, far left, a Saudi instructor of English, Al-Edrisi oversaw the growth of the center from 40 students in 1977 to 150 in 1981.

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60 energy to the world : Volume two

One of Aramco’s most challenging projects in the 1970s was unrelated to oil: the creation of a unified electrical power grid in the Eastern Province. The facility in this 1979 photo, one of a pair located near Ju‘aymah, began operations that year, increasing the total capacity of the Saudi Consolidated Electrical Company (SCECO) to almost 1,900 megawatts.

By the mid-1970s, the situation had improved somewhat, but the insufficient infra-

While solving a serious problem for the government, however, Jungers may have further

structure Jungers had observed was stretched to the breaking point: “The power that the

eroded his support among the American shareholders by championing yet another major project

local power companies had was outdated, old diesel generator sets that they tried to hook

that was only tangentially related to the oil business. As Powers, who served as president under

together. They weren’t integrated, all localized power, and it was going off all the time, and

Jungers, recalled, “The owner companies were dead set against it. … They saw it would diffuse

the transmission facilities were terrible. So we thought of the idea of forming a consolidated

our efforts from the oil and gas business, because here we were building power lines, whole

power system.”

substations, whole power plants, everything.”

Years later, Jungers described the events that led up to the creation of SCECO:

If embracing the gas project was a reactive move on the part of Aramco and Jungers,

the other major project that Aramco took on in the mid-1970s—creating a unified electrical

power grid in the Eastern Province—demonstrated that Aramco’s characteristic determina-

that it occurred to me primarily that we had to do something with our power system.

tion could solve some of the toughest problems in the Kingdom. The Saudi Consolidated

Aramco had its own power company, its own power. All of our communities were run

Electrical Company (SCECO) became a key part of Aramco’s and Jungers’s legacy.

by our own power plants, and they were as reliable as any power plants are anywhere.

It again was in that period when we were moving ahead with the gas program

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62 energy to the world : Volume two

Sometimes we went to the local towns at night for dinner with our Saudi friends, and

Larry Tanner, vice president of Plants and Pipeline, was flying with a group of reporters

all of a sudden the power would go off, and it would be hot because the AC would

to different Aramco sites in early May 1977 when he spotted a pillar of smoke rising from the

be off. And still Aramco’s community nearby was lit up and functioning. These people

direction of Abqaiq. His worst fears were confirmed minutes later when he received a call on the

are there damning their own power system, which was only going to end up with

plane radio requesting him to return to Abqaiq as quickly as possible. A buried crude oil pipeline

discontent and wondering why only the “Aramco foreigners” had power.

had ruptured and flames were engulfing entire sections of the world’s largest oil processing plant, as he later described: “The fire had burned up most of the [gas-oil separation] spheroid area.

Over the course of several months, a group of Aramco officials worked out the details of how

Shedgum [oil field] was [at an elevation] 600 feet above Abqaiq with 100,000 barrels of oil in

the 26 local power companies would be combined with Aramco’s power plants. In August 1976,

the pipeline. We could not close the valves to keep the additional oil from feeding the fire. They

King Khalid issued a Royal Decree creating SCECO. Aramco built, operated and managed the utility

were starting to close one valve and it took hours. … We had basically [to] shut Abqaiq down.”

during its first five years of operation, “seconding,” or lending, employees to run the utility and train

At that time, 10 million bpd of oil were being processed at Abqaiq.

Saudis in the industry. This mandate was later extended to 1983, when the management agreement was replaced with an agreement for loaned employees and services to be provided by Aramco.

Despite the tremendous demand for personnel during the mid-1970s expansion, Aramco continued to sponsor out-of-Kingdom education for Saudi employees. In 1976, a total of 54 personnel were sent to high schools and universities in the United States. This group of young men composed the second batch to be sent that year.

SCECO’s original service area included approximately 90,000 people in about 200 communities

and covered an area roughly the size of New Zealand, as well as the industrial city under development at Jubail. Within five years, the utility’s customer base more than doubled to 195,000, many of whom lived in remote villages that previously lacked electricity. The SCECO experience was later copied in other regions of the Kingdom, and eventually all of the regional power companies merged into a single Saudi Electricity Company power grid.

Being assigned to a power company that Aramco was going to operate on behalf of the government

may have sounded like a questionable career move, but several future senior Aramco executives made their mark at SCECO. John Kelberer, who had worked on Tapline issues in New York in the mid-1970s and earlier had worked as an engineer on Tapline in Beirut and in Saudi Arabia, came to Dhahran and succeeded Jungers to become the last American chairman of the board and CEO of Aramco. Initially for a short period, though, Kelberer was a member of the board of SCECO and its managing director. One of the first staffers assigned to SCECO was a Saudi from Aramco’s Public Relations Department who had recently returned from a management training course at Harvard. His name was Abdallah Jum‘ah, manager of Power Systems Public and Customer Affairs from 1977 to 1979.

Aramco insiders universally credit Jum‘ah with outstanding people skills and cite this ability

as among the most important factors in his eventual rise to the positions of president and CEO. Jum‘ah himself credits his time spent in the field with SCECO in the late 1970s as one of the most influential assignments in his career. One of his responsibilities was to act as the liaison with the 26 power companies and with the remote villages around the province that were to be included in the

SCECO grid. He listened to the villagers’ concerns and convinced them that connectivity to the grid

and Yamani bombarded Tanner with questions. The fire had killed a Saudi foreman, Muhammad

could not happen instantly. One story Jum‘ah told illustrated the knowledge and cultural gaps he

Al-Sunayyin, injured 13 workers and caused $100 million in damage. Tanner and Jungers estimated

had to close as part of his assignment:

they could get the plant back to full capacity in one month. Lying awake that night, Tanner blamed

As they stood amid the smoking ruins of the plant on the afternoon of the fire, Jungers

We had a line of 10 villages, and we ran the 115 kv [kilovolt] line to the

himself for making such an aggressive estimate, but Aramco rose to the occasion. Working under

end where we put a big substation to drop the voltage to the usage voltage. Then,

tremendous pressure, repair crews had the facility producing at more than 50 percent of capacity

as part of our value engineering, we said, ‘… Why don’t we put the substation in

in less than a week. Thirty-four days after the fire, Abqaiq was operating at full capacity, though

the village before last, and run a cheaper line to the other village.’ I had a delegation

with a temporarily diminished gas separation process.

coming from the last Bedouin village saying, ‘We don’t want the leftovers,’ because

they felt that electricity coming in on a smaller line was leftovers.

including gas pipelines, following another fire caused by a ruptured gas pipeline in 1978 in the

I’ve seen hundreds of people in my office, from all walks of life; someone

Abqaiq oil field. Substantially more fire-fighting equipment and concrete dikes and trenches between

concerned about a problem, a representative from a village asking about progress on

processing plants were also installed throughout the company. Dhaifallah A. F. Al-Utaibi, who

A lengthy safety review led to company-wide changes in the treating of buried pipelines,

the distribution network. I love dealing with people and it’s been the most rewarding

retired as senior vice president of Gas Operations in 2004, was head of maintenance in Abqaiq

experience of my career so far.

at the time of the fire. He recalled that “it took time and money [but] the outcome transformed the facilities from where they were to first-class facilities, and kept them that way.”

Pl ant Safet y

The huge increase in the amount of oil being processed by the mid-1970s With the massive buildup of projects and personnel during the mid-

made the potential for loss of production, and loss of life, all the more significant. A handful of

Refocus on Saudization

accidents at Abqaiq during the 1970s, beginning with an August 1972 fire that led to the deaths

1970s, Saudization—the term used to describe the development of Saudis to assume company

of 13 workers and injured 13 others, prompted the company to overhaul safety procedures. The

positions—slowed down considerably. It was all the company could do to bring in bodies to

turning point came in 1977.

fill positions; individual career development, with certain key exceptions, took a backseat. In

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64 energy to the world : Volume two

addition, by late 1977 it was widely rumored that Jungers was on his way out, and he left the company in January 1978. (Powers, president under Jungers, was moved to the newly created position of vice chairman in 1978. He retired in March 1979. Replacing him as president in 1978 was Hugh H. Goerner, a senior official from Exxon.) While the Saudization process had lost its most high-profile champion in Jungers, this crucial initiative was taken over by a new advocate, and this time he was himself a Saudi.

Al-Naimi had risen to the level of senior vice president of Oil Operations in 1978 and was

the highest-ranking Saudi in the company. When John Kelberer succeeded Jungers as chairman and CEO of Aramco in 1978, he ordered a review of Saudization, which generated several recommendations. A key to his plan was to form a Saudi Arab Manpower Committee (SAMCOM) and make Al-Naimi its first chairman. The committee’s goal, Al-Naimi later said, “was to seek, track and make sure that Saudi manpower was developed at all levels … coming from high school or going to college [or] coming back as a professional development [program] employee, and also seeing to it that after they finish these so-called PDP programs, they are pursuing their career.” He noted that “Saudization had been through many tracks … 1979 was really a formalization … we were able to track every Saudi who exhibited potential for further development.” Aramco CEO Frank Jungers, right, hosts a press conference with journalists from Saudi newspapers to discuss the May 1977 Abqaiq fire, which killed one worker and injured 13 others. Those present include Hamid Mutawi’, ‘Abd Allah Manna’, Muhammad Al-Jihian, Jihad Al-Khazin, Khidr al-‘Ali, Muhammad Al-‘Atiq, Fahd Al-Dossary, Bob Crew, Ahmad Muhammad Mahmud and ‘Abd Al-Majid Shubukshi.

Following months of negotiations, the government announced in February 1979 an

agreement to buy the remaining shares in Aramco and assume full ownership of the company. This surprised no one. Aramco officials and the four American shareholding companies had for some years assumed the inevitability of such a step. The agreement was signed in 1980 and on a financial basis was retroactive to 1976.

Fully owned by the Saudi government and refocused on developing and promoting

qualified Saudis through the ranks, Aramco had helped engineer the smoothest and most effective transition to national ownership the world had ever seen. Rather than acrimoniously severing ties with the Western companies that had developed its oil industry—as had been the case elsewhere—the now Saudi-owned Aramco maintained close commercial and technical ties to its former American shareholders. Indeed, the government retained Aramco to manage the company on its behalf for a number of years. King Khalid and Minister Yamani recognized the need to maintain access to expatriate technical expertise as the government continued to groom Saudis for more senior roles.

Symbolic of the rapid growth occurring in the major metropolitan areas in the Kingdom in the 1970s and 1980s, Jiddah, seen here in 1974, grew upward and outward.

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66 energy to the world : Volume two

chapter three

Transformation

The East-West Crude Oil Pipeline, 1985.

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68 energy to the world : Volume two

On May 16, 1983, Saudi royalty and dignitaries, led by King Fahd, celebrated with company officials and employees in the recently completed Exploration and Petroleum Engineering Center—commonly known as EXPEC—at the center of the Aramco office complex in Dhahran. The event marked the 50TH anniversary of the signing of the concession agreement by which the Kingdom granted Socal the right to explore for oil in eastern Saudi Arabia. King Fahd, who had succeeded his brother King Khalid when he died in 1982, honored the “Saudis and non-Saudis who have exerted themselves so greatly, and contributed to making Aramco what it is today.” Though the event rightly honored those who had transformed the Kingdom through its oil industry, the speeches that day focused not just on an illustrious past but also on a promising future. Minister Yamani told the crowd, “Aramco is now a Saudi Arabian institution that ‘speaks our language.’” He added, “We hope that the sun of this year will not set until a Saudi has become president of this company.” His prediction became reality that November when the Aramco board of directors appointed Al-Naimi the company’s first Saudi president, effective January 1984. The 1980s were a crucial period in the transformation of Aramco, as the Saudi government assumed full ownership of the company in the first year of the decade. The creation of EXPEC A field geologist examines rock in October 1989, part of an exploration campaign that surveyed new prospect areas. In the years following the original 1933 concession and the supplemental 1939 concession, Aramco’s exploration area had been

reduced through a series of relinquishments. In 1986, the government requested that Aramco expand its exploration activities to include areas it had previously relinquished. In 1988, a Royal Decree approved company exploration activities Kingdom-wide.

reflected this major shift in that EXPEC enabled Aramco to consolidate all of its high-tech exploration and petroleum engineering functions in Dhahran, work that had previously been performed in the United States or Europe by the four former owner companies. This transformation continued when Al-Naimi assumed his duties as president in 1984. Al-Naimi was a product of the company’s career development and Saudization programs and proof of their success. A Saudi national, he was elected because he was the most qualified due to his extensive training and years of service with the company. Al-Naimi, said Yamani, was not selected to be president “because he is Saudi to satisfy national sentiment, but because he earned the office through sweat and hard work, and because he has built himself and helped build others.”

King Fahd, accompanied by Crown Prince ‘Abd Allah, waves to the crowd during Aramco’s 50TH anniversary celebration in May 1983 after inaugurating Aramco’s Exploration and Petroleum Engineering Center (EXPEC).

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70 energy to the world : Volume two

The Fast Track Program

During this period, Aramco significantly stepped up the hiring of

Saudi high school students in anticipation of sharply higher staffing needs. In the decade prior to 1979, the company hired an annual average of only 90 high school graduates; that year the number expanded enormously, to 796. In 1980, the figure jumped again, to 1,281. The College Fast Track Program, instituted in 1979, attracted a great deal of interest among Saudi high school students. High school graduates with a grade average of 85 (out of 100) or better who agreed to join Aramco were sent to the United States for up to one year of intensive training in English. Those who achieved a 500 or better (out of 677) on the Test of English as a Foreign Language (TOEFL) proficiency exam qualified for an Aramco college scholarship. Even though only 57 high school graduates, including 13 women, qualified in 1979, many high school students joined Aramco after being initially attracted by the College Fast Track Program.

Aramco also intensified its pursuit of Saudi college graduates. In 1979, the company hired

124; in 1980, it hired 203. The two-year total exceeded the number of Saudi college graduates hired by Aramco in the previous two decades. These robust numbers, however, hardly put a dent in demand. Kelberer wrote to members of executive management on December 14, 1981, demanding additional hiring. “Every Saudi college graduate should be hired and developed,” he said, adding that the matter was “of utmost importance.” The story of Al-Naimi’s rise from Bedouin shepherd boy to president and CEO of Aramco, and later Minister of Petroleum and Mineral Resources, is perhaps the best-known example of the company’s contribution to the extraordinary transformation of Saudi Arabia and its people, but thousands of Saudis experienced similar journeys. Aramco-sponsored students gather on the campus of Arizona State University in Tempe, Arizona, in 1982. More than 1,200 Saudi employees were enrolled in university-level programs in Saudi Arabia and abroad that year, emblematic of the company’s increased effort to develop Saudis.

On November 8, 1983, the Aramco board of directors selected Ali Al-Naimi, seated right, as the company’s first Saudi president. His appointment took effect January 1, 1984.

Planning for Prosperity

Aramco had been caught short-staffed when the 1970s oil boom

began. Company planners were determined not to make that mistake again in the 1980s. Extrapolating from trends at the end of the previous decade indicating strong global demand for oil, Aramco’s corporate planners predicted the company needed to hire 30,000 more Saudis by 1985, more than doubling its Saudi workforce, to reach an anticipated total payroll of 75,000 employees.

To help train these new employees, the company approved a training budget of nearly

$300 million for 1980. New programs were introduced, training facilities built and staff added. “Developing people is time consuming and expensive, but it pays off in the long run—both from the individual’s and the country’s point of view,” noted Abdulaziz M. Al-Hokail, senior vice president of Industrial Relations in the early 1980s, who retired in 2002 as executive vice president of Manufacturing Operations.

Fortunately, Aramco could afford to foot the training bill. The company’s revenues

ballooned by 1980 to more than $84.5 billion. In the wake of the Iranian Revolution in the late 1970s, global oil prices soared once again. Arabian Light crude oil climbed from $12.70 a barrel in 1978 to $26 a barrel by January 1980. Aramco, making up for lost Iranian oil output, produced a record 9.6 million bpd during 1980, an increase of 1.5 million bpd over 1978. Saudi Arabia was now the world’s second-largest oil producer, after the Soviet Union’s 11.7 million bpd. (The United States was third at 8.6 million bpd. No other country was close to the top three. Iraq was fourth largest with 2.6 million bpd.)

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72 energy to the world : Volume two

Professional Development Program

The transformation of Saudi Arabia from desert kingdom to modern nation was mirrored in the personal journeys of thousands of Saudis who came of age in the 1950s and rose to high positions in Aramco in the 1970s and 1980s. Some of these accomplished men are shown in this November 1988 photo, including, left to right, Ahmed S. Al-Humaid, vice president of Government Affairs; Douhan Al-Douhan, executive director of Management Services; Sa‘ud Al-Ashgar, vice president of Planning; Ismail I. Nawwab, general manager of Public Affairs; and Faysal M. Al-Bassam, vice president of Public Affairs. Standing behind Al-Ashgar and Nawwab is John Duke Anthony, president of the National Council on U.S.-Arab Affairs.

Aramco’s commitment to helping new college graduates integrate themselves into the professional world intensified in 1974, when it established its Associate Professional Program (APP). Initially, the program suffered from high attrition. When the late 1970s brought increased Saudization, Aramco executives reworked the program to hire as many new Saudi college graduates as possible.

In 1980, APP was developed into the Professional Development Program (PDP). The

revised curriculum retained the three years of rotating job assignments that had characterized APP, but added written and oral English-language courses, a variety of basic training programs and a stronger individual counseling element. Those with weak English skills spent an additional nine months in a language immersion program.

Douhan Al-Douhan, for example, as a teenager in the 1950s made the three-day journey across the roadless desert from Najran to Abqaiq in the back of a truck with more than 20 other passengers. Al-Douhan was “looking for a future” with Aramco. “In the United States, people said ‘Go west, young man, go west.’ Here, they said ‘Go east,’” to Aramco, Al-Douhan recalled. He was not hired on his first application, but later, after working with a local contractor as a welder’s helper, he was hired by Aramco and trained as an auto mechanic. In 1965, he was part of a group sent to Temple University High School in Philadelphia to earn secondary-school diplomas. Al-Douhan went on to earn a bachelor of science degree in engineering technology from Memphis State University in Tennessee and after a series of assignments became executive director of Management Services. He retired in 1995. Many Saudis who were sent abroad for higher education compiled impressive records. Jaber S. Jum‘ah, for instance, was awarded the International Students Award each of the four years he attended Youngstown State University in Ohio. He ranked in the top 1 percent of his class during all four years, was elected to the national Phi Kappa Phi honor society and graduated summa cum laude in 1973 with a degree in business administration. He rose in the company to manager level before retiring in 1992.

As coordinator of out-of-Kingdom training in the United States from the late 1950s through

1977, Bob Brautovich oversaw the development of many young Saudis. “I have the greatest respect in the world for those Saudis who came to school here [in the United States]. I don’t think I could go to Saudi Arabia and do what they did when they came here,” he said. The Saudi college graduates who joined Aramco during this period as professionals were proud that Aramco actively recruited them. At the same time, they faced resentment from some Renamed King Fahd University of Petroleum and Minerals (KFUPM) in 1989 when this photo was taken, the institution celebrated in 1992 the 20TH anniversary of a cooperative program in which students received college credit for work assignments at Saudi Aramco.

of their countrymen who had worked for Aramco for years but had not had the same educational opportunities. Riyadh University graduate Khalid Nassir Al-Maghlouth joined Aramco in 1980,

entering its Professional Development Program. He was sensitive to the fact that among the older

Saudis. This total included new employees with fewer than three years of previous employ-

generation “many of them had worked day and night for 20 to 25 years to reach grade code 10.”

ment, although the program allowed them to follow a different course of study from the

He and his fellow college graduates started their careers at grade code 11, the initial professional

recent graduates. Senior Vice President of Finance Abdullatif A. Al-Othman, who entered PDP

In its first year, PDP enrolled 400 employees, 203 of whom were newly graduated

level. For every complaint, however, there were plenty of Saudi veterans who took pride in the

in 1981 after working for two years outside the company, was relieved to find that the com-

college graduates as representatives of a “bright, new generation” of Saudis, Al-Maghlouth said.

pany was “actually very aware of the need for flexibility” for those with prior work experience.

The program initially enrolled some expatriates but soon shifted its focus to encompass

By 1984, Aramco had 55,819 employees. The Saudi workforce totaled 34,226, of which

3,343 held supervisory positions—nearly 62 percent of the supervisory jobs available. Training these recruits was a top priority for Aramco, which by then had assembled one of the largest industrial training organizations in the world.

only Saudis. By 2008, more than 11,000 employees had benefited from the program.

The work of a young enrollee in the Professional Development Program is checked by a senior staffer in the program’s design room. Enrollment in the program fluctuated throughout the decade, peaking at 910 in 1987.

Transformation 75

Prosperity Well

Ameera A. Al-Mustafa, left, a senior geophysical consultant, discusses reservoir diagrams with colleague Hashim Hussein. The company’s efforts to sponsor the education and training of Saudi women began paying dividends in the late 1980s as more women joined the professional ranks of the company in fields such as petroleum engineering and computer science.

Dammam Well No. 7, the original discovery well that set the stage for the modern era in Saudi Arabia, was finally shut down in 1982 because of slack demand for oil, even though it was still capable of turning out about 1,800 bpd under natural pressure. The well, also known as “Lucky No. 7,” had produced nearly 32.5 million barrels of oil. In 1999, King ‘Abd Allah, then Crown Prince, visited Well No. 7 during a tour of company facilities and gave it the name “Prosperity Well.” Twenty-five years after the well was shut down, company geologists analyzed newly acquired 3-D seismic readings of the Dammam Dome in anticipation of once again producing oil from the structure, but not from Well No. 7. To avoid disrupting life in Dhahran, plans were drawn up to use horizontal wells that, from a safe distance, could tap the estimated 1 billion barrels of crude remaining in the reservoir. The second wellhead from Dammam Well No. 7, which controlled the well’s pressure between 1952 and 1978, stands just outside the Exploration and Petroleum Engineering Center.

”I See a Challenge”

Nabilah M. Altunisi, shown here in 2009 in her office at Aramco Services Company in Houston, Texas, was director of engineering on a proposed integrated refining and petrochemical project. She got her start with Aramco in 1982 as a computer systems engineer.

By the 1980s, young Saudis who had witnessed the phenomenal growth of

the oil industry and the Kingdom during the 1970s were flocking to Aramco. They were not simply looking for a paycheck or status; many wanted to make a difference in their country’s future, and they wanted a challenge. As Haider Al-‘Awwami, production supervisor at Safaniya in the mid-1980s, explained, “If it was money I wanted I would go and open a supermarket in al-Khobar. If I wanted a name and prestige I would go into government. I see a challenge in what I am doing here.” Many young professionals jumped at the opportunity to demonstrate that Saudis could run their own oil company. Salim Abu Khamsin graduated from the College of Petroleum and Minerals in 1973, and after a stint with another oil company and earning a master’s degree in petroleum engineering, joined Aramco in 1978. By 1984, he was superintendent of Safaniya Offshore Producing. He conceded that the isolation of offshore work was sometimes difficult, “but some Saudi has to do the job; we don’t want to be spoon-fed by expatriates.” Other Saudis realized that a job with Aramco gave them the opportunity to make an impact on the company and in some cases the oil industry itself. One example was Hesham Al-Musaiid, who joined Aramco after graduating with a degree in civil engineering from the University of While the 1980s opened new career opportunities in information technol-

Petroleum and Minerals. After reviewing the American Petroleum Institute (API) standard for design

Professional Women

of storage tanks during the course of work on a project, he concluded that two of the assumptions

ogy and other areas for women, as early as the 1960s and 1970s, a handful of professional women

on which the standard was based were incorrect. He recommended changes that would result in

set precedents in other fields. They included Na‘ilah Mousli of Reservoir Engineering, Aramco’s

a more conservative and safer standard. The API Standards Committee accepted his proposal, and

first female petroleum engineer and first female department manager. Another pioneer, Samia

the standard was revised accordingly in the late 1980s.

Al-Edrisi, joined Translation in 1974 and retired in 1996 as a planning and programs analyst in

The consolidation of computer-intensive work at EXPEC in the early 1980s opened up a new

Public Affairs. The early 1980s witnessed an exceptional influx of professional Saudi women at

field of endeavor for ambitious Saudis. Ibrahim S. Mishari joined the company in 1974 after earning

Aramco. Many serve as role models for current women employees.

a doctorate in computer science from Leeds University in the United Kingdom, and became manager

of the Computing Technology Department in 1984. He was attracted to the oil industry by “the

women in the early 1980s. The establishment of EXPEC and the expanding use of computers

scope of the work and the challenge,” he said. “I was becoming more aware of oil and its future

in general, however, provided them with additional career opportunities. Nabilah Altunisi’s

Few professional opportunities in the field or at production facilities were open to Saudi

importance.” He saw Aramco as representing the future of computer applications in the petroleum

career benefited greatly from what EXPEC offered. She recalled: “They needed … people with

industry. Mishari advanced through the ranks, leading the company through successive waves of

engineering backgrounds, computer backgrounds, all of these technical-types—petroleum

computer modernization and information technology advances. He retired as vice president of

engineers and so forth. … And they made me an offer, and they told me about this computer

Marketing and Supply Planning in 2007.

center and what they were planning to do. … ”

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76 energy to the world : Volume two

Petroleum Sleuths

After earning a master’s degree in electrical engineering from Oregon State University,

Altunisi declined several job offers from companies in California’s Silicon Valley to return to EXPEC brought together under one roof the equipment and expertise to enable Aramco

Saudi Arabia in late 1982 and work in EXPEC. She immediately began writing petroleum

to move to the forefront of world-class technology in exploration, drilling and reservoir

engineering computer applications on a state-of-the-art IBM mainframe. Within a few years,

engineering. Company personnel, rather than outside consultants, could now conduct

Altunisi was working in project management, on assignment in Houston, Texas, overseeing

from company headquarters in Dhahran their search for hydrocarbons and the best means

multimillion-dollar contracts. In 2005, she was promoted to manager of the Project Support

of producing them.

and Controls Department, overseeing a staff of more than 380 employees. The following year,

Within the Exploration & Producing organization, a variety of geoscientists and

she returned to the United States and earned an executive MBA from Stanford, and then was

petroleum engineers today consider a host of clues gathered from seismic surveys, core

called on to serve as the company’s director of engineering on a proposed petrochemicals

samples, wire-line logs and other means, and employ tools ranging from satellite surveys

project with Dow Chemical Co. In 2006, Altunisi was included on a list of 25 influential women

to scanning electron microscopes. The overall goal of all this data analysis, explained Dave

from around the world in project management by PM Network magazine.

Cantrell, former chief geologist and current chief technologist in the EXPEC Advanced

Thuraya Al-Arrayed, who joined Aramco in 1980, obtained her doctorate in educational

Research Center, is "to characterize the reservoir, its internal stratigraphy or architecture."

planning and administration from the University of North Carolina in 1976. The company had wanted her to start immediately in Corporate Planning, but she insisted that she preferred to get a good overview of the company’s range of activities first, and that Public Affairs was a better starting point. One of her first projects was to start a mobile library program as community outreach to local schools. She worked with a designer to retrofit two used vehicles as mobile libraries to carry books to schools across the Eastern Province.

Thuraya Al-Arrayed, a planning adviser with Saudi Aramco at the time, was a featured speaker at the Doha Debates in Qatar in 2009. After earning her doctorate from the University of North Carolina in 1976, Al-Arrayed began her career in Aramco Public Affairs.

In another project, Al-Arrayed wrote Public Affairs’ first guidebook for implementing the then

new Personal Development Program, which became the seed for the Professional Development Program guidebook that today is used throughout the company. In 1981, she joined Corporate Planning as its first permanent Saudi employee. Upon her request, one of her first assignments was to assist in coordinating the company’s five-year planning process with that of the Kingdom’s plans for the energy sector. Huda M. Al-Ghoson received an undergraduate degree in English literature from Riyadh’s King Sa‘ud University (then known as Riyadh University) before joining Aramco’s Medical Services organization in April 1981 as a patient relations representative. A few years later, the company granted her a leave of absence to complete her master’s degree in business administration at American University in Washington, D.C. Shortly after receiving her master’s degree in 1986, she transferred to Industrial Relations, where she completed various assignments of progressive responsibility until becoming the first woman in a corporate adviser position. In 2007, Al-Ghoson was the first woman named to the board of directors of a company subsidiary when she joined the board of Vela International Marine Limited. Two years later, Al-Ghoson was appointed general manager of Training and Career Development.

Fatema H. Al-Awami was among the handful of Saudi women to receive college scholar-

ships from the company in the early 1980s. She attended the University of Southern California and graduated in 1984 with a degree in petroleum engineering. She put her skills to good use in reservoir simulation, contributing to work on the Safaniya, Shaybah and Manifa projects, among many others. Al-Awami was one of the developers of the Event Solution, an innovative multidisciplinary approach to resolving reservoir management issues. Aramco’s Exploration and Petrolem Engineering Center (EXPEC), on the left, and the adjacent EXPEC Computer Center and Engineering buildings bustle with activity in December 1982, five months before the official inauguration ceremony. EXPEC enabled Aramco to consolidate its exploration and petroleum engineering activities in one center.

A hydrocarbon reservoir is more like a sponge soaked with oil and gas, rather than The dramatic increase in hiring beginning in 1980 caught Aramco without

an underground lake, and two key factors in how productive a reservoir might be are how

New Neighbors

big the holes are in the sponge and how they connect, known as porosity and permeability.

enough housing, reminding company veterans of similar situations during the 1950s. New

Some reservoirs might contain a lot of hydrocarbons in the pore spaces within the rocks,

housing units were constructed as quickly as possible, but the company could not keep up

but unless the rock is permeable, the hydrocarbons will likely remain trapped in the stone.

with the stream of new recruits—expatriates as well as Saudis. New employees often found

Porosity and permeability are therefore vitally important for petroleum engineers to know.

themselves living in trailers or other temporary housing while permanent accommodations

Thus, in one sense, petroleum engineers in EXPEC see hydrocarbon reservoirs as a giant

were built.

plumbing problem: What is the best way to drain the fluids from the reservoir? "With

multilateral wells and horizontal drilling, understanding the inner structure is even more

from age three until he went away to high school. He was recruited by Aramco in 1980 after

James R. Tracy, a member of the Tracy family mentioned earlier (p.15), lived in Ras Tanura

important," Cantrell noted.

serving in the U.S. Army, earning a master’s degree in international management and working in banking. He had fond memories of a spacious house and a grassy yard in Ras Tanura. But

Fatema H. Al-Awami, a supervisor in the Reservoir Description and Simulation Department, earned a degree in engineering in the early 1980s from the University of Southern California in Los Angeles.

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78 energy to the world : Volume two

Lean Times

Saudi Arabia has often been one of the few voices of oil market stabilization at

OPEC. When revolution temporarily halted the flow of Iranian oil in the late 1970s, many OPEC members raised prices in response to the shortage. Saudi Arabia stood by the official price, however, and strove to persuade other OPEC members to choose stability over short-term profit. However, the combination of reduced demand stemming from energy conservation measures enacted in the West and Japan following the price hikes of the 1970s, the continuation of high production levels by OPEC, and increased production from Alaska, the Gulf of Mexico and the North Sea resulted in lower oil prices in the 1980s. Oil on the spot market peaked in 1981 at $42 a barrel. In October 1981, OPEC finally agreed to stabilize the price of oil at $34 a barrel if Saudi Arabia would lower its output. The compromise, however, came too late to prevent a crash. While Saudi Arabia again struggled to maintain the official price, other OPEC countries dropped their prices to stay competitive with oil from the North Sea and other new fields. When prices started declining,OPEC Aramco’s hiring initiatives during the 1980s targeted not only Saudis but also expatriates. This 1981 ad highlights the quality of life available to expatriates and their families in Saudi Arabia.

The rapid pace of construction is evident in this 1980 photograph of Dhahran. Aramco built 780 new family residences in its four main company communities and started building 1,200 new bachelor units and other facilities, but temporary residential camps still housed 11,000 company bachelors and 700 families.

when he returned to Saudi Arabia to assume the first of several financial positions with the company, he and his wife, Claudia, were greeted by a slightly different prospect: “It was boom times. We lived in a place called North Camp, which was basically a big trailer park out in the desert. … It was just awful.” Despite the harsh conditions, the couple persevered and soon moved into a comfortable home in Dhahran. He retired in 2003, ending his family’s 58-year work history with Aramco, a service record not uncommon in a company with many third- and fourth-generation employees, expatriate and Saudi alike.

As more Saudis achieved professional status in the late 1970s and early 1980s, the number

of Saudi families moving into Aramco communities increased. It was not unusual for a young Saudi couple to move in next door to an American or other expatriate family who might have been living there for 10 or 20 years. Many close relationships developed among new neighbors.

Vice President of Corporate Planning Ali A. Al-Muhareb and his wife moved into the Ras

Tanura community in the late 1970s when he was a young engineer. Their next-door neighbors were an older, childless American couple who treated the Al-Muharebs’ first child as if he were their own grandson. The American woman presented the Saudi mother with needlepoint garments and a baby blanket, among other gifts. After the couple retired and moved back to the United States, the Al-Muharebs visited them during vacations and exchanged presents with them for years. As the expatriate population of what is now Saudi Aramco has grown more internationally diverse in recent years, such cross-cultural encounters regularly include South Africans, Colombians, Venezuelans, Chinese, Britons and Filipinos, among many others.

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80 energy to the world : Volume two

countries agreed to production cutbacks to stabilize the market. Despite the reductions, prices

In Saudi Arabia, expatriate ranks were thinned significantly by the time the payroll hit its

continued to fall through 1982, shaving approximately $39 billion off Saudi Arabia’s 1982 income

low point of about 43,500 employees in 1987. More than 14,000 of the 17,000 positions elimi-

from oil revenues compared with the previous year.

nated since 1982 had been held by expatriates. Among Saudis, many longtime employees were

encouraged to take early retirement. With so many expatriates leaving or taking early retirement,

In 1983, OPEC attempted another unified response. In addition to tightening the quotas

and dropping the official price to $29 a barrel, it explicitly assigned Saudi Arabia the role of swing

by 1985 the Saudi component of the workforce had increased to 65 percent.

producer. By having one country vary its production with world demand, OPEC hoped to keep

The impact of the downturn on the smaller Aramco housing compounds was especially

the price of oil stable. Saudi Arabia soon found its new role difficult, however, as some OPEC

striking. Aramco began a phased withdrawal of families from ‘Udhailiyah in 1985 in anticipation

countries still did not abide by the agreement.

of shuttering the entire community. The size of employee populations at Tanajib, Khurais, Abu

‘Ali, Shedgum and Berri was slashed by 60 percent. In addition, from the end of 1984 through the end of 1985, the number of contractors with living quarters assigned by Aramco plunged from 6,400 to 1,600.

The Ripple Effect The drop-off in demand for crude oil in the early 1980s was not just the result of a recession that hit much of the industrialized world. The high prices and threats of oil embargoes like those of the 1960s and ’70s prompted increased exploration and production elsewhere, especially in Alaska, the Gulf of Mexico and the North Sea. This increased production put even more oil into an already saturated market, lowering prices even further. The lessons learned by the developed world in the wake of the dramatic spike in oil prices in 1973 and 1974 also contributed to a reduction in demand. Many industries switched to other energy sources and installed more energy-efficient processes. In addition, individuals and governments took measures to conserve energy, including everything from improving One aftereffect of the oil embargoes was increased exploration in places such as the North Sea. This Mobil Oil drilling rig was built in 1982 to work the Statfjord oil field, one of the largest North Sea fields.

home insulation to boosting auto mileage requirements to enacting lower traffic speed limits. By 1984, the United States was using approximately 10 percent less oil than in 1973, despite the fact that the U.S. gross domestic product, adjusted for inflation, had grown by 34 percent.

In the summer of 1985, the Saudi government abandoned the quota strategy. By producing

large quantities of crude oil, Saudi Arabia hoped to regain market share from non-OPEC sources with higher production costs. Crude oil prices plunged to levels not seen since before the 1973–1974 price hikes. In 1986, oil prices dropped more than 50 percent before bottoming out at less than $10 a barrel. Faced with tumbling oil prices, OPEC members returned to the negotiating table in 1986. While not wholly satisfactory to anyone, the resulting revised quota system successfully stabilized oil at between $15 and $18 a barrel through the end of the 1980s—the same price it had sold for in 1979.

Aramco planners had based estimates of the company’s output and staffing needs for

the 1980s on late 1970s trends that had been wildly optimistic, as had planners at most major oil companies. Indeed, the boom-and-bust trend in oil prices had frustrated industry executives since the early 1970s and continued to do so through the decade that followed. Aramco’s average daily production hit a record high of 9.63 million bpd in 1980. Four years later, production at times dipped as low as 2 million bpd as demand contracted. In 1985, Aramco’s average daily production stood at 3 million bpd, the lowest since 1969. The personal toll was dramatic. The company’s 1980 estimate that it would employ 75,000 workers by 1985 proved off the mark. Instead, the total was slightly more than 50,000 by middecade, about 15 percent below its peak in 1982 of 61,227. At Aramco Services Company in Houston, whose employees were not included in Aramco’s total employment figures for Saudi Arabia, the payroll was cut from 2,500 to 800 during this period.

It was a tough period for those who remained at the company as well as those who were let

go or took early retirement. For many who had joined during the booming 1970s, it was their first lesson in coping with lean times. Khalid Al-Falih worked as a project engineer during the early to mid-1980s: “The company went through a painful period. There were layoffs, there were cutbacks in budgets, there were a lot of adjustments that we had to make. … That period also taught us as individuals as well as an institution a lot in dealing with the upside, which we did in the 1970s, but also managing to work under more austere financial conditions in the 1980s.” “The Big Picture”

Saudi industry received a dramatic boost from the new sources of power and

feedstocks provided by the Master Gas System and other projects that originated with the Second Five-Year Development Plan. By 1986, after the MGS had been expanded to include offshore fields, Aramco had the capacity to produce up to 2 billion scfd of gas.

Harbor pilot Mohammed Younis guides an oil tanker to its berth at Ras Tanura’s Sea Island in 1989, a year in which more than half of Aramco’s exports were destined for Asia, followed by 25 percent for North America, 21 percent for Europe, and the remainder shared between South America and Africa.

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82 energy to the world : Volume two

Saudi contractors and other companies that supplied goods and services to Aramco also

The Sails

benefited from the construction prompted by Aramco’s expansive budgets of the early 1980s. In a number of locations, the company trained contractors in tandem with its own new employees to

Aramco formed its own shipping subsidiary, Vela International Marine Limited, in 1984.

ensure there was adequate manpower to complete its ambitious roster of projects. The dramatic

Vela takes its name from the constellation Vela, part of a much larger constellation known

growth among contractors and other Saudi companies led to a considerable amount of poaching

in ancient times as Argo Navis, the ship of the mythical Jason and the Argonauts. Argo

of Aramco’s talent.

Navis was split up into four smaller constellations: the sails (Vela), the keel (Carina), the

stern (Puppis) and the compass (Pyxis); the ships in the Vela fleet were named after stars in

Some promising trainees were recruited by Saudi companies, which often offered higher starting

salaries than Aramco. But that was the price Aramco paid for running a quality training program, said

Argo Navis. Arabs had long used the stars to help them navigate their vast desert and sea

Abdulaziz Al-Hokail in 1984. “They are stars that shine in any company they go to,” he noted. “If you

expanses; now these “stars” would lead Aramco’s expanding fleet of oceangoing tankers.

have been working with Aramco you are recognized. We have discipline and experience.” Hamad A. Juraifani, vice president of Northern Area Manufacturing at the time, lamented the departure of these young Saudis, but was able to see the contribution of the program in broader terms: “Although we have lost a lot of experienced Saudis to the private sector, we Saudis [at Aramco] look at the big picture: what is good for the Kingdom.” The plunging oil prices of the mid-1980s impacted the Saudi private sector as much as Aramco. Contractors saw their list of future projects shrivel dramatically as Aramco—and the government—slashed construction budgets and canceled or delayed major projects. The ripple effect was felt in virtually every corner of the Saudi economy. “Mothballing”

Aramco shuttered some facilities as crude oil production fell in the 1980s. That

made economic sense for some older operations, such as an oil processing plant in Manifa, where the company was facing hefty maintenance and repair costs. However, for others it proved extremely costly: A planned refinery in Qasim in central Saudi Arabia was canceled, but the cost of terminating construction contracts and other costs made dropping the project roughly as expensive as completing it. There had to be a better way.

While a group of executives and engineers responsible for major offshore facilities in the

company’s Northern Area Operations was exploring cost-cutting ideas, some of the group came across an engineering journal that described the “mothballing” of U.S. Navy warships after World War II. The executives began thinking: If it worked for warships, why not oil-processing plants? Sadad Al-Husseini, then vice president of Northern Area Operations, put a team together to study the issue and create a mothballing plan. The concept was simple, but the scale was very large: Clean and store everything so that it would not corrode or deform, and provide enough maintenance so facilities could be reactivated quickly. Crews lifted huge rotors and turbines out of their moorings, put them in cases and stood them on end—if left horizontal while not rotating, they would deform under their own weight. They pumped diesel fuel through pipelines to displace all the corrosive sour crude. Likewise, nitrogen, an inert gas, was pumped though sensitive systems and equipment to displace corrosive oxygen-containing air. A minimal amount of power directed to instrument systems in control rooms kept them dry. Three or four guards provided security on each major offshore facility, minimizing personnel costs.

Facilities in the Marjan, Zuluf and Safaniya offshore fields were all mothballed using this

approach. Oil from the offshore wells served by these facilities was piped at reduced volumes to facilities on shore for processing. GOSPs at Hawiyah, Haradh and ‘Uthmaniyah were also mothballed. Similar mothballing was applied to facilities in Khurais, Abu Sa‘ fah, Harmaliyah and Mazalij, the community at ‘Udhailiyah and the 152-centimeter pipeline running from the Qurayyah Seawater Treatment Plant to the Ghawar field.

Saad A. Turaiki, a production engineer in ‘Udhailiyah during the early 1980s who later became

vice president of Southern Area Oil Operations, recalled that the mothballing process did not just look at the aboveground impact of shutting in facilities. Petroleum engineers also analyzed the impact on the oil reservoirs. “We had to go and conduct studies to find out exactly what are the most critical areas to mothball and shut down those that will have no effect on the reservoir,” he said.

The 290,000-deadweight-ton supertanker Phoenix Star is launched in November 1993 from the Nagasaki shipyard in Japan, the second very large crude carrier (VLCC) to join Vela’s fleet that year. Two years later, Vela, which started in 1984 with four secondhand tankers, completed its three-year construction program to build 15 VLCCs when it took delivery of the Alphard Star.

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A drilling crew works in the Safaniya oil field in 1982. Even though world demand for oil was dropping, resulting in a concurrent drop in Aramco’s production from more than 9.6 million bpd in 1981 to a low point of 3 million bpd in 1985, the company kept building production capacity in anticipation of future demand. The strategy proved to be prescient at the end of the decade.

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The costs associated with mothballing were significant. They were paid back several times over, however, when global demand rebounded, along with prices, beginning in the late 1980s and continuing into the early 1990s. Mothballing expenses paled when compared to the cost and time involved in building new facilities after demand had already started to increase. In this manner, the mothballing program dovetailed with the company’s approach to maintaining spare production capacity to help stabilize global energy markets. Non-Associated Gas

The overly optimistic projections that drove planning for crude oil produc-

tion as the 1980s began also impacted plans to utilize natural gas to fuel economic growth in the Kingdom. When the MGS was designed in the mid-1970s, it was based on the assumption that Saudi crude oil production would climb steadily to a level of 12 million to 15 million bpd by the mid- to late 1980s. That amount of crude oil would yield a corresponding amount of associated gas to meet much of the Kingdom’s estimated gas requirements. The rapid decrease in oil production in the early 1980s clearly indicated that unless drastic steps were taken, Aramco would not be able to produce enough gas to meet the country’s projected needs. With little if any commercial demand for Saudi gas in the early decades of oil exploration, Tanajib, where a gas-oil separation plant (GOSP) and other facilities were completed in 1985, became the new hub for expanded offshore activities, including work on new GOSPs in the Zuluf and Marjan fields. World oil markets remained weak throughout the mid-1980s, leading Aramco to mothball the Zuluf and Marjan GOSPs, among others.

Aramco engineers had not focused on locating potential non-associated gas reservoirs. (Nonassociated gas is free gas, or gas not associated with crude oil in a reservoir.) However, they had inadvertently found a large non-associated gas reservoir in the late 1940s in the Dammam Dome, where oil had first been discovered. Dammam Well No. 43 was deepened significantly after World War II as the company searched for additional sources of oil. At a depth of between 3,350 and 3,660 meters, the drilling crew hit what would become known as the Khuff formation, which contains non-associated gas.

Aramco brought six gas wells, such as this one, on-stream from the Khuff gas formation in 1986. As crude oil production declined in the mid-1980s, so did production of gas associated with the oil; at the same time, domestic demand for gas was on the rise. To meet this demand, Aramco embarked on a program to find and produce gas independent of crude oil, or non-associated gas.

The crew was unprepared when it struck the reservoir, and sour gas laced with toxic hydrogen sulfide escaped to the surface under very high pressure. Fearing it might drift into Dhahran and threaten the lives of the hundreds of workers and residents, the crew plugged the well. Drilling shifted to other areas of the concession, and the gas well was largely forgotten. That well may have marked the discovery of a gas-containing formation that extends through the entire Gulf region. Khuff gas has subsequently been found in several locations in the Kingdom, including the Haradh, Hawiyah, Shedgum and ‘Uthmaniyah areas of the Ghawar field, as well as in the Abqaiq, Berri, Dammam, Qatif, Khursaniyah and Hawtah fields. The Khuff formation is relatively old and deep compared with oil and gas reservoirs in the region. Most Saudi oil reservoirs are in the Arab Zone of sedimentary deposits from the younger Jurassic Period, deeper than the shallower reservoirs tapped in Iran, Iraq and Bahrain. Deeper, and older still, lies the Khuff gas formation.

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A team including Na‘ilah Mousli, manager of Reservoir Engineering, petroleum engineer

The Smokeless Flare

Martes Yushatly and Vice President of Petroleum Engineering and Development Ed Price devel-

Na‘ilah Mousli, Aramco’s first female petroleum engineer, was also the company’s first female manager, of Reservoir Engineering, in the 1980s. Mousli received a master’s degree in petroleum engineering from the University of Tulsa in Oklahoma and was a mentor to many other Saudi women in Aramco.

oped a program to revisit existing oil wells and drill deeper in search of Khuff gas. There was one

In 1986, as part of Aramco’s ongoing effort to reduce the flaring of natural gas, the company

problem, however: They did not have a budget to drill for gas, and with Aramco trying to cut

completed the installation of a new, modified safety flare system in Abqaiq, which dramatically

costs wherever possible during the mid-1980s, they were not likely to secure funding anytime

reduced the amount of gas flared at such facilities. Flares are needed as emergency means

soon. However, with crude oil production plummeting, the team needed to do something fast.

of burning excess gas, which occurs at times during the production process or in the case of

As Sadad Al-Husseini recalled:

a plant malfunction or regular maintenance shutdown. The new flare consumed eight times

Whenever we had a well that was located at a promising location, I would get the

less gas than the flare it replaced. In addition, its atmospheric emissions were nearly 10 times

engineers to change the program to deepen it two, three thousand feet and say we’re

less than its predecessor.

doing this for structural delineation … just to tap into the gas and find it. … The oil

would be at about 7,000 feet, and we’d get down to maybe 9,000 feet to find the

flare system technology that uses nonconventional methods of operation and won a Gold

In 1999, a young Saudi engineer named Mazen M. Mashour invented a smokeless

Khuff [gas]. So by the time we were running out of gas because oil production was

Award at the International Inventors Conference in Geneva in 2006. Mashour discovered

coming down, we had enough information on the Khuff in North Ghawar to be able

that injecting a relatively small amount of high-pressure air into the flare all but eliminated

to concoct a program where we would produce some of the wells as gas wells.

smoke from the flares, with significant savings over larger, complex systems. His invention delivers air, under high pressure, into an air-distribution ring. Jets, contained in a wind shield,

The Khuff gas project officially commenced in 1983. The gas, after passing through a

create the turbulence needed for smokeless operation.

pressure-reducing and processing system, was sent into the MGS. By 1985, Aramco’s capacity

The increased airflow creates a much hotter flame, which burns off the impurities

for non-associated gas reached 1 billion scfd. As Al-Husseini recalled, “We never made as much

rather than releasing them into the environment. Mashour’s smokeless flare was first

[non-associated] gas as we had designed the system for, but it was enough to see the Kingdom

installed at Shaybah in June 2000 and was subsequently installed at gas plants in ‘Uthmaniyah

through many years of low oil production.”

and Shedgum in 2005.

“Sell My Quota”

Since the 1973–74 price shock and embargo, OPEC countries, for the most

part, had wrested control of prices out of the hands of the major oil companies and tried to set

In May 2008, a joint venture agreement to produce Mashour’s invention on a commercial

scale was signed between the Al-Rushaid Group of Saudi Arabia and Zeeco, a U.S. combustion technology company based in Tulsa, Oklahoma. Saudi Aramco will be the first customer,

member-country production quotas. The system worked to varying degrees, subject to geopolitical

with a project to upgrade 29 GOSPs and two other facilities in Southern Area Oil Operations

events and each country’s willingness to adhere to its agreed production caps.

with the new technology.

