DOCSLIB.ORG

The Role of Saudi Arabia in the World Oil Market 1974

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
The Role of Saudi Arabia in the World Oil Market 1974 THE ROLE OF SAUDI ARABIA IN THE WORLD OIL MARKET 1974-1997 Thesis submitted for the degree of Doctor of Philosophy at the University of Surrey Department of Economics , by Nourah AbdulRahman Al-Yousef April 1998 ABSTRACT The Role of Saudi Arabia in the World Oil Market : 1974-1997 The importance of Saudi Arabia in the oil market is evident, but the motivations that contribute to the making of its oil policy are less clear. The primary purpose of this study is to fmd the framework that accounts for as many facts as possible, and in some cases to determine their influence on Saudi oil policy. This will be done through examining important factors affecting Saudi oil policy in the international market and analysing the oil-related decisions, that were formulated by the Kingdom of Saudi Arabia. These critically important decisions, such as how much oil to produce and at what price, are discussed in the light of views and information from prominent Saudi decision makers, Saudi officials, and international economic analysts, and compared with what has been revealed by the literature and the evidence of the market, to draw a conclusion about the Kingdom's oil policy. A review of the political structure and the process of oil policy decision making is made to provide an understanding of the process in Kingdom of Saudi Arabia. Fundamental changes in the world oil market, have been reflected in oil price volatility. Accordingly, a price that takes these changes into account must be found. Therefore, issues and concepts related to the price of oil are discussed and the time series to be included in the model is determined. By testing hypotheses of the Saudi role in the oil market we have reached a conclusion that its oil policy seeks to maintain oil as a viable longterm source of energy. This comes from the long life expectancy of Saudi oil reserves. Consequently, Saudi Arabia is following an oil policy that optimises the long- term value of its reserves, protects its share of the market and keeps oil prices stable by pursuing an economically rational strategy. Thus, Saudi Arabia played the role of swing producer between 1975 and 1985 to maintain stable oil prices, and by 1987 it had resorted to market sharing behaviour to maintain its share in the market. These two models were tested through multivariate system analysis using the Johansen procedures and testing of the time series properties such as seasonality, stationarity, exogeneity and cointegration. I would like to express my deep and sincere gratitude to His Excellency Sheikh Ahmad Zaki Yamani for his generosity with his time and his explanation of decisions taken when he was the Minister of Petroleum (1962-1986) in the Kingdom of Saudi Arabia. Also I would like to thanks His Excellency Minister of Petroleum in the Kingdom of Saudi Arabia (1986-1995). Sheikh Hisham Nazer, for time and help in allowing me access to information and to interview people in the Ministry. He took the time to answer questions about the period when he was Minister of Petroleum and Mineral resources. Thanks are due to Mr. Suliman Al-Herbish the Saudi Arabian Governor to OPEC, for his comments and suggestions, Mr. Farouk Al-Husseini the advisor to Saudi Arabia's Ministry of ,Petroleum and Mineral Resources from 1957-1996, for his time in providing detailed answers to my questionnaire Mr. Ian Seymour the Editor of the Middle East Economic Survey in Cyprus, allowed the use of the MEES files and answered questions that helped in clarifying some aspects of the oil market. I