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Saudi Arabian Oil Company Consolidated financial statements forResilience the year ended December and agility 31, 2020 Annual Report 2020 01 Independent auditor’s report to the shareholders of Saudi Arabian Oil Company Report on the audit of the consolidated financial statements Our opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of Saudi Arabian Oil Company (the “Company”) and its subsidiaries (together the “Group”) as at December 31, 2020, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards, that are endorsed in the Kingdom of Saudi Arabia, and other standards and pronouncements issued by the Saudi Organization for Certified Public Accountants (SOCPA). What we have audited The Group’s consolidated financial statements comprise: • the consolidated statement of income for the year ended December 31, 2020; • the consolidated statement of comprehensive income for the year ended December 31, 2020; • the consolidated balance sheet as at December 31, 2020; • the consolidated statement of changes in equity for the year ended December 31, 2020; • the consolidated statement of cash flows for the year ended December 31, 2020; and • the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information. Basis for opinion We conducted our audit in accordance with International Standards on Auditing, that are endorsed in the Kingdom of Saudi Arabia. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Group in accordance with the code of professional conduct and ethics, endorsed in the Kingdom of Saudi Arabia, that are relevant to our audit of the consolidated financial statements and we have fulfilled our other ethical responsibilities in accordance with these requirements. PricewaterhouseCoopers, License No. 25, Saudi Aramco, P.O. Box 1659, Dhahran 31311, Kingdom of Saudi Arabia T: +966 (13) 873-6800, F: +966 (13) 873-8883, www.pwc.com/middle-east 02 Independent auditor’s report to the shareholders of audi raian il opany (continued) ur audit approach Overview • e etermine overal Group materiaity tain nto acount the proit- orente nature o the Group. • Base on inome eore income taes an akat o SAR 372.4 billion, e Materiality determne our overal Group materiaity at AR 14.2 billion. • ur uantitative threshold or reportin msstatements to those hare with oernane as set at SAR 1. billion. Base on ther sie omplety an rsk: • e consere the Company’s standalone operations and our other components ocate n the Kindom o audi raia, the Unte tates of Group scoping Amerca an the epublic o orea as snificant to the Group audit an • e aso determine a number o other omponents to be in sope or the Group audit, in respet o hich appropriate audit proeures ere perorme. Key audit ur ey audit matters omprse the olowin: matters • Accountin or the aquisition o audi asic nustres Corporation (“SABIC”); an • Assessment o reoveraility o the goodwill an ran reonise as part o the ABIC aquiston. As part o esnin our audit, e etermne materality an assesse the rsks o matera msstatement in the onsolidate nania statements In particular, e onsere here the Boar o iretors mae subective uments or eample in respet o signficant acountin estimates that nolve making assumptions an onsidern uture eents that are inherently unertain s in al o our audits e aso adresse the rsk o manaement override o nterna ontros nludin amon other matters, conseration o hether there as evidene o ias that represente a rsk o matera msstatement ue to raud. Materiality The sope o our audit as inuene y our application o materaity. n audit s desine to obtan reasonale assurane hether the onsolidate finania statements are ree from materia msstatement. Misstatements may arise due to raud or error They are consere matera if, inividualy or n areate they cou reasonaly be epete to inuene the eonom desions o users taen on the asis o the consolidate nania statements Base on our proessional ument e etermined ertain quantitative thresholds or materaity, inludin the overal Group materaity or the consolidate nania statements as a whole as set out in the tale beow. These, toether th uaitative considerations heped us to etermne the sope o our audit an the nature timn an etent o our audit proeures an to evauate the eet o msstatements, oth inividualy an n aggreate on the onsolidate nania statements as a hole. 2 03 Independent auditor’s report to the shareholders of audi raian il opany (continued) Overall Group SA 14.2 billion (2019: SA 26.3 billion) materiality How we Approimately 4% of inome eore inome taes and aat determined it Rationale for the materiality Inome eore inome taes and akat is an important enhmark or the Group’s benchmark staeholders and is a enerally acepted benhmar or proit-oriented grops. applied e areed ith those chared ith oernane that e old report