Today’s pricing methods, however, were born out of the chaos of the mid-1980s price collapse. In 1985, OPEC members adopted “net-back” contracts to try to stabilize prices. Such contracts pegged the price of crude oil to the value of a refined product, after subtracting refining costs, margins and freight. Molten steel provides the fireworks in the Hadeed steel plant in Jubail, one of many industries powered by the Master Gas System (MGS), completed by Aramco in 1982. Initially, the MGS harnessed about 3.5 billion standard cubic feet of gas per day, the energy equivalent of 750,000 bpd of crude oil.

The jarring downturn in crude oil prices in 1986 sent oil producers in search of a new pricing mechanism. In December 1986, OPEC created the basket of prices, which quoted amounts for several grades of crude from different member countries, setting the price of Arabian Light crude oil at $17.52 a barrel. Production levels by some OPEC members, however, drove prices down, making it impossible for Saudi Arabia—through Aramco as its major producer—to sell oil at the official price. Nevertheless, Minister Hisham Nazer, who had succeeded Yamani as Minister of Petroleum and Mineral Resources earlier that year, came to Aramco CEO John Kelberer in September 1987 and said, “Sell my quota.” He did not specify a price at which he wanted the 3.3 million bpd sold. Kelberer met with Aramco senior economist William Laney Littlejohn and said, “OK, we have to sell the quota. We can’t use net-back contracts. How do we do it?” Littlejohn’s solution, which went into effect the following month, was used as the basis for pricing Saudi crude oil for more than two decades. Beginning in October 1987, Aramco priced its crude oil based on the prices for crude oil produced from a particular region, minus a certain differential based on several factors, including the quality of the oil, the distance from Saudi Arabia and related shipping costs. The company sold Saudi crude oil in the United States based on the price for West Texas Intermediate oil; in Europe, based on the Brent Weighted Average price for North Sea oil; and in the Far East, based on the average price quoted in Dubai and Oman.

Mazen M. Mashour’s invention, shown in prototype, was designed to reduce atmospheric emissions from gas flares without the expense of more complex machinery. The system injects compressed air into the flare, increasing the burn temperature.

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A new crude oil pipeline snakes its way toward a notch more than 1,000 meters high in the Hijaz Mountains in 1986. Aramco, which assumed operation of the existing 1,200-kilometer East-West Crude Oil Pipeline from a subsidiary of Petromin in 1984, nearly doubled the pipeline’s carrying capacity by laying a parallel line.

By 1987, rebounding industrialized economies had increased demand for oil, and prices

reversed a five-year decline. Late that year, OPEC set a reference price of $18 a barrel, far from the $7 a barrel or less for which many types of Arabian Gulf crude oil had been selling in July 1986. Aramco’s 1988 average daily production of 4.93 million barrels was the highest in six years. Rising employment levels reflected this increase. While still well below its peak of 61,227 employees in 1982, the number began to trend upward, with 43,822 employees on the payroll by 1988. Expanded production prompted a modernization of Ras Tanura Refinery, including construction of a new 250,000-bpd crude oil distillation unit and a major upgrade of Saudi Arabia’s East-West Crude Oil Pipeline. The pipeline, 122 centimeters in diameter, at the time delivered 1.85 million bpd to Yanbu‘ for refining or export. Aramco took over operation of the crude oil pipeline from Petromin’s Petroline in 1984, and began implementing a major expansion by laying a parallel 142-centimeter pipeline connecting to the existing pump stations, which were required to pump oil across Saudi Arabia and lift it over the Kingdom’s western mountains. The second line boosted capacity to 3.2 million bpd. An additional pump station completed in 1992 increased total crude oil capacity to 5 million bpd. Quick Response

On the evening of August 15, 1987, Abdallah Jum‘ah, then vice president of

Government Affairs, found himself managing a crisis. Malfunctioning equipment at the company’s Ju‘aymah Gas Plant had resulted in a serious fire, catching the company’s operating crews by surprise. The only injuries were burns sustained by four workers. By responding quickly to minimize damage and utilizing backup resources, the operating crews at Ju‘aymah managed to maintain a continuous flow of ethane feedstock to the industrial city in nearby Jubail and elsewhere, and a flow of NGL for export. With Aramco President Al-Naimi out of the country on vacation, Jum‘ah became company spokesman and chief liaison officer with the government.

Aramco’s Operations Coordination Center (OCC), seen here in the 1980s, is the central control room for the company’s vast and complex oil and gas operations. The display panels on the OCC’s walls monitor terminal scheduling, electric power generation and distribution, and the production and distribution of oil, gas and NGL, and refined products.

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A young Saudi works on a globe at the Saudi Aramco Exhibit in Dhahran in 1990. The company has had a permanent exhibit in Dhahran since the early 1950s to help educate the public about the oil industry. The current facility opened in 1986.

As early as 1986, Al-Naimi had been advocating, in conversations with the Ministry of

Petroleum and Mineral Resources, that the company should become more of an integrated petroleum company. Rather than limiting itself mostly to the “upstream” part of the industry, which includes exploring for and producing petroleum, Aramco should diversify, Al-Naimi believed, into what the industry terms “downstream” activities, which include international refining, distribution and marketing of petroleum products. Fin-fan coolers stretch into the distance atop one of the two fractionation modules of the Ju‘aymah Gas Plant rebuilt in the wake of a 1987 fire. Aramco responded quickly to ensure the flow of ethane feedstock and NGL to customers by adjusting pipeline flow, reactivating a mothballed plant and increasing production at other active plants.

Jum‘ah’s task involved careful communication with government officials to allay fears that the accident might have been the result of a deliberate attack and to reassure customers that supplies of feedstock and fuel would not be interrupted. He worked closely with one of Aramco’s leading in-Kingdom customers, Saudi Arabia Basic Industries Corporation (SABIC), communicating critical information in the crucial period after the accident occurred. In a subsequent meeting with Al-Naimi, then Aramco Executive Vice President Nassir Ajmi praised Jum‘ah’s performance as well as that of the entire Aramco response team.

Khalid Al-Falih was a lead project engineer on the team that rebuilt Ju‘aymah Gas Plant.

Team members drew on years of training—and plenty of adrenaline, he recalled—getting the crucial facility back up to speed as soon as possible: “We put parts of the plant in service right away, and others were rebuilt in record time. So that was a highlight in terms of the intensity of the work, the long hours, the criticality of the project for the local industry.”

Aramco also reviewed the accident from fire and safety perspectives to absorb lessons

that could be applied systemwide. “Accidents like this, as unfortunate and bad as they are, always force you to go back and reexamine your safety systems to determine what really went wrong,” Al-Falih noted. “In that case it was a hardware problem. Sometimes it’s people issues, but these accidents, we learn from them, and we improve our facilities, our systems and our human resource practices to make sure we avoid repetition of such incidents.” A New Name

Saudi Arabia’s Council of Ministers met in November 1988 and approved the

charter of a new national oil firm—the Saudi Arabian Oil Company, or Saudi Aramco—to assume the responsibilities previously carried out by Aramco on behalf of the government. (While the name “Aramco” no longer accurately reflected ownership of the company, it was retained to ensure continued name recognition as well as preserve a link to the company’s rich heritage.) The transition was seamless. The company marked another milestone in April of that year—following the retirement of John J. Kelberer—when then-President Al-Naimi was also named the first Saudi CEO of Saudi Aramco, and Minister of Petroleum and Mineral Resources Hisham Nazer was named the first Saudi chairman of the company’s board of directors.

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Children’s Art Contest For nearly three decades, Saudi Aramco has sponsored a nationwide children’s art contest, one of the first in the Muslim world. It is open to all children in the Kingdom ages five through 14. “The aim of the contest is to encourage our youth to continue [their] artistic journey, climbing new peaks of beauty, imagination and creativity,” said Ismail I. Nawwab, former general manager of Public Affairs and founder of the competition. The contest has fired the imaginations of thousands of Saudi children and inspired many to pursue their dreams of being an artist or working in the graphic arts. For others, the contest Three oryx graze near a water hole in Nasser Mohammed AlDowayan’s winning entry in the 1991 Saudi Aramco Children’s Art Contest. The contest has been firing children’s imaginations, Saudi and expatriate alike, since 1979.

raises their awareness of what is possible. Nasser Mohammed Al-Dowayan, currently working as an engineer on a project in the Safaniya offshore field, was among the contest winners in 1991 when he was a fourth-grader in the Dhahran Ahliyyah School. “Winning the contest was an amazing experience,” he said. “It helped me understand the concept of ‘challenge’ and made me always want to set higher goals for myself, achieve more and be a step ahead.”

The company proposed the forging of joint ventures with other international petroleum companies to increase the Kingdom’s revenue from its oil. With the green light from Riyadh, Kelberer led a team that entered into negotiations with several international downstream companies. In 1988, a company subsidiary formed a joint venture with Texaco in the United States called Star Enterprise.

Star Enterprise began operations on January 1, 1989, with assets that included major

refineries in Delaware City, Delaware; Convent, Louisiana; and Port Arthur, Texas. With nearly

King Fahd, center, comes to Ras Tanura in December 1986 to inaugurate the Aramco Training Center there. Joining him are Ali Al-Naimi, company president, on his right; Hisham Nazer, Minister of Petroleum and Mineral Resources, on his left; along with members of the Saudi government and Aramco management. Standing behind King Fahd is John Kelberer, company CEO.

4,000 employees, the joint venture also included four marketing divisions in the United States, 48 product distribution terminals and more than 11,000 Texaco-branded service stations. While the company gained added value through its share of the profits from the refining, distribution and marketing of crude oil products in prominent or growing markets, its efforts to enter and expand into international downstream operations were part of a higher strategic goal. As it secured a share of a downstream operation, the company could also secure a long-term The winning artworks, selected by a committee of independent judges comprising

agreement to regularly supply the operation with Saudi crude oil. By doing so, the company

artists, teachers and specialists in children’s art, are honored in different ways. They are

secured an outlet for its oil and reduced its vulnerability to market changes.

displayed in permanent exhibits in company buildings, in-Kingdom and internationally, and reproduced in company publications. The company also donates a selection of the contest’s

New Frontiers

The rebounding global oil market in the late 1980s added urgency to existing

artworks to royal embassies of Saudi Arabia around the world, and many are included in

plans for more aggressive exploration. In 1986, Saudi Arabia had reassigned Aramco its original

local children’s art exhibitions sponsored by the Youth Welfare Presidency.

oil exploration rights to areas that had been relinquished from both the 1933 concession and the 1939 Supplementary Agreement. This enlarged exploration area amounted to about two-thirds of the Kingdom—approximately 1.5 million square kilometers—an area larger than Germany, France and Spain combined. In 1988, a Royal Decree approved company exploration activities Kingdom-wide.

Saudi Aramco began its transformation from an oil-producing and -exporting company to a fully integrated petroleum enterprise in 1989 with the formation of Star Enterprise, a joint venture with Texaco in the United States.

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In 1989, Saudi Aramco geologists and drilling teams made headway in this new exploration

campaign when they found oil in previously unexplored areas. Premium-value Arabian Super Light crude oil (which is extremely low in sulfur) was struck at a depth of about 1,900 meters at Hawtah in central Arabia, south of Riyadh.

In the five years from 1989 to 1994, Saudi Aramco discovered 15 oil and gas fields in

the central, western and northwestern regions of the Kingdom. Found by using increasingly sophisticated technology to peer into previously uncharted regions, these discoveries heralded a new era of hydrocarbon exploration. The Star Enterprise joint venture and the exploration successes, coming after Saudis had taken over management of the company, signified a renewed vitality at Saudi Aramco. The company continued to look internationally to increase its business over the coming years. In response to mounting global demand for crude oil, Saudi Aramco began reactivating numerous facilities that had been mothballed early in the 1980s. New plants and facilities were slated for construction. Little did Saudi Aramco officials realize how fortuitous their expansion plans would prove to be.

Exploration efforts along the Red Sea coastal plain yielded results in 1992 with the discovery, in the well shown here, of sweet gas and condensate at Midyan, near the Gulf of Aqaba.

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chapter four

Rising to the Challenge

Shaybah, 2003

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The increasingly global role played by the Kingdom, and consequently the company, in the 1990s was marked by the international conflict that convulsed the Gulf region early in the decade. At the same time, the company continued to forge international ties to strengthen its business while coping with some of the most dramatic swings in world oil prices in a generation. At home, Saudi Aramco assumed greater responsibilities for helping develop the Saudi economy. A new generation of Saudis assumed leadership of the enterprise and fine-tuned operations as the company launched a new round of mammoth oil and gas facility construction projects—a harbinger of the building boom to come in the opening decade of the new millennium. The Gulf War

The decade began with a shock, and an extraordinary challenge for Saudi Aramco.

On August 2, 1990, Iraq invaded neighboring Kuwait, putting the Saudi government—and Saudi Aramco itself—on a crisis footing. While the government coordinated security measures both internally and with coalition forces from around the world, the company focused on its role in helping to stabilize world energy markets, now thrown into chaos by the invasion and subsequent international embargo on crude oil from Iraq and occupied Kuwait. The sudden loss of 4.8 million bpd of oil from the world’s oil markets put great pressure on all producing countries, and both producing and consuming countries looked toward Saudi A supertanker pulls away from the crude oil terminal at Yanbu‘. In 1993, Saudi Aramco added a fourth berth, part of a larger project to raise the terminal’s capacity from 2.6 million bpd to 4.2 million bpd.

Arabia and Saudi Aramco. With the world’s largest oil reserves, highest production level and highest sustainable production capacity—and a spotless record of reliability—the Kingdom and the company were expected to come to the rescue as quickly as possible.

Before it could do so, however, the company had a more immediate concern: the security

of its workers, their families and the company’s facilities. No one knew whether the Iraqi advance would stop in Kuwait. In the wake of the invasion, hundreds of employee dependents—most expatriates’ families—were flown out of the country at Saudi Aramco’s expense. Many families who were on vacation that August delayed their return to Saudi Arabia for weeks or even months. For employees and dependents who remained, the company implemented emergency plans, including later the distribution of gas masks.

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Early in September, Minister Nazer and other Ministry officials visited Dhahran and Saudi

monthly price of a barrel of Arabian Light spiked to $35 a barrel during select days in September

Aramco’s facilities in a public show of government support for the company’s employees. In

and October 1990, Saudi Aramco’s quick response successfully helped counter this price hike.

private meetings with senior Saudi Aramco executives, Nazer articulated the government’s most

By March 1991, the price of Arabian Light was quoted at nearly $16 a barrel, approximately the

pressing question: Would the company be able to boost crude oil production enough to offset

same price it had been in July 1990 before Iraq’s invasion.

lost Iraqi and Kuwaiti production? Esprit de Corps

A technician in the Abqaiq Mechanical Shops works on a job for the project to de-mothball a Khurais gas-oil separation plant in the latter half of 1990. Facilities mothballed in the mid-1980s were rapidly brought back online, reaffirming Saudi Arabia’s commitment to providing reliable supplies of crude oil by quickly ramping up production to meet global shortfalls.

Offshore facilities, such as these in the Zuluf oil field in 1991, were threatened by mines that had broken free of their moorings. Several mines caused damage to Saudi Aramco offshore facilities, but no lives were lost and oil production continued unabated.

The war months were a nerve-jangling experience for many employees and

residents living in or near company facilities. In February 1991, an Iraqi missile demolished a barracks housing U.S. troops near Dhahran, killing 28 and wounding 99. Although pieces of Iraqi missiles fell on company property in Dhahran, there were no casualties or significant property damage. Esprit de corps remained high among management and the hundreds of operators at onshore and offshore plants, including those near the Kuwait border. Bryan Bartlett, who served as superintendent at the Safaniya onshore plant during the war, recalled the commitment shown by employees during the conflict: “The operators worked 14 days on, seven days off. When the bombing started the crew that was on their seven days off were gone. … Everything was kind of going crazy. Every single Saudi operator that I had came back to work on time. Not one single time did a man not come back to work. … And all of our American expatriate support stayed there. Nobody left.” The Iraqis had placed hundreds of mines in the Gulf in an attempt to disrupt shipping and sink the vessels of the nations arrayed against them. Several mines broke loose from their moorings and drifted into the Zuluf, Safaniya and Marjan fields, as well as off the coast of Ju‘aymah. Most of these mines were detected while still far enough away that measures could be taken to avoid damage. Not all of these mines, however, were detected in time. Beginning in late December 1990, three such mines exploded under offshore platforms, causing more than $700,000 in damage, but no loss of life.

Wartime Efforts Increase Production

A Saudi tank crew pauses for a photograph on January 19, 1991, two days after the air campaign phase of the battle to liberate Kuwait began. A cease-fire took effect a little more than a month later, on February 28.

To help compensate for the loss of production from

Iraq and Kuwait, company leadership decided to “de-mothball” production facilities that had been taken off-line in the 1980s. M. Yusof Rafie, then vice president of Petroleum Engineering, was appointed to head the committee responsible for the massive de-mothballing effort. The most critical challenge was finding sufficient manpower to get the plants not only back in running order but also operating at near-capacity levels. One obvious pool of potential manpower was a group of about 800 trainees who had been recently recruited to work on the second major enhancement of the East-West Crude Oil Pipeline’s capacity. That project was more than a year away from completion. Although some officials were reluctant to have the pipeline fall behind schedule, then-Executive Vice President Nassir Ajmi decided the recruits would be temporarily reassigned.

Saudi Aramco made the most of its experienced workforce. By mixing the newcomers

with seasoned operators, foremen and superintendents, the company was able by the end of 1990 to recommission 146 oil wells and 12 GOSPs in Harmaliyah, Khurais and Ghawar fields, as well as the 152-centimeter water pipeline running from Qurayyah Seawater Treatment Plant to the north ‘Uthmaniyah area of the Ghawar field. The advantage of having such an experienced

“No Shutdown, No Slowdown”

In addition to the ongoing security concerns, Saudi Aramco faced

workforce—the average Saudi had been with the company more than 10 years by the end of

other unprecedented challenges from the war—protecting the fragile ecosystem of the Arabian Gulf

the decade—was never more apparent than that fall. Many of those who had participated in the

and the major industry-related operations located on the coast. In January 1991, Saudi and coalition

1980s mothballing work were still on the payroll in 1990 and knew firsthand the steps to take to

military officials detected oil drifting south in the Gulf—most of which had been discharged by

get the machinery working again. Increased supplies of oil flowed to world markets faster than

Iraqi troops from the al-Ahmadi Sea Island loading terminal 21 kilometers off the coast of Kuwait.

most outside observers thought possible.

Earlier in the month, the Iraqi Army had dumped the contents of several oil tankers docked at the

The de-mothballing was an enormous success, accounting for 2.8 million bpd of additional

terminal and opened the taps at the terminal. Due to the circ*mstances, accurate accounting of

production capacity achieved during 1990. By year’s end, Saudi Aramco’s average daily production

the extent of oil spilled was obviously very difficult. Minister Nazer, however, estimated at the time

was running at an astonishing 8.5 million bpd, up from 5.4 million bpd in July. While the average

that Iraqi forces dumped as much as 11 million barrels of crude oil into the Gulf.

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Retreating Iraqi forces set fire to Kuwaiti oil wells in 1991, creating massive conflagrations that took months to extinguish and wasted more than a billion barrels of oil.

Prince ‘Abd al-‘Aziz ibn Salman, then adviser to the Minister of Petroleum and Mineral Resources, noted during a late January press conference in Riyadh that the government and Saudi Aramco were working closely to deal with the effects of the massive oil slick. Nearly 70 tons of booms and skimmers alone were airlifted from England to the Gulf coast. In many locations, three or more lines of booms were deployed to protect the water intake channels of company facilities and critical government utilities such as water desalination and power generation plants. Much of the additional equipment was sent by the Southampton, England–based Oil Spill Service Center. The company was initially created by BP, but by the time of the Gulf War, the center was jointly owned by 13 oil companies, including Saudi Aramco. The governments of Japan, Germany, New Zealand, France, the United Kingdom, Canada, the United States and the Netherlands also contributed equipment to help combat the oil spill.

Saudi Aramco’s oil spill response team was well prepared to combat the advancing slick.

Drills conducted in 1989 by the team, which numbered more than 450 workers at its peak, led to the adoption of the company’s Oil Spill Contingency Plan in 1990. The team went to work under the direction of Dhaifallah A. F. Al-Utaibi, then vice president of Supply and Transportation and chairman of the company’s Oil Spill Committee. While closely following the contingency plan, team members also quickly applied lessons learned on the job, such as which type of boom was most effective at blocking the flow of oil in a given circ*mstance. Al-Utaibi spoke at the time about the challenges created by the oil spill: “It is tough, expensive and stressful fighting the elements, but Saudi fishing vessels sink in an oil slick near Manifa on the northern Gulf coast in March 1991, the result of a massive oil spill moving south from Kuwait.

so far we’re holding the line. All our facilities have been in operation since day one. … There has been no shutdown, no slowdown of production as a result of the oil slick. Everything is intact. We’re working hard to keep it together. … All conventional steps have been taken. Now we are trying to think what else we can do.”

As comprehensive and thorough as the 1990 Oil Spill Contingency Plan was, the possibility

of facing an oil slick in a combat zone during wartime had not been anticipated. The extent of the spill required that workers begin recovering oil before hostilities had ceased, making it impossible to adhere to some major provisions of the 1990 plan. For example, because the spill originated in a combat zone, there was no way to get to, and stop, the spill at its source—a primary goal of any spill response effort. Even as Saudi Aramco workers were attacking the slick farther down the Gulf, oil continued to flow at reduced rates from damaged Kuwaiti facilities until early May 1991, when it was finally stopped. Shifting winds and rough weather only made the team’s task more difficult. Much of the oil that might have threatened coastal facilities and communities in the Eastern Province was trapped in two bays south of Tanajib, well north of most coastal development. The Saudi Aramco team recovered several hundred thousand barrels of oil from these areas alone. Nearby, the company recovered another 100,000 or so barrels that had drifted near the onshore Safaniya oil processing plant. None of the government’s or Saudi Aramco’s coastal facilities that depended on water from the Gulf for operations such as water treatment, power generation or other facilities had to be shut down as a result of the unprecedented oil spill. Mike Erspamer, the Ras Tanura Terminal manager who served as oil cleanup coordinator reporting directly to Al-Utaibi during the Gulf War crisis, praised the Saudi Aramco crews on the job for their bravery and ingenuity. He and a crew of about 30 Aramcons were laying booms to direct the oil spill away from water intakes near the Safaniya facilities in late January 1991. The Saudi National Guard and coalition forces were in the process of forcing Iraqi troops out of the northernmost portion of Saudi Arabia’s Gulf coast and back into Kuwait. The Iraqis fired several “frog” missiles as they retreated. The inaccurate but deadly projectiles roared over the Saudi Aramco crew at a height of less than 100 meters and landed roughly 1,000 meters out in the Gulf. While clearly shaken, the company crew worked continuously through the day, and for weeks afterward, to safeguard facilities from the massive oil spill.

One of hundreds of personnel combating the oil spill faces a seemingly insurmountable task near Jubail in late March 1991. Saudi Aramco ultimately recovered more than 1 million barrels of oil from the spill and managed to protect all coastal installations from damage and operational interruption.

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Saudi Aramco expanded its international presence in August 1991, when a company affiliate purchased a 35 percent interest in the SsangYong Oil Refining Company (now S-Oil) in the Republic of Korea. The refinery at Onsan, shown here, underwent an expansion project shortly after the agreement was signed, increasing its capacity to 525,000 bpd.

Much of the equipment the cleanup crews used was designed in the wake of the 1989 Exxon Valdez spill off the coast of Alaska, and some of it was overwhelmed by the sheer size of the Gulf spill and the condition of the oil, which Erspamer likened to “chocolate mousse.” Some of the pumps designated for cleanup duty couldn’t handle the thick mass of oil, so the engineers and others assigned to the project came up with an alternative. Henry Clark, manager of Offshore Drilling, suggested they use the minivan-sized pumps that forced drilling “mud” down drill holes to instead supply the force necessary to suck up the spill. Oil recovered using the pumps was mixed with demulsifiers and sent to company desalting facilities for further treatment.

Saudi Aramco eventually recovered more than 1 million barrels of oil from the spill—perhaps

the largest amount of oil recovered from a spill and roughly four times the amount lost in the Exxon Valdez disaster. The recovered oil was transferred to containment basins on land, where it was treated to remove seawater and later used for commercial purposes. The Saudi Aramco team may have recovered only 18 to 24 percent of the oil spilled, but this was impressive compared to the global average recovery rate of 10 to 15 percent of most spills. Indeed, The Los Angeles Times noted that Saudi Aramco’s ability to recover so much oil was pivotal to the cleanup effort: “Key to the increased cleanup pace was the ability of Aramco, the Saudi-owned petroleum conglomerate, to more than double the amount of oil it is retrieving.” The company’s response did not end there. Environmental teams, which included employees and volunteers from within and outside the company, worked for weeks, in cooperation with Patti Echezuria passes a sea turtle to another volunteer as part of wildlife rescue operations in February 1991. Hundreds of Saudi Aramco employees joined the volunteer effort to rescue and clean turtles, seabirds and other animals.

related government organizations such as the National Commission for Wildlife Protection and Development and the Presidency of Meteorology and Environmental Protection, to rescue Gulf wildlife threatened by the spill. Saudi Aramco also conducted numerous environmental impact studies to evaluate the spill’s toll on the coastline of the Eastern Province and adjoining areas, including monitoring the air quality.

Expanding Global Reach

Even in the midst of a serious regional crisis, Saudi Aramco continued

to expand its strategic international reach in downstream operations. In 1990, the company agreed to an equity venture with the Republic of Korea refiner SsangYong Oil Refining Company, today’s S-Oil Corporation. The companies agreed to jointly own and operate SsangYong’s recently completed refining facilities at Onsan.

In August 1991, Saudi Aramco announced that one of its affiliates had purchased a 35

percent interest in SsangYong Oil Refining itself. In 2007, Khalid G. Al-Buainain, senior vice president of Refining, Marketing & International, commented that SsangYong ended up being one of the best refining investments Saudi Aramco ever made. He called the refinery “the most profitable refinery we have in our system today.”

Following its Korean venture, Saudi Aramco in early 1994 acquired a 40 percent equity

interest in Petron Corporation, the largest crude oil refiner and marketer in the Philippines. Two years later, Saudi Aramco announced its first joint venture in Europe—the purchase of a 50 percent stake in privately held Greek refiner Motor Oil (Hellas) Corinth Refineries, S.A., and its marketing affiliate, Avinoil Industrial Commercial and Maritime Oil Company, S.A. After a decade of partnership, Saudi Aramco sold its interest back to the Vardinoyannis family. In 2007, the company reviewed Petron‘s strategic fit and the company‘s commercial return on its investment in Petron, and decided to divest its total equity interest. An acceptable price was offered by an investor for the shareholding interest in Petron, and a sale was completed in 2008.

In May 1994, Hisham Nazer, Minister of Petroleum and Mineral Resources, second from left, and Ali I. Al-Naimi, president and CEO of Saudi Aramco, third from left, visited Asia to explore additional international opportunities.

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Going Green

In 1995, the supertanker Pherkad Star was one of three ships received by Vela that year. This was the final group of ships in the program that built 15 super-tankers. In 1995, carriers owned or chartered by Vela transported 622 million barrels of crude oil to customers in North America, Europe and the Far East.

As an increasing amount of wastewater went through tertiary treatment processes, Saudi Aramco started using it to improve the landscaping of its residential communities and facilities. By the mid-1990s, the company was irrigating common areas and beautifying company grounds. In 2001, a project got under way to replace the sand golf course of the Rolling Hills Country Club in Dhahran with a grass course irrigated with treated wastewater. This created an oasis of lush fairways and greens, along with trees and ponds that earlier generations of Aramcon duffers could only have dreamed of. The trees and water features of the verdant course quickly became a haven for resident and migratory birds. Golfers enjoy a round on Dhahran’s Rolling Hills course. The transformation from a sand course to a grass course was made possible by the company’s growing use of treated wastewater for landscaping.

world-class shipping

One day in 1992, Vice President of Supply and Transportation Dhaifallah

Al-Utaibi was summoned to meet with CEO Al-Naimi and Executive Vice President Ajmi in the CEO’s office. The two executives told Al-Utaibi he had been selected to be president of Vela International Marine, Limited. Surprised by the selection considering his relative lack of experience, Al-Utaibi replied, only half in jest, “I don’t have a clue about the shipping business.”

Al-Utaibi proved more than capable. When he was named president of Vela in December

1992, the affiliate consisted of eight supertankers: four very large crude carriers (VLCCs), which can carry up to 2 million barrels, and four ultra-large crude carriers (ULCCs), which can carry

Captain Assem Ashary, left, became the first Saudi captain of a Vela ship when he took command of the Altair Star in March 2008. Captain Bader Ghouth, Vela’s operations manager, is on the right.

more than 2 million barrels. Four smaller product tankers rounded out the fleet. An additional

15 new VLCCs were on order from shipyards in Japan, Denmark and the Republic of Korea. The

was being recycled for beneficial reuse via tertiary sanitary wastewater treatment facilities

fleet’s headquarters was located in a small suite of offices in the Saudi Aramco Tower Building

in the company’s main communities. Reuse applications, in addition to landscape irrigation,

in Dhahran.

included sod farming, cooling-tower water and boiler feed-water. The company committed

an estimated $750 million to build seven industrial water and wastewater projects, and an

Al-Utaibi spent nearly four years reconfiguring Vela’s operations into a world-class shipping

company. He brought the management of all aspects of Vela’s business in-house, training Saudis

As of January 2008, more than 72 percent of the company’s sanitary wastewater

estimated $200 million for six community water and wastewater treatment projects.

to assume jobs that had been previously performed by a number of different European manage-

Innovative technologies such as ceramic pressure exchangers and membrane bioreactors

ment companies. Vela’s ship management operations moved to Dubai in 1995 to take advantage

were developed to raise reuse of wastewater to more than 90 percent.

of its strategic location for Gulf shipping. That same year, after the last of the 15 VLCCs ordered in 1992 had been delivered, Vela’s fleet included 27 tankers, ranking it among the largest such fleets in the world. During Al-Utaibi’s time at the helm, Vela began a track record as a leader in safety and operational efficiency in the maritime transportation industry.

As a result of the merger, Saudi Aramco assumed responsibility for operating eight termi-

nals on the Red Sea for shipping and receiving crude oil, NGL and other refined products. The Domestic Integration

The company’s international ventures in the 1990s were accompanied

company also took over operation of the Kingdom’s petroleum product distribution network,

by a domestic transformation. A few years previously, in 1988, the government had created, as

which included 18 bulk storage plants and 14 air-fueling units at airports.

part of Petromin, the Saudi Arabian Marketing and Refining Company, or Samarec, tasked with

Now the responsibility for operating the Kingdom’s domestic oil refineries and distribution

refining, marketing and distributing refined products. On July 1, 1993, King Fahd issued a Royal

facilities and its joint-venture export refineries belonged solely to Saudi Aramco. With a stroke

Decree sanctioning a June 14 decision by the Council of Ministers, merging the operation and

of his pen, King Fahd had transformed Saudi Aramco into the world’s third-largest refiner after

facilities of Samarec into Saudi Aramco.

Exxon and Royal Dutch–Shell.

The merger transferred a series of assets and responsibilities to Saudi Aramco. Among these were three domestic refineries: a 190,000-bpd refinery at Yanbu‘, a 140,000-bpd refinery at Riyadh and Petromin’s 75 percent stake in Jiddah’s 90,000-bpd refinery—the remaining 25

“A Seamless Organization”

Like most Saudi Aramco employees, Khalid Al-Falih, at the time

a general supervisor in the Consulting Services Department, learned about the merger when

percent of which was held by local private investors. Saudi Aramco also assumed Petromin’s 50

he picked up the newspaper one morning in mid-June 1993. As was the case with 10 other

percent stake in its three joint-venture export refineries: a 320,000-bpd refinery with Mobil in

senior Saudi Aramco employees, Al-Falih also quickly learned that he had been drafted by senior

Yanbu‘, a 300,000-bpd refinery with Shell Oil in Jubail and a 325,000-bpd refinery with Greece’s

management to help execute the integration of Samarec’s in-Kingdom facilities and its employees

Petrola in Rabigh.

into Saudi Aramco.

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New Leadership

In 1995, after finishing a round of international meetings with Saudi Aramco’s

refining equity venture partners in the Philippines, President and CEO Al-Naimi flew to Alaska for a vacation. He had already donned his waders in anticipation of a day of fishing on a remote stretch of river when he received a phone message. Someone back in Jiddah was trying very hard to get in touch with him. He did not recognize the phone number, but he thought he ought to return the call in case it was critical. The message was from a senior adviser to King Fahd telling him to return to Saudi Arabia immediately. He had been appointed Minister of Petroleum and Mineral Resources and needed to be back in time for the official ceremonies. “It was a complete surprise,” Al-Naimi recalled.

Al-Naimi’s appointment opened up the president and CEO positions at Saudi Aramco.

Since the retirement of Executive Vice President Ajmi at the end of 1992, four executive vice presidents had served directly below Al-Naimi. Nabil I. Al-Bassam was responsible for Finance and Government Affairs; Abdulaziz Al-Hokail was in charge of Human Resources and Training; Dr. Sadad Al-Husseini headed Engineering, Exploration, Production and Industrial Services; and Abdallah Jum‘ah led International Operations and Joint Ventures. Eventually, Jum‘ah, who was known for his strong people skills as well as international experience, was chosen to succeed Al-Naimi as president and CEO of Saudi Aramco. His skill set was widely viewed within the company as complementary to that of Al-Naimi, who had spent much of his career at the oil company in operational roles.

Al-Naimi and Jum‘ah developed a close working relationship during the early 1990s as they

negotiated several international deals. Jum‘ah—the first company president not trained as an engineer or geologist—earned his undergraduate degree in political science, and his management approach and skills were fine-tuned through diverse business assignments and his participation in Harvard University’s executive management program. Al-Naimi recognized Jum‘ah’s potential and helped him broaden his understanding of the oil business. As Jum‘ah recalled, “At that time I was traveling a lot together with him. That was close, you know, walking at night or jogging at night in Holland or in London. He was throwing things to me to get me interested in the technical side of the business. …” Plant operators monitor refinery operations in a Saudi Arabian Marketing and Refining Company (Samarec) control room in 1988. Five years later, Samarec’s operations were merged with Saudi Aramco’s.

The integration team moved to Jiddah, where Samarec was based, and immediately began working with Samarec management to merge the two organizations as quickly and smoothly as possible. The team eventually swelled to 200 members to better deal with complex infrastructure, hydrocarbon system, financial and human resources issues. The immediate challenge was to restructure the company’s operations to more effectively fulfill its new role. The integration team determined that Saudi Aramco’s organizational structure, processes and systems should become the model for the newly merged entities. “The government felt that rather than reinventing the wheel, and creating all of these systems and practices, it would be best to adopt some system that we know already works, which is the Saudi Aramco system,” Al-Falih said. On August 8, 1993, 11 days after the merger task force completed its work, Saudi Aramco announced a revamped organizational structure. Having eliminated redundant roles and responsibilities, a newly enlarged Saudi Aramco was poised to exploit the advantages of a centralized organization. Among other areas of expertise, Samarec had experience running a highly effective domestic marketing campaign, which had generated sales that produced a profit of $22 billion from 1988 through 1993. The merger was operationally complete within six months. The assimilation of more than 10,250 Samarec employees and approximately 1,600 expatriate contractors into Saudi Aramco’s workforce increased the number of employees by approximately 25 percent, though fully integrating them understandably took several more months to accomplish.

“Today,” noted Al-Falih, “it’s a seamless organization. We look across the assets and across

the employees, and it’s very difficult to distinguish an employee as having been ex-Samarec or ex-Aramco. Everybody’s a Saudi Aramco employee, and the assets have all been upgraded and standardized in the same manner.”

Developing Potential To help develop the brainpower needed to guide the company in the future, Saudi Aramco started its College Degree Program for Non-Employees (CDPNE) in 1987, providing educational assistance to promising Saudi students as they finish high school. The program is a highly selective scholarship opportunity for male and female Saudi high school science graduates. The company provides free lodging and pays students a monthly stipend while they attend a one-year college preparatory program. Those who successfully complete the program are enrolled in a university of Saudi Aramco’s choice and follow a mandated program of study. Students must maintain a required academic standard throughout their years of study. If a graduate of this program is offered employment by Saudi Aramco and passes the mandatory 90-day probationary period, the years of study are included in the employee’s term of service with the company.

“We see ourselves as seeds planted by Saudi Aramco,” said Ayed Al-Qahtani, who

since 1993 has earned bachelor’s and master’s degrees, and in 2008 received a doctorate degree in energy economics from the Colorado School of Mines in the United States. “This whole effort has been an orchestrated, long-term investment by the company, with harvests along the way.” In the 20 years since the inception of CDPNE, more than 2,700 employees have earned college degrees through the program.

Scholarship student Munif Al-Munif consults with George J. Mollo, Jr., in June 2007. Saudi Aramco has been providing its scholarship students with both financial support and counsel from experienced advisers for decades.

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Transcending the Technical

Over his years with the company, Jum‘ah developed a valuable

insight that served the company well: Despite the focus on materials and technology inherent in the oil business, the true core of Saudi Aramco was its people. Adopting a merely technocratic approach to the business was naturally not Jum‘ah’s style, and he believed that human resources issues often lie at the heart of what might initially appear to be distinctly operational problems, especially in a company with such a strong engineering and technical heritage.

Attention to the human side of the business prompted almost immediate steps to change

the face of the company. In 1996 and early 1997, a number of industrial leaks, accidents and other problems at Saudi Aramco suggested that a review of operations was in order. None of the events was catastrophic, but collectively they were more than management was willing to tolerate. Jum‘ah felt management needed to dig beyond technical problems to find long-term solutions. Jum‘ah asked Al-Utaibi, who by this time was senior vice president of Engineering and Operation Services, to head a committee to investigate the issue and develop recommendations. Al-Utaibi was the right man for the job, recalled Bryan Bartlett, a committee member: “He wasn’t afraid of anything. He wasn’t afraid of anybody. He was also loyal to the company, and he worked us to death for two or three months.” The committee went throughout the entire company, interviewing people and engaging company psychologists and other experts Company geologists on a 2008 field trip in the mountains of northern Oman get a firsthand look at rock formations that, in the Eastern Province of Saudi Arabia, lie buried hundreds and thousands of meters underground. The detailed study of rock outcrops at various sites throughout the Arabian Peninsula helps geologists develop more accurate models of hydrocarbon reservoirs.

to create and analyze surveys. The group developed a “health of the company” report, which Al-Utaibi presented to management. Subsequently reviewed by Jum‘ah and the company’s senior vice presidents, the report was bitter medicine for some Saudi Aramco executives who did not appreciate hearing long-standing company practices criticized. But sound leadership depends upon honest feedback, and many of the recommendations included in the report were implemented. Compensation policies and shift schedules were improved for employees living and working offshore. Recognition programs for awards and merit were altered as well.

Three-dimensional seismic technology, as the name suggests, adds depth to the length and breadth recorded by 2-D technology. The 3-D seismic imaging produces a much more detailed image of underground reservoirs. This allows geoscientists and petroleum engineers to make better decisions about where to place wells to maximize the amount of oil and gas that can be drawn from subterranean structures. The company used 3-D seismic imaging as early as 1979 on parts of the offshore Marjan field. But cost-cutting associated with the oil industry slowdown and low oil prices of the mid-1980s left company officials leery of spending on such advanced technology beyond small amounts at experimental levels. It was not until 1991 that Saudi Aramco initiated its first onshore 3-D program, at Abu Jifan. The following year, three more 3-D surveys were completed, at Hawtah, Ghinah and Hazmiyah, as part of the initial development of these central Saudi Arabian oil fields. From Technology Updates

In the 1980s, Saudi Aramco lagged technologically behind some

that point forward, 3-D became an integral part of the exploration process at Saudi Aramco.

international oil companies. The relative accessibility of its largest fields, overall low producAt roughly the same time that Saudi Aramco was embracing 3-D technology

tion costs and the significant costs of new technology kept it from being a top priority for

Going Horizontal

the company.

in exploration, it was warming up to another new technology as well—horizontal drilling. For years,

Two-dimensional seismic imaging had been used in a relatively simple form as early as

due to the cost and difficulty of locating multiple drilling platforms offshore, the company had

the 1920s in the United States and Europe to help identify possible hydrocarbon reservoirs in

been drilling offshore wells at varying angles, as opposed to traditional vertical wells. Horizontal

sedimentary rock formations. More advanced forms had long been used by the company. For

drilling takes the concept one step further: Wells begin as vertical wells, then at a certain depth

several decades after seismic technology came into use, dynamite was used to create shock

the drill bit is turned to drill horizontally at a specific angle to reach a particular target within the

waves that were recorded as they bounced back from underground formations, much the way

hydrocarbon reservoir. Not only does the horizontal technique allow for targeting hard-to-reach

earthquakes are recorded on seismographs. Today, huge trucks press large vibrating metal plates

reservoirs, but it also enables the reservoir engineers to better manage production and reservoir

against the ground, causing strong pulsations to penetrate the earth. Sophisticated geophones

depletion issues by drilling the wellbore across the widest dimension of oil-bearing strata in a

capture the resulting echoes returning from formations and faults in the rock below.

reservoir, rather than down through it.

A convoy of thumper, or vibroseis, trucks crosses the desert near Abqaiq, part of an exploration survey. Large vibrating plates mounted on the undercarriage of the trucks are lowered to the ground to create sound waves that are recorded by sensors. This data is crunched by computer programs to produce 3-D images of the subterranean structure for analysis by geoscientists.

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Horizontal drilling, first employed by Saudi Aramco in 1991, proved key to extracting oil from difficult-to-reach reservoirs. An additional benefit over vertical drilling was that it greatly increased the contact the producing well could have with the reservoir.

The international oil companies were using the technology for exploration. We took the technology and applied it to reservoir management. They would use 3-D seismic to discover an oil field which was small, so they needed the seismic, and then they would drill it with a horizontal completion, or a few horizontal completions, to get the most out of it, and then they would walk away. To them, that was the end of the game. To us, that was the beginning. We would go to an oil field, [and] we would shoot the 3-D seismic to say, OK, now what can we say about this field? How can we link rock properties to seismic properties to fill in the gap between one well and the next, to create a database that really reflects what the field looks like? And then how can we use the horizontal drilling—eventually multilateral horizontal drilling—to optimize the recoveries from the zones that we have no control over in between the wells and so on at the surface? So they had the technologies, but they weren’t looking at the problem that we were looking at. They couldn’t care in terms of ultimate recovery. Overseeing the development and production of all the crude oil and gas reserves of Saudi Aramco is the responsibility of Reservoir Management. The work here is among the most technologically advanced of its kind in the world, ranking with the best of such endeavors among leading international oil companies. The huge number of the company’s computer clusters make it, in terms of computing power, among the top commercial computing centers in the world. This massive computing power is used chiefly to run simulation models. Reservoir simulation is a 3-D mathematical representation of the total petroleum system, including the reservoir and its associated aquifer, wellbore and surface facilities. These models are the primary tool used to locate, develop and manage oil and gas reservoirs. Thirty years ago, reservoir simulation consisted of creating 3-D models using a few thousand “cells.” Each cell represented a cube-shaped portion of the reservoir, measuring about two kilometers on each side and with a depth of from 15 to 30 meters. This technology was a big improvement over the 2-D seismic images used for decades in the industry, but it did not provide much specificity in terms of placing wells or understanding reservoir characteristics. The models

Saudi Aramco completed drilling its first successful horizontal wells in the offshore Berri

field in January and April 1991. The first Berri well was drilled vertically to about 1,980 meters and then at a horizontal angle for another 2,700 meters to its predetermined target “window,” which was only about 6 meters in diameter. Once in the oil-bearing rock, the horizontal well remained in contact with the oil-bearing strata for 760 meters. If a traditional vertical well had entered the same strata, it would have been in contact with the oil-bearing rock for only about 40 meters.

As Al-Husseini, who retired in 2004 as executive vice president of Exploration and

Producing, later recalled, “When we did it at Berri, suddenly the wells that were producing 2,000 barrels and 1,500 barrels [per day] were coming in at 5,000 to 6,000 barrels, because of the horizontal drilling. So that made people sort of say, ‘Well, this isn’t just for fun; there is some advantage here.’” Ultimate Recovery

In the early 1990s, Saudi Aramco officials visited several international oil

companies to gauge the latest in exploration and production technologies. The team realized that 3-D seismic and horizontal drilling were especially well suited to the company’s increasing emphasis on long-term reservoir management, and its role as steward of the Kingdom’s oil and gas resources. Saudi Aramco immediately also saw the value of the latest technology called multilateral drilling. Using this technique, drillers extend wells off of a common horizontal well, much like fingers on a hand, allowing them to target specific pockets of hydrocarbons. As Al-Husseini later recalled:

also took weeks for mainframe computers to produce.

Petroleum engineers Amal A. Al-Awami, right, and Mubarak N. Al-Dossary model a hydrocarbon reservoir in one of the 3-D visualization rooms housed in the Exploration and Petrolem Engineering Center in Dhahran.

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The Core Store Saudi Aramco rightly boasts of its technological prowess and computing power dedicated to analyzing its hydrocarbon-bearing reservoirs and prospective fields. Yet one of the most vital tools in its analytical arsenal is in many respects deceptively low-tech. Inside a nondescript building in Dhahran’s light industrial park is the company’s Well Samples and Laboratory Unit, popularly known as the Core Store. The cavernous structure houses more than 240 kilometers of core samples and is “the backbone of all the studies that have to do with finding more oil and developing more fields, with the prosperity of the country and of our whole operation,” said Haytham Ahmad A. Al-Tayyar, a geological consultant with the Geological Technical Services Division who retired in July 2007. Every core sample yields a wealth of knowledge about the hydrocarbon reservoir from which it comes. Core samples—and drill cuttings—are the only direct, hands-on contact anyone has with a hydrocarbon reservoir, thus allowing geologists to see the reservoir, and its component rocks and fluids. “Cores are the ground truth for everything else we do,” chief technologist of EXPEC’s Advanced Research Center Dave Cantrell said. “All the other data we collect is indirect. We need the kind of data supplied by cores to keep our models honest.” Aus Al-Tawil, left, discusses a core sample with fellow geologist Nasser Al-Ghamdi. The rock cylinders provide direct contact with the component rocks and fluids of a hydrocarbon reservoir, and thus hold a wealth of clues as to whether economically producible oil and gas, and how much of it, may lie in a reservoir.

Ghawar, the world’s largest oil field, measures about 280 kilometers long and up to 26 kilometers wide. This 3-D model shows the entire field, which lies 1,648 meters to 2,472 meters beneath the Earth’s surface. The colors represent depths below sea level, from red at the higher level to yellow and green deeper below.

Saudi Aramco’s state-of-the-art parallel-processor computer system provides a much

clearer idea of what is going on in these underground structures. Today’s reservoir managers, using Saudi Aramco’s proprietary technology developed in-house called POWERS—Parallel Oil

Water and Gas Reservoir Simulator—generate models comprising several million cells, with each

not every well is cored because it is a time-consuming and costly procedure. Core samples

cell measuring roughly 125 meters on a side and 30 centimeters deep. Even higher resolution

are handled carefully at well sites where they are cut, labeled and packed into protective

models are not out of the question in the foreseeable future, given that rapid advancements

crates and trucked to the lab in Dhahran. There, the cores go through a four-step process that

Core samples are taken from a zone of interest in a well, not from the entire depth, and

in computing power show few signs of abating. The 278-teraflop (278 trillion calculations per

includes prep work, sampling, analysis and archiving. “The more rock you look at from more

second) computing capability of the EXPEC Computer Center in 2008, for example, represents a

wells, the better you understand how it’s all put together,” explained Aus A. Al-Tawil, chief

485-fold increase in Saudi Aramco’s computing capacity since 2000. And in November 2008, the

geologist of the Reservoir Characterization Department. “You start to unlock the story of the

company’s next-generation prototype version of POWERS completed its first giga-cell (billion-cell)

reservoir, and with more data from other disciplines, the story becomes more complete.”

reservoir simulation run. Reservoir management experts industry-wide are taking the same approach used in visualization and applying it on the microscopic level to the porosity and permeability of the rocks in oil- and gas-bearing strata. For the past several years, Saudi Aramco has been using computer-aided tomography (CAT) scans and magnetic resonance imaging (MRI) techniques to obtain a better understanding of oil-bearing rock at the microscopic level.