would like to thank him and also Dr. Walid Khaduri for his time and information and for arranging my visit to MEES. vi My thanks also for His Excellency Dr. Khlid Al-Angary, the Minister of Higher Education in Saudi Arabia for his support for higher education which enabled many Saudi female students from entering different graduate programs both in Saudi Arabia and abroad. Thanks goes King Saud University for granting me the scholarship for my graduate study and to the Saudi education attache in London, Mr. Abdullah Al-Nasser for his concern for students. Many thanks to all my family especially my mother, brothers Fahad and Nasser and to all friends and colleagues who had helped me to accomplish this work also Last but not least, I express my deep gratitude to my husband Professor Saad Al- Rajeh, my children Dalal, Mohammed and Yazeed for their encouragement, support, patience and endurance, during a long and exhausting process. Without them, it would not have been possible to accomplish this work. I dedicated this work to My Husband, Professor Saad Al-Rajeh, and my children Dalal, Mohammed, and Yazeed viii Chapter TABLE OF CONTENTS Page 1 INTRODUCTION 01 -05 1.1 The Methodology 02 - 02 1.1.1 Interviews and Institutional Evidence 02 - 03 1.1.2 Econometric Analysis 02 - 02 1.2 Plan of the Study 03 - 05 2 PETROLEUM POLICY MAKING PROCESS 06 - 35 2.1 Introduction. 06 - 09 2.2 The Political Structure 09 - 13 2.2.1 The King 09 - 10 2.2.2 The Council Of Ministers 11 - 12 2.2.3 Consultative Council 12 - 13 2.3 The Structure of Oil Policy Decision Making 13 - 19 2.3.1 The Ministry of Petroleum and Mineral Resources 13 - 17 2.3.2 Supreme Petroleum Council 17 - 19 2.4 Saudi Aramco 20 - 28 2.4.1 The Development of the Fiscal Relationship Between Aramco and the Saudi Government... 20 - 24 2.4.2 Decision Making in Saudi Armco 24- 27 2.4.3 The Vertical Integration of Aramco 29 - 31 2.5 Other Saudi Oil Related Companies and Organisations 28 - 29 2.5.1 Petromin 31 -32 2.5.2 Sabic 33 - 33 2.6 Conclusion 33 - 33 3 ANALYSIS OF SAUDI ARABIA'S OIL DECISIONS 36 - 84 3.1 Introduction 33 - 38 3.2 Price Fixing Regime, Jan.1974- Feb. 1982 38 - 60 3.2.1 Price Stability from 1974 to November 1978 39 - 44 3.2.2 The Crisis Period 1978-1981 47 - 60 3.3 Fixing Ceilings, Quotas and Prices, March 1982-August 1985 60 - 67 3.4 From defence of Prices to defence of Market Share 1985-1987 67 - 74 3.5 Volume Fixing, Flexible Pricing 1988- Present 72 - 80 3.6 Conclusion 81 - 82 4 ECONOMIC MODELS OF OPEC BEHAVIOUR AND THE ROLE OF SAUDI ARABIA 85 - 126 4.1 Introduction 85 - 87 4.2 Models that do not Recognise Saudi Arabia's Role. 87 - 97 ix 4.2.1 The Monolithic Cartel 87 - 90 4.2.2 The Competitive Model 92 - 95 4.3 Models that Address Saudi Arabia's Role 97- 104 4.3.1 OPEC as a Cartel with Different Groups 98- 100 4.3.2 Dominant Producer Model with Saudi Arabia as the Swing Producer 102-104 4.4 Other Models of OPEC Behaviour 105-115 4.4.1 Property Rights Model. 105-108 4.4.2 Target Capacity Utilisation Model 108-111 4.4.3 The Fiscal Constraint Model 111-115 4.5 Econometric Testing 116-121 4.6 Political Interpretation of Saudi Arabia's Behaviour 122-124 4.7 Conclusion 124-125 5 THE SWING PRODUCER AND MARKET SHARING MODELS 127-139 5.1 Introduction 127-130 5.2 The Swing Producer Model (1975-1986) 130-136 5.3 Market Sharing Model (1987-1996) 136-138 6 OIL PRICES AND PRODUCTION DATA 140-152 6.1 Introduction 140-141 6.2 The Categories of Crude 141-142 6.3 Structure of Prices 142-15 6.3.1 Posted Prices 142-143 6.3.2 GSP Government Selling Prices 143-143 6.3.3 Spot Prices 143-143 6.3.4 Spot - GSP Relation 144-144 6.3.5 Netback Pricing 145-145 6.3.6 OPEC Reference Basket Prices 146-146 6.3.7 Market Related