to them misstatements identiied durin our adit aove SAR 1. billion. How we tailored our Group audit scope e tailored the sope o our adit in order to perorm sicient ork to enale s to proide an opinion on the onsolidated finanial statements as a hole, takin into acount the strcture o the rop, the acountin proesses and ontrols and the industry in hich the rop operates The Group’s operations are onducted throh many components in seeral parts o the orld. he most siniicant omponent ithin the rop is the Company itsel and most of the adit eort as spent y the rop enaement team ased in hahran, indom o Sadi Arabia he rop enaement team tested IT eneral ontrols application and manal ontrols over systems and proesses related to the Company’s inanial inormation spplemented y tests o detail and analytical proedures. Certain adit proedures ere arried out y the Grop enaement team ith assistane rom internal acountin, valuation, pension ta and IT eperts and speialists The rop enaement team also oordinated the or done by the various omponent teams aross dierent locations and perormed adit proedures on the consolidation orkins and dislosres. e identiied for additional siniicant omponents where a full sope adit on the respective components’ inanial inormation as perormed under our instructions emers o the Grop enaement team perormed the ll sope adit o the siniicant omponent located in hahran, Kindom o Sadi Araia Component teams in Riyadh, indom o Sadi Araia the United States o America and the epublic of Korea perormed full sope adits o the omponents at those locations e also reuested certain other component teams to perorm appropriate adit proedures. The seletion o these omponents as ased on ualitative and uantitative considerations inludin hether the component acounted or a siniicant proportion o individual onsolidated inancial statement line items The Group engagement team’s involvement in the adit or perormed y component teams considered the relative siniicane and compleity of the individual omponent his inluded allocatin overall Grop materiality to the dierent omponents sendin ormal instrtions obtainin regular updates on proress and reslts o proedures as ell as revie o deliverales and the releant underlyin oring papers. Key audit matters Key adit matters are those matters that, in our proessional dgment, ere o most sinificane in our adit o the onsolidated inanial statements o the current period. hese matters ere addressed in the contet o our adit of the consolidated inanial statements as a hole and in ormin our opinion thereon and e do not proide a separate opinion on these matters 3 04 Independent auditor’s report to the shareholders of audi raian il opany (continued) Key audit matter How our audit addressed the key audit matter Accounting for the acquisition of SABIC The Company acquire a 70% euity interest in ur proceures include the olloing SABC in une 020. • e rea the share purchase agreement an The total purchase consieration as AR 259.1 teste the appropriateness o the air value o the billion or acquisition o identiiale net assets ith purchase consideration. preliminary air values o AR 60.7 illion. on- controlling interests o AR 00.7 illion an • e assesse the competency obectivity an goodill of AR 99.1 illion ere recognise as inepenence of the inepenent valuer part o the transaction engage y the Group. The acquisition as accounte or in accorance • ith input rom internal valuation eperts with IFRS 3 ‘Business Combinations’, that is (where considere necessary, e perorme the enorse in the Kingom o audi raia, an olloing proceures, in relation to the reuire management to make signiicant preliminary air values of the identiiale net estimates as part of determining the preliminary assets that orme part of the purchase price air values o the identiiale assets acquire an allocation, as eeme appropriate liailities assume. - Consiere the appropriateness o the The Group engage an inepenent valuer in orer methoology an assumptions use in to etermine the air value o the purchase determining the preliminary air values consieration an the preliminary air values that base on the applicale inancial reporting orme part o the purchase price allocation reuirements an established maret practice; e consiere this to e a key audit matter given - Compare certain key unoservale inputs the significant estimates involve in determining unerlying the preliminary air values to the preliminary air values o the identiiale assets supporting ocumentation such as approve acquire an liailities assume inancial plans an - Evaluate the reasonaleness o certain Reer to ote 2(e) and ote 4 to the onsolidated observale inputs anor the resulting finanial stateents or urther inoration preliminary air values base on comparale maret ata.

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