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Development of the Shaybah oil field deep in the beautiful but unforgiving

Managing for the Future

Taming Shaybah

Saudi Aramco’s Reservoir Management Department is responsible for managing the Kingdom’s

achievement in the 1990s. The vast desert’s deserved reputation as one of Earth’s most inhospitable

Rub‘ al-Khali—on time and within budget—was in many ways the pinnacle of Saudi Aramco

Geoscientists analyze seismic data in November 1992, the year when the company first began using 3-D seismic surveying in reservoir development operations to more accurately delineate known reservoirs.

hydrocarbon resources to maximize recovery over the life of the reservoirs. That is a weighty

places made early expeditions, beginning in the late 1930s, few and far between and delayed the

responsibility, considering that the Kingdom’s proven crude oil reserves, at roughly 260

development of the region for decades. Geologists surveyed the barren region’s northwestern

billion barrels, are the largest conventional reserves in the world, and its natural gas reserves

stretches in 1938, and again in 1948, but exploratory drilling did not occur until the late 1950s.

of 263 trillion cubic feet rank as fourth largest.

In 1968, a drilling team struck oil at Shaybah Well No. 1.

The key to sound reservoir management lies in controlling the pace at which oil is extracted.

At the time, traveling the 800 kilometers from Dhahran to Shaybah by land could take

International oil companies tend to focus on extracting oil as quickly as feasible to recoup up-

longer than a week. Small airplanes reduced the trip to a few hours, which provided a solution

front exploration and development costs and to reward shareholders. Saudi Aramco, on the

for transporting people, but the vast quantities of supplies needed to sustain a drilling camp and

other hand, has longer-term goals, striving to maximize hydrocarbon recovery from its fields.

build oil and gas facilities required trucks. Technical and economic reasons made Aramco, in the

Rapid production of oil from reservoirs risks damaging the oil-bearing strata by promoting the

late 1960s, hesitant to establish a permanent operation at Shaybah, where summer temperatures

rapid infiltration of water into rock layers from which oil is being drawn, among other things.

often hit 50 degrees Celsius and sand dunes tower up to 300 meters high. Company officials

The company’s policy for decades has been to produce oil gradually from its fields—

feared the shifting sands might bury buildings even if they were erected on the sabkhahs, the

not maximizing short-term profits, but managing the flow of oil in the reservoir for optimal

narrow salt flats between the dunes.

recovery. Thus, the benefits to the Kingdom from its hydrocarbon resources are extended to

the longest time possible, and the reliability of crude oil supplies to world markets is sustained.

the sabkhahs remained consistently free of drifting sand alleviated concern. Continuing advances

Partly as a result of their tendency to produce oil more rapidly up front, international

oil companies as a group tend to recover on average less than 50 percent of the oil in a given

By the 1990s, improvements in technology and decades of measurements suggesting that

in computing power, 3-D seismic imaging technology and horizontal drilling gave the company’s geologists and engineers a much more detailed look at the Shaybah reservoir than had been

reservoir, estimated Nansen Saleri, who for many years oversaw Reservoir Management for

available for any previous drilling target of this magnitude. What they found was astounding:

the company. Saudi Aramco’s recovery rates are well above that. Recovery rates in some fields

To put Shaybah in perspective, the field holds as much oil—more than 14 billion barrels—as the

have reached 55 percent of original oil-in-place and are on target to ultimately reach 70

entire North Sea reserves. It contains 25 trillion cubic feet of natural gas as well.

percent. The remaining 30 percent is typically so tightly bound to the rock that short of actually mining the oil-bearing rock and hauling it to the surface for processing, it is considered unrecoverable with current technologies. Emerging technologies, however, can further improve recovery rates beyond 70 percent.

The next step will be to create animations to model the processes occurring within individual pores of oil-bearing rock in order to plan the most effective oil and gas recovery methods. The capability to view reservoirs in such detail already exists on one level—Saudi Aramco can visualize how fluids are moving through a reservoir by using historical data to build a model. The company can create video animation of a drill bit passing through a particular stratum of a reservoir based on sensors feeding back real-time data from the drill and well fluids. The limits to future reservoir simulation are likely to have more to do with the human imagination than the technologies available to the intrepid petroleum engineer.

Advancements in reservoir management and production technologies grew apace in the

light of supply dislocations caused by the Gulf War, which underscored the need for additional production capacity to meet the challenges of the rapidly evolving world energy markets. In 1994, the company completed a five-year program to raise its maximum sustainable crude oil production capacity to 10 million bpd, giving the Kingdom the largest spare production capacity of any country in the world at a time when almost all oil-producing countries were producing at or near capacity.

In late 1997, for the first time in four years, OPEC decided to increase its production ceiling.

The 10 percent increase to 27.5 million bpd took effect in January 1998. Unfortunately, it occurred almost simultaneously with a financial crisis that swept much of Asia, sharply reducing the region’s demand for crude oil. Consecutive warm winters in North America and Europe in 1996 and 1997, combined with the dearth of Asian demand, led to an increase in world oil inventories and drove prices sharply lower. The price of oil slid through much of 1997, after hitting $22 a barrel in late 1996, and plunged to below $10 a barrel in late 1998.

Abdallah Jum‘ah, president and CEO of Saudi Aramco, center, leads a management team on a March 1997 visit to the Shaybah project. On Jum‘ah’s left is Sadad Al-Husseini, executive vice president of Exploration & Producing (E&P), and on his right, in the white shirt, is Abd Allah Al-Saif, senior vice president of E&P.

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The logistics of developing Shaybah were mind-boggling. Until a road was graded through

In the Footsteps of Khamis

the sand dunes, materials had to be brought two-thirds of the way by contracted trucks and then transferred to Saudi Aramco’s specially designed deep-desert vehicles, which carried the

Legendary Bedouin guide Khamis ibn Rimthan’s desert-reading skills live on in Quriyan M.

supplies the rest of the way. In 1996 alone, the company used 300 trucks to transport more

Al-Hajri, a desert road–building supervisor in the Drilling and Workover Department. Al-Hajri,

than 3,800 loads weighing a total of 90,000 metric tons to the construction site. A paved

the great-grandson of Bedouin herdsmen, and his crews crisscross large parts of Saudi Arabia

access road was needed, however, and contractors built a 386-kilometer road across previously

as they prepare access roads and drilling sites.

trackless desert. The construction took 12 months and was completed three months early, due in part to the 1,300 workers dedicated to the project and the 533 pieces of heavy equipment used to move nearly 15 million cubic meters of dirt and sand. To build the road more quickly, Saudi Aramco arranged for the access road to be built by three different contractors, which simultaneously worked on different sections. The road was constructed by collecting earth from marl pits, clay-like soil with good bonding properties, and depositing it along the road’s path. Once laid, the marl was watered and then Deep in the Rub‘ al-Khali, construction crews lay pipe parallel to the Shaybah access road in August 1997. The pipeline carries oil 645 kilometers to Abqaiq, where it is processed for export from Ras Tanura and Ju‘aymah.

compacted by heavy equipment. This process was repeated several times to form layers, or “lifts,” of watered and compacted material to ensure the road’s reliability. After the road was completed, the trip from Dhahran to Shaybah could be made in less than 12 hours. A concrete runway large enough for a Boeing 737 followed 10 months later. With the regular delivery of supplies ensured, construction on facilities there continued at a rapid pace.

Following desert landmarks during the day and the stars at night, Al-Hajri relies on

orienteering skills honed during his boyhood in the early 1960s when he helped his family herd their camels in search of fresh grass and water. He joined Aramco in 1979 after working for several years with a company contractor. While he and all employees in the department are trained in using Global Positioning System (GPS) navigational devices, Al-Hajri prefers to rely on his innate skill. “I’m afraid that if I don’t use it, I will lose the knowledge,” he said.

“Our people may have to stay one or two nights out in the wilderness, dealing with

whatever comes up,” said Neil Brown, Wellsites Division superintendent and longtime friend of Al-Hajri.

Al-Hajri once spent six months living in a tent high atop one of the red dunes in the

Rub‘ al-Khali, helping direct road construction through the desert to Shaybah. Every night, Al-Hajri would light a fire and serve Arabian coffee for the weary workers. His tent became a focal point for relaxation and socializing for the people on the project, 800 kilometers south of Dhahran.

An appreciative guest of Al-Hajri’s hospitality nominated him for Employee of the Year

in 1996, noting in the nomination letter that Al-Hajri’s tent was a place “where people of all nationalities could relax from the rigors of the day [and] has become a well-known feature of Shaybah and has helped tremendously to maintain morale and bring a certain kind of normality to an abnormally difficult area to work and live.”

Quriyan M. Al-Hajri and Richard G. Moffitt check map coordinates near the Haruri airstrip about 200 kilometers northwest of Abqaiq in the spring of 2004. The two men were scouting the proposed location of an exploration well site.

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Discovered in 1968, the Shaybah oil field, located 800 kilometers south of Dhahran in the Rub‘ al-Khali, was held in reserve until technological challenges and other factors could be resolved.

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Expanding in the United States

Enabling easy air and ground transportation to Shaybah was only part of the challenge. The project also included construction of three GOSPs and scores of horizontal wells, scattered

In 1998, Saudi Aramco joined the top ranks of the U.S. gasoline marketing and refining

across the oil field.

industries. Saudi Refining Inc., a subsidiary of Houston-based Aramco Services Company,

and Texaco merged their Star Enterprise joint venture with Shell Oil assets in the southern

center in Abqaiq. To avoid the time and expense of building and maintaining a pump station in

and eastern portions of the United States to form Motiva Enterprises, LLC. The transac-

the deep desert, the oil is kept at high pressure, roughly 45 kilogram per square centimeter, after

tion included a 20-year oil supply contract, obligating Motiva to purchase a minimum of

leaving the wells. Housing and recreation facilities to accommodate 1,000 men were also built.

450,000 bpd of Saudi crude oil. The ownership changed when Saudi Refining Inc. and Shell

The marquee 500,000-bpd project had the undivided attention of new CEO Jum‘ah and

purchased Texaco’s interest and became 50-50 partners in Motiva as a result of the 2002

his management team. Dozens of Saudi-owned companies and top international engineering

merger of Texaco and Chevron. The refining and marketing alliance covers a 26-state area of

and contracting firms were enlisted for the project. Many of the Saudi partners were involved

the United States and ranks as the second-largest retail gasoline marketer in that country.

from an early stage as the company pursued an accelerated contracting process to streamline

A 645-kilometer pipeline was constructed to transport the oil from Shaybah to a processing

planning, bidding and construction.

In July 1998, three years after the development effort began and 30 years after the discovery

of oil there, Shaybah opened for production. In March 1999, King ‘Abd Allah, then Crown Prince, inaugurated the $1.7 billion project, which represented not only an extraordinary technical and logistical achievement, but a cultural milestone as well. In a significant development for the company and the Kingdom, 90 percent of the team in charge of the Shaybah project was Saudi. Oil prices rebounded from their 1998 lows as demand from Asia picked up and OPEC reduced production quotas, but the price collapse nonetheless reverberated throughout the industry. The mergers of Exxon and Mobil, BP and Amoco, and Total Fina and Elf Aquitane during this period were all driven at least in part by a desire to reduce operating costs in the face of lost revenue. Investments in capital programs worldwide all but dried up for several years for the same reason, setting the stage for oil production and refining capacity constraints in the following decade. Lessons Learned

Jum‘ah later conceded that the intense focus on Shaybah caused the company

to briefly let its attention slip from another contemporaneous project: the $1.3 billion upgrade of the Ras Tanura Refinery. The complex refinery project had started four years before Shaybah, but was completed two years behind schedule, the same year as the development of the oil field.

This Shell station is part of Motiva Enterprises, a joint venture between Saudi Refining Inc., a subsidiary of Houstonbased Aramco Services Company, and Shell. Motiva refines and markets gasoline under the Shell brand in the southern and eastern regions of the United States.

Following the merger, Motiva had four refineries until the 2004 sale of its

Delaware City, Delaware, refinery. Its remaining refineries in Louisiana and Texas have a total combined capacity of about 740,000 bpd, to go with its almost 8,000 service stations. Ground was broken in December 2007 on a project to nearly double the throughput of Motiva’s Port Arthur, Texas, facility from 325,000 bpd to 600,000 bpd, which will make it the largest U.S. refinery and one of the largest in the world. The expansion will supply additional gasoline, diesel and aviation fuels under the Shell brand to wholesale and direct supply markets. The refinery will be able to process heavy crude oil as well as bitumen from Canada’s oil sands. In line with the environmental commitments of Motiva’s parent companies and strict U.S. regulations, the plant will lower most types of emissions on a per-barrel basis, especially ozone precursors such as nitrogen oxides and volatile organic compounds.

King ‘Abd Allah, then Crown Prince, center, with President and CEO Abdallah Jum‘ah, on his right, and Ali Al-Naimi, Minister of Petroleum and Mineral Resources, on his left, are accompanied by members of the royal family and company management—and one young guest— on a visit to Dhahran in April 1999 for inaugurations of the Ras Tanura Refinery upgrade and a pipeline linking bulk plants at Dhahran, Qasim, Riyadh and al-Hasa.

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Despite delays in construction, the Ras Tanura Refinery upgrade, completed in 1998, four years after this photo was taken, was a valuable addition to company facilities. The improvements increased the percentage of high-value products, such as gasoline and diesel fuel, that the refinery can produce from each barrel of crude oil.

“We made the horrendous mistake of … not doing the inspection ourselves because at

position of higher authority, so they could apply what they had just learned. The company also

that time we were trying to economize. [Oil] prices were low and we were trying to cut costs

put operating and project management personnel on integrated teams so they worked more

as well as we can, so we sort of turned [over] a lot of the activities that we should be doing to

closely together. In addition, Total Quality Management programs, a series of subprograms

contractors without proper attention,” Jum‘ah said. He recalled that while he and the manage-

and guidelines to improve project management, were introduced in 1994 and were reinforced

ment team were going to Shaybah nearly every month during the construction process, he

from 1998 to 2002 in the wake of the delays at Ras Tanura to keep Saudi Aramco on the path

could only remember visiting the Ras Tanura Refinery once or twice during the upgrade.

“We certainly failed in Ras Tanura, but that failure was an eye-opener,” Jum‘ah said.

“To me, Ras Tanura was a hard lesson from which we emerged subsequently to be masters

of continuous improvement.

Concurrent with the Shaybah development and Ras Tanura Refinery upgrade, Saudi Aramco

was also bolstering its domestic product network, building a series of pipelines to transport

of megaprojects.”

refined products such as diesel, gasoline and kerosene to and from its bulk plants at Dhahran,

As a result of the setback at Ras Tanura, project management, construction and engineer-

Qasim, Riyadh and al-Hasa. Included in the project were new bottom-loading facilities for tanker

ing teams reexamined their practices and began consistently benchmarking their efforts against

trucks at the North Riyadh Bulk Plant, which eliminated operator exposure to product vapors.

international standards. In 1995, the company had joined the U.S. Construction Industry Institute,

The network provided many benefits, including increasing operating efficiency and the reliability

to take advantage of its best practices experience, and sponsored a chapter of the Project

of product supplies in the Central Province, eliminating approximately 1,650 tanker trucks daily

Management Institute in the Gulf region. Saudi Aramco began the process of taking person-

from the highways, reducing trucking costs and road degradation, improving traffic safety and

nel off one successfully completed project and moving them right on to the next project in a

easing traffic congestion around the company’s bulk plants.

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Hawiyah Gas Plant, shown here under construction in 2001, was designed to process 1.4 billion standard cubic feet of non-associated gas per day for the Master Gas System. Saudi Aramco entered the new century with an increased emphasis on production of natural gas to fuel the Kingdom’s economic diversification plans.

Value Engineering

Saudi Aramco in the 1990s explored numerous ways to increase its competi-

tive edge. One example was the company’s adoption of value engineering, a process aimed at reducing costs while improving quality. A value engineering team was assigned in 1992, under the leadership of then acting General Manager of Southern Area Projects and later Executive Director of Industrial Services Abdulaziz Omer Al-Ajaji, to evaluate all projects and eliminate what is often referred to as “gold plating”: the addition of features that come in the “nice to have” category but are ultimately not essential to the success of the project.

Value engineering naturally creates internal friction between operating organizations

that want the best facilities possible and project management teams responsible for bringing in projects on time and within budget. In the face of this natural tension, the value engineering team learned to listen to both sides, always with a keen eye on its ultimate mission: reducing costs while maintaining—or even improving—the quality and integrity of projects. The timing of the team’s creation could not have been better. The first project it reviewed was the giant Hawiyah Gas Plant. The plant was part of a push to develop additional nonassociated gas reserves to supply local industry with fuel and feedstocks. The team scrutinized every expenditure and trimmed $100 million off the $1.45 billion cost of the project. The plant opened in 2001, four months ahead of schedule. The company’s self-evaluation of its project planning and execution process that began in the late 1990s served Saudi Aramco well as the start of the 21st century brought multiple projects that placed even greater demands on company management. Saudi Aramco’s ability to execute such precedent-setting projects and meet other challenges would depend largely upon tapping the full potential of its Saudi and expatriate workforce.

The Shaybah project was a proving ground for Saudi Aramco’s workforce in the late 1990s, as many of the project managers and other key personnel moved on to even larger and more complex oil and gas projects in the new millennium.

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chapter five

Achieving the Vision

The central crude oil processing facility at Khurais.

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In early 2005, then-Crown Prince ‘Abd Allah, Minister Al-Naimi and other Saudi senior government officials began discreetly contacting the Kingdom’s major trading partners and allies to alert them about an important development. After reassessing the Kingdom’s oil and gas strategies, the Saudis had news that was likely to make headlines and move oil markets when it was announced in May: Saudi Arabia was budgeting tens of billions of dollars over five years on one of the largest oil industry capital-spending programs anywhere in the world. More than half the total was slated for the construction of a half-dozen sprawling oil production facilities—any one of which deserved a place in oil industry record books. Collectively, the new facilities were designed to boost the company’s maximum sustainable production capacity of crude oil by 2 million bpd to about 12 million bpd. That increase, roughly equivalent to the total daily production of Venezuela, would maintain Saudi Aramco’s spare capacity of at least 1.5 million to 2 million bpd to help meet unexpected demand. In addition, plans were prepared for expanding maximum sustainable production capacity to 15 million bpd in the following decade if market conditions warranted such an increase.

Some of the funds were earmarked for boosting Saudi Aramco’s refining capacity and

producing significantly more natural gas and related products. The natural gas would be used to fuel Saudi Arabia’s industrial growth, especially its petrochemical industry. Spurring the next phase of Saudi industrialization, the plastics and petrochemicals produced by these new industries would help the nation diversify its economic base and provide greater employment opportunities for its young and rapidly growing population.

In the summer of 2008, amid the worldwide escalation of prices for construction materials,

Saudi Aramco reaffirmed its commitment to push ahead with its expansion plans. At an industry Engineer Jamal Al-Marhoun, far left, and Saudi welders, left to right, Abbas Al-Darwish, Mohammad Al-Noor, Mohammad Al-Khabbaz, Hasan Al-Hasawi and Ali Al-Abbad pose in front of two storage tanks they helped construct at the Hawiyah NGL Recovery Plant in 2007.

gathering in Bahrain, Khalid Al-Falih told the audience, “As we speak, the company has an active project slate totaling some 65 billion dollars, while our five-year business plan, which begins next year, encompasses capital spending approaching 59 billion dollars.” The company held fast to its strategy of adding production capacity based on its long-term outlook for global oil demand and its experience in building for the future, even in down times, in order to cover shortfalls and help stabilize global energy markets.

It had been more than a generation since Saudi Arabia had seen anything approaching the

scope of the combined projects announced in 2005. In the mid-1970s, the oil company had built the country’s Master Gas System to capture and process natural gas for industrial use. While it was the largest such project of its era, its price tag, adjusted for inflation, came to roughly $35 billion.

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Ziyad Al-Qasim, studying for a degree in chemical engineering, works out a problem in a classroom in Seoul University in the Republic of Korea in 2006. Saudi Aramco’s growing presence in Asian markets is mirrored by a greater number of Saudi employees studying at universities in the region and going on orientation courses.

Industry consultancy Cambridge Energy Research Associates (CERA) estimates that based

on expected worldwide investments in oil exploration and production technologies, global oil production will not peak and then decline sharply. Instead, it will reach an “undulating plateau,” where global oil production will level off and slowly start declining over the course of several decades, beginning around the year 2030. This decline will be cushioned by significant amounts of production from unconventional oil sources such as heavy oil sands, which will become commercially viable as processing technologies improve and world oil prices rise.

Claims that the world faces an imminent shortage of oil are alarmist, CERA believes. “This

is the fifth time that the world is said to be running out of oil,” said CERA Chairman and Pulitzer Prize–winning author Daniel Yergin. “Each time—whether it was the ‘gasoline famine’ at the end of WW I or the ‘permanent shortage’ of the 1970s—technology and the opening of new frontier areas have banished the specter of decline. There’s no reason to think that technology is finished this time.”

The Asian Boom

What was driving the Saudi investments? The basic economics of supply and

demand. Depressed oil prices worldwide in the latter part of the 1990s, combined with the Asian financial crisis, discouraged global investment in the energy industry. Investors overlooked the resilience of the developing economies of Asia and elsewhere, and their thirst for oil. Led by China and India, economic development in areas of Asia came roaring back in the early years of the new millennium. Suddenly, oil industry experts realized that demand for crude oil was bumping up dangerously close to existing supply—and that the call for crude oil was going to increase. Fueled by double-digit economic growth rates, China’s oil imports jumped 17 percent in 2004, compared to gains of 10 percent in 2003 and 8.5 percent in 2002.

According to the Paris-based International Energy Agency (IEA), global demand for oil was

projected to increase from roughly 88 million bpd in 2010 to 92 million bpd by 2015, with 90 percent of the increase in demand coming from developing countries. By 2030, the IEA estimated worldwide demand for oil would reach 105 million bpd, even after accounting for anticipated alternative-fuel use and conservation efforts. Those projected increases loom especially large in light of one inescapable fact: Annual oil production over this period is expected to decline in several oil-producing regions, including the North Sea and Alaska’s North Slope, as their oil reserves are gradually depleted. Drawing upon its continued success at finding additional sources of oil, and reassessing what can be produced from existing fields to replace the approximately 3 billion barrels of oil Saudi Aramco entered the new millennium assessing both its ability to execute

produced each year, Saudi Aramco was—and still is—confident the country is nowhere near

PEOPLE POWER

reaching a “peak” in oil production, as some industry experts have postulated. Current reserves

major projects and its ability to empower and motivate employees. The company strove to improve

are sufficient to meet demand for decades to come, company executives note, and advances

its track record when it came to completing facilities on time and within budget. Equally important

in technology will likely enhance both oil exploration and oil production capabilities.

was improvement in its performance on the “soft side” of the business to continue to attract the

Saudi Aramco’s confidence is partially based on the fact that its total proven recoverable

best Saudi students and professionals, and remain a top choice among expatriate professionals.

reserves—roughly 260 billion barrels of crude oil—is a conservative estimate. A vast area of

“Building for the future isn’t simply a matter of laying pipeline, erecting distillation columns or

promising territory in the Kingdom has not been explored fully or with the latest technology.

building gas plants,” Jum‘ah said. “It also means developing minds—and mindsets—ready to

In addition, even small increases in oil production technology can yield big results, and the

meet the scientific, technical and intellectual challenges for an ever more complex world.”

company’s goal to raise recovery rates to 70 percent for most of its fields could translate into

billions of barrels of additional reserves. Even assuming that Saudi Aramco significantly increases

Nights fables about the genie to fashion a metaphor for transforming Saudi Aramco’s corporate

its production above the current rate of roughly 3 billion barrels a year, it clearly has reserves

culture. It was time for the company to “let the genie out of the bottle,” Jum‘ah declared. “I

to spare.

wanted the brainpower of this company to be released,” he recalled.

At a management retreat for company leaders in 1998, Jum‘ah tapped into The Arabian

Aviation apprentices do their coursework in the Dhahran Industrial Center in 2007. Participants in the Apprenticeship Program for Non-Employees go through 24 to 27 months of training and study English, science, computer science and mathematics, in addition to job skills, before they begin working.

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A Burst of Energy

Haitham Ruwaili, coordinator of the Radiology Group at Saudi Aramco Medical Services Organization in 2001, was one of the employees who benefited from the emphasis on self-

Until 1946, the predecessors of Saudi Aramco, first known as Casoc and then Aramco, oper-

development. Not long after he joined Saudi Aramco in 1995, Ruwaili was selected for a

ated under the concessionaire’s corporate identity and thus lacked a distinctive individual logo.

scholarship in the United States to obtain additional technical certification in radiation therapy,

All that changed with the announcement in the June 2, 1946, issue of the company news-

but instead opted to pursue a university degree in Riyadh during his off-duty hours. “We

paper the Arabian Sun and Flare of a contest to design the first Aramco logo. By the end of the

[Ruwaili and his wife of four months at the time] realized it would be difficult; however, we

month, at least 110 responses had been received. Harry Flackmeier’s double-A design, below

also realized that Saudi Aramco would give us full support.” He used vacation days and leaves

left, served as the company’s official trademark for the next 40 years.

without pay, and his managers allowed flexibility in his work hours. As a result, two years later

he obtained his degree.

In November 1988, with the creation of Saudi Aramco, a new logo was needed. Once

again, the call went out within the company, and in June 1989, the board of directors

endorsed the design, below right, created by company graphic artist ‘Abd Al-‘Aziz Al-Ridhwan.

benefit the company, Jum‘ah declared 2002 the “Year of Innovation.” Employees were encouraged

Keeping the focus on the potential of each employee to use insights and experience to

to submit ideas for improving company performance via the company’s proprietary Web-based Idea Management System. By the end of the year, nearly 3,500 suggestions had been received. Proposals ranged from ways to improve basic work processes or pieces of equipment to patentable ideas. Added together, those suggestions saved the company hundreds of millions of dollars within a few years and created new sources of revenue. Sami A. Abdel Mohsin and his team from the Central Ghawar Well Services Division, for example, found that pumping units could be built from recycled parts at a fraction of the cost of a new unit. Abdel Mohsin submitted this idea, and its implementation enabled his unit to cut costs significantly.

As the new millennium approached, the company revamped its corporate identity. At

the official unveiling of the new logo on April 24, 2000, CEO Abdallah Jum‘ah told employees

Suggestions continued to come in, even after 2002 came to a close. In 2003, the program’s

first full year, 3,890 employees participated. In 2006, that figure jumped to 6,200. By year-end 2009, nearly 80,000 ideas had been submitted through the system.

gathered in the EXPEC plaza in Dhahran, “This energy burst represents not only our company’s commitment to meet the energy needs of the world, but also the human energy, mobilized through teamwork, that has propelled Saudi Aramco into the new century.”

RETHINKING PERFORMANCE STANDARDS

To ensure the success of future construction projects,

Saudi Aramco’s senior management understood that it had to analyze its own performance as well as long-embedded company practices. They decided Saudi Aramco needed to be measured against its global best-in-class competitors if it was truly going to be transformed into a highperformance organization.

Jum‘ah declared 2001 “the Year of Self-Development” for Saudi Aramco, and the company instituted new programs, increased its support for employee participation in professional societies, hosted exhibitions and launched a special website to help employees take control of their own intellectual growth and career paths. The initiative emphasized the potential for employees to use personal computers to take courses tailored to their specific fields.

Self-development became an integral part of company culture. Nine years later, during

2010, more than 51,000 employees registered for e-Learning courses and completed an average of roughly 5.5 courses during the year, selecting from more than 3,645 offerings. Meanwhile, between 2005 and 2010, company oil and gas operators registered for more than 11,500 Webbased Operator Training Simulation courses. Employee Abdulrahman M. Abdulqadir said he felt the system demonstrates that Saudi Aramco is “looking for ways to lead, not just survive.” Senior Vice President of Finance Abdullatif A. Al-Othman noted, “We understand that sustained business success comes through providing our employees with opportunities to hone their skills and apply their talents, and helping them realize their potential as professionals, and as people.”

Hawiyah Gas Plant came online in mid-2001, under budget and four months ahead of schedule, testament to the push for improved performance brought about by the company’s experience with the Shaybah and Ras Tanura Refinery projects in the previous decade.

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The results were sobering. In 2000, Independent Project Analysis (IPA), a private U.S. con-

Research and Development Center

sulting firm, conducted a benchmark study of 30 industry projects. It found that Saudi Aramco’s Members of the Research and Development (R&D) Center’s biotechnology group, left to right, Vedamuth J. Vedakumar, Hanaa H. Habboubi and Mousa S. Enezi investigate the possibility of employing bacteria to remove sulfur from crude oil before it is refined.

projects were taking 60 percent longer than the average industry project and costing almost 30 percent more. Rather than searching for excuses, Saudi Aramco redoubled its efforts to improve performance. The Hawiyah Gas Plant, completed in 2001, was the first $1 billion-plus project completed since the IPA benchmarking. It provided the first solid evidence that Saudi Aramco was applying the lessons of Shaybah and Ras Tanura, as well as value engineering and related concepts. By mid-decade, major projects were being completed on schedule and under budget 80 to 90 percent of the time. NATURAL GAS MOVES TO CENTER STAGE

The stakes could hardly have been higher. Representing

the first expansion of the MGS since the 1970s, the Hawiyah Gas Plant was a critical component of the Kingdom’s industrial infrastructure, which was being taxed by the greater than expected local demand for natural gas fuel and feedstock. The complex, the first plant built exclusively to process non-associated gas, provided facilities to process 1.6 billion scfd of gas from the deep, Like its sister plant at Hawiyah, the Haradh Gas Plant’s project team was nearly all Saudi. The Haradh facility, with a processing capacity of 1.8 billion standard cubic feet per day of non-associated gas, started up in June 2003. Both gas plants were named “Project of the Year” by the Project Management Institute.

A pair of R&D personnel discuss their work with a Fourier transform mass spectrometer, used to measure extremely low levels of contaminants, such as sulfur, in crude oil and refined products. Left to right are Saeed H. Al-Shahrani, lab technician, and Hendrik Muller, senior lab scientist.

Scientists who had been engaged in research and development work for years at widespread Saudi Aramco facilities got their own home beginning in November 2000: the state-of-the-art Research and Development (R&D) Center in Dhahran. The center takes a portfolio approach to devising research programs, targeting near-, medium- and long-term market needs. The first priority is the desulfurization of crude oil. In the medium-term, the company is investigating clean fuels, and the third research focus is the management of carbon release. The R&D Center has entered or is considering entering into collaborations with leading universities, commercial technology providers and other oil companies, refiners, petrochemical companies and the automobile industry. Company scientists at the center have been responsible for nearly one-third of the company’s patents. In 2008, researchers began performing representative pilot plant testing in which refining processes are reproduced on a small scale. Currently, eight pilot plants are in operation, with future plans calling for a total of 25 plants to be grouped in one facility.

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high-pressure Khuff and Jawf gas reservoirs—the latter a sandstone formation found in 1994

plant was still under construction, Saudi Aramco formed its first Gas Operations business line

lying even deeper than the limestone Khuff formation—at the southern end of the Ghawar

to consolidate all gas-related activities. M. Yusof Rafie, who joined the company in 1970 after

field. The gas produced by the plant freed up for export crude oil that had been used to fuel

graduating from the University of Cairo with a bachelor’s degree in petroleum engineering, was

domestic industry.

appointed the first senior vice president of Gas Operations in June 2000. Rafie, who retired as

The Hawiyah Gas Plant was the model of a modern construction project. The Project

a senior vice president in December 2008, became responsible for all gas plants, as well as the

Management Institute (PMI) awarded the plant its prestigious Project of the Year Award in

planning, engineering, maintenance and future development of the company’s gas facilities.

2002. The equally large, more energy-efficient and environmentally friendly Haradh Gas Plant, Passengers board one of the company’s five Boeing 737 jetliners at the Haradh airstrip while a company helicopter lifts off in the background in 2007. Saudi Aramco flies one of the largest corporate air fleets in the world, with roughly 200 pilots and copilots at the controls of a variety of fixed- and rotor-wing aircraft.

In 2000, Rafie also was tapped to be a member of the Saudi

which reduced the amount of energy lost in the plant’s steam cycle from 65 to 20 percent, was

THE NATURAL GAS INITIATIVE

completed two years later, also at the southern end of the Ghawar field, and won PMI’s Project

government’s negotiating team for its Natural Gas Initiative (NGI). Khalid Al-Falih, who had been

of the Year Award in 2003.

serving as president and CEO of Petron, the company’s refining and marketing equity venture

The construction of the Hawiyah and Haradh gas plants, and later upgrades, increased

in the Philippines, was assigned to lead the negotiating team in 2001. At the same time, he was

the total capacity of the MGS to 9.4 billion scfd. The giant projects underscored the increasing

named vice president of Gas Ventures Development Coordination. The NGI was the outgrowth

importance the Kingdom and the company placed on developing the country’s gas resources,

of an effort on the Kingdom’s part to attract international oil companies to prospect for and

especially the gas produced independently of crude oil. Indeed, in June 2000, while the Hawiyah

develop gas reserves in regions that were not being actively explored by Saudi Aramco. In the late 1990s, Al-Falih had helped draft the Kingdom’s first gas strategy and development options to grow supplies to meet rising demand. The Hawiyah and Haradh gas plants were two of the more tangible results.

By 2000, the government, under the leadership of King ‘Abd Allah, then Crown Prince, was

focused on negotiating with international companies to help develop the Kingdom’s gas resources. The Saudi team discussed several complex ventures with three consortia of international oil and gas companies. The Saudi team and the international oil companies, however, could not agree on the ventures. “Alignment was proven to be … next to impossible to achieve, between their expectations and our expectations,” said Al-Falih. Two key roadblocks were disagreement over the extent of gas reserves open to development and the rates of return on invested capital. In June 2003, the Crown Prince directed the team to put the exploration portion of the ventures out for competitive bidding. The Natural Gas Initiative benefited from a timely change in Saudi Aramco’s corporate structure. In 2002, Jum‘ah convened a retreat for senior management at Shaybah to set longterm goals for the company, encapsulated in a set of strategic imperatives. One of the results of the retreat was the realization that the company needed to create a new organization to launch business-development initiatives, especially those involving international joint ventures or international investment in the Kingdom. Too often in the past, executives agreed, ideas or proposals for new businesses had failed to take root for lack of a dedicated corporate structure to nurture them. The gas joint ventures were put under the aegis of the New Business Development organization in 2003, and Al-Falih was named the vice president of that organization. The first international gas exploration joint venture, the South Rub‘ al-Khali Company Ltd., or SRAK, was formed with Royal Dutch–Shell and France’s Total in October 2003. Three more ventures followed the next year, with Saudi Aramco holding a 20 percent equity stake in each: Luksar Energy Limited, with Russia’s Lukoil; Sino Saudi Gas Limited, with China’s Sinopec; and EniRepSa Gas Limited, with Italy’s ENI and Spain’s Repsol YPF. In total, the four ventures covered more than 330,000 square kilometers of the Rub‘ al-Khali.

In early February 2008, Total exercised its right to withdraw under the terms of the agree-

ment, transferring its stake in SRAK to project partners Royal Dutch-Shell and Saudi Aramco. The exploratory drilling by the four joint ventures has resulted in two announced discoveries by Luksar and an excellent gas rate produced in one of SRAK’s wells. As of the end of 2010, all four ventures were engaged in drilling exploration or appraisal wells. Working in these remote locations, where the summer heat is extreme and infrastructure is practically nonexistent, could make the best geologists yearn for a desk job. Not SRAK CEO Patrick Allman-Ward and his crew, however. “Most geologists spend their lives remapping prospects that other people have already mapped,” he said. “In this project, we are putting new prospects on the map that have never been seen before. That, of course, is very exciting.”

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QATIF : BLEN DING SUCCESS

The first big crude oil increment of the new millennium was the Qatif project, which added 800,000 bpd of production capacity in the summer of 2004. The project also included expansion of Berri Gas Plant to handle the additional volumes of associated gas produced with the crude oil.

Saad Turaiki, vice president of Southern Area Oil Operations,

embodies the characteristics of innovation and self-motivation that the company has been promoting among employees. Long before innovation became an official part of the Saudi Aramco management vocabulary, Turaiki championed ideas that at first left many co-workers scratching their heads. In short order, however, they were applauding the implementation of his concepts. Turaiki joined Aramco in 1975 after graduating from the University of Petroleum and Minerals, and worked in the mid-1990s on the Qatif field development. Production was declining as OPEC tightened supply in an effort to curb falling prices, and managers were trying to cut operating costs any way they could. One day, Turaiki was thinking about processing costs and how Saudi Aramco needed different facilities to process each grade of oil it produced. “I said, ‘Why do we have to have three increments at Qatif? It’s in one area. Can’t you blend the crude and produce it as one increment?’” The Advanced Fire Training Center features realistic training environments to simulate firefighting scenarios such as tank storage, petrochemical processing, marine, commercial and residential sites. The center opened in 2005.

He wrote a letter to his superiors asking that the company investigate blending the crude oil grades, a concept that did not receive much initial support from his peers. “Everybody was sort of saying, you know, ‘What is this crazy idea?’” he said. Company engineers nonetheless took the idea to research and development. “To their surprise, they came to me and said, ‘You know, Saad, it’s great. It’s great Arabian Light crude,’” Turaiki recalled.

CAPACITY CONCERNS

Saudi Aramco significantly increased production in 2003 to help compensate

for the Iraqi production taken off the market following the U.S. invasion of Iraq in the spring of that year. The company’s average production for that year was 8.1 million bpd, up 1.3 million bpd from 2002. When production from the Qatif plant came online in 2004, average daily production increased to 8.6 million bpd, helping to meet rapidly increasing demand from China in particular. The production hike narrowed Saudi Aramco’s spare production capacity to less than its comfort level of 1.5 million to 2 million bpd (out of a total of about 10 million bpd) —and all signs indicated that world demand was likely to continue increasing at a brisk pace. At the same time, the level of hostilities in Iraq, including the sabotaging of oil facilities and pipelines, made it increasingly clear that world markets could not expect significant amounts of crude oil from that country anytime soon. Saudi Aramco and government officials realized by the latter part of Given the associated costs, senior operations management had not been interested in

2004 that the Qatif complex, while setting important milestones in terms of size and complexity,

producing individual grades of Qatif crude oil if they could be delivered in increments of only

was a harbinger of even bigger, costlier and more complex construction projects to come.

150,000 to 200,000 bpd for each grade. Bringing the field online as a single, 500,000-bpd incre-

The company quickly began firming up plans for the unprecedented capital spending

ment of blended crude oil, processed in a single facility, was a far more attractive proposition.

program announced in 2005. Concerns about reserve capacity were underscored within a few

With prices clearly recovering by 2000 (when Arabian Light hit a year-high of $31.93 a barrel on

months of the announcement when hurricanes Katrina and Rita slammed into the U.S. Gulf coast,

September 22), the project, which included doubling oil production capacity from the offshore

disrupting production and refining in several locations and sending crude oil and gasoline prices

Abu Sa‘fah field to 300,000 bpd, got the green light. Development of the increment began in

soaring. The twin disasters sent a clear message to world energy markets: The sooner additional

2001 and was completed in July 2004, three months ahead of schedule.

production could be brought online, the better.

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“POINT OF TRANSFORMATION”

A host of new technical advances the company had recently rolled

Using MRC wells guided by geosteering reduced by nearly 90 percent the number of wells

out or was in the process of employing in the field gave Saudi Aramco officials confidence that the

needed to produce 300,000 bpd, compared with traditional vertical drilling used earlier on the

company was more than ready for the massive projects in the works. At the southern tip of the

Ghawar field. Haradh-3 required only 32 MRC wells versus the 280 that would have been required

Ghawar field, 280 kilometers from Dhahran, the Haradh-3 crude oil increment was completed in

using vertical wells.

January 2006, five months ahead of an already tight 26-month design and construction schedule.

Today, Saudi Aramco’s upstream technological development is spearheaded by scientists

Equally remarkable, the project came in under budget. The Haradh-3 GOSP and associated

at EXPEC’s Advanced Research Center (EXPEC-ARC) in Dhahran. Teams of researchers explore

facilities added 300,000 bpd in Arabian Light crude oil production and also produced 140 million

new avenues in the fields of geophysics, geology, reservoir engineering (including enhanced oil

scfd of associated gas.

recovery technologies), computational modeling of reservoirs and drilling. Advising EXPEC-ARC is an advisory council—an international body of high-profile scientists, academics and industry experts that reviews and guides the technology strategy of the ARC. The council includes members from King Fahd University of Petroleum and Minerals (KFUPM), Massachusetts Institute of Technology (MIT), the Center for Remote Sensing at Boston University, Texas A&M University and the University of Texas. Muhammad M. Saggaf, chief petroleum engineer, is eminently qualified to lead company scientists on their quests. Saggaf joined the company in 1989 after completing a degree in mathematics at KFUPM. That same year, he earned his master’s degree in geophysics from MIT. After stints in Geophysical Research & Development and Reservoir Characterization at Saudi Aramco, he returned to Cambridge in 1998 and completed his doctorate at MIT in geophysics in less than two years. Saggaf is also a recipient of the prestigious J. Clarence Karcher Award from the Society of Exploration Geophysicists.

About 250 people work at EXPEC-ARC, and nearly half have doctoral degrees. “[W]e have

people working here from all over the world, of many different nationalities,” Saggaf said. “We believe in the value of working with a diversity of cultures to include the breadth of experience and knowledge that people from different countries can bring to Saudi Aramco. We also appreciate the value of the synergies that can be developed from this interaction between people.”

At the peak of construction, more than 15,000 laborers, craftsmen and professionals of various nationalities were at work on the Qatif project at different sites, in and out of Kingdom. More than 98 percent of the team members involved in the project design, implementation management and inspection were Saudis.

Located in the midst of a barren, tabletop terrain of gravel and sand, the Haradh project became recognized around the world as a showplace for cutting-edge technologies. Here, the unprecedented integration of drilling and producing technologies—maximum reservoir contact (MRC) wells, geosteering for optimal placement of wells, “smart” well completion technology and the revolutionary intelligent field concept (in which surface and subsurface sensors transfer real-time data on temperature, pressure, flow rates and other factors to Dhahran)—represented “a point of transformation” for Saudi Aramco, said Amin H. Nasser, then executive director of Petroleum Engineering and Development. Nasser, named senior vice president of Exploration & Production in May 2008, said bundling these technologies created “a model to be followed by the rest of the industry.” Many of these practices had been used separately or in pairs by the company on individual wells—the first MRC well in Saudi Arabia was drilled in Shaybah in 2002, and the first “smart” well was drilled in Shaybah in 2004. But Haradh-3 was the first major addition to production capacity—at Saudi Aramco or anywhere else in the world—that bundled the technologies and applied them to a drilling program developing a particular field.

A team from the Exploration and Petroleum Engineering Center’s Advanced Research Center (EXPECARC) discusses extreme reservoir contact well technology in 2007. Team members, left to right, are Hiba A. Dialdin; Nabeel S. Habib; Mohammad N. Asker; Muhammad M. Saggaf, then manager of the center; Jin Jiang Xiao; and Abdullah M. Al-Qahtani.

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EXPEC-ARC is just one of the many success stories that symbolize the growing capability of

As Saudi Aramco expanded its operations and production capacity, it continued to forge

the company since its transformation from a foreign-owned enterprise to one owned, managed

new contractual relationships with local and international companies. The strategy was, and still

and largely operated by Saudis. Former Saudi Aramco board of directors member James Kinnear

is, vital to the growth of both the company and the local economy. By engaging other companies

once observed that the transformation of Saudi Aramco from a foreign-run company to a Saudi-run

to perform important support tasks, Saudi Aramco could concentrate its own resources on

company may be the greatest transfer of technology in the history of mankind, and the EXPEC-

its core business tasks. At the same time, the contracts provided welcome opportunities for

ARC advisory council members agree. “I think it’s quite amazing what has been done here [at

entrepreneurial Saudis, including those just beginning to do business. In 2009, the company

Saudi Aramco] in the last 20-30 years,” said Stephen Holditch, head of the Petroleum Engineering

executed 2,200 contracts and amendments valued at more than $15 billion, 83 percent of which

Department at Texas A&M University and a member of the advisory council. “This was more or less

were contracts awarded to local companies and contractors.

an expat-run organization, and now that’s totally changed where it’s all run by Saudi nationals.”

On several of the major projects, aggressive schedules and the tight market for materials led to innovative construction approaches. In response to the shortage of steel fabrication facilities, for example, the Khursaniyah team used concrete as well as standard steel pipe racks. The

Award-winning geophysicist Mustafa Naser Al-Ali, shown here on the campus of the Delft University of Technology in the Netherlands, earned his doctorate from that institution in 2007. Al-Ali was sponsored in his studies by Saudi Aramco’s Advanced Degree Program, one of 227 employees in the program that year.

concrete columns were mostly prefabricated by Snamprogetti, a subsidiary of the Italian energy company ENI, and shipped to the construction site, with the final concrete work done on-site. One of the most innovative arrangements was with al-Zamil Heavy Industries, which won the contract to build and deliver 39 pressure vessels in 21 months. Six of the vessels were submarine-sized NGL storage vessels, or tanks, each measuring 67.7 meters long and 6.6 meters wide and weighing 1,050 metric tons. In a first for a Saudi Aramco project, the contractor built and heat-treated the tanks on-site—raising the vessel temperatures to 690 degrees Celsius for seven days—to speed the construction and installation process. The Khursaniyah project was especially challenging: A crude oil processing facility and a gas plant were built simultaneously, side by side. The complex has the capacity to process 500,000 bpd of Arabian Light crude oil from the Khursaniyah, Abu Hadriya and Fadhili fields and 1 billion scfd of associated gas. The gas plant receives gas from five different sources with varying pressures and hydrogen sulfide contents. The size and scope of the plant’s gas processing makes it the “most complex project ever executed” by Saudi Aramco, noted Usama Badghaish, lead project engineer for the gas plant. Fawaz Hassan, left, a safety officer with a contractor company on the Khursaniyah Gas Plant project, discusses proper safety harness rigging with a fellow employee early in 2007. Hassan was one of thousands of young Saudis trained to take on important construction jobs essential for the success of the long list of Saudi Aramco projects under way in the mid- to late 2000s.

EXPANSION CHALLENGES

The number and scope of the new projects forced the company to create

construction cities for temporary workers on a scale not seen since construction of the MGS in the 1970s. To house the Khursaniyah project workforce, for example, a temporary city was built and supplied with recreation and other support facilities. More than 30,000 men from roughly 30 countries, speaking more than 15 languages, were living there at the peak of construction in 2006. The high demand for skilled labor on other similar projects in the Gulf region prompted a renewed focus on training. Saudi Aramco contracted with private companies to train Saudis in construction, and some contractors provided their own training. Fawaz Hassan from al-Hasa signed on with Khursaniyah contractor Consolidated Contractors Company in the spring of 2006. A former communications operator, Hassan received on-the-job training as a safety officer. He encouraged other Saudis to consider the building trades. “I tell my friends that if they get the chance to come onto this kind of job, they will have a good future. I tell them they should take English courses and work on their computer skills, and they’ll get good jobs, too.”

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Achieving the vision 149

Assisted by tugboats, a supertanker— all 333 meters and 300,000 tons of her—eases into a crude oil loading berth at Ras Tanura Sea Island while a departing ship crosses her bow in early 2005. The delicate procedure of berthing and unberthing these enormous ships was performed by company harbor pilots—all Saudis— thousands of times during the year in which more than 2.6 billion barrels of oil were exported to markets around the world.

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The Khurais crude oil increment was the crown jewel of the capital program and demon-

Women in Today’s Workforce

strated the massive scale of the company’s effort to maintain stability in world energy markets. The project tapped into three fields—Khurais, Abu Jifan and Mazalij—and with total production

Increased educational opportunities for Saudi women in recent years have created a pool

capacity of 1.2 million bpd, it is the largest single production increment added in company history.

of well-educated and well-trained professionals ready to move ahead in their careers.

The project’s enormous scale and complex requirements, combined with an overheated world

Economic issues, especially the rising cost of living in Saudi Arabia, have also prompted

market for construction and manufacturing materials and services, created serious challenges for

significant changes in the roles of Saudi women in the Kingdom. Today, both partners

Saudi Aramco from a project management perspective. The company responded with innovative

in a Saudi household often work outside the home. For many Saudi women, Saudi Aramco

contracting, planning and engineering solutions, and Khurais came onstream on time, below

is a popular career option.

budget and with a stellar safety record.

Eiman A. Al-Hazza, left, a supervisor in Saudi Aramco’s Drilling and Workover Department, discusses safety and leadership issues with Bassam H. Bahrabi, right, during the company’s Exploration & Producing Management Forum in 2008.

At the same time that work was progressing on the massive Khurais and Khursaniyah

projects, Saudi Aramco was also building a 100,000-bpd oil increment in Nuayyim, south of Riyadh, adding 250,000 bpd of capacity to Shaybah and beginning work on the Manifa project, a 900,000-bpd oil increment slated for partial start-up in 2013. The capital program also included major components designed to meet growing demand for natural gas. Saudi Aramco oversaw a number of simultaneous, interrelated gas and NGL projects and expansions, primarily the grass-roots project to build the Hawiyah NGL Recovery Plant. The facility started up in the summer of 2008 with a process capacity of 4 billion scfd of sales gas from the Hawiyah and Haradh gas plants to yield 310,000 bpd of NGL. The capacity of A worker is dwarfed by an NGL storage vessel under construction on the Khursaniyah project site north of Dhahran in 2006. A Saudi firm was contracted to build six of the mammoth NGL tanks and 33 other vessels, and did so on-site.

the nearby Hawiyah Gas Plant to process non-associated gas was increased by 50 percent, from 1.6 billion to 2.4 billion scfd, and the fractionation capacities of the gas and NGL plants in Yanbu‘ and of the Ju‘aymah Gas Plant were also increased substantially. The capital program also required increasing the capacity of pipelines and other support infrastructure. The need for more treated seawater to maintain pressure in the Khurais and

Abeer M. Al-Mutlaq, a career counselor at the King Abdullah University of Science and Technology (KAUST), guides Ali I. Al-Naimi, Minister of Petroleum and Mineral Resources, through a photo gallery in Jiddah in early January 2009, part of an event for the first class of KAUST students.