Formula Prices 146-148 6.4 The D'ata 148-151 6.4.1 Oil Prices Data 148-150 6.4.2 Production Data 150-150 7 THE ECONOMETRIC METHODOLOGY 153-176 7.1 Introduction 153-153 7.2 Stationary and non-Stationary Time Series 153-160 7.3 Testing for Unit Roots and Stionarity 157-159 7.3.1 The Dickey Fuller Test 159-160 7.3.2 Structural Change and Unit Roots 157-162 7.4 Cointegration 160-164 7.4.1 Order of Integration 160-161 7.4.2 Error Correction Mechanism 161-163 7.4.3 Cointgration and Granger Causality 163-164 7.5 Seasonality 164-168 7.5.1 Definition of Seasonality 164-165 7.5.2 Test for Seasonality 165-166 7.6 Testing for Cointegration 169-175 7.6.1 Engle and Granger two Step Procedure ....... 169-170 7.6.2 Cointegration in Multivariate Systems 170-170 7.63 The Johansen Approach 171-175 7.7 Conclusion 175-176 8 EMPIRICAL ANALYSIS 177 -201 8.1 Introduction 177-177 8.2 Variables of the Study 177-178 8.3 Descriptive Statistics 178-178 8.4 Testing the Properties of the Time Series 179-182 8.5 Tests for Unit Root and Stationarity 183-183 8.5.1 The Dickey Fuller Test 183-184 8.5.2 Philips and Perron Test 184-184 8.5.3 Test for Degree of Integration 185-184 8.6 The Multivariate Cointegration Model 186-189 8.7 Testing the Swing Producer model for the Period 1976-1986 190-193 8.8 Testing the Market Sharing Model for the Period 1987-1995.. 193-196 8.9 Conclusion 196-196 9 CONCLUSION 201-205 APPENDICIES 207-231 1 The Saudi Ministers of Petroleum and Mineral Resources 207-208 2 The Structure of OPEC 209-210 3 Major OPEC Decisions 211-217 Chronology 4 The Participants in the Decision Making Process in the Kingdom of Saudi Arabia 218-218 5 The London Agreement 219-220 6 Quotas Agreement of OPEC from March 1982- December 1994 221-222 7 Trading Instruments 223-225 8 Markets of Crudes 226-228 9 The VAR Model 229-229 10 Definition of the Polynomial used in Seasonality Testing 230-230 11 Selecting the Order of the VAR Model 230-230 REFERENCES 232-246 xi xii Tables LIST OF TABLES Page 2.1 Saudi Aramco Foreign Downstream Ventures.
Load more

Recommended publications
  • Saudi Arabia and the US Author(S): Joe Stork Reviewed Work(S): Source: MERIP Reports, No
    Saudi Arabia and the US Author(s): Joe Stork Reviewed work(s): Source: MERIP Reports, No. 91, Saudi Arabia on the Brink (Oct., 1980), pp. 24-30 Published by: Middle East Research and Information Project Stable URL: http://www.jstor.org/stable/3010947 . Accessed: 19/11/2011 22:53 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact [email protected]. Middle East Research and Information Project is collaborating with JSTOR to digitize, preserve and extend access to MERIP Reports. http://www.jstor.org Ibn Saud meets FDR on the president'sreturn Trumanpresents Legion ofMerit medal to Prince Eisenhowerwith Crown Prince Faisal. fromYalta in 1945. (laterKing) Saud in Washington. Saudi Arabia simd the Joe Stork by production and "to substitute Middle Eastern oil for West? Arabia, like all such relationships, operate on ern hemisphere oil" in Europe and other "eastern hemi? several levels?strategic and military, political, sphere markets." and economic. More than with any other US client or ally, In order to "guard against political complications" that though, the connection with Saudi Arabia rests preemi? might threaten this tidy arrangement, the companies col? nently on economic grounds, in particular the US stake in laborated with the Treasury Department on a "profit-shar? Saudi oil resources, described by the State Department in ing" deal that would nominally give the producing regimes 1945 as "one of the greatest material prizes in world 50 percent of industry profits and deduct that amount from history."1 the companies' US tax bills.