Hiring and promoting qualified Saudi women is crucial to the company’s ability to tap the best minds in the Kingdom, male and female. Today, more than 1,100 Saudi women are full-time employees, including more than 750 who have college degrees, and more than 1,300 women are supplemental employees or contractors with the company. Since 1995, a handful of women have risen to the level of manager, and two held that position in 2010. More than 40 women hold positions ranging from supervisor to administrator.

Dr. Salwa S. Sheikh is a pathologist for Saudi Aramco Medical Services Organization and the first Arab woman to represent the College of American Pathologists as a team leader. Her mother passed away from cancer when Sheikh was seven, causing her to make a commitment to turn that tragedy into something positive, so she chose pathology as a career.

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To make this vision a reality, the company has been pursuing grass-roots projects, expansion programs and joint and equity ventures in-Kingdom and overseas. In addition to the expansion of affiliate Motiva’s Port Arthur refinery in the United States to process heavy, sour grades of oil, the projects include development of export refineries in Yanbu‘ and, in a joint venture with Total, in Jubail. These refineries will be designed to refine heavy crude oil with high sulfur content into high-quality, low-sulfur products to meet current and future international environmental specifications. Another project will construct a world-scale full-conversion refinery along with associated terminal facilities in the Jazan area. AN INCREASING INTERNATIONAL PRESENCE

For both crude oil and refined products, Asia has

been Saudi Aramco’s fastest growing market and is likely to be a source of steadily increasing demand for many years. More than half of Saudi Aramco’s exports of crude oil, NGL and refined products ship to Asia, where the company has a number of refining and marketing joint and equity ventures. Saudi Aramco increased its investments in the Far East in 2004, buying an equity stake in Japan’s Showa Shell Sekiyu K.K., a refining and marketing company. In 2005, Saudi Aramco raised its stake in the publicly held company to 14.96 percent.

“We are currently the number one supplier of crude oil to Japan, to China, to the Republic

of Korea, and to Taiwan,” noted Ahmed A. Al-Subaey, then general manager of the Tokyo branch of affiliate Saudi Petroleum Ltd., in a 2006 speech. “Frankly, given its geographic proximity to Saudi Arabia and the escalating demand for energy in Asia and the Pacific, this is our natural market, and we value it accordingly.” Teamwork and quick thinking enabled this team—left to right, Noora Shaikh, Deema Alomair, Aysha Alomair and Fatima Kaba—to tie for second place in the women’s division of the 2007 Grand Quiz. The annual event, which tests students’ cognitive skills, was hosted by Saudi Aramco’s College Preparatory Program.

Ghawar fields drove plans to increase capacity at the Qurayyah Seawater Treatment Plant by 4.5

million bpd to nearly 13.5 million bpd. The capacity expansion of the seawater treatment facility

related projects are a key component of the company’s future business in the People’s Republic.

China has fast become one of Saudi Aramco’s most important markets, and a pair of inter-

was the largest one-step increase at the facility ever undertaken by the company. The capacity

In 2007, company subsidiary Saudi Aramco Sino Co. Ltd. (SASC) signed agreements forming

of various crude oil, gas and NGL pipelines was also increased substantially, and power networks

two equity ventures with ExxonMobil, Sinopec Corp. and the Fujian provincial government. “It’s

were expanded.

very important for us to be there … in the refining and petrochemical marketing business. It’s a

breakthrough for us,” said Saudi Aramco Chairman and Minister Al-Naimi.

Saudi Aramco completed major work on the capital program in 2009 and wrapped up

remaining work in 2010. Going back to the first crude oil increment at Shaybah in 1998, the

The two ventures were the Fujian Refining and Petrochemical Co. Ltd. (FRPC), the first fully

company had completed an unequaled roster of projects, adding more than 3.8 million bpd of

integrated refining and petrochemicals venture with foreign participation in China, and Sinopec

oil production capacity and more than 6.3 billion scfd of raw gas processing capacity.

SenMei (Fujian) Petroleum Co. Ltd. (SSPC), a marketing venture. The FRPC project, completed in 2009, tripled the refining capacity of an existing refinery from 80,000 bpd to 240,000 bpd and

One of the prime factors in the rise in fuel prices in the mid-2000s

added petrochemical production units and a crude oil terminal. The SSPC venture started opera-

was the worldwide lack of refining capacity. Much of the world has long depended on the more

tions in 2007, marketing wholesale and retail motor gasoline, diesel and illuminating kerosene

EXPANDING REFINING CAPACITY

easily refined light, sweet grades of crude oil, but the forecast is for the world, and Saudi Aramco,

to customers in Fujian Province and the eastern part of the adjacent Guangdong Province.

to rely on heavier, sour grades in the future. Many of the world’s refineries are not equipped to

process these heavier grades. Weighing all these factors together, Saudi Aramco determined in

a mutually beneficial relationship with companies in the United States that extends beyond the

2006 that it needed to build additional refining capacity, especially for heavy oil.

simple supply-and-demand concerns of the petroleum market. American firms continue to play

Saudi Aramco’s energy strategy also looks to the West. Saudi Aramco has long enjoyed

“Conventional wisdom had always been to build the refineries where the market is,” to

prominent roles for the company in oil field services, project engineering and management,

take advantage of reduced freight costs, explained Abdulaziz F. Al-Khayyal, who was senior

and Saudi Aramco relies heavily on the industrial equipment, IT hardware and software, and

vice president of Refining, Marketing & International until moving to head Industrial Relations in

advanced technological tools produced in the United States. “[It] is because of the mutually

2007. “Lately, we’ve seen a shift in the market. Certain regions are becoming more demanding,

beneficial relationship we enjoy with the United States,” Khalid Al-Falih said, “that Saudi Aramco

preferring one product over another. That means there may be demand for gasoline in America,

is committed to remaining one of the top suppliers of petroleum to the U.S. for many decades

diesel in Europe and naphtha in the Far East. If we locate a refinery in Saudi Arabia, we’re able

to come.”

to supply one product to the Far East, one product to Europe and one product to the U.S., and

take advantage of our location between the three markets.”

Purchasing Company. The Rome-based company was renamed Aramco Overseas Company (AOC)

Saudi Aramco’s European presence dates back to 1948 with the creation of the Aramco

The company’s long-term vision sees a mix of refineries integrated with petrochemical

in 1950, and two years later, the office moved to The Hague in the Netherlands, where it remained

facilities linked to associated industrial parks, export refineries and upgraded domestic refineries.

for 30 years before moving to Leiden, where it was based until moving back to The Hague in 2009.

The benefits of such a strategy are many and include adding value to the country’s hydrocarbon

Today, AOC operates branch offices in London, Milan, Tokyo, Hong Kong, Shanghai and New

resources, increasing refining capacity capable of processing heavier grades of crude oil, provid-

Delhi, and the services provided range from purchasing and supply chain management to finance,

ing greater volumes of fuels and feedstocks for domestic industries, promoting local economic

law and human resources. Saudi Aramco also operates various affiliates that provide international

development and diversification, and creating jobs and investment opportunities.

marketing services, with offices in London, New York, Tokyo, Beijing and Singapore.

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The Nerve Center Saudi Aramco’s Operations Coordination Center (OCC), which is managed by the Oil Supply Planning and Scheduling (OSPAS) Department, is the central control room for the Kingdom’s far-flung oil and gas operations. Entrance to the cavernous space in Dhahran’s core office complex is tightly controlled, and with good reason. Here, the biggest video display wall in the hydrocarbon industry—forming an arc 67 meters long by 3 meters high—provides real-time monitoring of virtually all of the company’s operations: terminal scheduling; electric power generation and distribution; and the production and distribution of oil, gas and NGL and refined products. Most of the data used to generate the displays is refreshed every 15 seconds. This enables operators to track the flow of virtually every drop of hydrocarbons produced and shipped by Saudi Aramco, from wellheads to processing facilities, through more than 17,000 kilometers of pipeline, and finally to loading terminals on both the Gulf and the Red Sea. Operators work shifts around the clock to constantly track performance of key system components and have the ability from their desks in the OCC to shut off a remote pipeline valve, for instance, if sensors embedded in the distribution system detect a malfunction. The company uses the system to respond to international events as well. In the wake of hurricanes Katrina and Rita in 2005, OSPAS operators redirected tankers headed for The “Big Board” in the Operations Coordination Center (OCC) provides a real-time snapshot of Saudi Aramco’s operations, from wellheads to company terminals.

damaged U.S. Gulf coast refineries, built up inventory of other products and juggled delivery schedules to major international clients. The result was that the company met clients’ needs on a global basis and did not have to cut back production, despite the damage to U.S. oil facilities.

Keeping pace with the increase in international business, Vela, the company’s shipping

affiliate, moved its headquarters to Dubai in 2005. The same year, two double-hull product tankers, the Altarf and Zauruk, were added to the Vela fleet, and contracts were signed for the construction of six double-hull VLCCs in the Republic of Korea, part of the long-term program to replace existing single-hull carriers in advance of international maritime agreement requirements. Five of these tankers entered service in 2008 and the sixth in early 2009. Another two were added in 2010.

Vela is consistently recognized for its safety and environmental achievements. In July

2007, Vela’s engineers pioneered a new ballast exchange system for crude carriers to reduce the transmittal of invasive organisms. This new system, which was developed in response to 2004 regulations by the International Maritime Organization, continuously exchanges seawater for ballast to ensure organisms in the water are not transported out of their habitat and into foreign waters.

In 2010, the Vela fleet of 17 VLCCs, one smaller Aframax-class vessel and four product

carriers completed more than 1,000 voyages, transporting nearly 2 million bpd of crude oil to customers primarily in the United States and Europe. One of the new tankers, the Sirius Star, was seized late in 2008 by Somali pirates. The vessel and its crew were released unharmed early in 2009.

Khalid Al-Abdulwahed, Abdullah Al-Dossari and Bader Al-Mousa, left to right, share a moment on the Piazza Duomo in Milan, Italy, where in 2007 they were working on a company project with an Italian engineering company. With affiliate offices and activities in North America, Europe and Asia, company employees work in a wide variety of cultures.

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STEINEKE’S LEGACY

A Saudi Aramco affiliate in 2004 bought an equity stake in Showa Shell Sekiyu K.K. of Japan, one of the largest refiners in the country and a company that is also active in researching solar energy and hydrogen fuel. The following year, Saudi Arabia was the number one supplier of crude oil to Japan, China, the Republic of Korea and Taiwan, and a major supplier to India.

If he were around today, Max Steineke—the renowned geologist who set

the standard for oil exploration in Saudi Arabia—would be proud and amazed. His combination of intelligence, intuition, team building and risk taking contributed to the discovery of some of the largest oil fields in the world. These standards continue to be reflected in the values that drive Saudi Aramco today. Saudi Aramco’s geologists have been using the same skill set, and they are equipped with the latest in exploration technology, particularly 3-D seismic imaging, to advance the process that Steineke helped start more than seven decades ago. Their discoveries, and the company’s ability to find and produce oil from older fields, have played a critical part in Saudi Aramco’s ability to replace the oil and gas it produces. In the case of natural gas, the company has actually added to its reserves despite sharp increases in production. Between 2000 and 2010, 18 new oil fields and 11 new gas fields were discovered.

Ali Al-Hauwaj, manager of the Exploration Department since 2004, noted that since the

mid-1990s, the emphasis in exploration has shifted from finding additional oil and gas fields in central Arabia to a concentrated focus on finding non-associated gas in the Eastern Province. Based on seismic interpretation and years of working with existing fields, Saudi Aramco decided to look for gas near existing oil fields. That strategy has paid off, as witnessed by the discovery of the mammoth reservoir of non-associated gas in the offshore Karan oil field in 2006, making it Saudi Aramco’s largest offshore gas field.

Al-Hauwaj had his “Max Steineke moment” the previous year. His team had been exploring

around the Midrikah area south of Haradh. The fact that wells had hit gas on the southern end Khalid G. Al-Buainain, senior vice president of Refining, Marketing & International, center, tours a refinery in May 2008 in Fujian Province, China, site of a joint venture refining and petrochemicals project.

of the Haradh structure to the north gave Al-Hauwaj confidence that gas could be found near Midrikah. Even some of his closest associates doubted him, however. Abdulkader Afifi, manager of Exploration Technical Services at the time, recalled, “I had given up on some areas where Ali’s people subsequently discovered major accumulations of gas. … I thought this Midrikah area would not be a gas discovery.”

Al-Hauwaj had to all but plead for approval to drill a wildcat well. A seismic interpreter

pointed out that the seismic interpretation on the area did not indicate a geologic trap in the strata likely to contain gas. But more than a quarter-century of experience with the rocks in the region, and seeing similar formations that contained gas, convinced Al-Hauwaj that it was worth the risk. “I said, ‘Give me the location and I will prove the trap. We’ll take the risk and drill it.’” His bet paid off. By February 2006, the well was producing 30 million scfd of gas and 900 bpd of condensate (liquid hydrocarbons produced with natural gas). CARING FOR THE ENVIRONMENT

From the company’s earliest days, it has had an awareness of its

potential impact on the environment, resulting in a broad array of environmental requirements, engineering standards, air quality and emission standards, noise control regulations, landfill standards, water recycling procedures and hazardous material disposal rules. This awareness also manifested itself in publications such as Biotopes of the Western Arabian Gulf: Marine Life and Environments of Saudi Arabia in 1977, the result of a five-year company study, which included a list of the animals and plants inhabiting the Gulf and created a biological baseline against which future ecological changes could be measured. Similar studies were undertaken on the ecosystem of Tarut Bay in the mid-1980s in cooperation with the University of Petroleum and Minerals, and the ecology of Manifa and Tanajib bays, which was completed in 1986. In 1989, Saudi Aramco assisted in the publication of the most complete work on the birds of the western Gulf and its hinterlands ever printed: Birds of the Eastern Province of Saudi Arabia, a volume that covered 340 species.

In the early 1990s, the company began devoting billions of dollars to produce more envi-

ronmentally friendly products. The world started to see evidence of these initiatives by the turn of the new millennium. The company already was a Gulf area industry leader in the effort to remove lead from gasoline. By 1998, Saudi Aramco had reduced the lead content in its gasoline to half of the 1991 level, and on January 1, 2001, it stopped producing leaded gasoline altogether—well ahead of the schedule set by Gulf Cooperation Council member countries.

The Saudi Aramco logo began appearing on Sinopec SenMei (Fujian) Petroleum Co. gas station signage in China in the summer of 2007. A company subsidiary signed agreements that year, forming two joint ventures, a manufacturing arm and a marketing venture in the Fujian Province of China.

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Saudi Aramco is positioning itself to take a leading role among state-owned oil companies

on green issues, particularly in regard to reducing the “environmental footprint” of the petroleum industry, among producers and consumers alike. As Abdulaziz Al-Khayyal, senior vice president of Industrial Relations, put it, “There are opportunities to mitigate this environmental impact all the way from the wellhead to the wheel.” One such promising opportunity is greater efficiency. “Even incremental improvements in petroleum’s energy efficiency have enormous environmental and economic benefits,” Al-Khayyal observed, “while major breakthroughs could revolutionize our energy future.” A NATIONAL OIL COMPANY WITH INTERNATIONAL ROOTS

While Saudi Aramco began as the

business venture of a publicly traded international oil company (IOC), today it is a fully integrated national, or state-owned, oil company (NOC). The fact that Saudi Aramco is now state-owned is not unusual—worldwide, NOCs now manage more than 90 percent of known oil reserves—but Saudi Aramco has been uniquely successful at retaining the management culture of an IOC while adopting the long-range views and responsibilities of an NOC. Though NOCs and IOCs are in the same business, they operate differently. While IOCs focus purely on profit, NOCs often take on additional roles for the state, such as creating jobs, supporting the development of the national economy and supplying low-cost fuel, to name just a few. Because NOCs are responsible for their countries’ energy resources and cannot simply move on to a different region once the easily accessible oil has been extracted, they typically invest more effort into long-term planning than do IOCs. Saudi Aramco, for example, continuously develops new reservoir management techniques to preserve the Kingdom’s energy resources for as long as possible.

In May 2007, Vela appointed two new members to its board of directors— Ali A. Attiyah Al-Lafi, back left, and Huda M. Al-Ghoson, back center, a 26-year veteran of Saudi Aramco and the first woman to serve on the board of a Saudi Aramco affiliate. Also shown are board members Mustafa A. Jalali, back right; Abdulaziz F. Al-Khayyal, front left; and Saleh B. K’aki, front right.

Environmental issues continue to be a primary focus at Saudi Aramco, with programs focusing on monitoring and mitigating any impact on the quality of the environment in which the company operates. A series of upgrades in the first decade of the new century at Shedgum, Berri and ‘Uthmaniyah gas plants significantly reduced sulfur emissions. New diesel hydrotreaters at three Yanbu‘ and Riyadh refineries will reduce emissions from burning diesel by 95 percent, as all the diesel fuel produced in-Kingdom will be low-sulfur diesel fuel.

For more than 20 years, Saudi Aramco has been closely monitoring air quality near all of

its facilities to ensure they continue to meet or exceed stringent company air quality standards as well as government environmental regulations. Ongoing monitoring also tracks water quality near company facilities.

Sensitive to the issue of climate change, Saudi Aramco, in collaboration with the Ministry

of Petroleum and Mineral Resources, organized a May 2006 international symposium on carbon management, the first such meeting held in the Middle East. The company has also created a carbon-management team to focus on coordinating the company’s efforts to minimize carbon emissions.

Saudi Aramco is also collaborating with international research institutes and technology

developers to develop new environmental technologies. High on their research agenda are carbon capture and sequestration (capturing heat-trapping carbon dioxide from large sources such as power plants and refineries, liquefying it and injecting it into underground reservoirs), cleaner-burning fuels and more environmentally friendly automobile engine designs.

In addition, Aramco Services Company co-sponsors the Weyburn-Midale CO2 Monitoring

and Storage Project managed by the Petroleum Technology Research Centre in Canada. Other cosponsors of this initiative include companies such as Chevron and Schlumberger, Japan’s Research Institute of Innovative Technology for the Earth and the regional electric utility SaskPower.

Abd Allah S. Al-Saif, senior vice president of Exploration & Producing, standing at center with his hands crossed, and other company executives in April 2006 visit the crew of the offshore drilling rig that discovered Karan, the company’s largest offshore gas field.

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At the same time, Saudi Aramco’s organizational structure remains influenced by its days

In this relationship, the United States and other oil-importing countries rely upon the oil-

as an IOC. Unlike other NOCs, the company operates to implement the government’s energy

exporting nations for reliable supplies of petroleum to fuel their economic growth and maintain

policy, but does so with a large degree of independence. As Nansen Saleri, who for many years

their quality of life. In turn, oil-exporting countries need the energy markets of consuming countries

oversaw Reservoir Management, explained, “Today, when you look at [Saudi Aramco], it is an

to generate revenue to fund their own economic growth. Furthermore, the United States, Europe

international oil company. Even though it’s a national company, in many respects it operates

and Asia provide services and technology to countries such as Saudi Arabia. Moreover, many

like a private oil company … its thinking … its management style … the way it addresses its

Saudis in key positions in Saudi Aramco and the government received their higher education or

needs. … The amount of empowerment that middle management has far exceeds the amount

advanced training in the United States and Europe.

of empowerment that other middle management has anywhere else in the world. And I think this is a key differentiator as far as the performance of the company. It’s that empowerment.” ENERGY INTERDEPENDENCE

In the first eight years of the new millennium, crude oil prices more

than quadrupled, and on March 3, 2008, oil reached a high of $103.95 a barrel on the New York Mercantile Exchange, beating by 19 cents the inflation-adjusted record of April 1980. Four months later, in early July, oil prices briefly touched a new record price of $147 a barrel. The reasons for the escalation in prices were complex and varied. Saudi Aramco believed, and many energy analysts agreed, that the reasons were aboveground issues, rather than a lack of hydrocarbons beneath the surface. Some of these reasons included the growing demand from emerging markets in China, India and the Middle East, global underinvestment in oil infrastructure, a worldwide shortage of refining capacity, conflict and tension in key oil-producing areas of Latin America, Africa, the Middle East and Central Asia, and financial speculation in commodity markets such as oil and gold. In the build-up to the record price of March 3, other factors also came into play, as noted by The New York Times: the recent fall in the value of the U.S. dollar and the actions of investors, including pension and hedge funds, as they sought financial refuge in commodities such as oil to offset the slowing economy. Aramcons and local students join together to plant mangrove seedlings in 2004 as part of an effort to restore the natural habitat of Tarut Bay. Saudi Aramco has sponsored mangrove research and restoration since the 1980s, and its volunteer planting campaigns have become an annual tradition.

One key factor in the discussion of the future of the world’s energy supply is the growing role of energy sources other than petroleum. Perhaps surprisingly, Saudi Aramco has advocated the development of alternative energy sources as necessary to help meet future demand for energy. As Jum‘ah remarked in an address at the Harvard University Center for the Environment in January 2007, “As an oil man, I not only welcome additional contributions from alternative fuels, but I believe these contributions will be essential if we are to meet the growing needs of global energy consumers. … This growing need for additional energy supplies is why I think work on alternative energy is so important, and why such efforts should be based on a realistic appraisal of their potential, including the rate at which their contributions to global supplies can be expanded.” One promising direction for alternative sources of energy is a natural resource Saudi Arabia also possesses in abundance: sunshine. In 2009, Saudi Aramco signed an agreement with Showa The higher energy prices produced calls from some quarters in the United States and other

Shell Solar, an affiliate of Showa Shell that was later renamed Solar Frontier K.K., to share infor-

countries for “energy independence,” but Saudi Arabia and Saudi Aramco have long championed

mation with the intention of mutual commercial and technical development of electrical power

energy interdependence: cooperation among producers and consumers to encourage energy

generation plants in the Kingdom based on Solar Frontier’s technology. In 2010, work began on

diversity, efficiency and conservation. In remarks made at the 15th Annual Arab-U.S. Policymakers

small-scale solar power pilot facilities that can generate 1–2 megawatts.

Conference in Washington, D.C., in October 2006, Al-Falih framed the relationship in this manner:

The record-high oil prices in 2008 dropped sharply later in the year in the wake of the

“If one defines the pursuit of energy independence as essentially a quest for reliable and affordable

financial crisis that gripped much of the world. Most experts agreed, though, that a return to

supplies, then the best way to achieve that is by strengthening relationships in the context of a

higher energy prices was likely as the global economy recovered, mainly because most of the

diverse global marketplace.”

factors cited in the rise to the record-high prices remained valid.

Khalid A. Al-Falih, center, in lightcolored coveralls, leads a review of progress on the Hawiyah NGL Recovery Plant project in August 2008. Three months later, in November, Al-Falih, a 30-year veteran of the company and member of the board of directors since October 2004, was named CEO and president of Saudi Aramco.

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The Saudi government’s goal is to capture more of the value of the country’s resources, in this case natural gas, at every stage of the production process, not just as basic petrochemicals. Achieving this goal will lead to realizing another parallel goal—creating local industries that provide lucrative and sustainable employment opportunities for Saudi Arabia’s burgeoning population. Two large petrochemical projects will form the backbone of the latest phase of Saudi industrialization. The first is Petro Rabigh, a roughly $10 billion joint venture with Japan’s Sumitomo Chemical Co., Ltd., which transformed Saudi Aramco’s Rabigh Refinery on the Red Sea into an integrated refining and petrochemical processing plant. The second is a proposed multi-billion-dollar project with The Dow Chemical Co. to develop a petrochemicals facility in the Jubail industrial area north of the Ras Tanura Refinery complex and Ju‘aymah Gas Plant. The world-scale chemicals and plastics production complex includes plans for an associated conversion park for local and foreign private-sector companies.

Saudi Aramco and Sumitomo broke ground on the Petro Rabigh project in March 2006.

In addition to originating about 30 percent of the financing within Saudi Arabia, 25 percent of the equity in the project was sold in an initial public offering to Saudi citizens and institutions in January 2008. The stock offering raised $1.23 billion. It was the largest stock sale in Saudi history and marked the first time that Saudi Aramco had offered shares in one of its affiliates to the public.

Petro Rabigh commenced operations in early 2009 and is capable of producing 2.4 million tons

per year of petrochemical solids and liquids, mainly ethylene and propylene. The petrochemicals will be used to make everything from plastic fibers and films to foam for furniture and automobiles, sealants, resins and antifreeze. Large volumes of gasoline and other refined products will also be produced. Saudi Aramco and Sumitomo are exploring a proposed second phase of the venture to expand both refining and petrochemical production. The unprecedented expansion of Saudi Aramco oil, gas and petrochemical facilities in the Kingdom, impressive in its own right, is itself only a part of an even more ambitious and sweeping modernization plan that is reshaping Saudi society. The hydrocarbon expansion is one aspect of an estimated $500 billion investment program designed to further diversify the Saudi economy, provide millions of new jobs for Saudi citizens and greatly expand educational opportunities in the Kingdom. An 800-ton regenerator is offloaded at the Petro Rabigh project site in 2007. The regenerator and several other larger vessels were later lifted into position by an MSG80 heavy-lift crane, one of the two largest cranes in the world.

The following year, in October 2009, the oil market witnessed another significant development

BUILDING A KNOWLEDGE-BASED SOCIETY

in the price of crude oil: Saudi Aramco announced it would switch from West Texas Intermediate

ahead, Saudi Aramco received another task. In July 2006, King ‘Abd Allah, who became King

Even while the petrochemical projects were forging

(WTI) to the Argus Sour Crude Index as a benchmark price for all grades of crude oil sold to customers

in 2005 after King Fahd’s death, asked the company to take the lead in building and developing

in the United States. High inventories of WTI at its trading hub in Cushing, Oklahoma, in the first

the King Abdullah University of Science and Technology (KAUST), a centerpiece of the plan

quarter of 2009 dislocated the price of WTI from the global oil market. The change in pricing to the

to broaden the Kingdom’s educational offerings. The company was charged to construct the

less-volatile Argus Index, a basket of three grades of crude oil from the Gulf of Mexico, reflected

graduate research university from scratch on a 36 million-square-meter site located near the

the growing importance of sour grades of crude oil in the world market.

fishing village of Thuwal about 80 kilometers north of Jiddah on the Red Sea. Saudi Aramco assembled a project team and enlisted the help of an international advisory council to craft the

A HEIGHTENED PROFILE FOR PETROCHEMICALS

The MGS was the first major effort of Aramco

to support the launch of the Kingdom’s national industrialization plans and its petrochemical

university based upon the best practices of the world’s top academic and research institutions.

In an innovative approach, the university was organized around four interdisciplinary research

industries. In recent years, the company’s involvement in the petrochemical industry has taken

institutes and also features an adjacent research park to link activities with private-sector research

a new turn. Integrating petrochemical manufacturing centers with Saudi Aramco’s refining and

and economic development. The university, with a multi-billion-dollar endowment that places

related activities became the focus of the company’s New Business Development administrative

it among the top universities in the world, is open to men and women and attracts top science

area following the signing of the joint-venture gas exploration agreements in 2003 and 2004.

and technology students and faculty from around the world as well as from within the Kingdom.

The Kingdom and the company brought in consultants to help focus discussions on pet-

rochemical development options and to learn from other countries’ successes. “We said, ‘How

ceremony presided over by King ‘Abd Allah, emphasized the twin goals of the institution. “KAUST

KAUST Interim President Nadhmi A. Al-Nasr, speaking at the October 21, 2007, groundbreaking

did Singapore do it? What did Korea do? How did Japan industrialize?’” recalled Al-Naimi. Saudi

will collaborate with the best institutions and convene the most talented scientists from around

Arabia’s existing petrochemical company established in 1976—Saudi Arabia Basic Industries

the globe to enable discovery that will help all humanity,” he said. “It will also deepen and diversify

Corporation, or SABIC—“goes to a point and stops,” said Al-Naimi. “They sell basic materials,

Saudi Arabia’s knowledge-based economy,” added Al-Nasr, who was Saudi Aramco’s vice president

and then the industrialization is done in the Far East or in Europe. It’s not done here.”

of Engineering Services prior to being assigned to lead the KAUST development effort.

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The Evolution of Social Responsibility The Kingdom of Saudi Arabia and the company that became Saudi Aramco grew up together. Even in the early days, the Kingdom’s leadership knew the petroleum industry would—literally and figuratively—fuel the country’s growth and development. The company also realized its responsibility to help develop a healthy society and a vibrant economy, both of which were in the long-term interests of the company and the Kingdom.

From its first days, the company was involved—by internal initiative, business need, social

need or government request—in developing the nation in the broadest sense, far beyond its commitments as an oil concessionaire. In the beginning, the company had to do literally everything itself, and not just core activities such as surveying, drilling and building company facilities, but everything related to supporting itself: health care, power generation, water supply, laundry and food preparation. As the company grew, its social responsibility initiatives expanded, ranging from public health and safety programs, publishing, TV programming and transmission, and industrial development, to school building, land development, and home ownership and education programs, to name a few. One of the central areas of focus in the company’s contemporary community outreach philosophy is to develop a stronger culture of volunteerism in the Kingdom, especially among younger generations.

As time passed, the company was woven into the country’s economic and social services

fabric: It supported or complemented services provided by the government, and it increasingly depended on goods and services provided by the private sector—a private sector the company helped create by supporting employees who founded new businesses. Until 1980, Aramco was required to pay the government the concession rental and a share of its profits. Social responsibility initiatives and other developmental programs were paid for with the company’s share of profits or compensated for by the government. When the company became fully Saudi owned, all of its income became the government’s, and although some social responsibility programs were continued or expanded, its social responsibility strategy became more focused on increasing the Kingdom’s revenues from petroleum and on being a catalyst, role model and supporter of growth and development in all aspects of society in general, and in the economic sector in particular.

In a very real sense, the scope and scale of the company’s contribution to the economic

and social development of Saudi Arabia increased exponentially. Instead of being directly responsible for building some government schools, Saudi Aramco now contributes about 80 percent of the cost of every government school built because it contributes about 80 percent

of the government’s total revenue. This applies to government hospitals, health clinics, water treatment plants, highways and other infrastructure. And the oil, gas and feedstocks Saudi Aramco produces fuel water desalination, power plants and numerous domestic industries. Given this context, the company has reduced or ended programs now run by the government and has adopted new programs and expanded existing ones to be more compatible with its revised role. In 2009, the company articulated its citizenship vision: “To be an influential leader in creating sustainable social and economic opportunities for the welfare of the Kingdom and in other locations where we do business.” It focused its citizenship efforts on four sectors, or pillars—economy, community, knowledge and environment. Representative of the company’s citizenship vision was the Traffic Safety Signature Program initiated in 2009, an effort to address one of the Kingdom’s most critical challenges. The program focused on making a lasting difference through building capacity through strategic alliances with a goal of reducing traffic deaths.

King ‘Abd Allah has stressed the need for Saudi Arabia and all developing countries to

make greater academic progress in the fields of science and technology: “We are living in an era

pioneering graduates were awarded master’s degrees. About one-third of them intended to

Fifteen months later in December 2010, at the school’s first graduation ceremony, 292

of scientific and technological advancement. There is no real power without achieving progress

continue at KAUST in pursuit of doctoral degrees, and about half were planning to remain in

in science and technology.”

Saudi Arabia to contribute to the development of the Kingdom.

Officials of the nascent university began creating programs and signing international devel-

opment agreements even while facilities were under construction. KAUST initiated partnerships

speaker May Alqurashi. “It was not all about academics. Here, we met friends from all over

“Life at KAUST also taught us how to extend our family,” said student commencement

with some of the world’s foremost research institutions, with each partnership drawing upon the

the world. We found that although we are different in many ways, we are so close and similar.

strengths of the respective institution. For example, KAUST and the Woods Hole Oceanographic

Anyone walking around the campus would see friends gathering together and feel the spirit of

Institution in Massachusetts are engaged in research focused on coral reefs, coastal hydrography,

everlasting friendship all over the place.”

and fisheries and aquaculture, while a partnership with the Institut Français du Pétrole focuses

This same spirit was very much in evidence when Saudi Aramco celebrated its 75TH anniversary

on carbon capture, clean fuels, catalysis, polymers and chemical engineering modeling.

in May 2008. The centerpiece of the yearlong festivities was King ‘Abd Allah’s visit to Dhahran

In January 2008, the university awarded its first KAUST Discovery Scholarships to 178

on May 20 in remembrance of historic visits to company facilities in the Eastern Province in 1939

outstanding male and female engineering and technology undergraduate students from around

and 1947 by his father, King ‘Abd al-‘Aziz. On both occasions, when the Kingdom’s founder

the world, including more than 80 students from Saudi universities. The students, whose selection

visited the fledgling oil camp at Dhahran, among many other activities, he received the expatri-

was based on academic criteria, were part of the first group of graduate students when the

ate employees, their wives and their children. In 2008, the company brought 29 of those “1947

campus opened for classes in September 2009.

Kids,” some now accompanied by their spouses or grown children, back to Dhahran to meet King

Throughout its history, Saudi Aramco has served as a role model and innovator in the Kingdom in a wide variety of endeavors, from health care and education to environmental practices and safety standards. Here, Sahar A. Al Dughither works as a volunteer in the company’s hospital in Dhahran.

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Students head to class on the campus of the King Abdullah University of Science and Technology. The graduate research university, built by Saudi Aramco, opened its doors in the fall of 2009.

‘Abd Allah. Saudi Aramco’s pioneer spirit, exemplified by the many retired Saudi and expatriate employees honored during the anniversary, is a living part of Saudi Aramco today, and a source of inspiration for the new generation of Aramcons. On his visit to Dhahran to mark the company’s anniversary, King ‘Abd Allah laid the symbolic cornerstone for the King Abdulaziz Center for World Culture, Saudi Aramco’s flagship community outreach initiative. The Center, which will feature a public library, a museum, a children’s center and other facilities, is envisioned to be a catalyst for cultural and social progress and a forum for knowledge dissemination and innovation. Located near the site of Well No. 7, the Center will be an iconic architectural landmark and a model for social progress through education and cross-cultural exchange.

For Al-Naimi, developing Saudi Arabia’s petrochemical industry, founding its newest

university and building a world-class cultural center are closely linked to the Kingdom’s future, and all are linked to Saudi Aramco’s legacy of reliability and transformative power. “Hydrocarbons will always be important to Saudi Arabia,” he said. “Currently the Kingdom is exploiting them as the flywheel for developing industrialization across the country. But in the future we need to use them as the flywheel for converting [Saudi Arabia] into a knowledge-based society. That is the challenge.” The vision of King ‘Abd al-‘Aziz remains central to Saudi Aramco’s comprehensive strategy, which aims to ensure success both today and for generations to come. The King’s vision, embodied in the terms of the original concession agreement with Socal, has been realized many times over. King ‘Abd al-‘Aziz would approve of the enormous expansion of Saudi Aramco throughout the Kingdom and around the world, and the improvements in processes and technology that contributed to it, but he would be most pleased to see that many Saudi men and women are largely responsible for that success.

King ‘Abd Allah, center, joined by leaders of other Gulf states, members of the royal family, Saudi Aramco management and a group of Saudi children, celebrates Saudi Aramco’s 75th anniversary in Dhahran in May 2008.

appendix 169

168 appendix

Appendix

Upstream Downstream Operations Data

Top of reservoir

dammam dome

A 3-D reservoir model of the Dammam Dome from 2008 is aligned with the corresponding area from the first map of the Dammam Dome, drawn in 1934.

Geological fault

Reservoir porosity reflected in different colors

reservoir quality

The 3-D model illustrates the reservoir, roughly 1,500 meters below ground.

Poor Good Excellent

appendix 171

170 appendix

Upstream

The origins of hydrocarbons

Upstream encompasses all the activities from the drill bit to the refinery: the

Land

Sea

exploration for, and development, production and processing of, oil and gas. Water injection, oil stabilization, gas processing and pipelines are included within the scope of upstream operations. Upstream begins with earth scientists searching for oil and gas by examin-

Tiny forms of sea life such as plankton die and accumulate on the ocean floor.

ing rock outcrops on the surface to try to understand the subsurface strata. They integrate their interpretations with data collected from inside the well: from drill cuttings (bits of rock that rise to the surface as a well is drilled), core samples and wire-line logs (instruments that record electrical values,

Layers of sediment form as the accumulation process continues over time.

radioactivity, temperature and other rock properties). The integrated data are used to identify prospects—areas likely to contain petroleum. Once a prospect has been identified, geoscientists acquire and interpret seismic data to develop integrated geological and geophysical models that are used to select the best drilling locations. After a discovery is made, drilling to delineate and develop a field takes place, and reservoir engineers design production plans. Improvements in technology continue to increase recovery rates, enabling geoscientists and petroleum engineers to manage reservoirs efficiently and for the long term. Saudi Aramco also places significant emphasis on operations safety and environmental protection. The Origins of Oil and Gas

Oil and gas originate almost entirely from the remains of ancient

plants and animals as shown in the diagram on the facing page. The solar energy absorbed by

Parts of the dead material change to hydrocarbons mixed with other sedimentary materials. Layers become more and more compresssed as further layers settle on top.

these organisms and stored as carbon molecules in their bodies has been recycled into petroleum energy in the form of organic compounds composed mostly of hydrogen and carbon. These hydrocarbon compounds were created when microscopic marine organisms and plant matter were buried by layers of sediment and, over millions of years, transformed through bacteria, heat and pressure into oil and gas, which gradually seeped up through layers of rock, collecting in underground structures called traps. The fossilized remains of ancient marine organisms, seen in the core samples pulled up from wells thousands of meters deep and collected from rock outcrops on the surface, yield a wealth of clues to geologists searching for oil and gas. These specimens, as seen by a scanning electron microscope in EXPEC, are acritarchs, fossil marine organisms of unknown biological affinity, and date to the early Silurian age, about 430 million years ago.

New material–depositing sediment forms an impervious layer called cap rock. Gas Oil Gas, oil and water

Earth movements cause folds in the crust.

appendix 173

172 appendix

Stratigraphy of Eastern Saudi Arabia

The rich oil and gas fields of Saudi Arabia, located

mainly in the Eastern Province, are linked to the region’s long history of relative tectonic stability in its subsurface. The virtually flat platform of the Arabian Shelf, which underlies the middle and siberia

eastern side of the Arabian Peninsula and its shallow eastern offshore area, enabled an almost uninterrupted accumulation of sediments, which provided both the source for oil and gas and the reservoirs in which these hydrocarbons accumulated.

europe china turkey

iran

generalized cross section of saudi arabia

tibet north america

indochina southeast asia in millions of years africa

sea level arabia

south america –304.8m india

The final 10 million years of the late Jurassic Period witnessed significant environmental changes, as shallow seas receded and advanced, leaving behind alternate layers of nonporous anhydrite and porous and permeable limestone. The latter layers formed the Arab Zone, which contains the world’s largest petroleum reserves. Over the course of millions of years, infrequent tectonic events led to the formation of structural traps, capped by anhydrite, which captured the hydrocarbons.

e a r ly j u r a s s i c 1 9 5 m i l l i o n y e a r s a g o

key

The enormous hydrocarbon reservoirs in what became Saudi Arabia accumulated in carbonate sedimentary rocks deposited in the late Jurassic Period, around 150 million years ago.

ancient Landmass

–609.6m cretaceous period

67–140 million years ago

australia a n ta r c t i c a

limestone –914.4m

120

The Earth’s interior, composed of semi-molten

rock, is in constant motion. The outer rigid layer, the lithosphere, consists of large plates

Zubair Zone

130

Upper Ratawi Zone

135

Lower Ratawi Zone

140

Manifa Zone

collide with each other in a process called plate tectonics, forming mountains, basins and the continents themselves.

Arab B Member Arab C Member

animals appeared in great numbers.

About 100 million years later, in the early Devonian Period, the Paleozoic oceans began to

close, and eventually the supercontinents of Gondwana and Euramerica collided to form Pangea.

jurassic period

which included the landmass of Arabia, stretched from the Equator to the South Pole, and it and the other continents were flooded by shallow seas. Algae were dominant, and hard-shell marine

140–204 million years ago

Around 1.1 billion years ago in the Precambrian, the Earth’s landmasses formed one

of Gondwana formed around 514 million years ago, in the late Cambrian Period. Gondwana,

150

In the last 20 million years, the Red Sea opened, rifting Arabia away from Africa.

–2,133.6m

–2,438.4m

Hanifa Zone Hadriya Zone Fadhili Zone

Jurassic Period, about 180 million years ago. This age was dominated by the giant dinosaurs, Jurassic Period, enormous layers of organic matter accumulated in what became Saudi Arabia.

–1,524m

Arab D Member Mid-Jubaila Zone

Pangea began to break apart in three main episodes, with the first occurring in the middle

the first appearance of birds and extensive inland seas where, 30 million years later, in the late

porous limestone –1,219.2m

–1,828.8m

Arab A Member

supercontinent, Rodinia, which, some 250 million years later, broke apart. The supercontinent

sandstone

Bahrain Zone

that slide over the semi-molten layer. These plates pull apart from, slip past, dive under and

anhydrite shale

Modern Landmass

seafloor spread ridge

A Brief Geological Timeline of Saudi Arabia

sand and mud

100

subduction zone (triangles point in the direction of subduction)

key

165

–2,743.2m

appendix 175

174 appendix

Petroleum Traps

Niyashin Rimthan As Sayd

El Haba

Reservoir rock and water

Juraybi‘at

Abu Hadriya

Duhaynah Jaladi

Bakr

Faridah

Manifa Kurayn

Sharar

Habari

Watban

Cap rock

Maharah

Ribyan Harqus

Namlan

Wari‘ah

Gas

Marjan

Lawhah

Hasbah

Dibdibah Jauf

Suban

An anticline trap is an upward fold in the layers of rock shaped like an arch. Petroleum migrates into the highest part of the fold and is prevented from escaping by an overlying bed of impermeable cap rock. The great majority of oil reservoirs are found in anticline traps.

Zuluf

Safaniya

Dhib

Karan Jana

Jurayd Rabib

Berri

Khursaniyah Fadhili Samin

Hamur

Arabiyah

Abu Sa‘fah

Qatif

Oil

bahrain

Dammam Dhahran

Fazran Jaham

Abqaiq

‘Ain Dar

Shedgum Khurais

Riyadh

Gas Oil Reservoir rock and water

Shiblah Hilwah

Manjurah Farhah Awtad Warid Mazalij Sirayyan Sahba Dilam Arsan Abu Sanaman Shidad Raghib Wudayhi Midrikah Duayban

Haradh Jufayn Dirwazah Niban Nujayman Halfa

Nuayyim

Muraiqib

Abu Sidr

Kassab

Qamran Maghrib

Sham‘ah

‘Amad

Kahla Shaybah

Shutfah North

Ramlah

Tukhman

Waqr

Ghinah

Marzouk

Jawb

Zimlah

Shaden

Hawtah

Lughfah

Yabrin

Abu Markhah

Nisalah

united arab e m i r at e s

Tinat

Mulayh

Burmah

Hazmiyah

Harmaliyah

Abu Rakiz

Khuzama

q ata r

Ghawar

Qirdi Hawiyah

Abu Jifan

Cap rock

A fault is the result of horizontal layers of rock being folded or deformed, creating a fracture. When the rocks on the two sides of a fracture move in opposite directions, a fault is created. A fault trap occurs when formations on either side of a fault prevent further migration of petroleum.

‘Uthmaniyah

Kidan

Umm Jurf Usaylah

South

Layla Cap rock Gas Oil

Stratigraphic traps occur when a reservoir layer, also called a bed, is sealed by other beds or by a change in porosity or permeability within the reservoir bed itself.

Reservoir rock and water

key

Nearly all of Saudi Aramco’s oil and gas fields are located in the Eastern Province. Other fields are located in the Central Province, south of Riyadh, and in the Western Province, on the Red Sea coast. Total recoverable crude oil reserves are roughly 260 billion barrels—the largest in the world. Reserves of natural gas are roughly 279 trillion cubic feet, fourth largest in the world.

Jalamid

Towns C a p i ta l oil field

Kahf

gas field scale in kilometers 0

Sidr Midyan Barqan

100

scale in kilometers 100

200

Oil and gas are formed in organic-rich layers of rock exposed to heat and

Tabuk

Petroleum Traps

oil and gas fields of saudi arabia

pressure, called source rock. The oil and gas will migrate upward through the rock layers where,

Umluj Al Wajh

if conditions are favorable, they will accumulate in reservoirs, layers of porous and permeable rock such as limestone or sandstone. The migration of hydrocarbons to the surface is stopped by an impermeable layer of rock that acts as a seal, or cap. Oil and gas accumulate only where the reservoir and cap rock form traps.

Geologists classify petroleum traps into two basic types: structural traps, formed by Earth

movements and rock folds, and stratigraphic traps, the result of the deposition of layers favorable to the formation and trapping of petroleum. Two common examples of structural traps are anticline and fault traps.

e s t i m at e d w o r l d w i d e c r u d e o i l r e s e r v e s

e s t i m at e d w o r l d w i d e g a s r e s e r v e s

(billion barrels) as of january 1, 2010

(trillion cubic feet) as of january 1, 2010

260

saudi arabia

211

VENEZUELA

175 137 115

CANADA IRAN IRAQ

1,680

Russia

1,045

Iran

895

qatar

279

saudi arabia

265

TURKMENISTAN

appendix 177

176 appendix

Exploration

The professionals in Saudi Aramco’s Exploration organization cover Saudi Arabia

on a scale that extends from wide swaths of desert, basins and mountains to the micron level. They also consider a fourth dimension in their quest: time, which they measure in the hundreds of millions of years. A new road, cut through a hill, allows a young geologist to map rock layers near al-‘Ula, Saudi Arabia.

The Fossil Record

Core samples, drill cuttings, plugs (a kind of mini-core pulled from the

Sedimentologists and carbonate geologists in Saudi Aramco’s Core Lab study the separate layers, or beds, within hydrocarbon reservoirs as revealed by core samples. Thin sections are cut from the core samples and examined by company micropaleontologists, who look for fossils of marine and land organisms, and by palynologists, who look for ancient pollens and spores.

This short interval of a core sample, pulled from 1,468 meters deep in the Shaybah field, shows the contact between crude oil and gas. The light brown section of the core is filled with Arabian Super Light crude oil while the gray section is from the gas column of the reservoir, above the oil column. The limestone core is composed of fragments of an ancient bivalve, and the oil and gas are stored in the inter-particle pore spaces between the shell fragments.

larger core) and thin sections mounted on slides are examined by geoscientists. The rock yields a wealth of knowledge about the reservoir: porosity and permeability, basic and structural geology, petroleum physics, stratigraphy, sedimentology and other data.

Geoscientists are especially interested in microfossils such as pollens, spores, protists

(one-celled organisms, including algae, dinoflagellates and others) and Foraminifera—organisms with calcium carbonate shells. The fossil record illustrates the historical environment of Arabia: from shallow, warm seas during the Jurassic Period to glaciers and ice sheets when Arabia, in its continental wandering, was located near the South Pole. Fossil remains of the single-celled aquatic organisms known as Foraminifera serve as excellent records of the environment and geologic age of the rock layers in which they are found. Foraminifera, with their hard exoskeletons, small size, short reproductive cycles, prolific numbers and wide distribution over marine environments, are especially valuable fossil clues.

A hydrocarbon reservoir is similar to a sponge soaked with oil and gas. Two key factors in a reservoir’s potential productivity are how big the holes in the sponge are and how they connect, known as porosity and permeability. Using a scanning electron microscope, company scientists can examine the reservoir rock at the 2- to 5-micron level, close enough to see the individual pores in the stone, and better understand the porosity and permeability of the reservoir. The rock on the left reveals poor reservoir quality, while the sample on the right shows excellent porosity and good permeability.

appendix 179

178 appendix

Company earth scientists and petroleum engineers use the latest in 3-D reservoir simulation technology in the Upstream Professional Development Center in Dhahran. Such technology provides a better understanding of prospects before an exploratory drilling program begins, and in reservoir development, it helps delineate fields and place wells to optimize production.

Seismic Imaging

Seismic surveying is used in conjunction with structure drilling in the search

for oil and gas. Sound waves, produced by mechanical vibrators mounted on the underside

Reservoir Characterization

Reservoir characterization plays a critical role throughout the

productive life of an oil or gas field. Every producing reservoir has a reservoir simulation model that

of large trucks, penetrate layers of rock thousands of meters beneath the Earth’s surface. The

is continually updated with new drilling and production data and is used to develop and evaluate

sound waves are reflected back to the surface where their altered waveforms are recorded as

alternative reservoir management strategies. Because of the huge size and large well spacing of

raw seismic data. This information is manipulated by powerful computers to produce an image

Saudi Arabia’s hydrocarbon resources, Saudi Aramco has developed its own reservoir simulator,

of the underground rock formations.

POWERS (Parallel Oil Water and Gas Reservoir Simulator), to produce 3-D geo-cellular models, comprising billions of individual cells. These reservoir models are used in reserves estimation and reservoir simulation models, which are also used to evaluate proposed well locations.

appendix 181

180 appendix

Reservoir Nano-agents: Resbots™

One promising avenue of research in reservoir manage-

ment is the development of nano-scale reservoir robots, called Resbots. Company researchers are studying the feasibility of deploying Resbots, 1/1,000th the size of a human hair, with the fluids injected into a hydrocarbon reservoir. Resbots would gather information about reservoir properties, including pressure, temperature and fluid type, in onboard memory. The Resbots would be retrieved through production wells and the data downloaded and analyzed, helping delineate the extent of the reservoir, map fractures and faults in the rock, define areas of higher permeability, identify bypassed oil, optimize well placement and help design even more precise

A multilateral well extends multiple branches within the hydrocarbon reservoir. Multilateral wells improve well productivity and reduce field development costs by requiring fewer wells to produce a field.

geological models of the reservoir. For the Resbots concept, the Exploration and Petroleum Engineering Center (EXPEC) Advanced Research Center won the prestigious New Horizons Idea Award at the 2008 World Oil Awards. Drilling and Reservoir Engineering

Drilling is conducted for both exploration and production

purposes. Structure drilling is used to determine key subsurface strata. Wildcat wells are drilled to test whether oil or gas is present in the structures that geologists have recommended. Once a new field has been discovered, a number of delineation wells are drilled some distance apart in order to outline the configuration and size of the field. Finally, the field is put into production by drilling development wells in a pattern recommended by petroleum engineers. Water injection wells inject treated seawater to maintain reservoir pressure.

Drilling technology has come a long way since the early days of the industry. Directional

drilling was first introduced in the 1920s, driven by the need to drill from difficult onshore sites

Geologists direct well drilling from Saudi Aramco’s Geosteering Center in Dhahran as real-time information is transmitted from sensors near the drill bits. The center operates 24 hours a day, seven days a week.

and, later, from offshore platforms. Horizontal wells became popular in the 1980s and were developed for deeper wells in the 1990s. A horizontal well penetrates a reservoir bed across the target zone, rather than down through it, improving recovery rates. More recent developments include multilateral wells, with multiple junctions like the branches of a tree. Drilling wells, whether for exploration, delineation, production or water injection, is at the heart of the petroleum industry.

A maximum reservoir contact (MRC) well is a multilateral horizontal well with more than five kilometers of total contact with the reservoir rock. Such wells also employ “smart” well features that enable a reservoir management team to intervene remotely. For example, the team can shut off one lateral without disturbing the remaining laterals. Smart wells also include downhole sensors, which provide real-time monitoring of the well, helping optimize production and reservoir management.

A further refinement of the MRC is the extreme reservoir contact (ERC) well, a smart

multilateral well that does not require individual control lines from the wellhead on the surface to each lateral. This allows an unlimited number of smart laterals, which can be remotely controlled using real-time data.

The Geosteering Operations Center (GOC) in Dhahran is staffed by teams of geologists and

engineers who monitor drilling operations anywhere in the field. They analyze downhole data in real time to remotely guide drilling activities and ensure that each well is optimally placed.

appendix 183

182 appendix

Oil & Gas Production and Processing

Gas Production and Processing

Natural gas is processed to produce clean fuel (methane, or

For a diagram of Saudi Aramco’s oil and gas production operations and a map of production

sales gas) and feedstock (methane, ethane, propane, butane and natural gasoline). Sales gas and

facilities, see the Operations Data section.

ethane are consumed entirely by Saudi Arabia’s utilities and industry. Excess propane, butane and

natural gasoline (collectively known as NGL) that are not used by the domestic petrochemicals

Saudi Aramco’s oil and gas production operations encompass Saudi Arabia, including

territorial waters in the Arabian Gulf and the Red Sea. Totaling more than 1.5 million square

industry are exported to world markets.

kilometers, this area is larger than the combined areas of Texas, California, Oklahoma and Utah, or of France, Spain and Germany. gas production

Oil Production and Processing

Most oil-producing wells are free-flowing with a typical oil

Sales Gas

NGL

flow rate of 5,000 bpd. Once the oil is extracted, it is piped to a gas-oil separation plant (GOSP) Gas Plant

where water and the majority of dissolved gases are extracted. The remaining oil is then sent to a stabilization facility, such as the Abqaiq Plants, for final gas separation and removal of hydrogen

Sulfur

sulfide. The extracted gas is sent to Gas Operations facilities for additional processing, while the water is injected back into the ground. This oil is now dry (no water), sweet (no hydrogen sulfide)

Oil

Gas

GOSP

Condensate

and stabilized (no gas), and can be refined or exported. This gas-oil separation plant (GOSP) is one of four that perform the initial processing of oil from the Shaybah field.

Gas

Gas Oil

Saudi Aramco’s Master Gas System (MGS) is fed with two types of gases: the gases associated with crude oil that are removed by the gas-oil separation plants (GOSPs), and the non-associated gases that come from gas wells that do not produce crude oil. Gas processing involves removing the hydrogen sulfide (H2S) and carbon dioxide (CO2) to produce sweet gas, and separating sales gas (methane) from the heavier components. The heavier products are liquefied and pumped to NGL plants for fractionation and final delivery to customers. The H2S is converted to elemental sulfur and sold to domestic and export markets.

Water Water

Associated Gas

Non-Associated Gas

Basic process of Gas Plants

Condensate

Sour Associated Gas

Sour Non-Associated Gas

Condensate Stripper

Low Pressure Amine

High Pressure Amine

Acid Gas Sweet Gas

Fluids produced from an oil well are typically under pressure and comprise oil, dissolved gas, salty water and some hydrogen sulfide. This mixture is sent to a gas-oil separation plant (GOSP) for initial processing. At the GOSP, a pressure step-down process releases most of the dissolved gas. A desalting process then removes the salt water. The resulting sour crude oil is then sent for stabilization.

Inlet for oil/water/gas mixture

Sulfur Recovery Unit

Compression

Gas outlet

Water

Gas

Liquid Sulfur

Dehydration

Foam Oil

Cooling

Emulsion Water

NGL Recovery

Water outlet

Oil outlet NGL

Sales Gas

In the gas plant, gas is received at slugcatchers, which separate condensate and water from gas and capture liquid ”slugs.“ These slugs, traveling at high velocity, may damage piping systems. Condensate liquids go to the stripping section, where H2S and water are removed. The separated sour gas feed goes to the gas treating modules, where, via contact with alkylamine, the H2S and CO2 are stripped away, creating sweet gas. The sweet gas is compressed and chilled to separate ethane and heavier gases. The H2Sand CO2-rich gas, now referred to as acid gas, is sent to the sulfur plants where H2S is converted to elemental sulfur, recovered and made into solid pellets for domestic and export sales.

appendix 185

184 appendix

Pipelines

Saudi Aramco operates a pipeline network nearly 20,000 kilometers long—roughly

equivalent to the flying distance between Rome and Sydney—including flow lines from oil and gas wells, water injection pipelines and systems for refined products distribution. Major crosscountry pipelines include the Saudi Arabia–Bahrain Pipeline and the East-West Crude Oil and NGL pipelines to Yanbu‘ on the Red Sea. The NGL pipeline linking Yanbu‘ and Shedgum is the longest and most advanced gas line ever built—1,170 kilometers long.

Downstream Downstream encompasses all the activities that occur after crude oil and gas have been produced and initially processed. The fractionation of natural gas liquids (NGL), the refining of crude oil and the petrochemical industry are downstream activities. Shipping and distribution of crude oil and refined products are also included within this scope. OSPAS

The Oil Supply Planning and Scheduling (OSPAS) organization is the nerve center for the

movement of all of Saudi Aramco’s crude oil, natural gas and refined products. OSPAS plans, schedules, coordinates and monitors the quantity—and quality—of millions of barrels of crude oil every day of the year from the wellhead to company terminals.

OSPAS also tracks refined product movements from seven refineries, 19 bulk plants, 18 air

refueling sites, five strategic storage facilities and 1,600 kilometers of refined products pipeline. It also tracks gas and NGL from six gas plants, three fractionation centers and more than 5,000 kilometers of pipeline. Saudi Aramco also operates 44 export berths at five marine ports, loading millions of barrels of oil and refined products each day onto supertankers destined for ports in the world’s three major energy markets: Asia, North America and Europe.

Within OSPAS, the “Big Board” of the Operations Coordination Center (OCC) tracks the

movement of oil, gas, NGL and refined products, and also oversees terminal operations and electrical power distribution. Operators in the Operations Coordination Center can, at a glance, see the entire scope of the company’s hydrocarbon production and distribution operations. With the click of a mouse, operators can check the status of individual pipeline valves, the feed rate of a distillation column at a refinery, the volume of a storage tank or the loading status of a supertanker.

Terminals

Saudi Aramco’s enormous storage tank farms and shipping terminals supply crude oil,

NGL and refined products to customers around the globe. Every year, more than 9,000 tankers call at company terminals at Ras Tanura and Ju‘aymah on the Arabian Gulf, and at Yanbu‘, Jiddah and Rabigh on the Red Sea.

The Ras Tanura Terminal consists of the South Pier, the North Pier and the Sea Islands.

The South Pier, currently abandoned, is where Saudi crude oil was first loaded onto the

tanker D. G. Scofield in May 1939. The North Pier, connected to the mainland by a 1,200-meterlong causeway and trestle, operates six berths for the loading of crude oil, refined products and refined liquid petroleum gasses (RLPG).

The Ras Tanura Sea Islands are a complex of man-made islands approximately 1½ kilometers

northeast of the North Pier. The four Sea Islands (one of which is decommissioned) each feature a loading station for crude oil and bunker fuel (to power marine vessels) and two berths. Six supertankers of up to 500,000 deadweight tons can load simultaneously.

In addition to linking wells to processing plants, Saudi Aramco’s pipeline system delivers crude oil, gas, NGL and refined products to domestic industries and utilities and to company export terminals.

appendix 187

186 appendix

Refining

Crude oil is a mixture of hydrocarbon molecules, the simplest of which, methane, is

one carbon atom linked with four hydrogen atoms. The three principal groups of hydrocarbon compounds that occur naturally in crude oil are paraffins, aromatics and naphthenes.

The refining process begins with the distillation, or fractionation, of crude oil into separate

hydrocarbon groups. Each hydrocarbon fraction has its own boiling point. The light fractions,

CH4– Methane (Natural Gas)

such as kerosene, have low boiling points while heavier fractions, such as fuel oil, have high boiling points.

In the refining process, crude oil is heated in a distillation column, and the vapors resulting

from the boiling are drawn off and condensed. The fractions produced by a distillation column are only the products that are in the crude oil to begin with—to produce more of a desired fraction, such as gasoline, refineries must add conversion processes.

The earliest conversion process was thermal cracking, in which the heavy fractions of

crude oil are heated to a high temperature and the hydrocarbon molecules “cracked” to release

C 3H8– Propane

the lighter fractions, gasoline, for example. In visbreaking, residual (heavy oils leftover from the distillation process) is heated, cooled with gas oil and rapidly burned or flashed. Visbreaking reduces the viscosity of heavy oils and produces tar. co*king involves heating residual, but at higher temperatures than visbreaking, until it cracks into heavy oil, gasoline and naphtha. The heavy, almost pure carbon residue left behind is called co*ke and is also a commercial product.

Gas

Naphtha* Reflux

Crude Oil Distillation Column * For processing into gasoline or petrochemicals ** For further processing into jet fuel

Kerosene**

A crude oil loading line is lifted into place aboard a supertanker calling at the Ju‘aymah Offshore Terminal in the Arabian Gulf.

The Ju‘aymah Offshore Terminal is a crude oil and bunker fuel loading facility designed

Light Diesel Oil

for loading and topping off deep-draft tankers. The loading facilities are roughly 29 kilometers north-northwest of Ras Tanura and 11 kilometers offshore. The largest supertankers afloat

C16H34– Diesel

take on cargo from six single-point moorings (SPM), each with a crude oil loading rate of up to 130,000 barrels per hour. There is also a two-berth RLPG loading facility at Ju‘aymah, accessible from the shore via a 10-kilometer trestle.

Light fractions of crude oil, such as methane and butane, are drawn from the top of the distillation column, while heavier molecules, such as diesel, come from lower in the column.

Heavy Diesel Oil

The Yanbu‘ crude oil terminal consists of four loading berths, two of which can be used

Furnace

simultaneously for a combined loading rate of 300,000 barrels per hour. Ships taking on cargo at Yanbu‘ for Europe or North America can save about 7,400 kilometers (4,000 nautical miles) per round trip, compared with sailing around the Arabian Peninsula from Ras Tanura or Ju‘aymah.

The Yanbu‘ NGL Plant has an associated two-berth RLPG terminal that can also handle

natural gasoline tankers. The nearby Yanbu‘ Refinery also has its own terminal, consisting of four berths for loading fuel oil and marine diesel for cargo or bunker, motor diesel oil, regular and premium gasoline, jet fuel, kerosene, naphtha and RLPG.

Fuel Oil

The Jiddah Terminal imports crude oil for the Jiddah Refinery and exports finished and

unfinished naphtha, kerosene, jet fuel, diesel, premium gasoline and fuel oil from four crude oil and refined product berths and five bunker loading berths.

Steam

Saudi Aramco also operates smaller bulk plant marine terminals at Jazan and Duba.

Asphalt

Crude Oil

The fractional distillation of crude oil is the first step in the refining process, which yields a range of products, including petroleum gas (methane, ethane, propane and butane); naphtha; gasoline; kerosene; gas oil or diesel distillate, used to make diesel fuel and heating oil; lubricating oil; fuel oil; and residuals such as co*ke, asphalt, tar and waxes.

appendix 189

188 appendix

The Saudi Aramco Shell Refinery Co. (SASREF), a joint venture between Saudi Aramco and Shell, operates this refinery complex in Jubail.

Catalytic cracking involves the use of a solid material, called a catalyst, mixed with the oil to help

Company (SATORP), a venture with Total of France, will be located in Jubail, and the Red Sea Refining

crack the heavier fractions. The process of hydrocracking adds high-pressure hydrogen gas to catalytic

Co., a subsidiary of Saudi Aramco, will be located in Yanbu‘. The third project is a company-owned

cracking, producing additional volumes of gasoline and other light fractions. Catalytic reforming uses

refinery and terminal in the Jazan region of southwestern Saudi Arabia. Internationally, Saudi Aramco,

a catalyst to combine low-weight naphtha into aromatics, which are used in blending gasoline and

through subsidiary offices, is a joint or equity venture partner in refineries in the United States, the

making chemicals.

Republic of Korea, China and Japan.

The various products from the distillation and cracking processes must be treated to remove

The Ras Tanura Refinery is the most complex refinery in the company’s domestic portfolio. The

undesirable compounds, such as sulfur, and to meet various performance and environmental specifica-

refinery includes facilities for crude oil stabilization and distillation, NGL processing, gas condensate

tions.

distillation, hydrocracking, visbreaking and catalytic reforming.

Saudi Aramco operates four domestic refineries, at Riyadh, Ras Tanura, Yanbu‘ and Jiddah,

and owns 50 percent of two domestic joint-venture refineries, with ExxonMobil in Yanbu‘ (SAMREF)

The Yanbu‘ Refinery is a hydroskimming plant, which is more complex than a topping refinery,

and it produces liquefied petroleum gas, gasoline, jet fuel, diesel oil and fuel oil, mainly for the domestic

and with Shell in Jubail (SASREF). Saudi Aramco also has a 37.5 percent stake in Petro Rabigh, with

market. The Jiddah Refinery features catalytic cracking and a catalytic reformer, and is a key supplier

Sumitomo Chemical Co. holding 37.5 percent and the Saudi public 25 percent. Work is also under

of fuel to the Jiddah and Makkah areas, especially during peak demand periods such as Ramadan and

way on three additional refining complexes. Two of the projects are 400,000-bpd full-conversion

Hajj. The Riyadh Refinery, like the Jiddah facility, contains a vacuum column, which permits processing

refineries integrated with petrochemical facilities: The Saudi Aramco Total Refining and Petroleum

of the heavier crude fractions. The Riyadh plant also features a hydrocracker and a catalytic reformer.

appendix 191

190 appendix

Gas Fractionation

Natural gas liquids recovered at the gas plants are sent to the NGL frac-

Distribution

In addition to the giant storage tank farms that feed shipping terminals with crude

tionation plants at Yanbu‘, Ju‘aymah and Ras Tanura for further processing. Typically, NGL plants

oil, NGL and refined products, Saudi Aramco operates a vast network of bulk plants and air fueling

receive ethane plus NGL in a combined feed from the gas plants via pipelines. The NGL is then

units strategically located throughout Saudi Arabia. Overall capacity of the company’s storage

pumped to the de-ethanizer columns in the fractionation modules, where the ethane is separated

facilities for all hydrocarbons is roughly 200 million barrels. Pipelines, marine crude oil tankers,

overhead as a vapor product. The ethane is sent to consumers as petrochemical feedstock or

product carriers and trucks are the principal delivery systems for the company’s petroleum and

injected into the sales gas system. The heavier gas at the bottom of the de-ethanizer column is

petroleum products.

fractionated in additional steps, yielding propane, butane, natural gasoline, hexane and pentane.

Through its 19 bulk plant operations, Saudi Aramco annually supplies around 375 million

Natural gasoline and pentane are blended and sent to refining, while the hexane and heavier

barrels of refined products to about 5,000 domestic bulk customers. Compliance reviews and

components are used as feedstock for petrochemical plants.

periodic spot checks are conducted to assist in maintaining product quality and to assure operations compliance with established safety and environmental policies and procedures.

Approximately 2,000 trucks are used to transport refined products over the Kingdom’s

150,000 kilometers of highways. The use of these trucks, which are subject to strict safety and quality standards, is being minimized as Saudi Aramco replaces them with new pipeline systems.

Shipping vessels account for almost all of Saudi Aramco exports of crude oil, NGL and

refined products and are also used to transport hydrocarbons to supply and distribution facilities on the Red Sea.

The company’s shipping subsidiary, Vela International Marine Limited, was established in

1984, when rights to Vela’s name and four existing tankers were acquired. Vela currently operates a fleet of 17 very large crude carriers (VLCCs), each capable of carrying 2.1 million barrels of crude oil. Vela also owns and operates five product tankers that perform coastal trade in the Red Sea and the Arabian Gulf. Overall, Vela ships make roughly 1,000 voyages per year—83 percent of which are international, with the remainder domestic—safely transporting roughly 2 million bpd.

The Master Gas System, which handles more than 9 billion standard cubic feet per day of gas, provides fuel and feedstock to domestic industries, such as this plant in Jubail.

The sales gas (methane) system is extensive, covering large areas of Saudi Arabia from

coast to coast. Adding to its complexity is the integration and interdependence of the three main systems: oil, gas and NGL.

The sales gas system depends greatly on oil production, since associated gas represents a

significant part of the system feed. It is also fully integrated into the NGL system, since any NGL component recovered during processing causes a reduction in the sales gas supply. Sales gas is piped to more than 54 industrial customers, including power, desalination and petrochemical plants, throughout the Eastern, Central and Western provinces of Saudi Arabia.

The Ju‘aymah and Yanbu‘ gas plants receive ethane (C2) plus NGL, and Ras Tanura receives

propane (C3) plus NGL for fractionation and sweetening. The Ju‘aymah plant also receives C3 plus NGL streams from the Berri Gas Plant and the Qatif and Abqaiq crude stabilization facilities. The Ju‘aymah and Yanbu‘ gas plants produce ethane, propane, butane and natural gasoline products, while the Ras Tanura Refinery produces all but ethane. The Ju‘aymah facility also has a depentanizer column and associated facilities necessary for the delivery of a hexane (C6) stream to petrochemical customers in Jubail. Propane is primarily used as petrochemical feedstock in the industrial cities of Yanbu‘ and Jubail and the excess is exported. Butane is used as domestic petrochemical feedstock and is also exported as a liquid. NGL products are used to produce more than 50 petrochemical products and are sold to customers in more than 100 countries worldwide.

The Saiph Star, a doublehull crude oil carrier, joined the Vela fleet in 2009.

appendix 193

192 appendix

Petrochemicals

The petrochemical industry traces its roots to World War II, when the demand

The next year, Saudi Aramco and The Dow Chemical Co. began exploring the possibility of

for synthetic materials rose due to shortages of, and lack of access to, natural resources. Before

building a petrochemical complex. The proposed joint venture, to be located in the Jubail industrial

the war, petrochemicals were an experimental sector: synthetic rubbers were developed in the

area, is perhaps the largest and most complex project in Saudi Aramco’s downstream portfolio.

early 1900s; Bakelite, the first petrochemical-derived plastic, in 1907; and polystyrene in the

The project proposal includes chemicals and plastics production units and an associated conversion

1930s. Today, petrochemicals are found in furniture, kitchen appliances, medical equipment,

park for local and foreign private-sector companies to build industries to use the products.

automobiles, airplanes and ships, soaps and detergents, solvents, drugs, fertilizers, pesticides, computers, paints, epoxies, clothing and shoes, flooring and insulating materials, cosmetics, luggage, and recording disks and tapes. The final destination of most crude oil is the fuel tank of a vehicle, whether a motorcycle, car, truck, airplane or train. Saudi Aramco exports of crude oil power the transportation industries in Europe, North America and Asia— in this case, China.

Natural Gas

Crude Oil

NGL

Methane

Xylenes

Benzene

petrochemical products: olefins (mainly ethylene, propylene and the C4 derivatives, including butadiene) and aromatics (benzene, toluene, xylene and naphthalene). A significant proportion of the basic petrochemicals are converted into polymers: polyethylene,

polyvinyl chloride and polystyrene, all derived from ethylene, and polypropylene, derived from propylene. Polymers are used in plastics, synthetic rubbers and synthetic fibers, such as polyester, nylon and acrylic. Beginning in the 1990s with a series of international joint and equity ventures in refining and

marketing, Saudi Aramco has been transforming itself from a crude oil producing and exporting company into an integrated petroleum enterprise, with activities all along the value chain. The

Ethane

C4 box*

Propylene

Ethylene

Olefins

Xylenes

Toluene

Benzene

Pygas

C4 box*

Propylene

Ethylene

Solvents, dyes, fibers and films used in products such as polyester fibers and plastics and in plasticizers, substances that make plastics more flexible and are used in medical tubing and blood bags, toys and footwear.

Industrial chemicals used in coatings, sealants, adhesives, paints and the foam used in furniture, bedding, car seats and building insulation.

Plastics used in boats, cars, computers, food containers and packaging, construction materials, nylon, toys, carpets, shampoo, cleaning products, emulsifiers and pharmaceuticals.

Used for gasoline blending or as feedstock.

Synthetic rubbers and plastics used in such products as automotive parts, tires, aviation gasoline and the gasoline additive MTBE.

Resins, fibers and plastics used in such products as detergents, solvents, varnishes, super-absorbent materials, acrylic fibers, pharmaceuticals, cosmetics and food packaging.

Plastics, polyesters and synthetic rubber used in products such as luggage, appliances, automotive parts, footwear, flooring and tires.

most recent development in the company’s transformation is the petrochemical sector. The goal is to create more value from Saudi Arabia’s hydrocarbon resources, principally by bringing petrochemicals processing and manufacturing to the Kingdom rather than exporting commodity

petrochemicals

petrochemicals to foreign markets where they are used in associated industries.

The petrochemical industry converts crude oil and natural gas into basic petrochemical building blocks that, in turn, are used to produce consumer goods ranging from heart valves to raincoats.

Pygas

LPG

a r o m at i c s

among others. These feedstocks are then further cracked to create the basic building blocks for

Toluene

Methane

Petrochemical facilities receive their raw material, known as feedstocks, from refineries

and NGL and gas plants. Feedstocks include ethane, naphtha, propane, butane and hexane,

Associated Gases

Naphtha

In March 2006, Saudi Aramco and Sumitomo Chemical Co. of Japan broke ground on the

Petro Rabigh joint venture, one of the world’s largest integrated refining and petrochemical facilities. The complex commenced operations in early 2009 and has the capacity to produce 18.4 million tons of high-value petroleum products and 2.4 million tons of ethylene- and propylene-based petrochemical derivatives per year. An associated industrial city will use the materials produced by Petro Rabigh to manufacture a wide range of products for local and international consumption.

* Butylene, butadiene and derivatives

appendix 195

194 appendix

Safaniya Jubail

Tanajib Nariya

Ju‘aymah Ras Tanura Qatif Dammam Dhahran

Khursaniyah Berri iraq

Operations Data Domestic Operations Map

■

International Operations Map

■

Oil and Gas Operations

■

Production and Workforce History

Shedgum

Turaif Badanah

jordan

■

Abqaiq

al-Jawf

al-Hasa

Khurais

Sakaka Dawmat al-Jandal

kuwait

Hafar al-Batin Qaisumah

Tayma

Duba

‘Udhailiyah ‘Uthmaniyah

Rafha

Tabuk

al-Wajh

Qurayyah

Safaniya Tanajib

Hayil

Haradh al-Khafji Jubail

Nariya

al-‘Ula Buraydah

Ras Tanura Qatif Dammam Abqaiq Dhahran Hofuf

al-Zilfi

‘Unayzah

Khaybar

al-Hasa

Yanbu‘

il pi pel ine Riyadh crude o east-west al-Dawadimi ine al-Kharj ngl pipel east-west

Madinah

Khurais Hawiyah

Salwah

Haradh

saudi arabia

united arab e m i r at e s

Rabigh Layla Jiddah

Makkah Tayif

oman

al-Sulayyil

al-Bahah Bishah Tathlith Abha

Khamis Mushayt Najran

ash-Sharawrah

Jazan

yemen

d o m e s t i c o p e r at i o n s key Towns

d o m e s t i c r e f i n e ry

major crude oil pipeline

C a p i ta l

j o i n t / e q u i t y v e n t u r e r e f i n e ry

major ngl pipeline

s e a w at e r t r e at m e n t p l a n t

crude oil terminal

trans-Arabian pipeline

gas processing plant

refined products terminal

S h ay b a h - a b q a i q p i p e l i n e

I n t e g r at e d r e f i n e r y a n d petrochemical plant

domestic refined products terminal

major oil processing complex domestic refined products d i s t r i b u t i o n fa c i l i t y

ngl terminal oil field gas field

scale in kilometers 0

200

appendix 197

196 appendix

> S-Oil Corporation Seoul republic of korea

> Saudi Petroleum

Overseas Ltd. > Aramco Overseas Company B.V. London

Toyko > Saudi Petroleum Ltd. > Aramco Overseas Company B.V. > Showa Shell Sekiyu K.K.

j a pa n

The Hague | Aramco Overseas Company B.V. Rotterdam > Texaco Esso AOC Maatschap > TEAM Terminal B.V.

at l a n t i c O c e a n

Saudi Petroleum Ltd. Beijing

> Aramco

Overseas Company B.V. New Delhi

Aramco Overseas Company B.V. Shanghai > Fujian Refining and

Petrochemical Co. Ltd.

Pa c i f i c O c e a n

> Sinopec SenMei (Fujian)

Petroleum Co. Ltd.

Fujian

Okinawa

Hong Kong > Aramco Overseas Company B.V. > Saudi Aramco Sino Co. Ltd.

New York City Saudi Petroleum International Ltd. Washington, D.C. Aramco Services Company

Singapore Saudi Petroleum Ltd.

indian Ocean

u n i t e d s tat e s

> Aramco Services Company > Saudi Refining Inc. > Motiva Enterprises LLC

Sidi Kerir

Houston

Ain Sukhna SUMED Arab Petroleum Pipelines Co.

LOOP

Aramco Gulf Operations Co. Ltd. al-Khafji

> Luberef > Saudi Aramco Mobil

Refinery Co. Ltd. (SAMREF)

> MARAFIQ

Yanbu‘

> MARAFIQ Jubail | > Saudi Aramco Shell Refinery Co. (sasref) Dhahran

Ju‘aymah Ras Tanura

Rabigh | Petro Rabigh Thuwal saudi arabia Jiddah > Luberef > Jiddah Oil Refinery Co.

i n t e r n at i o n a l o p e r at i o n s key Towns Saudi Aramco Headquarters a f f i l i at e , s u b s i d i a r y o r joint/equity venture long-term storage and t e r m i n a l fa c i l i t i e s

m a r a f i q : E l e c t r i c i t y a n d W at e r U t i l i t y f o r J u b a i l a n d Ya n b u

‘

Luberef: Saudi Aramco L u b r i c at i n g O i l R e f i n e r y C o . loop: Louisiana offshore oil port lightering areas ports

p r i n c i pa l e x p o r t r o u t e s v e l a s h i pp i n g r o u t e s

Dubai Vela International Marine Limited

appendix 199

198 appendix

Abu Hadriya

Zuluf

Qatif

Shaybah

Khursaniyah

Ghawar

Berri

Marjan

Abu Sa‘fah

Safaniya

Berri

Abqaiq

Khursaniyah

Haradh

Hawiyah

Harmaliyah Qatif

Qatif

‘Uthmaniyah

Shedgum

Ras Tanura

Abqaiq

Hawiyah

Yanbu‘

Jubail

Abqaiq

Tapline

MARAFIQ

Dhahran Tanks

Jubail***

Ras Tanura

Khurais

Bahrain*

Ras Tanura

Ju‘aymah

Yanbu‘

Ras Tanura

Ju‘aymah

Yanbu‘

Central Arabian Fields

Yanbu‘

Ras Tanura

Ju‘aymah Riyadh

Yanbu‘**

Petro Rabigh

Jiddah SWCC

MARAFIQ

key

g a s o p e r at i o n s

o i l o p e r at i o n s

The crude oil produced by Saudi Aramco from both onshore and offshore fields first goes to gas-oil separation plants for removal of gases, water and salt, after which it is sent for further processing at stabilizers or refineries. Most of the crude oil is delivered to tankers at Ras Tanura, Ju‘aymah or Yanbu‘.

key oil Field

r e f i n e ry

gosp: gas-oil s e pa r at i o n p l a n t

i n t e g r at e d r e f i n e r y a n d petrochemical plant

s ta b i l i z e r plant terminal

Local customer

* The refinery in Bahrain is not a Saudi Aramco facility. ** Two Yanbu‘ refineries (one joint venture) *** Joint venture

Gas produced with crude oil is collected from gas-oil separation plants and fed to gas processing plants. There, impurities are removed, hydrogen sulfide is recovered for conversion into elemental sulfur, and sweet, dry gas is extracted for use as an industrial fuel or feedstock. From gas processing centers at Shedgum, Hawiyah, Khursaniyah and ‘Uthmaniyah, NGL (natural gas liquids) and ethane are piped to plants at Yanbu‘ and Ju‘aymah for fractionation. After removal of the ethane, the NGL is further fractionated into LPG (propane and butane) and natural gasoline.

Gas produced independently of crude oil (non-associated gas) is processed at the Haradh and Hawiyah gas plants for delivery into the sales gas system. The Hawiyah NGL Plant processes sweet gas from the Hawiyah and Haradh gas plants. NGL from the Berri Gas Plant goes to Ju‘aymah or Ras Tanura for fractionation. LPG is exported from Yanbu‘ and Ju‘aymah. From the fractionation plants, ethane is delivered to the industrial complexes at Yanbu‘ and Jubail for use as a petrochemical feedstock.

n o n - a s s o c i at e d gas wells gosp: gas-oil s e pa r at i o n p l a n t Gas Plant

marafiq: electricity a n d w at e r u t i l i t y for jubail and ya n b u

‘

N G L : n at u r a l g a s liquids plant

swcc: saline w at e r c o n v e r s i o n c o r p o r at i o n

industrial complex

terminal

f r a c t i o n at i o n p l a n t

o t h e r i n d u s t ry saudi electric c o m pa n y

Average daily production of crude oil and NGL

s a u d i a r a m c o p r o d u c t i o n h i s t o ry 1 9 3 8 – 2 0 1 0 (thousands of barrels) key

crude oil

N at u r a l G a s L i q u i d s

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

1984

1983

1982

1981

1980

1979

1978

1977

1976

1975

1974

1973

1972

1971

1970

1969

1968

1967

1966

1965

1964

1963

1962

1961

1960

1959

1958

1957

1956

1955

1954

1953

1952

1951

1950

1949

1948

1947

1946

1945

1944

1943

1942

1941

1940

1939

1938

6,826.94 141.42 8,343.95 184.78 9,016.95 219.45 8,066.11 253.11 9,251.08 309.26 9,631.37 369.23 9,623.83 448.17 6,327.22 429.50 4374.30 330.10 3,922.08 355.07 3,041.10 316.31 4,689.80 304.18 3,991.00 344.92 4,928.10 416.21 4,863.53 420.95 6,257.56 533.23 8,053.40 586.74 8,156.57 622.06 7,854.74 639.76 7,833.28 687.93 7,807.63 731.85 7,864.83 756.15 7,751.93 767.45 8,006.24 764.83 7,274.05 737.35 7,800.07 778.71 7,570.64 801.05 6,792.32 868.32 8,103.45 945.43 8,610.58 1,058.14 9,064.62 1,096.94 8,912.17 1,093.24 8,531.91 1,081.00 8,924.14 1,098.92 7,912.56 1,123.96 7,910.20 1,219.30

1,520.70 2.90 1,629.02 5.80 1,716.11 11.01 2,024.87 13.87 2,392.74 15.56 2,597.56 20.40 2,829.98 38.47 2,992.66 46.17 3,548.87 52.12 4,497.58 52.07 5,733.40 54.07 7,334.65 97.12 8,209.71 137.63

1,392.52

1,247.14

1,095.40

1,015.03

992.11

986.13

965.04

953.00

844.64

824.76

761.54

546.70

476.74

390.31

246.17

164.23

58.39

21.30

13.34

12.41

11.81

13.87

10.78

1.36

200 appendix appendix 201

key saudi

e x pat r i at e

t o ta l w o r k f o r c e

s a u d i a r a m c o w o r k f o r c e h i s t o ry 1 9 3 5 – 2 0 1 0 ( at y e a r - e n d )

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

1984

1983

1982

1981

1980

1979

1978

1977

1976

1975

1974

1973

1972

1971

1970

1969

1968

1967

1966

1965

1964

1963

1962

1961

1960

1959

1958

1957

1956

1955

1954

1953

1952

1951

1950

1949

1948

1947

1946

1945

1944

1943

1942

1941

1940

1939

1938

1937

1936

1935

48,053 7,013 47,741 7,057

10,636 3,334 12,432 4,390 14,931 5,451 15,187 6,543 16,740 8,787 17,894 16,755 21,839 20,413 26,321 24,260 29,753 27,885 33,067 28,165 34,226 24,736 34,882 23,273 33,382 18,209 31,906 13,958 31,623 12,555 32,085 12,399 31,712 12,216 32,106 11,582 32,900 12,948 33,847 13,008 34,615 14,107 44,938 12,548 46,180 11,596 12,216 5,408 46,133 10,347 46,172 9,360 45,586 8,490 46,315 8,186 45,869 8,208 46,496 7,991 46,365 7,589 45,505 7,015 44,991 6,852 44,702 6,654 45,464 6,629 47,502 6,939

115 26 1,076 62 548 54 2,745 340 3,178 463 2,668 382 1,647 193 1,654 171 2,692 190 7,585 1,475 8,087 3,379 7,297 2,684 12,018 4,879 12,226 7,379 10,026 6,099 10,767 6,734 13,786 8,852 14,819 10,273 14,051 9,393 14,665 8,782 13,844 8,091 13,671 7,535 13,222 6,635 12,572 6,076 12,216 5,408 11,660 4,296 11,442 3,558 11,341 3,124 10,892 2,998 10,805 2,999 10,793 2,958 10,761 2,848 10,294 2,678 9,894 2,483 9,438 2,213 9,133 2,099 9,109 2,225 9,590 2,575

54,798

55,066

54,441

52,093

51,356

51,843

52,520

53,954

54,487

54,077

54,501

54,076

55,532

56,345

56,480

57,776

57,486

48,722

46,855

45,848

43,688

43,928

44,484

44,178

45,864

51,591

58,155

58,962

61,232

57,638

50,581

42,252

34,649

25,527

21,730

20,382

16,822

13,970

12,165

11,334

11,232

11,651

12,377

12,972

13,609

13,751

13,804

13,890

14,465

15,000

15,956

17,624

18,648

19,857

21,206

21,935

23,447

23,444

25,092

22,638

17,501

16,125

19,605

16,897

9,981

11,466

9,060

2,882

1,825

1,840

3,050

3,641

3,085

602

1,138

141

202 appendix appendix 203

company ceos 205

204 company ceos

Company Leadership

Company CEOs

Harry D. Collier 1940–1941, 1944–1951

R. C. Stoner 1941–1944

William S. S. Rodgers 1951–1952

Fred A. Davies 1952–1959

Norman Hardy 1959–1961

Company Presidents

Chairmen of the Board of Directors

Fred A. Davies 1940–1947

Liston F. Hills 1969–1971

R. C. Stoner 1943–1944

Robert I. Brougham 1969–1970

W. F. Moore 1947–1952

Frank Jungers 1971–1973

Harry D. Collier 1944–1951

Liston F. Hills 1970–1973

Robert L. Keyes 1952–1957

R. W. ”Brock“ Powers 1973–1978

William S. S. Rodgers 1951–1952

Frank Jungers 1973–1978

Norman Hardy 1958–1959

Hugh H. Goerner 1978–1983

Fred A. Davies 1952–1959

John J. Kelberer 1978–1988

Thomas C. Barger 1959–1968

Ali I. Al-Naimi 1984–1995

Norman Hardy 1959–1968

Hisham M. Nazer 1988–1995

Robert I. Brougham 1968–1969

Abdallah S. Jum‘ah 1995–2008

Thomas C. Barger 1968–1969

Ali I. Al-Naimi 1995–

Khalid A. Al-Falih 2009– On May 29, 1933, the oil concession agreement was signed between Saudi Arabia and Standard Oil Company of California (Socal). On November 8, 1933, a subsidiary, California Arabian Standard Oil Company (Casoc), was created to manage the concession. Casoc operated until January 1944, when the company’s name changed to the Arabian American Oil Company (Aramco). On November 8, 1988, the Saudi Arabian Oil Company (Saudi Aramco) was established.

Thomas C. Barger 1961–1969

Robert I. Brougham 1969–1970

Liston F. Hills 1971–1973

Ali I. Al-Naimi 1988–1995

Abdallah S. Jum‘ah 1995–2008

Khalid A. Al-Falih 2009–

Frank Jungers 1973–1977

John J. Kelberer 1978–1988

acknowledgments 207

206 acknowledgments

Acknowledgments

oral history interviews conducted by the history factory

Former and Current Employees Mustafa Abuahmad Khalid I. Abubshait Khalid A. Afandi Abdulkader M. Afifi Abdulaziz Omer Al-Ajaji Nassir M. Ajmi Mohammed Saeed Salman Al-Ali Othman Alkhowaiter Matter J. Alshammery Nabilah Altunisi Khalid Ali Alturki Michael Ameen Ibrahim Al-Anaysha Richard Arnold Dr. Thuraya Al-Arrayed Sa‘ud Abdulrahman Al-Ashgar Mona Al-Attas Fatema H. Al-Awami Ali M. Al-Baluchi Henry Barracano Fahmi Basrawi Faysal M. Al-Bassam Jimmy K. Beresky, Jr. Bader Eid Biltagi Khalid G. Al-Buainain Dave L. Cantrell Victor C. Crane Dr. Tawfiq Q. Al-Daiel James C. Davidson Hamad M. Al-Dhewalia

Maram M. Al-Dowayan Samia Al-Edrisi Mike Erspamer Khalid A. Al-Falih Khalid Afandi Abdulla Fouad Bidah Mejdal Al-Gahtani Fahad Muhammad Al-Ghaslan Huda M. Al-Ghoson Maxine Steineke Goad Geraiyan Mohammad Al-Hajri Samir Ahmad Hassan Ali Y. Al-Hauwaj Abdulaziz M. Al-Hokail Charles V. Hudson Ahmed Saleh Al-Humaid Dr. Sadad Al-Husseini Abdallah S. Jum‘ah Frank Jungers Hamad A. Juraifani Mohammad A. Al-Juwair Syed I. Masood Kauser Thomas H. Keith Dr. Saadeh A. Khalil Abdulaziz F. Al-Khayyal Othman Al-Khowaiter Ibrahim Y. Koheji Robert W. Lebling Leslie Lewis William Laney Littlejohn Dr. Ibrahim S. Mishari Mohammad R. Al-Mughamis Ali A. Al-Muhareb Hesham Al-Musaiid

Ali I. Al-Naimi Ahmad S. Al-Nassar Soulafa Al-Nassar Ismail Ibrahim Nawwab Robert Norberg Naser Al-Nughaimish Abdullatif A. Al-Othman Kathleen M. Owen Richard B. Owen Thomas A. Owen David G. Peck Jairo Antonio Plata Torres Thomas A. Pledge John E. Pratt Bidah Al-Qahtani Hamed T. Al-Saadoun Abd Allah S. Al-Saif Muhammad A. Salamah Nansen G. Saleri Ali Seflan Maha S. Shahid Sa’ad R. Al-Shaifan Matter J. Al-Shammery Richard J. Snedeker Louis C. Spencer Muhammad A. Tahlawi Abdulaziz A. Talhah Aus A. Al-Tawil Saad A. Turaiki Dhaifallah A. F. Al-Utaibi Capt. Khalid A. Al-Watban John M. Weatherburn

institutions

Repositories, Archives, College Libraries, etc. Saudi Arabia King Abdulaziz Foundation for Research and Archives, Riyadh King Abdulaziz Public Library, Riyadh, Dr. Abdul Kareem A. Al-Zaid, Deputy Supervisor General King Fahd National Library, Riyadh, Mohammed A. Al-Rashid, Vice General Director Ministry of Petroleum and Mineral Resources, Riyadh Saudi Aramco Community Heritage Gallery, Dhahran United States Consulate, Dhahran International American Petroleum Institute, Washington, D.C., United States Aramco ExPats.com Aramco Services Company, Houston, Texas, United States Bechtel Corporation, San Francisco, California, United States Bapco, Bahrain BP p.l.c., London, United Kingdom Chevron Corporation, San Ramon, California, United States Columbia University, New York, New York, United States Embassy of Saudi Arabia, Washington, D.C., United States ETH Bibliothek, Zurich, Switzerland ExxonMobil Corporation, Irving, Texas, United States Georgetown University, Washington, D.C., United States Harvard University, Cambridge, Massachusetts, United States Library of Congress, Washington, D.C., United States National Archives and Records Administration, Washington, D.C., United States Oberlin College, Oberlin, Ohio, United States OPEC, Vienna, Austria President Harry S. Truman Library, Independence, Missouri, United States Princeton University, Princeton, New Jersey, United States Royal Geographical Society, London, United Kingdom Smithsonian National Museum of American History, Washington, D.C., United States Stanford University, Stanford, California, United States University of California, Berkeley, California, United States University of Utah, Salt Lake City, Utah, United States University of Wyoming, Laramie, Wyoming, United States People who assisted with this book Marwan A. Abdrabuh, Abdulrahman M. Al-Abdulqader, Abdulaziz S. Abubshait, Khalid A. Afandi, Graeme Agland, Eyad M. Ajaj, Khalid A. Albahkali, Yousef A. Al-Ali, Shawki M. Alsukairi, Harry Alter, Hassan H. Al-Amri, Ibrahim Al-Anayshah, Wael Faisal Al-Angari, Ross and Patty Atkinson, Tariq A. Al-Awaisi, Ensan M. El-Ayoubi, Fahad S. Al-Aziz, Saad Said Azzahri, Nabil A. Ba‘ashan, Mohamed A. Bagais, Raed M. Bahomaid, Robin J. Bally, Tim Barger, Ralph D. Bears, Catarina P.

Beresky, Bader Eid Biltagi, Idrees M. Bodah, David D. Bosch, Neil Brown, Salah S. Al-Buraiki, Tina Pakka Cape, Edna K. Catchings, Arthur P. Clark, Basima K. Al-Saleh Darwaza, James C. Davidson, Peter Davidson, Abdullah A. Al-Deraibi, Mohammad G. Al-Domaini, Saad F. Al-Dosari, Adel H. Al-Dossary, Dick Doughty, Nasser Mohammed Al-Dowayan, Gregory J. H. Dowling, Khaled M. Al-Dukeer, David Duncan, Ralph Echezuria, Galal T. Elkhatib, Deya A. Elyas, Dwight Fullingim, Steve Furman, Tony Germani, Michael Gerow, Fouzi M. Al-Ghaithi, Ibrahim A. Al-Ghamdi, Khalid S. Al-Ghamdi, Mohammed S. Al-Ghamdi, Saleh Ghazi Al-Ghamdi, Ahmad H. Al-Ghannam, Nasser H. Ghazzawi, Mohammed A. Al-Ghuwinim, Arthur E. Gregory, Ahmed M. Al-Gusaier, Mohammad A. Al-Haddad, Quraiyan Mohammad Al-Hajri, Saad S. Al-Hajri, Bandar S. Al-Hakami, Ziyad Al-Hamidi, Mohammed O. Hammadi, Mona S. Hassan, Zaid Mohammad Al-Hazmi, Ghalib Moghram Al-Houtan, Charles V. Hudson, Geraint W. Hughes, Haitham K. Al-Jehairan, Mashal M. Jehani, Abdulkarim M. Al-Juhani, S. I. M. Kauser, Thomas H. Keith, Mark W. Kennedy, Abdelkan K. Khalil, Abdelkarim K. Khalil, Dr. Saadeh Khalil, Ibrahim Y. Koheji, Norman H. Kong, Elizabeth C. Lacsamana, Robert W. Lebling, Robert F. Lindsay, Jose A. D. de Luna, Mohammed A. Mahtersh, Richard Maise, James P. Mandaville, Maha A. Al-Mansoury, Saeed N. Al-Marri, Timothy W. Martin, Mark McCarthy, Brian J. McKeage, Jeff D. Meisner, Abdalmatloob Ali Al-Mohammadi, Fadi S. Al-Mubarak, Ibrahim A. Al-Muhaiza, Mohammad A. Mulla, Fayez S. Al-Mutairi, Nazih F. Najjar, Ni‘mah I. Nawwab, Gregory C. Noakes, Hussain A. Al-Obaid, Hani A. Al-Omair, Khalid Abdulrahman Al-Omair, Saad M. Al-Omani, Alaa A. Othman, Kathleen M. Owen, Owen Oxley, Alex M. Padippurathu, Honorio S. Pangan, Janis E. Patton, David G. Peck, Thomas A. Pledge, Adel Ali Al-Ramadhan, Saleh M. Al-Rushaid, Abdullah A. Al-Saadoun, Sami A. Sa‘ati, Fawzi A. Al-Sadah, Ali Al-Salem, Samer S. Samman, Nestor Sander, Ahmed S. Al-Saqer, Saud Abdulah Al-Saqri, Paul E. Sauser, Moneer A. Sayed, Michelle M. SeatersAlireza, Douglas C. Seedorf, Hisham A. Shah, Khalid S. Al-Shahab, Omar M. Al-Shahrani, Saad A. Al-Shahrani, Ahmed Abed Shaikh, Khalid G. Al-Shammari, Zaki M. Al-Shobber, Arafat A. Al-Shurei, Ken Slavin, Richard J. Snedeker, Peter C. Speers, Gordon P. Tobert, Yousef S. Al-Ubaid, Khalid D. Al-Usail, Chris P. Vice, Keith G. Wallis, Khalid A. Al-Watban, Marilyn Bunyan Wilkens, Christopher Wszolek, Faisal S. Al-Zahrani, Abdullah S. Zaindin and James G. Zibbel. Appreciation is also extended to people who provided assistence for this book but were inadvertently not included in the above list. About the Author Scott McMurray has authored several landmark books for The History Factory’s clients, including the histories of consulting industry leader Accenture, biotech pioneer Chiron and one of America’s leading health-care innovators, Sutter Health System. A former senior writer with The Wall Street Journal, Scott has more than 25 years’ experience in business writing, research and analysis of corporate strategy. A graduate of Grinnell College with a BA in English Literature and American Studies, Scott is a member of the Phi Beta Kappa academic honor society and the Authors Guild.

list of abbreviations 209

List of Abbreviations

AAPG

American Association of Petroleum Geologists

MRI

magnetic resonance imaging

AMDP

Aramco Mobile Drilling Platform

NEDC

Near East Development Company

Aminoil

American Independent Oil Company

NGI

Natural Gas Initiative

AOC

Aramco Overseas Company

NGL

natural gas liquids

APP

Associate Professional Program

NOC

national (or state-owned) oil company

Aramco

Arabian American Oil Company

OAPEC

Organization of Arab Petroleum Exporting Countries

ASC

Aramco Services Company

OCC

Operations Coordination Center

Bapco

Bahrain Petroleum Company

OPEC

Organization of Petroleum Exporting Countries

British Petroleum Company

PDP

Personal Development Program

bpd

barrels per day

PDP

Professional Development Program

Casoc

California Arabian Standard Oil Company

POWERS

Parallel Oil Water and Gas Reservoir Simulator

CAT

computer-aided tomography

ppb

parts per billion

CDPNE

College Degree Program for Non-Employees

PRC

Petroleum Reserves Company

CERA

Cambridge Energy Research Associates

R&D

research and development

E&P

Exploration and Production

SABIC

Saudi Arabia Basic Industries Corporation

EXPEC

Exploration and Petroleum Engineering Center

SAG

Saudi Arabian government

EXPEC-ARC

Exploration and Petroleum Engineering Center’s Advanced Research Center

Samarec

Saudi Arabian Marketing and Refining Company

SAMCOM

Saudi Arab Manpower Committee

FREP

Fujian Refining and Petroleum Company Ltd.