    [Show full text]
  • Saudi Oil Policy Author(S): David E
    Saudi Oil Policy Author(s): David E. Long Reviewed work(s): Source: The Wilson Quarterly (1976-), Vol. 3, No. 1 (Winter, 1979), pp. 83-91 Published by: Wilson Quarterly Stable URL: http://www.jstor.org/stable/40255563 . Accessed: 19/11/2011 22:55 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact [email protected]. Wilson Quarterly and Woodrow Wilson International Center for Scholars are collaborating with JSTOR to digitize, preserve and extend access to The Wilson Quarterly (1976-). http://www.jstor.org SAUDI ARABIA SAUDI OIL POLICY by David E. Long Isaac Newton is said to have been the last man in the world who knew everything. This is not an indictment of subsequent generations but simply a recognition of the fact that the sum of human knowledge has expanded beyond the grasp of any in- dividual. So have the complexities of petroleum production. To understand them fully one must be a geologist and a petroleum engineer versed in the mysteries of rock strata and seismography, an economist comfortable with the intricacies of supply and demand, and a political scientist familiar with the shifting eddies of domestic and foreign policy. An outsider, try- ing to understand how Saudi decision-makers perceive all these factors, also must be, to some degree, an anthropologist.
    [Show full text]
  • Oil, Power and Trade by Vito Stagliano* the Geopolitical Dimensions of Reliance on Oil Cannot Be Effectively Managed, Either by the U.S
    10 | Second Quarter 2007 Oil, Power and Trade By Vito Stagliano* The geopolitical dimensions of reliance on oil cannot be effectively managed, either by the U.S. or the rest of the world. It would be consequently prudent to devise a trading structure for oil that would be less susceptible to the intervention of governments in the marketplace. Such a structure should be built on a foundation that will have been cleared of present legacies, including, most importantly, of the political intercourse between the House of Saud and occupants of the White House. The world of oil is badly served by the Washington-Riyadh axis, which also enables OPEC1 and the parastatals2 that mimic its market-manipulative behavior. A WTO3-sponsored free trade round of negotiations to fully commod- itize oil would usher in an era of de-politicized commerce for one the world’s essential commodities, and foster better international relations among producer and consuming nations. Anecdotes abound of the perverse U.S.-Saudi ties. The one that follows illustrates how blithely one misunderstands the other and how close to the surface is mutual resentment. In the waning days of the Administration of George H.W. Bush, a desultory effort was organized to expand the U.S. Strategic Petroleum (SPR) reserve by seeking to “lease,” from the Saudi Arabian government, 100 million barrels of oil, at below market prices, for storage in SPR caverns. The effort was desultory because the initiative was pursued at sub-ministerial level, when it was clear to everyone involved that a deal could be struck only by direct communications between the President and the King.
    [Show full text]
  • Saudi Aramco: National Flagship with Global Responsibilities
    THE JAMES A. BAKER III INSTITUTE FOR PUBLIC POLICY RICE UNIVERSITY SAUDI ARAMCO: NATIONAL FLAGSHIP WITH GLOBAL RESPONSIBILITIES BY AMY MYERS JAFFE JAMES A. BAKER III INSTITUTE FOR PUBLIC POLICY JAREER ELASS JAMES A. BAKER III INSTITUTE FOR PUBLIC POLICY PREPARED IN CONJUNCTION WITH AN ENERGY STUDY SPONSORED BY THE JAMES A. BAKER III INSTITUTE FOR PUBLIC POLICY AND JAPAN PETROLEUM ENERGY CENTER RICE UNIVERSITY – MARCH 2007 THIS PAPER WAS WRITTEN BY A RESEARCHER (OR RESEARCHERS) WHO PARTICIPATED IN THE JOINT BAKER INSTITUTE/JAPAN PETROLEUM ENERGY CENTER POLICY REPORT, THE CHANGING ROLE OF NATIONAL OIL COMPANIES IN