SASC

Saudi Aramco Cino Ltd.

GOSP

gas-oil separation plant

GPS

global positioning system

IDD

Industrial Development Division

IEA

International Energy Agency

IOC

international oil company

IPC

Iraq Petroleum Company

information technology

ITC

Industrial Training Center

Jersey

Standard Oil Company of New Jersey

KAUST

King Abdullah University of Science and Technology

KFUPM

King Fahd University of Petroleum and Minerals

LPG

liquefied petroleum gas

MGS

Master Gas System

MIT

Massachusetts Institute of Technology

MRC

maximum reservoir contact (well)

Saudi Aramco Saudi Arabian Oil Company SCECO

Saudi Consolidated Electrical Company

scfd

standard cubic feet per day

Socal

Standard Oil Company of California

Socony

Standard Oil Company of New York

SSPC

Sinopec SenMei (Fujian) Petroleum Co. Ltd.

SRAK

South Rub‘ al-Khali Company Ltd.

Tapline

Trans-Arabian Pipeline or Trans-Arabian Pipe Line Company

TOEFL

Test for English as a Foreign Language

TPC

Turkish Petroleum Company

UAE

United Arab Emirates

ULCC

ultra-large crude carrier

VLCC

very large crude carrier

ZHI

al-Zamil Heavy Industries

notes on sources 211

210 notes on sources

■

Notes on Sources

■

The Wallace Earle Stegner Collection, in the Special Collections of the J. Willard Marriot Library at the University of Utah, Salt Lake City, Utah. The White Collection, in the Chevron Corporate Archives, San Ramon, California.

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The William E. Mulligan Papers and the Joseph A. Mahon Papers, in the Special Collections of the Lauinger Library at Georgetown University, Washington, D.C. The Saudi Aramco Technical Information Center and the Saudi Aramco Community Heritage Gallery, Dhahran, Saudi Arabia.

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The Karl S. Twitchell Papers, in the Special Collections of the Seeley G. Mudd Manuscript Library, Princeton University, Princeton, New Jersey. The Aramco Resource Library at The History Factory, Chantilly, Virginia. The Saudi Aramco Oral History Project at Aramco Services Company, Houston, Texas. The Archives at the Hoover Institution on War, Revolution and Peace, Stanford University, Stanford, California.

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The George Rentz Collection in the King Abdul Aziz Public Library, Riyadh.

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The National Archives, Washington, D.C.

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national resources

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On Thomas C. Barger, see Paul F. Hoye, “Tom Barger: Myth or Man?” Aramco World, September/October 1969. On his strategy at Aramco, see “Planning Guidelines for Aramco as a Corporation” in the Joseph A. Mahon Papers. On Oil in the Arab States, see “Summary of the Oil in the Arab States” at the Saudi Aramco Technical Information Center. On oil price cuts in the late 1950s and early 1960s, see William E. Mulligan, “A Kingdom and a Company,” Aramco World, May/June 1984, and “Esso Cuts Posted Price of Middle East Crude,” Middle East Economic Survey, 12 August 1960.

On the Sidon price claim, see “Aramco Comments on Sidon Claim,” Middle East Economic Survey, 28 July 1963; “Aramco and Tapline Agreements Ratified,” Middle East Economic Survey, 5 April 1963; and “Aramco Back Payments and Economic Development,” Middle East Economic Survey, 19 July 1963. On Aramco staff cuts in the late 1950s and early 1960s, see Aramco’s 1954, 1959 and 1960 Report of Operations. On corresponding increases in revenue, see “Oil Revenue From Aramco Reaches $895 Million for 1969,” Middle East Economic Survey, 10 April 1970.

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On Aramco’s employment of female Saudis, see Sadad Al-Husseini’s interview in the Aramco Resource Library.

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On Aramco employee life during the 1960s and 1970s, see Khalid A. Al-Falih’s interview in the Aramco Resource Library and interviews with Frank W. Tracy and Lawrence Tanner in the Saudi Aramco Oral History Project collection. For more information on Al-Falih, see also “Streaker Designated Senior VP; Falih Elected Vice President,” Arabian Sun, 25 November 1981, and “Board Appoints 6 to Vice Presidential Posts,” Arabian Sun, 16 May 2001. On Petromin, see Arthur Clark, “Saudi Aramco at Sixty,” Aramco World, September/October 1993. On relinquishment of portions of the concession, see Aramco 1963 and “Obliging Goliath,” Time, 13 September 1963. On the rise of Saudi government-run television, see “Channel 3 Television Bows Out Gracefully After 41 Years,” Arabian Sun, 30 December 1998.

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On the oil glut in the late 1960s, see Baldo C. Marinovic’s interview in the Regional Oral History Office collection. ■

■

boom time

On education in Saudi Arabia, see “Company-Built SAG School Program” in the William E. Mulligan Papers, box 5, folder 14, and Abdallah S. Jum‘ah’s interview in the Aramco Resource Library.

On the College of Petroleum and Minerals, see the King Fahd University of Petroleum and Minerals Web site at http://www.kfupm.edu.sa/kfupm/about/ history.asp. See also Aramco 1970 and “Arabian American Oil Company Donations, Contributions, and Assistance to Saudi Arabia 1933–1970” in the William E. Mulligan Papers, box 5, folder 10.

■

On the 1967 oil embargo, see “Saudi Oil Minister’s Statement to Al-Madinah Al-Munawwarah,” Middle East Economic Survey, 14 July 1967.

Chapter 2

■ ■

Chapter 1

■

On shifts in Saudi oil policy during the early 1960s, see “Saudi Oil Policy,” Middle East Economic Survey, 10 November 1961. For Ahmed Zaki Yamani’s appointment as Minister of Petroleum and Mineral Resources, see “Chronicle of OPEC and Sheikh Zaki Yamani,” The Daily Star, 19 February 2004.

■ ■

The Regional Oral History Office collection, in the Bancroft Library, University of California, Berkeley, California.

■

On Saudization of Aramco’s management, see Mustafa Abuahmad’s interview in the Aramco Resource Library.

Book sources for this chapter: Al-‘Abbusi, Oil in the Arab States Barger, Out in the Blue Facey, et al., A Land Transformed Lacey, The Kingdom Lippman, Inside the Mirage Noring and LaFantasie, Foreign Relations of the United States, 1961–1963 Pakka, The Energy Within Pledge, Saudi Aramco and Its People Stocking, Middle East Oil Symonds, Jebel Dhahran and the New Saudi Generation Viola, Human Resources Development in Saudi Arabia Yergin, The Prize

For complete information on book sources, see the bibliography, pp. 214-215.

sources of documentary information

On “Rock Wednesday,” see Fred H. Drucker’s interview in the Saudi Aramco Oral History Project collection; Richard W. Powers’s interview in the Regional Oral History Office collection; and Richard W. Powers’s interview in the Aramco Resource Library.

■

On oil company name changes, see “Kelberer Assumes Board Chairman, CEO Posts; Powers Elected Vice Chairman,” Arabian Sun, 4 January 1978; the ExxonMobil Web site at http://www.exxonmobil.com/Corporate/history/ about_who_history.aspx; the Chevron Web site at http://www.chevron. com/about/company_profile/; and the Texas State Historical Association Web site at http://www.tshaonline.org/handbook/online/articles/doogz. On surging oil demand in the late 1960s, see Richard W. Powers’s interview in the Regional Oral History Office collection; George L. Perry’s essay “The War on Terrorism, the World Oil Market and the US Economy” at http://www.brookings.edu/views/papers/perry/20011024.htm; and Aramco 1970 and Aramco 1971.

■

On Saudi Arabia’s role as swing producer, see Walter Dell’Oro’s interview in the Saudi Aramco Oral History Project collection. On the closure of Tapline, see Fred H. Drucker’s interview in the Saudi Aramco Oral History Project collection. On Aramco’s rapid payroll expansion during the 1970s, see Aramco 1975 and Aramco 1980. For a firsthand perspective, see also interviews with Abdulaziz F. Al-Khayyal and Mustafa Abuahmad in the Aramco Resource Library and interviews with Robert Luttrell and Frank Fugate in the Saudi Aramco Oral History Project collection. On concurrent growth in training programs, see “Ali M. Dialdin Retires from Training,” Arabian Sun, 25 November 1998. On the construction of new ports, see “Saudi Arab Government Gas Program” in the William E. Mulligan Papers, box 5, folder 12, and “Shallow Piers for New Cargo Offloading System,” Arabian Sun, 21 July 1976. On the growing importance of project management, see Henry Barracano’s interview in the Saudi Aramco Oral History Project collection.

■

On rising oil prices in the 1970s, see “Oil Crisis Averted in Tehran,” Washington Post, 14 February 1971, and “The Oil Settlement at Tehran,” Washington Post, 17 February 1971. For a firsthand perspective, see Frank Jungers‘s interview in the Regional Oral History Office collection. On the transfer of oil companies to government ownership, see Thomas J. Hamilton, “Oil Nations Seeking 20% Interest,” New York Times, 29 January 1972; “Oil Accord Signed by 2 Arab States,” New York Times, 22 December 1972; Juan de Onis, “Saudi Displeased with Her Oil Pact,” New York Times, 11 September 1973; and John M. Lee, “Oil Companies Drop Demand for a Global Accord,” New York Times, 29 January 1971. For a firsthand account, see Leslie Lewis’s interview in the Saudi Aramco Oral History Project collection. On the effects of the 1973 Arab-Israeli War, see “Company Urges Review,” New York Times, 19 September 1973. For the resulting oil embargo, see “Cut to Military Charged,” New York Times, 24 January 1974, and “Aramco Concedes Denying Oil to U.S. Military Since October,” New York Times, 2 January 1974. On Saudization during the 1970s, see interviews with Hamed T. Al-Saadoun, Sa‘ud A. Al-Ashgar and Ali I. Al-Naimi in the Aramco Resource Library. See also Baldo C. Marinovic’s interview in the Regional Oral History Office collection and “New Superintendents Appointed at Refinery,” Arabian Sun, 19 January 1977. On education trends in Saudi Arabia, see UNESCO’s statistics at http://stats.uis. unesco.org/unesco/TableViewer/document.aspx? ReportId=121&IF_Language =eng&BR_Country=6820. On training for expatriates, see William Laney Littlejohn’s interview in the Saudi Aramco Oral History Project collection. On SRI’s participation in Saudi Arabian development, see SRI International’s Web site at http://www.sri.com/about/timeline/timeline-flash.html. On the Master Gas System, see “Tuesday Seminar: Decisions in ARAMCO are 100% Saudi,” Ar-Riyadh, 26 January 1982. On housing for Aramco employees during the mid-1970s, see Arabian Sun, 12 January 1977; Arabian Sun, 31 August 1977; and Aramco 1977. On Saudi contractors in the 1970s, see William E. Mulligan, “A Kingdom and a Company,” Aramco World, May/June 1984. On the NGL pipeline, see “Ceremony Marks First Shipment of Petroline Crude from Yanbu‘,” Arabian Sun, 8 July 1981. On the growth of Saudi Arabia’s electrical grid in the 1970s, see “A Bright New Era for Electrical Power,” Dimensions, Fall 2003, and “The Pillars,” Aramco World, November/December 1982. For a firsthand account, see Abdallah S. Jum‘ah’s interview in the Aramco Resource Library. For a description of earlier electrical infrastructure, see Aramco 1978. On Abdallah S. Jum‘ah, see “Jum‘ah Named Senior Vice President; Saleh Elected Vice President,” Arabian Sun, 20 July 1988, and “Dune Doings: Letters from Arabia 1958 to 1983” in the Aramco Resource Library. On the 1977 Abqaiq fire, see Lawrence Tanner’s interview in the Saudi Aramco Oral History Project collection and an untitled Associated Press article dated 2 May 1977. For the resulting facilities improvements, see Dhaifallah A. F. Al-Utaibi’s interview in the Aramco Resource Library.

Book sources for this chapter: Bashshur, Higher Education in the Arab States Dajani and David, Economic Diplomacy Edens, Oil and Development in the Middle East Facey, et al., A Land Transformed Han, Oil, The Persian Gulf States, and the United States Howarth, A Century in Oil Pledge, Saudi Aramco and Its People Sampson, The Seven Sisters Yergin, The Prize

notes on sources 213

212 notes on sources

Chapter 3

Chapter 4

transformation

rising to the challenge

■

On Aramco’s 50TH anniversary, see “His Majesty King Fahd Honors Aramco at 50,” Arabian Sun, 18 May 1983, and “New Aramco President to be Saudi National, Yamani Says,” Platts Oilgram News, 18 May 1983.

■

On training programs in the 1980s, see William E. Mulligan, “A Kingdom and a Company,” Aramco World, May/June 1984. For a firsthand account, see Abdullatif A. Al-Othman’s interview in the Aramco Resource Library. On increases in oil revenues in the late 1970s, see Aramco 1980; Anthony J. Parisi, “Price of Saudi Oil Reportedly Raised 8% to $26 A Barrel,” New York Times, 28 January 1980; and the U.S. Energy Information Administration’s statistics at http://tonto.eia.doe.gov/dnav/pet/pet_pri_wco_k_w.htm. On Saudization and the growth of Aramco’s payroll in the early 1980s, see Aramco 1986 and “Al-Mishari Named General Manager, Oversees EXPEC Computer Center,” Arabian Sun, 4 May 1988. For a firsthand account, see Hesham Al-Musaiid’s interview in the Aramco Resource Library.

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On Aramco’s female Saudi employees, see interviews with Samia Al-Edrisi, Nabilah Altunisi, Thuraya Al-Arrayed, Huda M. Al-Ghoson and Fatema H. Al-Awami in the Aramco Resource Library. On daily Aramco employee life in the 1980s, see James R. Tracy’s interview in the Saudi Aramco Oral History Project collection and Ali A. Al-Muhareb’s interview in the Aramco Resource Library. On Aramco payroll reductions in the mid-1980s, see Seth L. Sharr’s interview in the Saudi Aramco Oral History Project collection and Khalid A. Al-Falih’s interview in the Aramco Resource Library. For the reductions in oil demand behind the payroll cuts, see the U.S. Energy Information Administration’s statistics. On Aramco’s mothballing program in the 1980s, see Aramco 1985 and Aramco 1987. See also “Saudi Aramco Details 1990 Surge in Oil Production,” Oil & Gas Journal, 12 August 1991; “Surprise: Drilling is Up,” World Oil, August 1989; and “’Udhailiyah: In the Middle of Nowhere, Home,” Dimensions, Summer 2005. For firsthand accounts, see interviews with Sadad Al-Husseini and Saad A. Turaiki in the Aramco Resource Library.

■

On the Master Gas System, see “GAO Team Reports Saudi Fields Healthy,” Oil & Gas Journal, 20 March 1978, and Cook, “A Hard Choice: More Recession—Or More Expensive Oil?,” Forbes, 20 March 1978. On the discovery of natural gas reservoirs, see Aramco’s 1957 Report of Operations, Aramco 1985, Aramco 1986 and Aramco 1987. See also “After 18-Month Decline, Gas Crunch Forces Saudi Arabian Oil Flow Higher,” Oil & Gas Journal, 10 October 1983. For a firsthand account, see Sadad Al-Husseini’s interview in the Aramco Resource Library. On oil pricing in the 1980s, see United Press International, “OPEC Slashes Oil Production,” 2 March 1987; United Press International, “OPEC Accord Sets Stage for Official Oil Price Hike,” 7 July 1987; and “Text of OPEC Agreement,” Middle East Economic Survey, 27 December 1987. For a firsthand account, see William Laney Littlejohn’s interview in the Saudi Aramco Oral History Project collection.

■

On Aramco’s growth in the late 1980s, see Saudi Aramco 1988. On the Ju‘aymah Gas Plant fire, see BBC, “Saudi Report on Fire at Natural Gas Plant,” 17 August 1987, and Aramco 1987. For a firsthand account, see Abdallah S. Jum‘ah‘s interview in the Aramco Resource Library.

■

On Saudi Aramco’s vertical integration, see Saudi Aramco 1989. For a firsthand account, see Ali I. Al-Naimi’s interview in the Aramco Resource Library.

Book sources for this chapter: Ghosh, OPEC, the Petroleum Industry, and United States Energy Policy Marcel, Oil Titans Pakka, The Energy Within Pledge, Saudi Aramco and Its People Yergin, The Prize

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On the effect of the Gulf War on oil production, see U.S. Energy Information Administration statistics. For the effect on prices, see “Cash Prices” in the New York Times and the 1991 OPEC Annual Statistical Bulletin, table 71. For damage caused to oil facilities, see the U.N. Compensation Commission’s 2002 Report and Recommendations Made by the Panel of Commissioners Concerning Part Two of the Seventh Installment of “E1” Claims. On Saudi Aramco’s response to Gulf War oil shortages, see “Saudi Aramco Details 1990 Surge in Oil Production,” Oil & Gas Journal, 12 August 1991; “Hisham Nazer Tours Aramco, Talks to Employees,” Arabian Sun, 5 September 1990; and Saudi Aramco 1990. For firsthand accounts, see Sadad Al-Husseini’s interview in the Aramco Resource Library and Bryan Bartlett’s interview in the Saudi Aramco Oral History Project collection. On the early 1990s Gulf oil spill, see “Oil Spills Continue to Threaten the Gulf,” Middle East Economic Survey, 11 February 1991; “Oil Spills Sweep the Gulf,”Middle East Economic Survey, 4 February 1991; Thomas A. Pledge, “A War Within a War,” Saudi Aramco World, May/June 1991; Bennie H. Brown, “Al-Utaibi 42 Years on Board,” Arabian Sun, 28 January 2004; “Oil Slick Defenses Hold the Line Despite Rough Weather,” Arabian Sun, 13 February 1991; Abdulaziz M. Al-Hokail, interview by Liane Hansen, Weekend All Things Considered, National Public Radio, 27 January 1991; and “Oil Recovery Nears One Million Barrels,” Arabian Sun, June 1991.

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On the integration of Samarec into Saudi Aramco, see “Saudi Aramco’s Operations Dramatically Expanded,” Dimensions, Fall 1993; Abdul Aziz Al-Khamis, “Aramco’s $4b refinery projects get big boost,” MoneyClips, 16 June 1993; Mark Nicholson, “Survey of Saudi Arabia,” Financial Times, 22 December 1993; and Saudi Aramco’s 1993 Annual Review. For a firsthand account, see Khalid A. Al-Falih’s interview in the Aramco Resource Library.

For the extent of Saudi Arabia’s natural gas reserves, see U.S. Energy Information Administration statistics. On recovery rates, see United Press International, “Undersea Channels Might Aid Oil Recovery,” 22 May 2006, http://www.physorg.com/news67534124. html. See also Abdallah S. Jum‘ah’s speech “The Future of Global Energy: Uncertainty Surrounding Global Energy Issues and Policies, and Its Impact on Future Supply Expansion” on Saudi Aramco’s Web site.

■

achieving the vision ■

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On Saudi Aramco’s increased production in the 1990s, see U.S. Energy Information Administration and BP p.l.c. statistics. See also Interpress Service, “Gulf States Rein in Spending to Cut Deficits,” 28 December 1994, and “Commodities Survey: November 1994,” Barclays Bank Commodities Survey, November 1994. For descriptions of specific discoveries, see Saudi Aramco’s 1991 and 1992 Annual Review and “Drillers Sink Offshore Wells Using Horizontal Techniques,” Arabian Sun, June 1991. On Saudi Aramco’s improved computer technology, see Rick Snedeker and Jamal K. Dabal, “Growing IT,” Dimensions, Spring 2007, and Saudi Aramco’s 2006 Annual Review. For a firsthand account, see Nansen G. Saleri’s interview in the Aramco Resource Library. See also “Future of Global Oil Supply: Saudi Arabia” at http://www.saudi-us-relations.org/energy/saudi-energy-saleri.html.

On the Motiva joint venture, see PR Newswire, “ChevronTexaco Comments on Announcement of Definitive Agreement for Sale of Former Texaco U.S. Downstream Interests,” 12 December 2001.

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Chapter 5

On Saudi Aramco’s use of wastewater, see Kyle Pakka, “Turf’s Up,” Dimensions, Fall 2003. On Ali I. Al-Naimi’s appointment as Minister of Petroleum and Mineral Resources, see Al-Naimi’s interview in the Aramco Resource Library. On the resulting appointment of Abdallah S. Jum‘ah as president of Saudi Aramco, see Jum‘ah’s interview in the Aramco Resource Library.

On Saudi Aramco’s megaprojects, see John Palmer and Timir Mukherjee, “MegaProjects,” Dimensions, Spring 2007.

■

Book sources for this chapter: Facey, et al., A Land Transformed Pakka, The Energy Within

On Saudi Aramco’s investment in SsangYong, see Khalid G. Al-Buainain’s interview in the Aramco Resource Library. On Vela, see ”Two New Vela Tankers Named,” Arabian Sun, 22 September 1993; “15 VLCCs on Order for Saudi Aramco,” Moneyclips, 30 June 1993; and “A Year of Advancement,” Dimensions, Spring 1995. See also the Saudi Aramco publication “Vela International Marine Ltd.” in the Aramco Resource Library. For a firsthand account, see Dhaifallah A. F. Al-Utaibi’s interview in the Aramco Resource Library.

On Shaybah, see “Crown Prince Abdullah Inaugurates Shaybah Oilfield” on the Royal Embassy of Saudi Arabia Web site, http://www. saudiembassy.net/archive/1999/news/page391.aspx.

■

On Saudi Aramco’s early 2000s capital improvement program, see “Saudi Mega Spend Is Fuzzy on Detail,” Petroleum Intelligence Weekly, 16 May 2005, and “Saudi Arabia Plans Heavy Downstream Spend, Local Consultant Says,” International Oil Daily, 27 May 2005. See also Saudi Aramco’s 2005, 2006, 2007 and 2008 Annual Review. On booming oil demand in the 2000s, see BP p.l.c. and U.S. Energy Information Administration statistics. See also Senate Committee on Energy and Natural Resources, Short-Term Energy Outlook Summer 2007: Oil and Gasoline, 110th Cong., 1st sess., 15 May 2007. On Saudi Aramco’s reserves, see Saudi Aramco’s 2006 Annual Review. See also Abdallah S. Jum‘ah’s speech “State of the Oil and Gas Industry” at http://www.saudi-us-relations.org/articles/2006/ioi/060613-jumah-speech. html, and Nabilah Altunisi’s speech “Saudi Aramco Mega Projects: Sustaining a Stable Energy Supply to the World” on Saudi Aramco’s Web site.

■

On declining world oil supply, see the Web site of Cambridge Energy Research Associates, http://www.cera.com. On Saudi Aramco’s cultural change initiative in the 2000s, see Abdallah S. Jum‘ah’s interview at the Saudi Aramco Technical Information Center. See also Saudi Aramco’s 2002 Annual Review and “Performance at Peak,” Arabian Sun, 22 May 2002. On Saudi Aramco’s Research and Development Center, see Saudi Aramco’s 2000 Annual Review. See also Rick Snedeker and Lori Olson White, “R&D Center Expands,” Dimensions, Winter 2004, and Saad A. Turaiki’s interview in the Aramco Resource Library. On performance benchmarking, see John Palmer and Timir Mukherjee, “MegaProjects,” Dimensions, Spring 2007. On the expansion of the Master Gas System, see “Saudi Aramco Khursaniyah Oil and Gas and Hawiyah NGL Recovery Programmes, Saudi Arabia” at http://www.hydrocarbons-technology.com/projects/ saudi-aramco/ and “Saudi Arabia—The Arab Light Producers—Ghawar Group,” APS Review Gas Market Trends, 1 October 2007. See also Fahad A. Al-Khaldi, Saif D. Al-Qahtani and Basel F. Abu-Sharkh, “Improved Design for the Haradh Gas Plant Energy System,” Saudi Aramco Journal of Technology, Fall 2004, and “Aramco Forges Ahead with Own Gas Projects,” International Oil Daily, 23 October 2002. For a firsthand account, see Khalid A. Al-Falih’s interview in the Aramco Resource Library. On Saudi Aramco’s joint ventures in natural gas exploration, see Rick Snedeker, “What Could be More Natural?,” Dimensions, Spring 2004, and Mark Kennedy, “The New Explorers,” Dimensions, December 2006. See also Saudi Aramco’s 2003 Annual Review. For working conditions, see UK Newsquest Regional Press, “Soldiers Will Have to Swelter in Temperatures of 130F,” 10 October 2001, and Paul William Roberts, review of Sand Dance: By Camel Across Arabia’s Great Southern Desert, by Bruce Kirkby, The Globe and Mail, 17 June 2000.

■

On other exploratory ventures, see Abdulkader M. Afifi and Ali Y. Al-Hauwaj’s interview in the Aramco Resource Library and Saudi Aramco’s 2006 Annual Review. On oil blending at Qatif, see Saad A. Turaiki’s interview in the Aramco Resource Library. For background on the Qatif field, see Simon Wardell, “Saudi Aramco Aims to Exceed 11 Million bpd in Output Capacity by 2007,” World Markets Analysis, 7 May 2003. On Haradh-3, see “Quick Takes,” Oil & Gas Journal, 1 January 2001, and A. O. Al-Kaabi, A. S. Muallem and N. G. Saleri, “Haradh III: A Milestone for Smart Fields,” Journal of Petroleum Technology, November 2006. See also Saudi Aramco’s 2004 Annual Review. For a firsthand account, see Nansen G. Saleri’s interview in the Aramco Resource Library. On Khursaniyah, see Stephen L. Brundage, “Khursaniyah Rising,” Arabian Sun, 18 April 2007, and Ralph Bears’s speech “Saudi Aramco: Oil to a Thirsty Market” on the World Energy Council Web site. On Khurais, see Rick Snedeker, “Mega2,” Dimensions, Winter 2006. On Saudi Aramco’s growing number of oil rigs, see Lori Olson White, “The Big Push: Saudi Aramco Forging Ahead in Historic Production Expansion,” Dimensions, Fall 2006, and ‘Abd Allah S. Al-Saif’s interview in the Aramco Resource Library. On the expansion of Saudi Aramco’s refining capacity, see Abdulaziz F. Al-Khayyal’s interview in the Aramco Resource Library and Jamal Kheiry, “Saudi Aramco: The Leader,” Arab News, 6 December 2006. See also Ali I. Al-Naimi’s interview in the Aramco Resource Library and Saudi Aramco’s 2006 Annual Review. On OSPAS, see Larry Seigel, “The Nerve Center,” Dimensions, Winter 2006, and Saudi Aramco’s 2006 Annual Review. On environmental issues, see “Saudi Aramco and the Environment,” Dimensions, Spring/Summer 1998. For firsthand accounts, see interviews with ‘Abd Allah S. Al-Saif and Abdallah S. Jum‘ah in the Aramco Resource Library. See also Saudi Aramco’s Web site. On the Argus Sour Crude Index, see Javier Blas, “Saudis drop WTI oil contract,” Financial Times, 28 October 2009. On Saudi Aramco’s petrochemical initiatives, see Rick Snedeker, “And Now … Something Completely Different: PetroRabigh,” Dimensions, Summer 2006, and “Aramco’s Push For $26bn Ras Tanura Second Phase,” Gulf Daily News (Bahrain), 5 June 2007. On KAUST, see the KAUST Web site at http://www.kaust.edu.sa and “Saudi Arabia to Set Up SR10bn University of Technology,” Arab News, 29 November 2006.

Book sources for this chapter: Facey, et al., A Land Transformed

bibliography 215

214 bibliography

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216 Image credits

Image Credits

Volume Two

Front Matter

End papers Saudi Aramco; Title page Faisal I. Al-Dossary/Saudi Aramco; ix Pivot Design.

Chapter One National Resources

Opening spread Burnett H. Moody/Saudi Aramco; 2 Burnett H. Moody/Saudi Aramco; 4 (top) Ahmed A. Al-Mentakh/Saudi Aramco; 4 (bottom) Courtesy of OPEC; 5 Ahmed A. Al-Mentakh/Saudi Aramco; 6 Burnett H. Moody/Saudi Aramco; 7 Burnett H. Moody/Saudi Aramco; 8-9 V. K. Antony/Saudi Aramco; 10 V. K. Antony/Saudi Aramco; 11 Saudi Aramco; 12 (top) Pat K. Moody/ Saudi Aramco; 12 (bottom) Saudi Aramco; 13 Saudi Aramco; 14 (top) Abdul Latif Yousif/Saudi Aramco; 14 (bottom) Burnett H. Moody/Saudi Aramco; 15 Thomas F. Walters/Saudi Aramco; 16 Saudi Aramco; 17 V. K. Antony/ Saudi Aramco; 18 (top) Saudi Aramco; 18 (bottom) Abdul Latif Yousif/Saudi Aramco; 19 Pivot Design; 20 Burnett H. Moody/Saudi Aramco; 21 Burnett H. Moody/Saudi Aramco; 22 (left) Saudi Aramco; 22 (right) Saudi Aramco; 23 Saudi Aramco; 24 Saudi Aramco; 25 Burnett H. Moody/Saudi Aramco.

Chapter Two Boom Time

Opening spread Shaikh M. Amin/Saudi Aramco; 28 Shaikh M. Amin/Saudi Aramco; 29 Burnett H. Moody/Saudi Aramco; 30 Burnett H. Moody/Saudi Aramco; 31 Saudi Aramco; 32 Shaikh M. Amin/Saudi Aramco; 33 Thomas F. Walters/Saudi Aramco; 34 Shaikh M. Amin/Saudi Aramco; 35 Geoff R. Hunter/ Saudi Aramco; 36 Burnett H. Moody/Saudi Aramco; 37 (top) Saudi Aramco; 37 (bottom) Ali Mohammed Al-Khalifa/Saudi Aramco; 38 © Corbis; 39 Geoff R. Hunter/Saudi Aramco; 40 © Corbis; 43 © Owen Franken/Corbis; 44 Shaikh M. Amin/Saudi Aramco; 45 (top) Pat K. Moody/Saudi Aramco; 45 (bottom) Pat K. Moody/Saudi Aramco; 46 Burnett H. Moody/Saudi Aramco; 47 Burnett H. Moody/Saudi Aramco; 49 Shaikh M. Amin/Saudi Aramco; 50 Saudi Aramco; 51 Geoff R. Hunter/Saudi Aramco; 52 Dorothy Miller/Saudi Aramco; 53 Shaikh M. Amin/Saudi Aramco; 54 (top) Saudi Aramco; 54 (bottom) Shaikh M. Amin/Saudi Aramco; 55 Saudi Aramco; 56-57 Michael J. Isaac/Saudi Aramco; 58 Shaikh M. Amin/Saudi Aramco; 59 Courtesy of Samia Al-Idrisi; 60-61 Geoff R. Hunter/Saudi Aramco; 63 Saudi Aramco; 64 Saudi Aramco; 65 Shaikh M. Amin/Saudi Aramco.

Chapter Three

Chapter Five

Appendix

Transformation

Achieving the Vision

Downstream

Opening spread Shaikh M. Amin/Saudi Aramco; 68 Shaikh M. Amin/Saudi Aramco; 69 Saudi Aramco; 70 Shaikh M. Amin/Saudi Aramco; 71 Burnett H. Moody/Saudi Aramco; 72 (top) Ian W. Bennett/Saudi Aramco; 72 (bottom) Shaikh M. Amin/Saudi Aramco; 73 Ali Abdullah Al-Khalifa/Saudi Aramco; 74 Hussain A. Al-Ramadan/Saudi Aramco; 75 (top) Saudi Aramco; 75 (bottom) David Lugo/Saudi Aramco; 76 Shaikh M. Amin/Saudi Aramco; 77 (top) Courtesy of the Doha Debates, photo by Adrian Haddad; 77 (bottom) Stephen L. Brundage/ Saudi Aramco; 78 Saudi Aramco; 79 Saudi Aramco Community Heritage Gallery; 80 STF/AFP/Getty Images; 81 Shaikh M. Amin/Saudi Aramco; 83 Abdullah Y. Al-Dobais/Saudi Aramco; 84-85 J. E. Champney/Saudi Aramco; 86 Shaikh M. Amin/Saudi Aramco; 87 Shaikh M. Amin/Saudi Aramco; 88 (top) Saudi Aramco; 88 (bottom) Saudi Aramco; 89 Stephen L. Brundage/Saudi Aramco; 90 Shaikh M. Amin/Saudi Aramco; 91 Shaikh M. Amin/Saudi Aramco; 92 Shaikh M. Amin/Saudi Aramco; 93 Saudi Aramco; 94 Saudi Aramco; 95 (top) Abdullah Y. Al-Dobais/ Saudi Aramco; 95 (bottom) Saudi Aramco World/SAWDIA; 97 Saudi Aramco.

Opening spread Joseph Lynch; 132 Saudi Aramco; 134 Saudi Aramco; 135 Saudi Aramco; 136 Saudi Aramco; 137 Mohammed A. Al-Shihri/Saudi Aramco; 138 Ken Childress; 139 (top) Stephen L. Brundage/Saudi Aramco; 139 (bottom) Courtesy of Bobbi Lane; 140 Ali Mubarak/Saudi Aramco; 142 Joseph Lynch; 143 Ken Childress; 144 Ken Childress; 145 Saudi Aramco; 146 Saudi Aramco; 147 Stephen L. Brundage/Saudi Aramco; 148-149 Faisal I. Al-Dossary/Saudi Aramco; 150 Saudi Aramco; 151 (top) Hasan M. Al-Taraiki/Saudi Aramco; 151 (bottom left) Stephen L. Brundage/Saudi Aramco; 151 (bottom right) Courtesy of Abu Abdulaziz Studio & Labs; 152 Hadi A. Al-Makayyl/Saudi Aramco; 154 Saudi Aramco; 155 Saudi Aramco; 156 Saudi Aramco; 157 (top) Courtesy of Showa Shell Sekiyu K.K.; 157 (bottom) Courtesy of Sinopec Senmei Petroleum Co.; 158 Saudi Aramco; 159 Saudi Aramco; 160 Saudi Aramco; 161 Moayed Al-Qattan/Saudi Aramco; 162 Saudi Aramco; 164 Mahmoud A. Al-Hashem/Saudi Aramco; 165 Courtesy of Bobbi Lane; 166 Joseph Lynch; 167 Hasan M. Al-Taraiki/Saudi Aramco.

184 Faisal Al-Dossary/Saudi Aramco; 185 Joseph Lynch; 186 Courtesy of Robert Pollack/Still-Light.net; 187 (left) Pivot Design; 187 (right) Pivot Design; 188-189 Adrian G. Waine/Saudi Aramco; 190 Courtesy of Sabic; 191 Courtesy of Vela; 192 Courtesy of Sinopec Senmei Petroleum Co; 193 Courtesy of Association of Petrochemicals Producers in Europe.

Chapter Four

Upstream

Appendix Rising to the Challenge

Opening spread Ken Childress; 100 Ken Childress; 102 Saudi Aramco; 103 (top) Saudi Aramco; 103 (bottom) © Thierry Orban/Corbis; 104 (top) © Peter Turnley/Corbis; 104 (bottom) Ron Johnson/Saudi Aramco; 105 Ron Johnson/ Saudi Aramco; 106 Saudi Aramco; 107 (top) Courtesy of Showa Shell Sekiyu K.K.; 107 (bottom) Abdullah Y. Al-Dobais/Saudi Aramco; 108 (top) Abdullah Y. Al-Dobais/Saudi Aramco; 108 (bottom) Saudi Aramco; 109 Saudi Aramco; 110 Abdullah Y. Al-Dobais/Saudi Aramco; 111 Saudi Aramco; 112 Courtesy of David L. Ternes; 113 Stephen L. Brundage/Saudi Aramco; 114 Saudi Aramco; 115 Saudi Aramco; 116 Saudi Aramco; 117 Hussain A. Al-Ramadan /Saudi Aramco; 118 Adrian G. Waine/Saudi Aramco; 119 Faisal I. Al-Dossary/Saudi Aramco; 120 Faisal I. Al-Dossary/Saudi Aramco; 121 Stephen L. Brundage/Saudi Aramco; 122-123 Ken Childress; 124 [SHELL STATION]; 125 Abdullah Y. Al-Dobais/Saudi Aramco; 126-127 Adrian G. Waine/Saudi Aramco; 128 Saudi Aramco; 129 Ken Childress.

168 Nazih F. Najjar/Saudi Aramco; 170 (left, right) Saudi Aramco; 171 Courtesy of Elizabeth C. Lacsamana and Keith W. Wallis; 172 Courtesy of C. R. Scotese, PALEOMAP Project (www.scotese.com); 173 Pivot Design; 174 Courtesy of Maverick Energy, Inc.; 175 Pivot Design; 176 (top) Courtesy of Christian Heine; 176 (bottom left, right) Geraint W. Hughes/Saudi Aramco; 177 (top) Hussain A. Al-Ramadan/Saudi Aramco; 177 (center) Robert F. Lindsay/Saudi Aramco; 177 (bottom left, right) Saudi Aramco; 178-179 Joseph Lynch; 180 M. Mercer/Saudi Aramco; 181 (top) Saudi Aramco; 181 (bottom) Joseph Lynch; 182 (top) Joseph Lynch; 182 (bottom) Courtesy Department of Physics and Technology, University of Bergen; 183 Pivot Design.

Appendix: Operations Data

195, 196-197, 198-199, 200-201, 202-203 Pivot Design.

Company CEOs

Collier Saudi Aramco; Stoner Saudi Aramco; Rodgers Saudi Aramco; Davies Saudi Aramco; Hardy Burnett H. Moody/Saudi Aramco; Barger Burnett H. Moody/Saudi Aramco; Brougham Burnett H. Moody/Saudi Aramco; Hills Burnett H. Moody/Saudi Aramco; Jungers Saudi Aramco; Kelberer Burnett H. Moody/Saudi Aramco; Al-Naimi Abdullah Y. Al-Dobais/Saudi Aramco; Jum‘ah Saudi Aramco; Al-Falih Salah A. Al-Alwan/Saudi Aramco.

index 219

Index Page numbers in blue indicate Energy to the World, The Story of Saudi Aramco Volume One. Page numbers in red indicate Energy to the World, The Story of Saudi Aramco Volume Two. Page numbers in bold indicate charts, italics indicate photographs, and page numbers followed by “n” indicate notes.

A Abadan, 18, 20, 163 Al-Abbad, Ali, 132, 132 Al-‘Abbusi, Muhammad Jawad, 5 Al-Abdulwahed, Khalid, 155, 155 ‘Abd al-‘Aziz (King). See Al Sa‘ud, ‘Abd al-‘Aziz ibn ‘Abd al-Rahman (King) ‘Abd al-Aziz, Faysal, 6 Abd Allah. See Philby, Harry St. John Bridger (“Abd Allah”) ‘Abd Allah, Rashid ibn, 143, 143 Abdel Mohsin, Sami A, 137 Abdulqadir, Abdulrahman M., 136 Al-‘Abid, ‘Abdal ‘Aziz, 11, 11, 47, 47 Abqaiq, xii, 73, 81, 101, 105, 106, 109, 110–111, 116, 128, 136, 137, 142, 143, 143, 144, 146, 162, 162, 168, 169, 171, 179, 180, 16, 20, 27–28, 28, 49, 52, 62, 63, 64, 64, 72, 87, 89, 89, 120, 125 downstream operations, 190 fire at, 63, 64, 64 upstream operations, 182 Abqaiq Mechanical Shop, 102, 102 Abuahmad, Mustafa, 21, 33, 46 Abuahmad, Mustafa Al-Khan, 190, 190, 212, 213, 213 Abu ‘Ali, 81 Abu al-Naft. See Holmes, Frank “Abu al-Naft, Father of Petroleum” (Major) Abu Dhabi, 206, 41 Abu Hadriya, 14, 14, 88, 105–126, 109, 147 Abu Hijlah, Omar, 159, 159 Abu Jifan, 113, 150 Abu Khadrah, Najati, 190, 190 Abu Nahyah, Hamad, 168, 168 Aburqubah, ‘Ali Dakheel, 11, 11 Abu Sa‘fah, 16, 17, 17, 82 Abyssinia, 37 acid gas, 183 acritarchs, 170, 170 Aden, 111, 10 Advanced Degree Program, 146 Advanced Fire Training Center, 142, 142 Advanced Industrial Training Center, 172 aerial reconnaissance, 68–73 Al-‘Afaleq, Ibrahim A., 47, 47 Afifi, Abdulkader, 156 Aframax-class vessels, 155 agreement in al-‘Uqayr, 14–16, 35, 42, 43 agriculture. See farming A-group students, 46

Ahmad, Sa‘id, 151, 151 ‘Ain Dar, 144, 144, 145, 145, 146, 154, 200, 200, 31, 49 ‘Ain Dar Gas Injection Plant, 210, 210 air conditioning, 48, 83, 86, 133, 159, 168 air quality, 158 air raid shelters, 107, 107 Al-Ajaji, Abdulaziz Omer, 178, 128 Al-Ajam, Saleh A., 9, 9 Ajmi, Nassir M., 13, 172, 47, 47, 92, 102, 108, 111 Alaska, 106, 23, 79, 80, 134 El ‘Alat Dome, 73 Aleppo College, Syria, 192 Alexander, T. C., 113, 179, 179 Alexandria, Egypt, 69 Algemeene Exploratie Maatschappij, N. V., 47, 47 Algeria, 41 ‘Ali, ‘Abd Allah, 6 al-‘Ali, Khidr, 64, 64 Al-Ali, Mohammed Saeed Salman, 102 Al-Ali, Muhammad Sa‘id, 11, 11 Al-Ali, Mustafa Naser, 146, 146 ‘Ali al-Kaylani, Rashid, 97 ‘Ali al-Khajah, ‘Abd Allah Haji, 149, 149 Ali Alturki, Khalid, 47, 47 alkylamine, 183 alliances, building, 129–131 Allies (World War II), 119, 121, 125 Allman-Ward, Patrick, 141 “All the King‘s Oil” (Marquis), 55 Almana, Muhammad, 181 Alomair, Aysha and Deema, 152, 152 Alphard Star (tanker), 83 Alqurashi, May, 165 Altair Star (tanker), 108 Altarf (tanker), 155 Alter, Harry, 149 alternative energy sources, 161 Altowelli, Khalid F., 158 Altunisi, Nabilah M., 75, 75, 77 Aluminum Products Co. (ALUPCO), 51, 51 Ambah, Saleh, 14 AMDP-2 (Aramco Mobile Drilling Platform 2), 2, 2 America. See United States of America (USA) American Association of Petroleum Geologists (AAPG), 146, 147 American Independent Oil Co. (Aminoil), 138, 201

index 221

220 index

American Petroleum Institute (API), 27, 74 American University, Washington, D.C. (USA), 77 American University in Cairo, 59 American University of Beirut (AUB), 98, 176, 192, 192, 211, 212, 212 Amoco, 125 Amouzegar, Jamshid, 39 Al-Anaysha, Abdullah Yusuf, 99, 101 Al-Anaysha, Ibrahim, 101 Anderson, Floyd, 80 Anglo-Iranian Oil Co., 47, 47, 168, 197, 201, 202 Anglo-Persian Oil Co., Ltd., 15, 16, 17, 18, 19, 20, 21, 26, 47, 50 Anglo-Saudi Treaty of 1915 (Darin or Qatif Treaty), 6 anhydrite, 79, 79, 82 Animal Farm, 113, 115, 115 Annual Arab-U.S. Policymakers Conference, 160 Anthony, John Duke, 72, 72 anticline traps, 174, 174 Antioch College, Ohio (USA), 212 Antonius, George, 37 AOC (Aramco Overseas Co., Aramco Purchasing Co.), 193, 193, 153 API (American Petroleum Institute), 27, 74 APP (Associate Professional Program), 73 Apprenticeship Program for Non-Employees, 135, 135 Aqil, Hullayil, 8, 8 Arab Congress in Paris (1913), 12 Arabian American Little League, 138 Arabian American Oil Co. (Aramco), 55, 94, 101, 102, 107, 111, 113, 115, 116, 117, 118, 120, 3–4, 5, 6, 7, 10, 10, 11, 13, 16, 20, 21, 22, 23, 24, 29, 30, 31, 32, 33, 34, 34, 36, 38, 39, 41, 42, 44, 46, 49, 50, 51, 52, 53, 54, 59, 60, 62, 63, 64, 69, 70, 71, 72, 75, 77, 78, 82, 83, 88, 89, 205. See also “Aramcons”; California Arabian Standard Oil Co. (Casoc), Chevron, Saudi Arabian Oil Co. (Saudi Aramco); Standard Oil Co. of California (Socal), Standard Oil Co. of New York (Socony); Standard Oil of New Jersey (Jersey, Exxon), The Texas Company (Texaco) annual oil production, 198 Aramco world for Saudis, 14–16 board of directors, Saudis named to, 210, 211, 211 headquarters move to Dhahran, 202, 202, 210 logo, 136, 136 name change, 92–93, 95, 205 Saudi government, frayed relationship, 162–163, 165, 168 Saudi ownership of, 156, 177, 29, 40–41, 45–46, 64, 69, 159 social responsibility evolution, 164 Arabian Gulf, 18, 75, 102, 122, 122, 206, 33, 41, 103–104, 103, 104, 105, 157 downstream operations, 185, 191 upstream operations, 182 Arabian Heavy crude oil, 40 Arabian Light crude oil, 40, 42, 44, 52, 70, 89, 103, 142, 144, 147, 177 Arabian Nights, The (fable), 135 Arabian Peninsula, 75, 131, 173 Arabian Research Division, 148, 149, 150 Arabian Shelf, 75, 81, 173 Arabian Shield, 75 Arabian Sun, The, 55 Arabian Sun and Flare, 136 Arabian Super Light crude oil, 96, 177 Arab Industrial Development, 149, 181 Arab-Israeli tensions, 20, 22, 42–43 Arab-Israeli War of 1948, 132, 142, 199 Arab-Israeli War of 1967, 205 Arab-Israeli War of 1973, 29 Arab League, 196 Arab Oil Congress in Cairo, 4 Arab Petroleum Congress, 5. See also Organization of Petroleum Exporting Countries (OPEC) Arab Preparatory School (Jabal School for Boys), 113, 138, 153, 155, 156, 156, 168, 168, 172–173, 175, 177 Arab Revolt against the Turks in 1916, 6 Arab Zone, 89, 105, 87 Arab Zones A-D, 144, 146 Aramco. See Arabian American Oil Co.

Aramco Mobile Drilling Platform 2 (AMDP-2), 2, 2 “Aramcons,” xi–xii, 150, 170, 170, 15, 15, 16, 160, 160. See also Arabian American Oil Co. (Aramco); Saudi Arabian Oil Co. (Saudi Aramco) visited by King ‘Abd al-‘Aziz, 160, 161, 161, 207 visited by King ‘Abd Allah, 165–166, 167, 167 visited by King Sa‘ud, 207, 207 Aramco Overseas Co. (AOC, Aramco Purchasing Co.), 193, 193, 153 Aramco Services Co., 124, 124, 158 Aramco World, 15. See also Saudi Aramco World Argus Sour crude Index, 162 Aridi, Mohamed, 113 Arizona State University (USA), 71, 71 Arnot, Anne, 171 Arnot, Elizabeth, 165, 165, 171 Arnot, Paul, 100, 109, 111, 143, 171, 21, 21 aromatics, 187, 192, 193, 193 Al-Arrayed, Thuraya, 77, 77 art contest, children’s, 94, 94 Al-As‘ad, Saleh, 146, 146 Ashary, Assem (Captain), 108, 108 Al-Ashgar, Sa‘ud Abdulrahman, 72, 72 ‘Ashoor, Saif Al-Deen, 148 Asia, 203, 134–135, 153, 161 Asker, Mohammad N., 145, 145 asphalt seeps, 18, 26 associated gas, 144, 147, 183 Associate Professional Program (APP), 73 Al-Atasi, Hashem, 191 Al-Atiq, Muhammad, 64, 64 Atlantic Refining Co., 22 Australia, 6, 18, 113, 138, 193 automobiles, 19, 19, 23, 126, 40, 40, 158 Avinoil Industrial Commercial and Maritime Oil Co., S. A., 107 Al-Awami, Amal A., 115, 115 Al-Awami, Fatema H., 77, 77 ‘Awny, Muhammad Husain, 185 Al-‘Awwami, Haider, 74 Al-‘Awwami, Ni‘mah S. M., 47, 47 Axis Powers (World War II), 95, 97, 99, 99, 101, 108, 113, 116 Al-Ayyam Al-Jamilah, 100 Al-‘Aziz, ‘Abd, 181 Al-Aziz, Muhammad ibn ‘Abd, 186, 186 al-‘Aziziyah, 160 Azerbaijan, 20, 21, 21, 23 ‘Aziz, Zaid Abdul, 9, 9 B Baba Gurgur, 22, 23 bacteria to remove sulfur, 139, 139 Badanah, 134, 134 Badghaish, Usama, 147 Baghdad, 18, 21, 40, 69, 177, 5 al-Bahah, 43, 43, 178 Bahrabi, Bassam H., 151, 151 Bahrain, 7, 9, 12, 16, 22, 23, 24–25, 26, 27, 28–29, 31, 31, 35, 39, 41, 42, 43, 46, 46, 47, 47, 48, 49, 50, 61, 62, 62, 63, 64, 69, 72, 73, 76, 78, 79, 80, 80, 84, 90, 108, 133, 138, 143, 169, 182, 87 Bahrain Petroleum Co. (Bapco), 29, 30, 30, 31, 31, 39, 41, 48, 48, 73, 76, 78–79, 90, 108, 143, 162, 169, 182, 183 Bahrain Pipeline, 185 Bait al-Americani, 97, 97 Bait al-Baghdadi, 97, 97 Bait al-Sha‘r (house of hair), 13 Baku, 20, 21, 21, 23 Baljurashi, 178 Al-Baluchi, Ali, 172, 185, 185, 46 Banban, 57 Bapco. See Bahrain Petroleum Co. barastis, 9, 77, 78, 78, 111, 113 Barge 136 Queen Mary, 37, 37 Barger, Kathleen, 84, 104

Barger, Thomas C., 67, 67, 84–85, 84, 87, 102, 104, 104, 105, 127, 137, 148, 150, 172, 210, 210, 3, 6, 6, 16, 20, 21, 21, 24, 24 company leadership, 204, 205 ”Planning Guides for Aramco as a Corporation,” 3, 6, 24 Barger, Tim, 87 Barracano, Henry “Hank,” 35 Barran, David, 40 Bartlett, Bryan, 103, 112 “basem*nt rocks,” 75 “basket” of prices, 89 Basra, 16, 69 Basrawi, Fahmi, 156, 172, 176, 177, 212, 212 Al-Bassam, Faysal M., 46, 46, 72, 72 Al-Bassam, Nabil I., 111 Bataweel, Omar, 11, 11 Baty, Harvey, 212, 212 Bechtel-McCone-Parsons, 115, 116, 132–133, 134, 136, 182, 183 Bedouin. See also guides (Bedouin), 5, 13–14, 14, 15, 15, 17, 39, 55, 68, 70, 72, 112, 113, 134, 136, 136, 144, 144, 148, 148, 150, 150, 179 relators, 148, 148, 149 Beijing, 153 Beirut, 33, 71, 163, 192, 199, 7 Beit Meri, 41 Bell, Gertrude, 3 benzene, 192, 193, 193 Berg, Ernie, 102, 103, 104, 104 Berg, W. H., 41 Berri, 16, 37, 37, 81, 87, 114, 143, 158 downstream operations, 190 operations data, 199, 199 B-group students, 46 “Big Board” in Operations Coordination Center (OCC), 154, 154, 184, 184 Big Oil Man from Arabia (Cheney), 133 Al-Bilad, 198, 7 Biltagi, Bader, 194, 196 biotechnology, 139, 139 Biotopes of the Western Arabian Gulf: Marine Life and Environment of Saudi Arabia, 157 Birds of the Eastern Province of Saudi Arabia, 157 Bi‘r Shubat, 43, 43 Bitter Lake, 120 “Black” Monday (USA stock market crash), 37, 37 blending crude oil grades (Qatif), 142, 143, 143, 144, 144, 190 board of directors, Saudis named to Aramco, 210, 211, 211 bombing of Dhahran by Italy, 106, 106, 107, 107, 108, 109 Book of Khalid (Rihani), 12 Borneo, 23 boys school (Arab Preparatory School, Jabal School for Boys), 113, 138, 153, 155, 156, 156, 168, 168, 172–173, 175, 177 BP. See British Petroleum Bramkamp, Richard A., 104, 133, 137, 146 Brent Weighted Average price for North Sea oil, 89 Bretton Woods, New Hampshire (USA), 193 Brewster Committee (U.S. Senate committee), 162 British Admiralty’s Hydrographic Department, 90 British government, 3–4, 6, 8, 8, 14, 15, 16, 19, 20, 21, 26, 28–29, 42, 48, 49, 50, 52, 55, 96, 97, 112, 119, 130, 204, 205, 206 British Oil Development Co., 47, 47 British Petroleum (BP), 4, 5, 39, 41, 45, 104, 125 Brougham, Robert I., 7, 7, 20, 24, 204, 205 Brown, Art B., 63, 63 Brown, Edna, 83 Brown, Ron, 169, 169 Brown University in Providence (USA), 13 Brunton compasses, 66 Al-Buainain, Khalid G., 107, 156, 156 Bubshait, ‘Abd Al-Qader, 212, 212 Al-Bubshait, ‘Abd al-Rahman, 47, 47 Bucknell University, Pennsylvania (USA), 212, 213 Buday, ‘Abd Al-Aziz ibn Ahmad, 176, 176 Bukhara, 40

Bunyan, Marilyn, 169, 169 Buqqah, 143, 143 Buraimi Oasis, 206, 206 Burchfiel, Hugh L., 63, 63, 64, 69, 70 Burgan, 23, 126 Burleigh, William, 106, 108, 148 Burmah Oil, 18 Busbayte, ‘Abd Allah S., 190, 190, 212, 213, 213 butadiene, 192 butane, 190, 192. See also Natural Gas Liquids (NGLs) Butler, Joyce, 169, 169 “buyer’s market for oil is over,” 38–40 C Cadman, Sir John, 15, 26–27, 47, 48 Cairo, 40, 69, 127, 196 Calgary, Canada, 23 California (USA), 23, 26, 41, 182 California Arabian Standard Oil Co. (Casoc), 9, 63–66, 68, 69, 71, 72, 73, 76, 77, 78, 79, 80, 84, 88, 89, 90, 95–96, 96, 97, 97, 98, 101, 104, 109, 110, 111, 113, 116, 118, 118, 179, 182, 183, 195, 136. See also Arabian American Oil Co. (Aramco) facilities visited by King ‘Abd al-‘Aziz, 88, 88 name change, 55, 101, 113, 115, 118, 118, 205 California Texas Oil Co., Ltd. (Caltex), 79 Cambrian Period, 172 Cambridge, 145 Cambridge Energy Research Associated (CERA), 135 Campbell, William S. “Sandy,” 191, 193 Canada, 23, 126, 138, 104 Cantrell, Dave, 76, 117 capacity concerns, 143 Cape of Good Hope, 205, 33 capital program, 30, 133, 141, 143, 150, 150–151, 152 cap rocks, 174 Caravan, The (Al-Qafilah), 158 carbonate geologists, 177 carbonates, 82 carbon capture and sequestration, 158 carbon dioxide, 183 carbon management, 158 Carpenter, Nellie, 83 Case, Paul, 213, 213 Casoc. See California Arabian Standard Oil Co. Caspian Sea, 21 catalytic cracking, refining process, 188 catalytic reforming, refining process, 188 CAT (computer-aided tomography) scans, 116 CDPNE (College Degree Program for Non-Employees), 111, 111 Center for Remote Sensing at Boston University (USA), 145 Central Ghawar Well Services Division, 137 Central Province, 127 CERA (Cambridge Energy Research Associated), 135 Chamberlin, Edith, 169 Cheney, Michael Sheldon, 133 Chevron (Standard Oil of California), 29, 41, 124, 158. See also Arabian American Oil Co. (Aramco) Chevron Geophysical, 68 children’s art contest, 94, 94 Childs, J. Rives, 196 Childs, Marquis, 55 China, 40, 78, 134, 141, 143, 153, 156, 156, 157, 160 downstream operations, 189 chronometers, 66 Churchill, Winston, 19, 20, 119, 136 Clark, Henry, 106 cleaner-burning fuels, 158 clerical training, 59, 59 climate change, 158 coal, 126 coins, first official, 195

index 223

222 index

co*king, refining process, 187 Cold War, 171, 186, 193 College Degree Program for Non-Employees (CDPNE), 111, 111 College Fast Track Program, 71–72 College of American Pathologists, 151 College of Arabic Language, 173 College of Arts in Baghdad, 5 College of Petroleum and Minerals (University of Petroleum and Minerals, King Fahd University of Petroleum and Minerals), 173, 173, 179, 13–14, 20, 48, 72, 72, 74, 142, 157 College of Shari‘ah (Umm al-Qura University, Makkah), 173 College Preparatory Program, 152 Collier, Harry D., 204, 205 Colorado School of Mines (USA), 111 Common Brothers, 36 Comodoro Rivadavia, Argentina, 23 Compagnie Française des Pétroles, 21, 130 company leadership, Saudi Aramco, 111, 204–205 compasses, 66, 83 computer-aided tomography (CAT) scans, 116 Computing Technology, 74 concessions for Middle Eastern oil, 47, 47, 95, 98, 104, 127, 68, 69, 205 condensate (liquid hydrocarbons), 157, 183 Consolidated Contractors Co., 146 consolidation of territories by King ‘Abd al-‘Aziz, 3–4, 5, 14, 120 Constantinople College for Girls, 40 construction surge, 30, 32, 34–35, 36, 50, 52–53, 78, 82, 83, 92, 96, 101, 120, 125, 126, 133, 137, 140, 143, 144, 144, 146, 147 Consulting Services, 109 Convent, Louisiana (USA), 95 conversion processes, refining process, 187 Cooper, Nan, 169, 169 Core Lab, 177, 177 core samples, 170, 176, 177, 177 Core Store (Well Samples and Laboratory Unit), 117, 117 Corporate Planning, 168, 77, 78 Cox, Sir Percy, 3–4, 4, 6, 9, 14 Crane, Charles R., 36, 37, 39, 40, 40 Cretaceous Period, 41, 173, 173 Crew, Bob, 64, 64 cross-cultural relationships (Saudi and Western), 148–150, 151, 151, 156–157, 171, 77–78, 166 crude oil classifications, 39, 152, 162 currency complications, 193, 193, 195, 210 Curry, J. M., 7, 7 Cushing, Oklahoma (USA), 162 D D. G. Scofield (tanker), 90, 91, 98, 185 Daggy, Richard, 179 Dahl Hit, 79, 79, 81–82 Dahna sands, 39, 56 Dajani, M. S., 42 Damascus, 6, 8, 8, 191 Dammam area, 12, 137, 174, 179, 181, 183, 14, 51 Dammam Dome, 17, 23, 42, 42, 49, 62, 64, 66, 66, 70, 71, 72, 73, 73, 76, 76, 77, 78, 80, 82, 83, 84, 86, 87, 87, 89, 90, 95, 99, 105, 105, 108, 111, 160. See also Well No. 7 (Dammam Dome) three-dimensional model, 168, 168 Well No. 12 fire, 12, 98–100, 98 Well No. 43 (non-associated gas), 86, 87 Dammam Girls’ School, 12, 12 Dammam Laundry Business, 181 Dammam Port, 136, 140, 140, 36 Daoud, Bishara, 98, 163 Daoudi, M. S., 42 D’Arcy, William Knox, 18–19, 18, 20 Darin, 62 Darin Treaty, 6 Al-Darwish, Abbas, 132, 132 date palm oases, 8, 9, 12. See also al-Hasa

Davies, Fred A., 29, 29, 30, 31, 43, 49, 62, 73, 78, 80, 81, 106, 142, 197, 201, 36 company leadership, 204, 205 Davis, Edmond, 48 al-Dawasir tribe, 9 Al-Deen, Mustafa Husam, 148 de-ethanizer columns, 190 Delaware City, Delaware (USA), 95, 124 Delft University of Technology, 146, 146 delineation wells, 180 Dell’Oro, Walter, 136, 31–32 demand for oil. See supply and demand de-mothballing production facilities, 102, 102 Denmark, 108 depentanizer columns, 190 desalting process, 182 Deutsche Bank, 40 Devonian Period, 172 Dhahran, 42, 42, 58, 58, 66, 66, 75, 76, 77, 78, 78, 81, 83, 86, 88, 88, 89, 90, 95, 100, 101, 101, 102, 104, 105, 106, 106, 107, 107, 108, 109, 111, 113, 116, 119, 119, 125, 126, 126, 127, 129, 132, 133, 136, 137, 137, 138, 142, 148, 149, 152, 152, 159, 159, 160, 162, 163, 164, 165, 165, 166, 166–167, 168, 169, 171, 172, 173, 174, 175, 175, 176, 177, 180, 184, 185, 192, 192, 193, 194, 203, 203, 207, 207, 213, 5, 5, 13, 20, 20–23, 24, 24, 30, 30, 48, 78, 78, 102, 103, 109, 109, 125, 125, 127, 165 Dhahran Ahliyyah School, 94 Dhahran Industrial Center, 135, 135 Dhour El Choueir, 71 dhows, 9, 12, 62, 77 Dialdin, Ali, 34, 46 Dialdin, Hiba A., 145, 145 Dickson, H.R.P. (Colonel), 36 diesel, 187, 187 Al-Din, Ibrahim Nur, 185 dirahs, 15 al-Dir‘iyah, 7 directional drilling, 180 Directorate of Education, 173 disabling injury rate, 197 Discovery! (Stegner), 100 “Discovery of the Ghawar Field” (Keith), 146 distillation column, refining process, 187 distillation units, 125 distribution, downstream operations, 191 diversification and downstream operations, 93, 95, 107 Doha Debates in Qatar in 2009, 77 Domercq, John, 108, 108 domestic integration, 108–109 domestic operations map, 195 dormitory housing, 159, 165, 171, 159 Al-Dosari, ‘Abd al-Rahman, 172 Al-Dosari, Ahmad, 172 Al-Dosari, Sulaiman, 172 Al-Dossari, Abdullah, 155, 155 Al-Dossary, Fahd, 64, 64 Al-Dossary, Mubarak N., 115, 115 Al-Dossary, Muhammad ibn Ahmad, 181 Al-Douhan, Douhan, 72, 72 double-hull tankers, 155, 191, 191 Douglas Aircraft, 120, 160 Al-Dowayan, Nasser Mohammed, 94, 94 Al-Dowsari, Khalifah, 151, 151 Dow Chemical Co., The, 77, 163, 193 downstream operations, 184–193. See also operations data; upstream operations distribution, 191 diversification and, 93, 95, 107 gas fractionation, 190 Oil Supply Planning and Scheduling (OSPAS), 154, 154, 184 petrochemicals, 192–193 pipelines, 185 refining, 187–189 terminals, 185–186

Doyle, Pat, 86, 86 Dreyfus, Felix W., 63, 63, 64, 71 drill cuttings, 170, 176 drillers (Saudi), 101, 102, 102, 154, 154 drilling and reservoir engineering, 180–181 Drilling and Workover, 151, 151 drilling wells, 180, 180 drillpipe, 39, 39 Drucker, Fred H., 134, 21 Duba, 186 Dubai, 108, 155 Dubai and Oman, 89 Duce, James Terry, 143, 177 Al Dughither, Sahar A., 165, 165 Dukhan, 23 Dunbar, G. C., 192, 192 Dust Rag, The, 158 Al-Duwaihi, ‘Abd Al-Rahman, 151, 151 E Earth’s interior, 172 East Africa, 116, 119, 120 Easter Egg Row (Gazelle Circle), 127 Eastern and General Syndicate, 4, 14, 16, 17, 26, 27, 28, 35, 42, 43, 46, 47, 47, 48 Eastern Gulf Oil Co., 26, 47, 47 Eastern Province, 6, 10, 11, 13, 14, 18, 20, 29, 33, 48, 52, 54, 58, 60, 61, 77, 105, 106, 112, 156, 165. See also Al-Hasa oil and gas fields of, 175 stratigraphy of, 173 East Texas (USA), 23 East-West Crude Oil and NGL Pipeline, 56–57, 57, 66, 66, 90, 90, 91, 102 downstream operations, 185 Echezuria, Patti, 106, 106 Echezuria, Ralph, 48 Economic Diplomacy: Embargo Leverage and World Politics (Daoudi and Dajani), 42 economic downturn, 13, 24, 29, 35, 36, 37, 37, 40, 41, 44, 52, 54–55, 89, 138 war years (World War II), 120 Eddy, William A. (Colonel), 94, 94, 127 Edh Duraiya, 73 Al-Edrisi, Samia, 59, 59, 75 Education and Arab Training, 176 education and training, 10–14, 39, 128, 128, 147, 155, 156, 168, 168–170, 171, 171, 172–179, 184, 190, 190, 192, 192, 193, 211–213, 212, 213, 46, 47, 47, 51, 59, 59, 63, 63, 64, 70, 72–73, 75, 75, 110, 110, 111, 111, 113, 135, 135, 151, 151–152, 152, 163–166. See also girls’ education; scholarships; specific schools and universities. Egypt, 36, 39, 193, 203, 204, 20, 22, 42, 43, 44, 137 war years (World War II), 97, 116 ‘Eid, Khalifah, 172 Eisenhower, Dwight D. (U.S. President), 204 Eisler, Bill, 100 e-Learning courses, 136 electrical power, 29, 54, 58, 60–62 electricity experiments, 192, 192 Electric Power Unit, 35 Elf Aquitane, 125 Eli Knudsen (tanker), 204 Eltiste, William, 30, 30, 76, 100, 181, 182 embargoes (“oil weapon”), 22–23, 29, 40, 42, 43, 43–44, 45, 80, 88 Empire drill, 41, 41 employee identification badges, 80 Employee Relations, 33, 46 Empty Quarter, 7. See also Rub‘ al-Khali energy independence, 160 energy interdependence, 160–162 Enezi, Mousa S., 139, 139 Engineering and Mechanical Services, 186 Engineering and Operation Services, 112 Engineering Services, 35, 163 English, Walter, 68

ENI, 141, 147 EniRepSa Gas Limited, 141 En Nala (al-Na‘lah), 72, 73 En Nala hypothesis, 144–146, 145. See also Ghawar entrepreneurial Saudis, 107, 147, 147, 149, 149, 155, 181, 181, 182, 182, 183, 183, 184, 50, 50–51, 51, 53, 125, 147, 163 environment, caring for the, 157–159 Eocene Period, 75, 75, 81, 103, 106 ERC (extreme reservoir contact) wells, 145, 145, 181 Eritrea, 116, 119, 120 Erspamer, Mike, 105, 106 El Segundo (tanker), 69 Es Safa, 70 Esso Libya, 42 ethane, 190, 192, 199 ethylene, 163, 192, 193, 193 Euramerica supercontinent, 172 Europe, 126, 127, 130, 130, 131, 193, 107,161 Event Solution Center, 77 executive positions of Saudis, 48 expatriate workforce, 156, 157, 157, 160, 164, 164, 165, 165, 168, 169, 169, 171, 15, 15–16, 48, 52, 52, 64, 77, 78, 79, 79, 81, 101, 128, 202–203. See also workforce EXPEC (Exploration and Petroleum Engineering Center), 69, 69, 74, 74, 75, 76, 76, 77, 115, 115, 170, 170 EXPEC-ARC (Exploration and Petroleum Engineering Center-Advanced Research Center), 116, 117, 145, 145–146, 180 Exploration, 150, 156 exploration, 16–19, 68, 68, 95–96 upstream operations, 176 Exploration and Petroleum Engineering Center (EXPEC), 69, 69, 74, 74, 75, 76, 76, 77, 115, 115, 170, 170 Exploration and Petroleum Engineering Center-Advanced Research Center (EXPEC-ARC), 116, 117, 145, 145–146, 180 Exploration & Producing (E&P), 114, 119, 144, 159 Exploration & Producing Management Forum, 151, 151 exploration support caravan, 188, 188 Exploration Technical Services, 156 extreme reservoir contact (ERC) wells, 145, 145, 181 Exxon. See Standard Oil of New Jersey ExxonMobil, 153, 188 Exxon Valdez (tanker), 106 F F. A. Davies (storage vessel), 36, 36 Fadhili, 147 Fairchild 71, 68–69, 69, 70, 70–71 Al-Faisal, ‘Abd Allah, 47, 47 Al-Faleh, Saleh, 11, 11 Al-Falih, ‘Abd Al-‘Aziz, 47, 47 Al-Falih, Abdulaziz D., 14 Al-Falih, Khalid A., 14, 81, 92, 109, 110, 133, 141, 153, 160, 161, 161, 204, 205 family members at oil camps, 83, 83, 108, 163, 164, 164, 165, 165, 171 Faraj, Ibrahim, 174, 174 Farasan Islands, 16, 79 Far East, 153 farming, 36, 36, 137, 137, 50, 50, 51 Farouq (King of Egypt), 136 fast track program, 71–72 Father of Petroleum. See Holmes, Frank “Abu al-Naft, Father of Petroleum” (Major) fault traps, 174, 174 feeding the nation, 112 feedstocks, 183, 192 Feeney, John, 49, 49 “field allotments,” 80 field parties, 67, 67 50/50 profit sharing, 199, 200, 207, 210, 4 “50-in-5” plan, 176, 178 Filipinos, 78 Finance and Government Affairs, 111

index 225

224 index

Finance and Treasury, 78 financial speculation and oil prices, 160 fin-fan coolers, 93, 93 firefighting training, 142, 142 fires Abqaiq, 63, 64, 64 Dammam Well No. 12, 98, 98–100 Ju‘aymah, 91–92 “fire temple,” 18–19 First Five-Year Development Plan, 49 Fish, Bert, 98, 127 fishing, 12, 13 fixed drilling platforms, 124, 124 Flackmeier, Harry, 136 flaring natural gas, 6, 29, 49, 89, 89 “floating hotels,” 53 Flood, Bill and “Dotty,” 164 fluid hydroformer, 8, 8–9 Fly-Carrier of Disease, The (film), 170 Flying Camel (airplane), 166, 166–167 Foraminifera, 176, 176 Forbes, 183 foreign capital resources needed, 35, 43, 52 foreign correspondents, 86, 86 foreign trade, 193–194 fossils, 70–71, 170, 170, 176–177 Fouad, ‘Abd Allah, 107, 181, 181, 182, 183 Fourier Transform Mass Spectrometer, 139, 139 fractionation, refining process, 183, 184, 187, 190, 199, 199 Framarzi, Abdul Rahim, 47, 47 France, 5, 6, 8, 21, 204, 104, 141 upstream operations, 182 Fraser, William, 39 free gas (non-associated gas), 86–88, 138, 156, 183, 199, 199 “frog” missiles, 105 FRPC (Fujian Refining and Petrochemical Co. Ltd.), 153 fuel from turpentine, 17 Fugate, Frank, 34 Fujian Province, 156, 156, 157 Fujian Refining and Petrochemical Co. Ltd. (FRPC), 153 Fuller, Elmo, 129 Furman, Steve, 113, 115, 115, 169 furush, 76, 77, 77 future, managing for the, 118, 118 G Gambusia fish, 180 gas. See Master Gas System (MGS); natural gas gas fractionation, downstream operations, 190 gas from coal, 17 gas injection plant (model), 24, 24 gas-oil separation plants (GOSPs), 143, 143, 186, 186, 200, 200, 16, 31, 32, 32, 36, 58, 58, 82, 86, 86, 89, 102, 125, 144 operations data, 198, 198, 199, 199 upstream operations, 182, 182, 183, 183 gasoline-blending discharge valve, 198, 198 “gasoline famine,” 135 gasoline rationing, 114, 114, 126 Gas Operations, 63, 141, 182 Gaza, 69 Flying Gazelle (airplane), 166 Gazelle Circle (Easter Egg Row), 127 Gazzaz, Hasan, 7, 7 General Agreement of Participation, 41, 42, 45 “general” category, 159, 165, 194 General Petroleum and Minerals Organization (Petromin), 7, 52, 58, 90, 108 geological reconnaissance maps, 66 Geological Technical Services Division, 117 geological timeline of Saudi Arabia, 172 geologic fault in Saudi Arabia, 60, 60 geologists, 68, 68, 112, 112

geophones, 112 Geophysical Research & Development, 145 geopolitical climate, 191, 193, 196 geosteering, 144, 145 Geosteering Operations Center (GOC), 181, 181 Germany, 5, 20, 21, 40, 96, 97, 99, 104, 111, 112, 116, 104 upstream operations, 182 Gerrha, 9 Gester, G. Clark, 29, 68, 89 Getty, J. Paul, 201, 201 Getty Oil Co., 197, 198, 201 Al-Ghamdi, Nasser, 117, 117 Ghanim, Salah A. W., 47, 47 Ghawar, 13, 72, 73, 103, 103–105, 106, 145–147, 22, 22, 49, 87, 102, 116, 125, 140, 144, 145 Ghinah, 113 Al-Ghoson, Huda M., 77, 158, 158 Ghouth, Bader (Captain), 108, 108 Ghuraymil (Jebel), 71, 81 ghutra (headdress), 91, 91, 102, 197, 197 giant pumps, 36 girls’ education, 175, 177, 10–12, 12, 13, 13, 59, 59, 75, 75, 151, 151–152, 152 war years (World War II), 111, 111 Global Positioning System (GPS), 121 global reach, 107, 153, 155, 159–160 GOC (Geosteering Operations Center), 181, 181 Goerner, Hugh H., 64, 205 Golden Corridor, 72, 72, 74 gold payments, 46, 50, 52, 54, 55, 57, 57, 61, 195 golf in Dhahran, 109, 109 Gondwana supercontinent, 172 Al-Gosaibi family, 62, 63 GOSPs. See gas-oil separation plants Government Affairs, 207, 3, 59, 72, 91, 207 Government Relations, 77, 94, 127, 143, 146, 148–149, 151, 151, 162, 163, 165, 172, 191, 7 GPS (Global Positioning System), 121 grades of crude oil, 152, 162 Graham Associates (Roy and Ray), 170 Grand Hotel, Jiddah, 49, 51, 51 Granville, Maurice, 42 Great Britain, 5, 21, 206. See also British government Great Depression, 13, 24, 29, 40, 44, 52, 54–55, 89, 120 Greece, 108 “greening of Aramco,” 48 Grobba, Fritz, 97, 99, 99 Group of 23, 39 Grumm, Watson, 102 Guangdong Province, 153 guides (Bedouin), 67, 67, 71, 85, 85, 86, 87, 102, 116, 121, 121, 137, 160 Gulbenkian, Calouste “Mr. Five Percent,” 21, 23, 130 Gulf Cooperation Council, 157 Gulf of Aqaba, 97 Gulf of Mexico, 79, 80, 162 Gulf Oil Corp., 22, 26, 27, 28, 50, 30, 45 Gulf War, 101–103, 104, 105, 118 Al-Gusaibi, Ahmad, 148 gutch (gypsum), 76 H Habboubi, Hanaa H., 139, 139 Habib, Nabeel S., 145, 145 Hadeed, 88, 88 Haenggi, Walter, 73, 73, 76 Hafiz, ‘Ali, 206, 206 Hagerstown, Maryland (USA), 68–69 Hagia Sophia, 40 Hague, The, 193, 193, 35, 36, 153 Haifa, 50 Hajj pilgrims, 35, 39, 43, 43, 44, 44–45 Al-Hajri, Quriyan M., 121, 121

Half Moon Bay, 54, 54 Hamilton, Airy, 48 Hamilton, Lloyd N., 34, 34, 42, 48, 49, 50, 52, 54, 55, 56, 56, 68, 81, 95 Hamilton House, 100 Hammadi, Sa‘doun, 39 Hamzah, Fuad, 50 Haradh, xii, 102, 103, 104, 136, 144, 145, 145, 146, 82, 87, 138, 138, 140, 140, 141, 144, 145, 150, 156 operations data, 199, 199 “hardship pay,” 169 hardships, joy, and laughter, 13–14 Hardy, Norman “Cy,” 142, 204, 205 Harmaliyah, 82, 102 Harr, 16 Harriss, Jerry, 67, 67, 84, 84, 105 Harsusi, 133 Hart, Parker T., 125, 127, 127, 129 Haruri, 121, 121 Harvard (USA), 180, 7 al-Hasa, 3, 4, 5, 5, 6, 7, 8–13, 14, 17, 39, 41–42, 46, 49, 50, 54, 61, 64, 75, 75, 79, 85, 89, 111, 116, 148, 174, 195, 51, 125, 127. See also Eastern Province Al-Hasawi, Hasan, 132, 132 Hasan, Muhammad, 11, 11 Hassan, Fawaz, 146, 147, 147 Hattab, Jamil “Baba,” 177, 177 Al-Hauwaj, Ali, 156, 157 Hawiyah, 146, 82, 87, 128, 128, 132, 132, 137, 137, 138, 140–141, 150, 161, 161 operations data, 199, 199 Hawkins, Monte, 100 Hawley, H. J., 41, 42, 46 Hawtah, 87, 113 Hayes, Joseph, 117, 117 Hazmiyah, 113 Al-Hazza, Eiman A., 151, 151 health care, 39, 155, 179, 179–180, 184, 51, 165 “health of the company” report, 112 heavy crude oil, 39, 40, 152, 153 Heim, Arnold, 17, 17 helicopters used in exploration work, 18 Henry, Annette and Mitzi, 83, 83 Henry, Bob, 149 Henry, Schuyler B. “Krug,” 24, 24, 61, 62, 62, 63, 63, 64, 64, 66, 68, 70, 81, 83 hexane, 190, 192 high school students, developing, 71–72, 111, 111 hijar, 14 Hijaz, 6, 8, 36, 39, 40, 40, 43, 43, 71, 137 Hijaz Mountains, 58, 90, 90 Hills, Liston F., 24, 204, 205 Hilyard, Lester, 82, 82, 84 Hinna, 66, 68 Hinnawi, Sami (Colonel), 191, 193 Hoag, Walter, 84, 84 Hobby Farm, 168 Hodgeson, W., 21, 21 Hofuf, 5, 5, 6, 8, 9, 10, 10–11, 39, 62, 63, 73, 106, 113, 136, 170, 7 Al-Hokail, Abdulaziz M., 70, 82, 111 Holditch, Stephen, 146 Holmes, Frank “Abu al-Naft, Father of Petroleum” (Major) 4, 4, 9, 14, 15, 16, 17, 24, 26, 30, 30, 35, 42, 43, 48, 50, 50 Home Ownership Program, 165, 168, 168, 185, 3, 14, 14, 51. See also housing home schooling, 83, 111, 111, 10, 12 Hong Kong, 153 Hoover, Herbert (U.S. President), 55 Hoover, J. W. “Soak,” 62, 63, 63, 64, 64, 66, 68, 70, 71, 105 horizontal drilling, 74, 113–114, 115, 119, 125, 180 Hosmer, Jack G., 113 Houg, Carol DuPriest, 160, 161 House of Rashid, 7 House of Sa‘ud, 7 housing, 73, 76, 89, 89, 162, 162–163, 163, 165, 168, 168, 171, 184, 194, 194, 52, 52, 53, 54, 54, 77–78, 78, 81. See also Home Ownership Program

Al-Humaid, Ahmed S., 72, 72 Human Resources and Training, 111 Hundred Men, The (McConnell), 86, 108 “hundred men, the” (reduction in workers), 108–111, 115 hurricanes Katrina and Rita, 143, 154 Husain (soldier), 67, 67 Hussein, Hashim, 75, 75 Al-Husseini, Haitham, 13 Al-Husseini, Hassan, 13 Al-Husseini, Ibrahim (Colonel), 13 Al-Husseini, Ihsan, 13 Al-Husseini, Moujahed, 13 Al-Husseini, Najat, 13, 13 Al-Husseini, Sadad, 13, 14, 82, 88, 111, 114–115, 119, 119 Al-Husseini, Saif, 172 Al-Husseini, Zafer H., 21, 21 Al-Huzaim, Hilal Y., 8, 8 hydrocarbon reservoirs, 76, 112, 113, 117, 118, 177, 177 hydrocarbons, 166, 170, 171, 171, 187 hydrocracking, refining process, 188 hydrogen sulfide, 183, 199 hydroskimming plant, 189 hydrotreaters, 158 I ibn ‘Adwan, Shaykh ‘Abd Allah, 185 ibn ‘Agil, Sa‘d, 186, 186 ibn Ahmad, ‘Id, 198, 198 ibn ‘Ali, Sharif Husain, 6, 8 ibn Fahad, Ahmad, 143, 143 ibn Hamaid, Shaykh Rashid, 206, 206 ibn Hasan, ‘Abd Allah, 200, 200 ibn ‘Isa Al Khalifah, Shaykh Hamad, 26 ibn Jiluwi, Amir Sa‘ud, 148, 176, 176 ibn Muhammad, Ja‘far, 113 ibn Nahir, Khalifah, 203, 203 ibn Rimthan, Khamis (guide), 67, 67, 71, 85, 85, 86, 87, 116, 137, 160, 121 ibn Sa‘id, Ahmad, 186, 186 ibn Salman, ‘Abd al-‘Aziz, 104 Ibn Sa‘oud of Arabia (Rihani), 12 ibn Saqr, Shaykh Sultan, 206, 206 Ibn Sa‘ud, 3n. See also Al Sa‘ud, ‘Abd al-‘Aziz ibn ‘Abd al-Rahman (King) ibn Sulayman, Muhammad, 67, 67 ibn Yousuf, Ya‘qoub, 186, 186 Ibrahim (driver), 67, 67 Ibrahim, Yousuf, 174, 174 Idea Management System (Web-based), 137 Idrisi dynasty, 79 IEA (International Energy Agency), 134 igneous rocks, 75 Imam Muhammad ibn Sa‘ud University, Riyadh, 173 Imperial Geological Survey of Japan, 97 incubators, 113, 137 Independent Natural Gas Association of America, 42 Independent Project Analysis (IPA), 138 India, 36, 116, 142, 193, 203, 134, 157, 160 Industrial Center, 135, 135 Industrial Development Division (IDD), 181, 182 Industrial Relations, 33, 70, 77, 152, 159 Industrial Services, 128 Industrial Training Centers, 174, 8, 10, 10, 34 inflation, 112, 116 information network of King ‘Abd al-‘Aziz, 36–37, 39 infrastructure, 142, 142, 155, 181, 165 Institut Français du Pétrole, 164 intelligent field concept, 144, 181 “intermediate” category, 159, 159, 165, 194 International Energy Agency (IEA), 134 International Inventors Conference in Geneva (2006), 89 International Maritime Organization, 155 international oil companies (IOCs), 159–160

index 227

226 index

international operations map, 196 international presence, 107, 153, 155, 159–160 International Students Award, 72 IOCs (international oil companies), 159–160 IPA (Independent Project Analysis), 138 IPC. See Iraq Petroleum Co. Iran, 16, 18, 18, 20, 23, 26, 163, 4, 4, 5, 39, 40, 43, 70, 87 Iraq, 6, 8, 8, 14, 16, 21, 23, 26, 35, 36, 41, 85, 97, 108, 116, 163, 196, 4, 5, 39, 41, 43, 70, 87, 101, 102, 103, 104, 104, 105, 143 Iraq Petroleum Co. (IPC), 23, 26, 28, 64, 47, 47, 48, 49, 50, 52, 54, 55, 71, 79, 96, 129, 130, 197, 204, 205, 5, 41 Ishaq, Muhammad, 160 Island of Allah (film), 170, 170 Israel, 131, 196, 204, 31 Israeli-Arab tensions, 20, 22, 29, 42–43 Istanbul, Turkey, 40 Italian workers, 116, 119, 119, 120, 120, 127, 158, 159, 160, 161–162, 10. See also workforce Italy, 106, 106, 107, 107, 108, 109, 141, 153, 155, 155 Ithmaniya. See ‘Uthmaniyah J J. Clarence Karcher Award, 145 Jabal Dukhan, 23, 29, 31, 48, 48 jabals (modest hills), 30, 31, 42, 42, 66, 66, 83, 103, 108, 159, 159 Jabal School for Boys (Arab Preparatory School, Arab Trade Preparatory School), 113, 138, 153, 155, 156, 156, 168, 168, 172–173, 175, 177 Jaber, Shaykh Ahmad bin, 50, 50 Jabrin, 70 Jackson, Henry M., 44 Jaizan, 79, 186 Jalali, Mustafa A., 158, 158 Jamil, ‘Ali Bay, 185 Jana, 16 Janson, E. W., 48 Japan, 13, 97–98, 112, 125, 126, 193, 36, 40, 40, 52, 83, 104, 108, 153, 157, 158, 162, 163, 189, 192 Al-Jasir, Shaykh Hamad, 172 Jassim, Hijji bin, 110, 111 Javits, Jacob K., 44 Jawf, 140 Jazan region, 153, 189 Jebel Ghuraymil, 81 Jersey. See Standard Oil of New Jersey Jiddah, 8, 28, 28, 34, 35, 37, 39, 43, 44, 46, 48, 49, 50, 50, 51, 51, 53, 54, 55, 56, 61, 64, 77, 81, 90, 95, 96, 97, 97, 99, 127, 148, 173, 196, 198, 201, 207, 211, 65, 65, 108, 111, 163 downstream operations, 185, 186, 188, 189 Al-Jihian, Muhammad, 64, 64 jinn (genies), 85 Al-Jishi, ‘Abd Allah Jasim, 154, 154 Job Skills Training, 176 joint ventures, 89, 95, 96, 107, 108, 109, 111, 124, 124, 141, 153, 156, 157, 162, 163 downstream operations, 188, 189, 189, 192, 193 operations data, 198 Jones, Patsy, 83 Jordan (Transjordan), 6, 8, 8, 79, 131, 134, 165, 196, 20, 22, 33 Ju‘aymah, 53, 54, 60–61, 61, 91–92, 93, 93, 103, 120, 150, 163 downstream operations, 185, 186, 186, 190 operations data, 198, 198, 199, 199 Jubail, 5, 6, 8, 27, 27, 61, 62, 63, 63, 64, 64, 66, 66, 68, 69, 70, 70, 71, 72, 96, 96, 37, 54, 54, 62, 105, 105, 108, 153, 163 downstream operations, 188, 188–189, 189, 190 operations data, 199, 199 Jubail Industrial City, 88, 88 Jum‘ah, Abdallah S., 12, 111, 186, 49, 49, 62, 91–92, 111, 119, 119, 125, 125, 136, 137, 141, 161 company leadership, 204, 205 Jum‘ah, Jaber S., 72, 112, 125, 126, 135 Jum‘ah, Jasim, 151, 151

Jungers, Frank, 186, 3, 24, 29, 29, 37, 37, 38, 41, 42, 44, 46, 48, 54, 60, 61–62, 63, 64, 64 company leadership, 204, 205 Juraifani, Hamad A., 168, 179, 190, 190, 212, 213, 213, 82 Jurassic Arab Formation, 82 Jurassic Period, 75, 87, 172, 172, 173, 173, 176 K Kaba, Fatima, 152, 152 K‘aki, Saleh B., 158, 158 Al-Kathiri, Muhammed ‘Ali, 85, 85 al-Khamis, 10, 10–11 al-Kharj farming project, 137, 137 Al-Khatib, Muhammad, 168, 168 al-Khobar, 9, 12, 65, 76, 76, 77, 77, 90, 111, 127, 143, 149, 149, 158, 160, 172, 179, 181, 184, 187, 187, 194 Al-Khobar Electric Co., 181 Al-Koheji, Yousef, 80, 80 al-Kut, 10, 10–11 Karan, 16, 156, 159 KAUST (King Abdullah University of Science and Technology), 151, 151, 163, 164, 166, 166 Keith, Thomas, 81–82, 146 Kelberer, John J., 62, 64, 89, 92, 95, 95 company leadership, 204, 205 Kennedy, John F. (U.S. President), 19 Kennedy, Mollie, 169, 169 Kerr, Richard C. “Dick,” 63, 63, 68, 69, 70, 142 Keyes, Robert L., 205 KFUPM (King Fahd University of Petroleum and Minerals, College of Petroleum and Minerals), 173, 173, 179, 13–14, 20, 48, 72, 72, 74, 142, 157 Al-Khabbaz, Mohammad, 132, 132 Al-Khayyal, Abdulaziz F., 33, 152, 158, 158, 159 Al-Khayyal, Khalidah, 59 Al-Khazin, Jihad, 64, 64 Khafji, 142 Khamsin, Salim Abu, 74 Khan, ‘Ajab, 64, 148 Khazindar, Husain, 160 al-Khobar, 10, 11, 47, 51 Khuff formation, 39, 86, 87, 88, 140 Khurais, xii, 81, 82, 102, 102, 130, 130–131, 150 Khursaniyah, xi, 87, 146, 147, 150, 150, 199, 199 Khuzam Palace, 34, 34, 50 King, Henry C., 36, 40 King Abdulaziz Center for World Culture, 166 King Abdulaziz University in Jiddah, 173, 45, 45 King Abdullah University of Science and Technology (KAUST), 151, 151, 163, 164, 166, 166 Kingdom of Hijaz and Najd and Its Dependencies, 46 Kingdom of Saudi Arabia, xi, 3, 4, 7, 8, 46–48, 47, 127, 173, 186, 5, 10. See also Al Sa‘ud (Kings); Saudi Arabia King Fahd University of Petroleum and Minerals (KFUPM, College of Petroleum and Minerals), 173, 173, 179, 13–14, 20, 48, 72, 72, 74, 142, 157 King Sa‘ud University (Riyadh University), 72, 77 Kingsbury, K. R., 26, 27, 28, 41, 48 Kinnear, James, 146 Kirkuk, 17, 22, 23, 36, 163, 41 knowledge-based society, building a, 163–166 Koch, Thomas W., 63, 63, 72, 73 Kombargi, Shafiq W., 199, 199 Korean War, 168, 199, 200, 204 Kreider-Reisoner, 69 Kristofferson, H. C., 21, 21 Krueger, L. P., 192, 192 Kuwait, 5, 7, 13, 13, 14, 16, 23, 23, 50, 96, 126, 142, 4, 5, 38, 41, 101, 102, 103, 104, 105 Kuwait City, 177, 43 Kuwait Oil Co., 47, 47, 197, 201, 45

L “Labor City” (Madinat al-‘Ummal), 14 labor unrest, 158–162, 184–186 Al-Lafi, Ali A. Attiyah, 158, 158 LaGuardia Airport, New York (USA), 69, 69 landing strip, 137 language barrier, 151, 157, 157 al-Latif, Muhammad ibn ‘Abd, 67, 67 Latin America, 160 laundry workers, 80, 80 Lawrence, T. E. (Lawrence of Arabia), 6 lead content in gasoline, 157 leadership, company, 111, 204–205 leadership abilities of King ‘Abd al-‘Aziz, 3, 5, 36, 37 lean times, transformation, 79–81 Lebanon, 8, 8, 71, 131, 133, 133, 134, 157, 165, 193, 196, 33, 41 Leeds University (U.K.), 74 Legacy of a Lifetime (Ajmi), 13 Lehigh University, Pennsylvania (USA), 212 Leiden, 153 Lenahan, William J. “Bill,” 64, 90, 95, 96, 96, 97–98 lending employees (“seconding”), 62 lessons learned, 125–127, 128, 137, 138 letters from oil company employees, 86, 86, 87, 184 Lewis, Leslie, 41 Libya, 23, 38, 41, 42 Life magazine, 171 light crude oil, 39, 40, 42, 44, 52, 70, 89, 96, 103, 142, 144, 147, 177 lightering areas, 36, 196 Light Industrial Park, 117 lighting, fuel for, 17, 19 limestone, 75, 75, 79, 79, 81, 82, 89, 103, 177 liquid hydrocarbons (condensate), 157, 183 lithosphere, 172 Littlejohn, William Laney, 52, 89 Little League Baseball, 138, 79, 79 living conditions, 155, 157, 158, 159, 160, 185 Local Industrial Development, 46, 51 Logan, Sam “Mr. Sam” and Mildred, 137 logo, Saudi Aramco, 136, 136 Lombardi, Maurice E., 25–26, 26, 27, 29, 41, 42, 43, 46, 47, 48, 49, 50, 55, 63 London, 130, 130, 202, 35, 153 Long Beach, California (USA), 132, 132 Longrigg, Steven, 50, 50, 52, 54, 55, 79, 96 Loomis, Francis B., 42, 43, 46, 47, 49 Los Angeles Times, The, 169, 106 Louisiana (USA), 124, 196 “Lucky No. 7.” See Well No. 7 (Dammam Dome) Lukoil, 141 Luksar Energy Limited, 141 Lunde, J. P., 21, 21 Luqman, Muhammad, 151, 151 Luttrell, Robert, 36 M Maby, Robert L., Jr., 157 MacPherson, James “Mr. Mac,” 128–129, 129, 138, 142, 149, 201 Madani, Mansoor, 158, 158 Madgwick, George, 25 Madinah, 6, 35 Madinah Gate, 44, 44, 97, 97 Madinat-Abqaiq, 168, 168, 171, 171 Madinat al-‘Ummal (“Labor City”), 14 Al-Maghlouth, Khalid Nassir, 72 magnetic resonance imaging (MRI), 116 Mahmud, Ahmad Muhammad, 64, 64 Al-Majdhub, ‘Abd Al-Mun‘im, 185 Majid, Said, 174, 174 majlises (traditional open meeting rooms), 41, 50, 55 majority stake in Aramco by Saudi Arabia, 45–46 Al-Makhaytah, ‘Abd al-Latif ‘Abd Allah, 99, 101

Makkah, 6, 8, 28, 35, 44, 44, 46, 51, 56, 90, 138, 207, 7, 189 malaria, 62, 179, 180 Al-Malhouq, Shaykh ‘Abd Allah, 172 Al-Malik Saud Al-Awal (tanker), 205, 205 Management Development, 48 Management Services, 72 managers, Saudi, 21, 21 Al-Manasir, Farraj T., 8, 8 Mandaville, James P., 149, 150 mangrove research and restoration, 160, 160 Manifa, 142, 77, 82, 104, 104, 150, 157 Manna‘, ‘Abd Allah, 64, 64 Manufacturing Operations, 70 Maracaibo, 24 Maracaibo, Lake, Venezuela, 23 Marafiq, 196, 199, 199 Al-Marhoun, Jamal, 132, 132 Marinovic, Baldo, 23, 48, 50 Marjan, 16, 32, 32, 36, 82, 86, 103, 113 Marketing and Supply Planning, 74 market vs. posted price of oil, 4, 5, 39, 43 marl pits, 120 Marshall Plan, 126 Mashour, Mazen M., 89, 89 mashrabiyah (privacy screens), 51, 51 Masjid-i-Suleiman, Iran, 18, 18, 20, 23 Massachusetts Institute of Technology (MIT, USA), 145 Master Gas System (MGS), 37, 37, 44, 44, 52–54, 53, 54, 58, 81, 86, 88, 88, 128, 128, 133, 138, 140, 146, 162 downstream operations, 190, 190 upstream operations, 183, 183 Al-Matrood, ‘Abd Allah, 183 Matthews, Charles, 133, 149 Al-Mausalli, Ahmad ‘Isa, 174, 174 maximum reservoir contact (MRC) wells, 144, 145, 181 Mazalij, 82, 150 McConnell, Philip, 72, 86, 86, 108, 109, 112, 160, 161 McDonald, Harry, 149 McGhee, George, 200 McIntosh, Clarence J., 127 Medical Services, 77, 137, 151 Mediterranean Sea, 131, 132 Meeker, Floyd, 81 Mellon, Andrew, 27, 28 Memphis State University, Tennessee (USA), 72 metamorphic rocks, 75 methane (sales gas), 52, 183, 187, 187, 190, 199 Mexico, 23 MGS. See Master Gas System microfossils, 176, 176 micropaleontologists, 177 Middle East Export Press, 170 Midrikah, 156 Midyan, 97, 97 Milan, 153, 155, 155 Miller, Otto N., 42 Miller, Robert P. “Bert,” 24, 24, 61, 62, 62, 63, 63, 64, 66, 69, 70, 71, 73, 73 Ministry buildings, 208–209, 209 Ministry of Finance, 34, 39, 49, 50, 52, 53, 55, 56, 90, 98, 101, 142, 146, 148, 162, 173, 207 Ministry of Higher Education, 173, 13 Ministry of Petroleum and Mineral Resources, 155, 156, 210, 6, 7, 10, 13, 24, 37, 71, 89, 92, 93, 95, 104, 107, 111, 125, 151, 151, 158 Miocene Period, 25, 41, 73 Mishari, Ibrahim S., 74 Miyah-A Story of Water (film), 170 Mo‘ammar, Masha‘el, 59, 59 Mobil (Socony Vacuum), 29. See also Arabian American Oil Co. (Aramco) Mobil Oil Co., 183, 41, 42, 80, 80, 108, 125 modernization plans of Saudi Arabia, 207, 210–211, 4, 163 modern oil industry, 17, 19

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228 index

Moffett, James A., 162 Moffitt, Richard G., 121, 121 Mollo, George J., Jr., 111, 111 Moore, W. F., 138, 205 Moose, James S., 127 Al-Moqbil, Ahmad R., 8, 8 Mosque of the Adenese, 78, 78 mosquitos, fighting, 180 “most ambitious energy project in history,” 49, 52–54, 58 Mosul, 21 mothballing, 82, 86, 102, 102 Motiva Enterprises LLC, 124, 124, 153 Motor Oil (Hellas) Corinth Refineries S.A., 107 Al-Mousa, Bader, 155, 155 Mousli, Na‘ilah, 75, 88, 88 MRC (maximum reservoir contact) wells, 144, 145, 181 MRI (magnetic resonance imaging), 116 Mubarak, ‘Abd al-Rahman M., 9, 9 al-Mubarraz, 99 Al-Mughamis, Mohammad, 179 Al-Muhareb, Ali A., 78 Al-Muhtasib, Ibrahim, 211, 212, 212 Muhammad, ‘Abd Allah, 159, 159 Muller, Hendrik, 139, 139 Mulligan, William, 148, 172, 202, 203 multilateral drilling, 114–115, 180, 181, 181 Multinational Corporations (U.S. Senate Subcommittee), 44 Al-Munif, Munif, 111, 111 Al Murrah tribe, 7 Murraba‘ Palace, 112, 112 Murray, Wallace, 42, 43 Al-Musaiid, Hesham, 74 Al-Mustafa, Ameera A., 75, 75 Mussolini, Benito, 108 Mutawi‘, Hamid, 64, 64 Al-Mutlaq, Abeer M, 151, 151 Mutlaq (Bedouin), 113 N Nagasaki, 36, 83, 83 Al Nahyan, Shaykh Zayed ibn Sultan, 206 Al-Naimi, Ali I., 155, 156, 172, 176, 190, 190, 212, 213, 213, 21, 46, 48, 49, 49, 64, 69, 70, 70, 71, 91, 92, 93, 95, 95, 107, 107, 108, 111, 125, 125, 133, 151, 151, 153, 162, 166 company leadership, 204, 205 Najd, 3, 6, 12, 14, 15, 16 Najran, 72 al-Na‘lah (En Nala), 72, 73 names for Tapline pumping stations, 133, 133 naphtha, 192 naphthalene, 192 naphthenes, 187 Al-Nasr, Nadhmi A., 163 Nasif, Shaykh Muhammad, 50 Nasser, Amin H., 20, 144 Nasser, Gamal Abdel (Colonel), 203–204 National Bank of Turkey, 21, 130 National Commission for Wildlife Protection and Development, 106 National Council on U.S.-Arab Affairs, 72 National Dairy and Ice Cream Plant, 183 nationalization, 40, 41, 45 National Laundry, 183 national (state-owned) oil companies (NOCs), 159–160 natural gas, 72, 72, 76, 6, 29, 39, 39, 49, 119, 138, 140–141, 147, 150, 156, 163, 175, 175. See also oil and gas operations, 199, 199 production and processing, 182, 183 Natural Gas Initiative (NGI), 141 Natural Gas Liquids (NGLs), xi, 37, 37, 52–54, 53, 54, 56–57, 57, 58, 81, 109, 150, 150 downstream operations, 184, 185, 190, 192

operations data, 199, 199 production history, 200–201 upstream operations, 183 natural gasoline. See Natural Gas Liquids (NGLs) Nawwab, ‘Abd al-Hafiz, 172 Nawwab, Ismail I., 72, 72 Nazer, Hisham M., 89, 92, 95, 95, 102, 103, 107, 107 company leadership, 205 Near East College Association of Beirut, 176 Near East Development Corporation (NEDC), 22–23, 26 “Near East” map, 8, 8 Nearpass, G. McLean “Mac,” 138, 172 “net-back” contracts, 88 Netherlands, 8, 35, 43, 104, 146, 146, 153 Netherlands Bank, 53, 55, 57, 57 Neutral Zones, 14 New Business Development, 141, 162 New Deal, 54–55 New Horizons Idea Award, 180 New York (USA), 78, 202, 202, 213, 153 New York Mercantile Exchange, 160 New York Times, The, 8, 98, 104, 42, 160 New York University (USA), 7 New York World Telegram, 87, 87 New Zealand, 62, 104 NGI (Natural Gas Initiative), 141 NGLs. See Natural Gas Liquids Nigeria, 36 nitrogen oxides, 124 Nixon, Richard M. (U.S. President), 31, 43 NOCs (national (state-owned) oil companies), 159–160 “nominations” (projections of crude oil required), 29–30 Nomland, Jorgen “Doc,” 29, 64, 71, 79 non-associated gas (free gas), 86–88, 138, 156, 183, 199, 199 Al-Noor, ‘Abd, 151, 151 Al-Noor, Mohammad, 132, 132 North Camp, 78 Northern Area Manufacturing, 82 Northern Area Operations, 82 Northern Area Producing, 48 North Pier, Ras Tanura, 185 North Riyadh Bulk Plant, 127 North Sea, 23, 79, 80, 80, 119, 134 North Slope of Alaska, 134 Nuayyim, 150 O OAPEC (Organization of Arab Petroleum Exporting Countries), 38 oases, 8, 9, 12. See also al-Hasa Oasis of Al-Hasa, The (Vidal), 149 Oberlin College, 36, 40 OCC (Operations Coordination Center), 91, 91, 154, 154, 184, 184 Occidental Petroleum Co., 39, 41 Offshore Drilling, 106 offshore oil and gas, 124, 124, 138–139, 142, 16, 16, 17, 17, 32, 32, 34, 36, 37, 37, 52, 58, 58, 74, 80, 80, 82, 84, 84–85, 86, 86, 103, 103, 156, 157, 159, 159. See also Safaniya; specific facilities downstream operations, 186, 186 upstream operations, 180 Ohliger, Floyd, 76, 77, 77, 81, 97, 98, 148, 162 oil and gas. See also downstream operations; natural gas; operations data; price of crude oil; Saudi Arabian Oil Co. (Saudi Aramco); supply and demand; upstream operations crude oil classifications, 39, 152, 162 discoveries (major) 1859–1939, 23 operations map, 197 origins of, 74–75, 170–171 production and processing, upstream operations, 182 production history, 200–201 reserves, 72, 72, 74, 22–23, 134, 143, 175, 175 Oil Caravan, The (Qafilat az-Zayt), 158, 158

Oil Creek (Pennsylvania, USA), 17, 19 oil glut, 23 Oil in the Arab States (Al-‘Abbusi), 5 oil operations, 198, 198 oil seeps, 16, 16, 17, 18 Oil Spill Contingency Plan, 104, 105 oil spill in Arabian Gulf, 103–106, 104, 105 Oil Spill Service Center, 104 oil stabilizer plants, 160 Oil Supply Planning and Scheduling (OSPAS), 154, 154, 184 oil tanker loading celebration, 90, 91, 91, 95, 160 “oil weapon.” See embargoes Oily Bird, 74 Oklahoma (USA), 23, 182 Olayan, Suliman, 147, 148, 183 Old Town Camp, Bahrain, 31, 31 olefins, 192, 193, 193 Oman, 206, 112, 112 Onassis (Aristotle) arbitration, 200–201, 203, 203 Onsan, 107, 107 OPEC. See Organization of Petroleum Exporting Countries “Open Door Policy,” 21 Operations Coordination Center (OCC), 91, 91, 154, 154, 184, 184 operations data, 194–203. See also downstream operations; upstream operations domestic operations map, 195 gas operations, 199, 199 international operations map, 196 natural gas liquids (NGLs) production history, 200–201 oil and gas operations map, 197 oil operations, 198, 198 oil production history, 200–201 production history, 200–201 workforce history, 202–203 Operator Training Simulation (Web-based), 136 Oregon State University (USA), 77 Organization of Arab Petroleum Exporting Countries (OAPEC), 38 Organization of Petroleum Exporting Countries (OPEC), 210, 4, 4, 5, 7, 38, 41, 42, 43, 45, 79–80, 88, 89, 91, 118, 125, 142 “Origin of Oil, The” (Steineke), 74 origins of oil and gas, 74–75, 170–171 Flying Oryx (airplane), 166 Al-Osaimi, Mohammed A., 158 OSPAS (Oil Supply Planning and Scheduling), 154, 154, 184 Al-Othman, Abdullatif A., 73, 136 Ottoman Empire, 5, 6, 7, 8, 8, 9, 20, 21, 23, 36, 39, 40, 137 Out in the Blue (Barger, Tim), 87 Out-of-Kingdom Training, 72 Owen, Bill, 41 Owen, Garry, 146, 146 Owen, William L., 191, 193, 7, 7 ownership of Arabian American Oil Co. (Aramco) by Saudis, 29, 40–41, 45–46, 64, 69, 159 ozone precursors, 124 P Pacific Theater, serving the, 115–116, 118, 121, 121, 126 Pacific Western Oil Corporation, 201 Page, Robert C., 179, 179 Pakistan, 10 Pakistanis, 142 Paleozoic Era, 172 Palestine, 69, 131, 132, 196, 196 Palestinians, 120, 142, 157, 199, 199, 10, 20, 31, 42 Palmer, William, 106, 108, 148 Palm Springs, California (USA), 40 palynologists, 177 Pan American Petroleum and Transport Co., 22 Pangea, 172 paraffins, 187 Parallel Oil Water and Gas Reservoir Simulator (POWERS), 116, 179 participation agreement, 40–41, 42, 45

PDPs (Professional Development Programs), 64, 72, 73 pearling, 12, 13, 13, 26 Pennsylvania (USA), 17, 19, 20, 20, 23, 162, 11 pentane, 190 people power (self-development), 135–137 performance standards, rethinking, 137–138 “permanent shortage” of 1970s, 135 permeability, 177, 177 Permian Basin, West Texas (USA), 23 Persia, 4, 15, 18, 20, 23, 35, 36, 41 Persian Gulf, 49, 74 Peshawar, 64 petrochemicals, 133, 152, 153, 156, 158, 162–163, 166 downstream operations, 190, 192–193, 199 upstream operations, 183 Petrola, 108 Petroleum Concessions Ltd., 79, 95, 96 petroleum engineer, first woman, 75 Petroleum Engineering and Development, 88, 102, 144 Petroleum Technology Research Centre in Canada, 158 petroleum traps, 170, 174, 174 Petroline, 58 Petromin (General Petroleum and Minerals Organization), 7, 52, 58, 90, 108 Petron Corp., 107, 141 Petro Rabigh, 108, 162, 162, 163, 185, 188, 192 Pherkad Star (supertanker), 108, 108 Phi Kappa Phi honor society, 72 Philby, Harry St. John Bridger (“Abd Allah”), 17, 35, 36, 37, 43, 46–47, 49, 49, 50, 52, 54, 55, 97 Philippines, 111, 141 Phoenix Star (tanker), 83, 83 Piazza Duomo, 155, 155 Piercy, George, 39 pipelines, 18, 18, 90, 98, 98,128, 143, 36, 58, 63, 90, 90, 91, 102, 120, 120, 125, 127, 150 downstream operations, 185, 191, 195 plane table, 70 Planning, 72 “Planning Guides for Aramco as a Corporation” (Barger), 3, 6, 24 plant safety (safety procedures), 62–63 Plants and Pipeline, 63 plastics industry, 133, 163, 192 plate tectonics, 172 PMI (Project Management Institute), 126, 138, 140 PM Network, 77 “point of transformation,” 144–146 polymers, 192 polystyrene, 192 porosity, 177, 177 portable housing, 89, 89, 162, 162, 194, 194 Port Arthur, Texas (USA), 95, 124 posted vs. market price of oil, 4, 5, 39, 43 power grid (electrical), 58, 60–62 power plants built, 73, 142 POWERS (Parallel Oil Water and Gas Reservoir Simulator), 116, 179 Powers, R. W. “Brock,” 4, 18, 20, 29–30, 61, 64 company leadership, 205 Precambrian Era, 75, 172 Preferential Area of Standard Oil Co. of California, 47, 47 Presidency of Meteorology and Environmental Protection, 106 president of Aramco, first Saudi, 21, 69, 70, 70 pressure vessels, 147 Price, Ed, 88 price of crude oil “basket” of prices, 89 dramatic swings in, 101 falling, 19, 24,138, 5, 80, 82, 113, 118, 126, 134, 142 gyrations of, 4 posted vs. market price, 4, 5, 39, 43 quota strategy, 79, 80, 88–89, 91

index 231

230 index

rising, 53, 55, 126, 32, 39, 40, 42, 44, 49, 70, 80, 86, 102, 125, 135, 142, 152, 160, 161 Sidon price claims, 7, 10, 19 private sector vs. Aramco, 81–82 Producing and Water Injection, 48, 49 product carriers, 155, 191 production history, 200–201 production increase for wartime effort, 102–103 Products Distribution, 21 Professional Development Programs (PDPs), 64, 72, 73 profit sharing, 197–200, 207, 210, 4 projections of crude oil required (“nominations”), 29–30 project management, centralized, 35, 35 Project Management IBM, 34, 34 Project Management Institute (PMI), 126, 138, 140 Project of the Year Awards, 138, 140 project planning and execution process, 125–127, 128, 137, 138 Project Support and Controls, 77 promotion of Saudis, 46, 48 propane, 187, 187, 190, 192. See also Natural Gas Liquids (NGLs) propylene, 163, 192, 193, 193 prospects, identifying, 170 “Prosperity Well.” See Well No. 7 (Dammam Dome) Public Affairs, 172, 72, 75, 77 Public Relations, 172, 21, 46, 49, 62 pumping units, 137 pump stations (Tapline), 133, 133, 134, 135 pygas, 193, 193 Pyxis compass, 83 Q Al-Qafilah al-Usbu‘iyyah (Weekly Caravan, The), 158 Qafilat az-Zayt (Oil Caravan, The), 158, 158 Al-Qahtani, Abdullah M., 145, 145 Al-Qahtani, Ayed, 111 Qaisumah, 85, 132, 134, 143 al-Qasim, 82, 125, 127 Al-Qasim, Ziyad, 134, 134 Qasim, 52 Qatar, 7, 23, 49, 102, 206, 41 Qatif, 5, 6, 6, 8, 9, 12, 54, 54, 62, 73, 143, 87, 142, 143, 143, 144, 144 downstream operations, 190 Qatif Treaty, 6 Al-Qudaihi, Jasim ibn Muhammad, 154, 154 Queen Mary (barge), 124, 124 quick response, 91–92 quota strategy, 79, 80, 88–89, 91 Qurain, 73 Quran, 173, 20 Qurayyah Seawater Treatment Plant, 35, 35, 52, 55, 55, 58, 82, 102, 152 Qurishi, Ahmed Abdullah, 68 R Rabil, Annette, 83 Radhi, Ahmad, 203, 203 Radiology Group, 137 Radio Makkah, 10 radio shack and towers, 107, 142, 142 Rafha, 134 Rafie, M. Yusof, 102, 141 Al-Rahman, ‘Abd, 5 Rahimah, 11, 15, 15 railroads, 136–137, 137, 140 rainfall. See water importance Ras al-Mish‘ab, 132–133, 135, 135 Al Rashid, 6 Al-Rashid, Rashid, 190, 190 Ras Safania, 70 Ras Tanura, 39, 41, 89, 89, 90, 98, 98, 107, 111, 115, 116, 117, 117, 120, 121, 121, 125, 128, 128, 129, 129, 131, 132, 142, 143, 158, 159, 160, 162, 163, 163, 164, 164, 165, 165, 168, 169, 169, 171,

172, 174, 178, 180, 182, 195, 195, 198, 198, 201, 4, 8, 8–9, 10, 15, 16, 26, 31, 31, 36, 48, 52, 54, 77–78, 91, 95, 95, 105, 120, 125, 125 downstream operations, 185, 188, 189, 190 operations data, 198, 198, 199, 199 upgrade, 125–126, 127, 137, 138 Rathbone, Monroe, 5 recovered oil from oil spill, 105, 106 Al-Redaini, Saleh, 58 Red Crescent, 191, 204 Red Line Agreement, 20, 21–24, 26, 129–130 Red Sea, 75, 79, 96, 131, 33, 54, 57, 58, 97, 97, 109, 163, 172, 182, 185, 191 Red Sea Refining Co., 189 refined liquid petroleum gasses (RLPG), 185 refineries, 78, 108, 107, 107, 108–109, 118, 124, 133, 152–153, 158, 160. See also Ras Tanura; specific refineries downstream operations, 187–189 Refining, Marketing & International, 107, 152, 156 regenerator, 162, 162 relinquishments of non-oil producing portions, 18, 68 remarkable relationship, 84–85, 87 Rentz, George, 133, 148, 148, 149 Report of Operations (Aramco), 170 Repsol YPF, 141 Republic of Korea, 107, 107, 108, 134, 134, 153, 155, 157, 162 downstream operations, 189 resbots (reservoir nano-agents), 180 Research and Development (R&D) Center, 139, 139 Research Institute of Innovative Technology for the Earth, 158 reserves of oil and gas, 72, 72, 74, 22–23, 134, 143, 175, 175 reservoir characterization, 179 management, 77, 114–118 pressure, 49, 54, 55, 55, 180 simulation, 115, 115–116, 116 Reservoir Characterization, 117, 145 Reservoir Description and Simulation, 77 Reservoir Engineering, 75, 88 Reservoir Management, 115, 118, 118, 160 reservoir nano-agents (resbots), 180 Reynolds, George, 18 Rhoades, Ralph “Dusty,” 26, 28 Richards, Don E., 185 Richmond Exploration Co., 142 Al-Ridhwan, ‘Abd Al-‘Aziz, 136, 136 Rider University, New Jersey (USA), 179 Rihani, Ameen, 3, 4, 12, 12, 14, 15 rijm (pile of rocks), 71 ripple effect, 183, 80 Riverhead, New York (USA), 151, 157, 174 Riyadh, 3, 4, 5, 7, 9, 9, 32, 38, 38, 39, 52, 79, 81, 82, 90, 97, 98, 102, 120, 136, 137, 140, 142, 142, 159, 170, 196, 207, 208–209, 209, 20, 50, 104, 108, 125, 127, 137, 158 downstream operations, 188, 189 Riyadh University (King Sa‘ud University), 72, 77 riyals, 195, 195, 210, 10, 10 RLPG (refined liquid petroleum gasses), 185 Robert College, Istanbul, 40 Robert Morris Junior College in Pittsburgh (USA), 11, 11 Rocheville, Charles, 63, 63, 69, 70 rock, studying, 112 “rock oil,” 17, 19 “Rock Wednesday” demonstrations in Dhahran, 20–23 Rodgers, William S. S., 204, 205 Rodinia supercontinent, 172 Rodstrom, Charles, 80 Rolling Hills Country Club, 109, 109 Roosevelt, Franklin Delano (U.S. President), 54–55, 126, 136, 137, 162 ‘Abd al-‘Aziz (King) and, 94, 94, 119–120, 127, 136, 137, 196 Roosevelt, Theodore (U.S. President), 42 “Roosevelt Recession,” 89 rotary drillers, 101

Royal Dutch-Shell Group, 19, 20, 21, 109, 141 Royal Mint in Britain, 57 Royal Navy (British), 18, 19, 29, 111 Rub‘ al-Khali, xv, xvi, 5, 7, 56, 67, 111, 197, 197, ix, x–1, 16, 18, 18, 39, 39, 119, 120, 120, 121, 141 Rubaya‘, Sulaiman, 212, 212 Al-Rushaid Group of Saudi Arabia, 89 Russia. See Soviet Union Rutherford, M. R., 127 Ruwaili, Haitham, 137 Ryan, Sir Andrew (“Last of the Dragomans”), 50, 55 S Al-Saadoun, Hamed T., 48 Al Sabah, Shaykh Mubarak, 7, 7 SABIC (Saudi Basic Industries Corporation), 92, 162 Sabini, John Anthony, 149 sabkhahs (small salt flats), 76, 147, 119 Sa‘d, ‘Aziz A., 9, 9 Safaniya, 124, 124, 139, 142, 16, 16, 34, 36, 37, 37, 74, 77, 82, 84, 84–85, 103, 105 safety procedures for plants, 62–63 Saggaf, Muhammad M., 145, 145 Al-Saif, Abd Allah S., 119, 119, 159, 159 sails (Vela), 83 Saiph Star (tanker), 191, 191 Salamah, Muhammad A., 148, 151, 151, 186, 212, 212 Saleh, Hamzah, 111 Saleri, Nansen, 118, 160 sales gas (methane), 52, 183, 187, 187, 190, 199 Salhah, Najib, 50 Salih (cook), 67, 67 Saline Water Conversion Corp. (SWCC), 199, 199 Salwah, 70, 84 Samarec (Saudi Arabian Marketing and Refining Co.), 108, 109, 110, 110 Samarkand (Uzbekistan), 40 SAMCOM (Saudi Arab Manpower Committee), 64 Sander, Nestor John, 86, 104, 105, 144, 145, 146, 147 San Francisco, California (USA), 48, 50, 68, 71, 73, 78, 80, 81, 84, 89, 90, 105, 202 SASC (Saudi Aramco Sino Co. Ltd.), 153 SaskPower, 158 SASREF (Shell in Jubail), 188–189, 189 SATORP (Total Refining and Petroleum Co.), 188–189 Satterthwait, Arnold, 174, 174 Al Sa‘ud, ‘Abd al-‘Aziz ibn ‘Abd al-Rahman (King), xi, 5–8. See also Kingdom of Saudi Arabia; Saudi Arabia Americans as viewed by, 55 Aramcons and families reception hosted by, 160, 161, 207 CASOC facilities visited by, 88, 88 consolidation of territories by, 3–4, 5, 14, 120 death of, 174, 185 foreign capital resources needed and, 35, 43, 52 information network of, 36–37, 39 leadership abilities of, 3, 5, 36, 37 modernizing government by, 207, 210–211 negotiation talent of, 5 official coins, first, 195 oil tanker loading celebration, 90, 91, 91, 95, 160 personality of, 2, 3 photographs of, 2, 4, 7, 12, 91, 94, 111, 161, 201, 207 railroad and, 137 Riyadh recaptured by, 5, 7, 170, 170 Roosevelt, Franklin Delano (U.S. President) and, 94, 94, 119–120, 127, 136, 137, 196 subjects (providing for) goal of, 3–4, 14, 37, 39, 90, 111, 120 suspicion of outside influence, 5, 14, 16, 35, 55, 98 vision of, 166 warrior skills of, 3, 5 Al Sa‘ud, ‘Abd Allah (King), 69, 74, 125, 125, 133, 141, 163, 164 “Aramcons” and families visited by, 165–166, 167, 167 Al Sa‘ud, Fahd (King), 42, 69, 95, 108, 109, 111, 163

Al Sa‘ud, Faysal (King), 56, 206, 211, 3, 4, 4, 6, 10, 13, 19, 42, 44, 49, 52, 81 First Five-Year Development Plan, 49 Kennedy (U.S. President) and, 19–20 Second Five-Year Development Plan, 52, 81 Al Sa‘ud, ibn Muhammad, 7 Al Sa‘ud, Imam ‘Abd al-Rahman, 7 Al Sa‘ud, Khalid (King), 37, 37, 52, 62, 64, 69 Al Sa‘ud, Muhammad ibn, 7 Al Sa‘ud, Sa‘ud (King), 174, 185, 196, 3, 6, 10–11, 19, 207 Aramcons and families reception hosted by, 207 Al Sa‘ud, Sa‘ud ibn ‘Abd al-‘Aziz Al-Zayd (Sa‘ud Al-Kuwaiti), 108 Al Sa‘ud, Turki ibn ‘Abd Allah, 7 Al Sa‘ud Dynasty, 5, 7, 7 Sa‘ud Al-Kuwaiti (Al Sa‘ud, Sa‘ud ibn ‘Abd al-‘Aziz Al-Zayd), 108 Saudi Arab Government (SAG), 162 Saudi Arabia, iv, xi, xii, xiii, xv, 46, 49, 54, 54, 131, 132, 135, 138, 206, ix. See also cross-cultural relationships; Eastern Province; Al Sa‘ud (Kings); Saudi Arabian Oil Co. (Saudi Aramco) frayed relationship with Aramco, 162–163, 165, 168 General Agreement of Participation, 41, 42, 45 modernization plans of, 210–211, 4, 163, 207 ownership of Arabian American Oil Co. (Aramco), 29, 40–41, 45–46, 64, 69, 159 stratigraphy of Eastern Saudi Arabia, 173 “swing producer,” 31–32 transformation of society, 54, 54, 56 Saudi Arabia (Twitchell), 39 Saudi Arabia-Kuwait Neutral Zone, 96, 138, 201 Saudi Arabian Marketing and Refining Co. (Samarec), 108, 109, 110, 110 Saudi Arabian Oil Co. (Saudi Aramco). See also Arabian American Oil Co. (Aramco); “Aramcons”; California Arabian Standard Oil Co. (Casoc); downstream operations; operations data; Saudi Arabia; upstream operations company leadership, 204–205 corporate air fleets, 140, 140 diversification, 92, 93, 95, 95, 96 employee identification badges, 80 logo, 136, 136 Oil Spill Contingency Plan, 104, 105 social responsibility evolution, 164, 164, 165, 165 Star Enterprise, 95, 95, 96 United States of America (USA) and, 153, 161, 189, 196 Saudi Arabian Tankers Co., Ltd. (Satco), 201 Saudi Arab Manpower Committee (SAMCOM), 64 Saudi Aramco. See Saudi Arabian Oil Co. Saudi Aramco Exhibit in Dhahran, 92, 92 Saudi Aramco Sino Co. Ltd. (SASC), 153 Saudi Aramco World, 170. See also Aramco World Saudi Basic Industries Corporation (SABIC), 92, 162 “Saudi Camp,” 13 Saudi Camp School, 110, 110, 113 Saudi Consolidated Electrical Co. (SCECO), 60, 60–61, 61, 62 Saudi Development Committee, 46 Saudi Electric Co., 62, 199, 199 Saudi-Kuwait Neutral Zone, 142, 197 Saudi National Guard, 20, 20, 105 Saudi Refining Inc., 124, 124 Saudi workers, 76, 76, 77, 77, 87, 89, 100, 101, 117, 117, 133, 136, 139, 139, 158, 160. See also workforce “Saudization,” 139, 139, 176, 46, 48, 63–64, 69, 73 scale of operations, 34, 36 Scandinavia, 194, 194 scanning electron microscope, 177, 177 SCECO (Saudi Consolidated Electrical Co.), 60, 60–61, 61, 62 Schloesslin, Jack, 76 scholarships, 180, 180, 192, 192, 193, 211, 212, 212, 213, 213, 47, 50, 50, 51, 111, 137, 164. See also education schools. See education and training Scottsdale, Arizona (USA), 42 Sea Island, Ras Tanura, 31, 31, 81, 81, 148–149, 149, 185 seawater injection system, 54, 55, 55 seawater treatment, 35, 35, 52, 82, 102, 152

index 233

232 index

Second Five-Year Development Plan, 52, 81 “seconding” (lending employees), 62 sedimentary rock, 74, 79, 79, 81, 87 sedimentologists, 177 seeps (oil seeps), 16, 16, 17, 18 Seflan, Ali, 178, 179 Seismic Camps, 18, 18 seismic technology, 106, 22, 22, 112–113, 114, 115, 118, 118, 119, 156 upstream operations, 170, 178 self-development, 135–137 “sell my quota,” 79, 80, 88–89, 91 Seminole, Oklahoma (USA), 23 semiskilled/skilled labor, 175–176 “senior” category, 159, 165 senior staff camp, 165 Seoul University (Republic of Korea), 134, 134 “Sewage Acres” (Victory Gardens), 112, 113, 115, 115 Al-Shahrani, Saeed H., 139, 139 Shaikh, Noora, 152, 152 Shakespear, William (Captain), 6, 7 Al-Shalfan, ‘Abd al-‘Aziz, 80 Shanghai, 153 Shari‘ah (Islamic law), 54, 7 al-Sharq Hospital in al-Khobar, 181 Shauby (driver), 67, 67 Shaybah, 16, 18, 77, 89, 98–99, 119–120, 121, 122–123, 123, 125, 129, 129, 137, 138, 144, 150, 152 upstream operations, 177, 177, 182, 182 Shaykh of Kuwait, 5, 7 Shedgum. 145, 145, 146, 174, 174, 31, 49, 53, 53, 57, 58, 63, 81, 87, 89, 158 downstream operations, 185 operations data, 199, 199 Sheikh, Salwa S., 151, 151 Shell in Jubail (SASREF), 188–189, 189 Shell Oil Co., 79, 40, 108, 124, 124 Al-Shihabi, Nadia, 59 shipping, 77, 83, 83, 108, 108, 155, 158, 158 downstream operations, 191 operations data, 196 Showa Shell Sekiyu K.K., 153, 157, 157 Showa Shell Solar (Solar Frontier K.K.), 161 shrimping, 23, 23 Shubukshi, ‘Abd Al-Majid, 64, 64 Sidon, 131, 132, 133, 133, 134, 135, 157, 33 Sidon price claims, 7, 10, 19 Signal Hill, California (USA), 23 Silicon Valley, California (USA), 77 Silurian age, 170, 170 silver riyals, 195, 195, 210, 10, 10 Sinai Desert, 204, 20 Sinclair Exploration Co., 47, 47 Al-Sindi, Badria, 59 Singapore, 153, 162 single-point moorings (SPM), 186 sinkholes, 79, 79, 82 Sinopec Corp., 141, 153 Sinopec SenMei (Fujian) Petroleum Co. Ltd. (SSPC), 153, 157, 157 Sino Saudi Gas Limited, 141 Sirius Star (tanker), 155 Six-Day War, 20, 20, 22 60/40 profit sharing, 4 Skinner, E. A. “Ed,” 30, 30, 43, 81 skyhook, 133, 135, 135 slugs, 183 “smart” wells, 144, 181 Smith, Ernest, 76 Smith, Felix T., 130 Snamprogetti, 147 Snyder, Harry R., 174, 174, 175–176, 177 Snyder, Les, 137 Snyder, Thorn, 52

Socal. See Standard Oil Co. of California soccer, 138 social responsibility evolution, 164, 164, 165, 165 Societe Franco-Iranniene Des Recherches, 47, 47 Societe Industrielle Des Asphaltes Et Petroles De Lattaquie, 47, 47 Society of Exploration Geophysicists, 145 Socony-Vacuum Oil Co. (Standard Oil Co. of New York), 29, 129. See also Arabian American Oil Co. (Aramco) “soft” side of business, 155, 186, 135, 135 S-Oil Corp. (SsangYong Oil Refining Co.), 107, 107 Solar Frontier K.K. (Showa Shell Solar), 161 solar power, 161 Al-Somali, Ahmad “Mussolini,” 77, 77 Sorbonne in Paris, 5 source rock, 174 sour gas, 183 sour oil, 152, 153 South Africa, 138, 78 Southampton, England, 104 Southeast Asia, 112 Southern Area Oil Operations, 82, 89, 142 Southern Area Producing, 46 Southern Area Projects, 128 South Pier, Ras Tanura, 185 South Rub‘ al-Khali Co. Ltd. (SRAK), 141 Soviet Union (Russia), 5, 8, 18, 20, 21, 21, 40, 119, 171, 193, 204, 4, 20, 43, 70, 141 Al-Sowayigh, Saleh, 148 Spain, 141, 182 Special Clerical Training Center, 59, 59 Speers, Peter C., 149, 163, 207, 7, 7 Spindletop, Texas (USA), 23 spiral cable-drill bit, 82, 82 SPM (single-point moorings), 186 spudding, 73, 76–78, 144 SRAK (South Rub‘ al-Khali Co. Ltd.), 141 SsangYong Oil Refining Co. (S-Oil Corp.), 107, 107 SS Exochorda, 69 SSPC (Sinopec SenMei (Fujian) Petroleum Co. Ltd.), 153, 157, 157 “stabbing board,” 82, 82, 100 stabilization facilities, 182 Stalin, Joseph, 119 Standard Oil Co. of California (Socal), 19, 20, 22, 24, 24–25, 25–26, 26, 27, 28, 29, 30, 34, 39, 41, 42, 43, 46–47, 47, 48, 48, 49, 50, 51, 51, 52, 55, 56, 56, 57, 57, 61, 63, 78, 79, 81, 86, 87, 98, 104, 128, 129, 130–131, 142, 16, 42, 69, 166, 205. See also Arabian American Oil Co. (Aramco); California Arabian Standard Oil Co. (Casoc); Texas Co., The (Texaco) war years (World War II), 98, 104 Standard Oil Co. of New York (Socony). See also Arabian American Oil Co. (Aramco); Standard Oil of New Jersey (Jersey, Exxon), 22, 129, 130, 131, 138 Standard Oil of California (Chevron), 29. See also Arabian American Oil Co. (Aramco) Standard Oil of Indiana, 23 Standard Oil of New Jersey (Jersey, Exxon). See also Arabian American Oil Co. (Aramco); Standard Oil Co. of New York (Socony), 20, 22, 26, 129, 130, 131, 138, 200, 4, 5, 29, 36, 39, 41, 42, 64, 109, 125 Stanford University (USA), 72, 212, 49, 77 Stapleton, T. “Vic,” 129 Star Enterprise, 95, 95, 96 Statfjord, 80, 80 steel from USA for construction, 115, 121, 121, 125, 131, 132, 132 Steel Worker (cargo ship), 140–141, 140–141 Stegner, Wallace, 100 Steineke, Florence, Maxine, and Marian, 83 Steineke, Max, 24, 24, 63, 72, 73, 73, 74, 75, 75, 79, 81–82, 84, 84, 85, 87, 89, 102, 103, 104, 105, 105, 106 legacy, 156–157 “stepout,” 146 Stewart, Jim, 149 stock market (USA), 37, 37 Stoner, R. C., 204, 205 Strait, Donald, 179, 179

stratigraphic petroleum traps, 174, 174 striking workers, 158–159, 160, 161, 184–186 structural petroleum traps, 174 structure drilling, 81, 180 study-abroad program, 190, 190 Al-Subaey, Ahmed A., 153 Al-Suba‘y, Wasib, 185 subjects (providing for) goal of King ‘Abd al-‘Aziz, 3–4, 14, 37, 39, 90, 111, 120 submarine loading lines, 90, 33, 33 submarine pipeline, 143 succession planning system, 48 Suez Canal, 18, 94, 94, 120, 131, 196, 203–206, 210, 10, 23, 33 Sulaiman, ‘Ali ibn Ahmad, 154, 154 Sulaiman, Jasim ibn Muhammad, 154, 154 Sulaiman, Shaikh Abdulla, 138 Al-Sulayman, ‘Abd Allah, 34, 34, 50, 52, 52, 53, 53, 55, 56, 56, 90, 101, 142, 146, 146, 148, 162, 173 sulfur, 139, 139, 158, 183, 199 Sultan of Najd and Its Dependencies, 3. See also Al Sa‘ud, ‘Abd al-‘Aziz ibn ‘Abd al-Rahman (King) Sumatra, 18, 23 Sumitomo Chemical Co., Ltd., 163, 188, 192 Sun and Flare, 158 Al-Sunayyin, Muhammad, 63 supertankers, 135, 205, 205, 23, 31, 31, 100, 100, 108, 108, 148–149, 149 downstream operations, 186, 186 Supplement Agreement, 98, 104, 127, 68, 95 supply and demand, 125–126, 128, 5, 23, 31, 32, 38, 95, 118, 124, 128, 134, 142, 143, 152, 153, 160, 161 Supply and Transportation, 104, 108 suq (open-air market), 6, 6, 9, 10, 10–11, 38, 38, 184, 184, 185, 185 suspicion of outside influence by King ‘Abd al-‘Aziz, 5, 14, 16, 35, 55, 98 Sutherlen, George, 108, 108 SWCC (Saline Water Conversion Corp.), 199, 199 “sweet” crude, 143 sweetening, 190 sweet gas, 183, 199 “swing producer,” 31–32 Sydney Powers Award, 147 Syria, 8, 8, 36, 131, 132, 134, 191, 196, 20, 22, 33, 38, 42, 43, 44 T Taher, Abdul Hady, 7, 7 Tahir, Sa‘id M., 46 Taibah, Mahmoud, 190, 190 Al-Taifi, Haifa, 59 Taiwan, 153, 157 Tamayshah, 39, 39 Al-Tamimi, ‘Ali, 181, 182, 182, 183 Tampico, Mexico, 23 Tanajib, 81, 86, 86, 105, 157 tank crew (Saudi), 103, 103 tankers, 90, 131, 143, 204, 204, 205, 205, 23, 33, 33, 81, 81, 83, 83, 108, 155 downstream operations, 185, 191 Tanner, Lawrence “Larry,” 16, 63 Tapline. See Trans-Arabian Pipeline Tariki, Abdullah H., 207, 210, 210, 211, 211, 4, 6, 7 Tarut Bay, 157, 160, 160 Tarut Island, 62, 73, 165, 165 Al-Tawil, Aus, 117, 117 taxes collected by USA on Aramco‘s operations, 197, 198, 200 Tayif, 8, 41 Taylor, Lee, 169, 169 Taylor, William F., 29 Al-Tayyar, Haytham Ahmad, 117 team sports, 138, 138 technological achievements of Saudi Aramco, xi technological advances, 23, 144–146 technology transfer, 19–20 technology updates, 112–113 tectonic plates and oil, 74, 75 Tehran Agreement, 39–40

telephone exchanges, 142 television, 158, 172, 177, 177, 19 Temple High School, Philadelphia (USA), 72 temporary housing, 88, 88, 78 terminals, downstream operations, 185–186 Test of English as a Foreign Language (TOEFL), 71 Texaco. See Texas Co., The Texas (USA), 23, 41, 124, 182 Texas A&M College (USA), 137 Texas A&M University (USA), 14, 145, 146 Texas Company, The (Texaco), 48, 78–79, 95, 124, 128, 129, 130–131, 164, 177, 29, 41, 42. See also Arabian American Oil Co. (Aramco); Standard Oil Co. of California (Socal) Texas Eastern Engineering Ltd., 52 thawbs, 102 theodolites, 85 thermal cracking, 23 thermal cracking, refining process, 187 Thomas, John “Johnny,” 102, 103 three-dimensional technology, 113, 113, 114, 115, 118, 118, 119, 156 upstream operations, 168, 168, 178–179, 179 thumper (vibroseis) trucks, 113, 113 Thuwal, 163 Tigris River, 18, 69 Time magazine, 191, 19 Titusville, Pennsylvania (USA), 19, 23 TOEFL (Test of English as a Foreign Language), 71 Tokyo, 98, 153 Tokyo Stock Exchange, 38, 38 toluene, 192, 193, 193 Total Fina, 125 Total of France, 141, 153, 189 Total Quality Management, 127 Total Refining and Petroleum Co. (SATORP), 188–189 TPC. See Turkish Petroleum Co. (TPC) trachoma, 180 Tracy, Bill, 169, 169 Tracy, Frank, 80, 80, 15 Tracy, Frank William, Jr. “Bill,” 15 Tracy, James R. and Claudia, 77 Tracy, Margret, 15, 15 traditional Saudi attire, 63, 63 Traffic Safety Signature Program, 165 Training, 213 training. See education and training Training and Career Development, 34, 46, 77 train system, 136–137, 137, 140 Trans-Arabian Pipeline (Tapline), 122, 122, 128, 129, 131–135, 136, 182–184, 191, 193, 196, 203, 205, 4, 7, 10, 33, 33, 38, 62 Transjordan. See Jordan Translation, 75 Transportation, 77 traps, 170, 174, 174 travel difficulties in Saudi Arabia, 61, 62, 62, 63 traverse map, 69 Treaty of ‘Uqayr (1922), 14 Tri District Quiz (TV show), 177 “true Saudization,” 46, 48 Truman, Harry (U.S. President), 143, 171 Al-Tu‘aimi, Saleh A., 47, 47 Tufley, Ralph, 168, 168 Tulsa, Oklahoma (USA), 23 Turaif, 134 Turaiki, Saad A., 82, 142 Turkey, 20, 21 Turkish Petroleum Co. (TPC), 17, 17, 21, 22, 22–23, 26, 47, 47 Tuwaiq Escarpment, 79, 79, 81 Tuwaiq Mountains, 102 Twitchell, Karl S., 15, 15, 32, 32–33, 36, 37, 39, 39, 41, 43, 43, 46, 47, 48, 49, 50, 50, 201 Twitchell, Nona, 48

index 235

234 index

U ‘Udhailiyah, 44, 44, 82 ‘Ujman tribe, 85 al-‘Ula, 176, 176 ULCCs (ultra-large crude carriers), 108 ultimate recovery, 114–118 ultra-large crude carriers (ULCCs), 108 Um Er Rus (Umm al-Rus), 71 Umm al-Qura, 56, 98 Umm al-Qura University, Makkah (College of Shari‘ah), 173 ‘Unayzah, 52 “undulating plateau,” global oil production, 135 United Arab Emirates (UAE), 206 United Arab Republic, 5 United Kingdom, 35, 104 United Nations, 131, 132, 196, 206 United States of America (USA), 6, 20, 21, 22, 24, 29, 43, 48, 56, 62, 68, 96, 97, 114, 114, 115, 119–120. See also Arabian American Oil Co. (Aramco); California Arabian Standard Oil Co. (Casoc); cross-cultural relationships; Texas Co., The (Texaco); (World War II); specific Standard Oil companies ‘Abd al-‘Aziz’s (King) view of Americans, 55 automobiles, 19, 19, 23, 126 conservation efforts, 80 crude oil reserves, 22–23 diplomats in Saudi Arabia, 127, 127 domestic supply-demand gap for oil, 31 fuel efficiency standards, 40 gasoline rationing in, 114, 114, 126 gasoline shortages, 43, 43 Great Depression, 13, 24, 29, 40, 44, 52, 54–55, 89, 120 Gulf War casualties, 103 importer of oil, 126 oil discoveries in, 23 oil producer, 70 refining and marketing alliance, 124, 124 Saudi Arabian Oil Co. (Saudi Aramco) and, 153, 161, 189, 196 taxes collected on Aramco’s operations, 197, 198, 200 University of Cairo, 207, 7, 141 University of California, Irvine (USA), 33 University of California at Berkeley (USA), 68, 149 University of Damascus, 13 University of Edinburgh, 172 University of North Carolina (USA), 77 University of Petroleum and Minerals (College of Petroleum and Minerals), 173, 173, 179, 13–14, 20, 48, 72, 72, 74, 142, 157 University of Riyadh (King Sa‘ud University), 173 University of Southern California (USA), 77 University of Texas (USA), 208–209, 145 University of Tulsa, Oklahoma (USA), 88 upstream operations, 93, 170–183. See also downstream operations; operations data drilling and reservoir engineering, 180–181 exploration, 176 fossil record, 176–177 gas production and processing, 182, 183 geological timeline of Saudi Arabia, 172 oil, origins of, 74–75, 170–171 oil and gas fields of Saudi Arabia, 175, 175 oil production and processing, 182 petroleum traps, 170, 174, 174 reservoir characterization, 179 reservoir nano-agents (resbots), 180 seismic imaging, 178 stratigraphy of Eastern Saudi Arabia, 173 Upstream Professional Development Center, 179 al-‘Uqayr, 3, 5, 8, 9, 63, 65 al-‘Uqayr (Uqayr Conference), 3–4, 4, 12, 12 al-‘Uqayr agreement, 14–16, 35, 42, 43 Urdu, 196 U.S. Army, 77

U.S. Construction Industry Institute, 126 U.S. Consulate, 116, 119, 119, 127, 127, 22 U.S. National Security Council, 201 U.S. Navy, 19, 115, 125–126, 162, 82 U.S. State Department, 198, 199, 200 U.S. Treasury Department, 200 USA. See United States of America (USA) USS Murphy, 120 USS Quincy, 94, 94, 120 Utah (USA), 182 Al-Utaibi, Dhaifallah A. F., 63, 104, 105, 108, 112 Al-‘Utayshan, ‘Abd Allah, 206 ‘Uthmaniyah, 146, 82, 87, 89, 102, 158, 199, 199 V value engineering, 128 Van Leeuwen, I.J.S., 53, 53 Van Peursem, Bob, 149 Vardinoyannis family, 107 Vedakumar, Vedamuth J., 139, 139 Vela (sails), 83 Vela International Marine Limited, 77, 83, 83, 108, 108, 155, 158, 158, 191, 196 Venezuela, 23, 24, 138, 198, 4, 5, 22–23, 78, 133 Versailles Peace Conference in 1919, 40 very large crude carriers (VLCCs), 83, 83, 108, 155, 191 vibroseis (thumper) trucks, 113, 113 vice president of Aramco, first Saudi, 46, 46 Victory Gardens (“Sewage Acres”), 112, 113, 115, 115 Vidal, F. S. “Rick,” 149 visbreaking, refining process, 187 vision of King ‘Abd al-‘Aziz, 166 VLCCs (very large crude carriers), 83, 83, 108, 155, 191 volatile organic compounds, 124 volunteerism, 164, 164 W Wadi al-Sahba, 102–103, 103 Wadi Muhrim, 41, 41 Wadi Nisab, 75, 75 wadis (riverbeds), 39, 150 al-Wafrah, 201 wages, 157, 158, 160, 184, 185, 186, 195, 195 Wahbah, Hafiz, 210, 211, 211 Al-Wahhab, Shaykh Muhammad ibn ‘Abd, 7, 149 War Production Board in Washington, D.C. (USA), 128, 129 warrior skills of King ‘Abd al-‘Aziz, 3, 5 Washington, D.C. (USA), 148, 196, 213, 160 wastewater recycling, 109 water importance, 15, 15, 39, 40, 40, 41, 41, 43, 43, 134, 136, 136, 137, 170 water injection wells, 180 water testing, 179, 179 Weathers, L. T. “Stormy” (Colonel), 120 Web-based Operator Training Simulation, 136 Webster, Ken, Mildred “Mimi,” Susan, and Judy, 164, 164 Weekly Caravan, The (Al-Qafilah al-Usbu‘iyyah), 158 Well No. 7 (Dammam Dome), 76, 76, 78, 82, 83, 84, 86, 87, 87, 89, 90, 95, 99, 105, 74, 74, 166 Well Samples and Laboratory Unit (Core Store), 117, 117 Western culture. See cross-cultural relationships (Saudi and Western) Western wear, 102, 102 Westhampton, New York (USA), 151, 151 West Texas (USA), 23 West Texas Intermediate (WTI), 89, 162 Weyburn-Midale CO2 Monitoring and Storage Project, 158 whale oil, 17 Whipple, Sam, 164, 169, 169 White, Allen C., 24, 24, 63, 63, 64, 71 White House, Washington, D.C. (USA), 190, 190 Wickstrom, Butch, 100 wildcatters, 76 wildcat wells, 180

wildlife rescue operations, 106, 106 Williams, Guy “Slim,” 73, 73, 76 Williams Brothers, 134 Williamsport, Pennsylvania (USA), 138 Wilson, Ivan, 108, 108 Wilson, Woodrow (U.S. President), 36, 40 wire-line logs, 170 Witherspoon, Erma and Marilyn, 83, 83 women, professional, 75, 75, 77, 151, 151–152, 152, 158, 158. See also girls’ education first professional, 13, 13 Woods Hole Oceanographic Institution, Massachusetts (USA), 164 workforce, 115–116, 118, 119, 119, 120, 120, 33–34. See also expatriate workforce; Italian workers; Saudi workers history, 202–203 labor unrest, 158–162, 184–186 reduction, 108–111, 115, 10, 23, 79–81 wages, 157, 158, 160, 184, 185, 186, 195, 195 workman’s compensation, 101 World Bank, 126, 204 World Oil Awards, 180 World War I, 6, 8, 8, 19–20, 23, 29, 36, 135 World War II. See war years (World War II) WTI (West Texas Intermediate), 89, 162 X Xiao, Jin Jiang, 145, 145 xylenes, 192, 193, 193 Y Yalta Conference, 119 al-Yamamah, 172 Yamani, Ahmed Zaki, 7, 7, 10, 13, 22–23, 24, 24, 37, 37, 38, 39, 41, 42, 45, 46, 48, 63, 64, 69, 89 Yanbu‘, xv, ix, 54, 57, 58, 100, 100, 108, 150, 153, 158 downstream operations, 185, 186, 188, 189, 190 operations data, 198, 198, 199, 199 Yasin, Yusuf, 50, 53, 53 Yassin, Shaikh Yusuf, 162 “Year of Innovation,” 137 “Year of Self-Development,” 136 Yemen, 36, 36, 37, 69, 79, 113, 142 Yergin, Daniel, 135 Yokohama, 40, 40 Yokoyama, Masayuki, 97 Youngstown State University, Ohio (USA), 72 Younis, Mohammed, 81, 81 Youth Welfare Presidency, 94 Yushatly, Martes, 88 Z Zagros Mountain, 75 Al-Zaid, Salih Sa‘d, 159, 159 Al-Za‘im, Husni, 132, 191 al-Zamil Heavy Industries, 147 Zarka, 33 Zauruk (tanker), 155 Al-Zawawi, Yousef, 183, 183 Zeeco, 89 Zinola, Ed, 35 Zuluf, 16, 36, 52, 58, 58, 82, 86, 103, 103

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238 energy to the world : Volume two

endnotes 239

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