INTERNATIONAL ENERGY MARKETS. WHEREVER FEASIBLE, THIS PAPER HAS BEEN REVIEWED BY OUTSIDE EXPERTS BEFORE RELEASE. HOWEVER, THE RESEARCH AND THE VIEWS EXPRESSED WITHIN ARE THOSE OF THE INDIVIDUAL RESEARCHER(S) AND DO NOT NECESSARILY REPRESENT THE VIEWS OF THE JAMES A. BAKER III INSTITUTE FOR PUBLIC POLICY NOR THOSE OF THE JAPAN PETROLEUM ENERGY CENTER. © 2007 BY THE JAMES A. BAKER III INSTITUTE FOR PUBLIC POLICY OF RICE UNIVERSITY THIS MATERIAL MAY BE QUOTED OR REPRODUCED WITHOUT PRIOR PERMISSION, PROVIDED APPROPRIATE CREDIT IS GIVEN TO THE AUTHOR AND THE JAMES A. BAKER III INSTITUTE FOR PUBLIC POLICY ABOUT THE POLICY REPORT THE CHANGING ROLE OF NATIONAL OIL COMPANIES IN INTERNATIONAL ENERGY MARKETS Of world proven oil reserves of 1,148 billion barrels, approximately 77% of these resources are under the control of national oil companies (NOCs) with no equity participation by foreign, international oil companies. The Western international oil companies now control less than 10% of the world’s oil and gas resource base.
    [Show full text]
  • Prince Abdulaziz Bin Salman (Abs)
    (Arabic Version) (Japanese Version) October 2019 Saudi New Oil Minister : Prince Abdulaziz bin Salman (AbS) 1. Saudi prince was assigned to Energy Minister Prince Abdulaziz bin Salman (hereinafter referred to as AbS) was replaced Al-Falih as Energy Minister in Saudi Arabia 1 The new minister is 59 years old (born in 1960) He is the fourth son of King Salman and the brother-in-law of Prince Mohammad bin Salman (hereinafter referred to as MbS) 2 The Ministry of Oil and Mineral Resources was established in 1960 when AbS was born The first minister was H E Abdullah Tariki Since then the successive ministers were all technocrat; Ahmed Zaki Yamani, Hisham Nazer, Ali Naimi and Khalid A Al-Falih AbS is the first energy minister of royal family members People were surprised by this assignment New Minister AbS graduated from University of Petroleum and Mineral Resources (now KFUPM) in Dharan, Kingdom of Saudi Arabia in 1982 Since then he has been working as an specialist in energy He had an experience as a director of Arabian Oil Company, a joint venture with Japan, and also worked at the OPEC headquarter In 2015 he was appointed as deputy minister of Energy He assisted Minister Al-Falih, who was the schoolmate in KFUPM and lifelong colleague His 40 years of experience in the oil industry is perfect and he has a wide connection in the oil industry at home and abroad Nobody could underestimate his career However, it would be the most serious and subtle problem for AbS that how to communicate with MbS who is his younger brother-in-law but is now a de facto dictator of Saudi Arabia The oil matters are now closely related to international political issues; Cooperation between OPEC+ (plus) countries such as Iran of OPEC member, or Russia of non-OPEC colleague The United States is not only a rival as the world's largest oil producer3 but also US is an indispensable ally New energy minister AbS has to confront complex diplomatic mechanics 2.
    [Show full text]
  • Saudi Aramco 2030 Mohamed A
    Saudi Aramco 2030 Mohamed A. Ramady Saudi Aramco 2030 Post IPO challenges Mohamed A. Ramady London, United Kingdom ISBN 978-3-319-67749-1 ISBN 978-3-319-67750-7 (eBook) DOI 10.1007/978-3-319-67750-7 Library of Congress Control Number: 2017954578 © Springer International Publishing AG 2018 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Printed on acid-free paper This Springer imprint is published by Springer Nature The registered company is Springer International Publishing AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Dedicated to my son, Faisal, and all past, present, and future male and female “Aramcons” of many nationalities who have made Saudi Aramco what it is today and what it aspires to be.
    [Show full text]
  • Saudi Energy Policies Unlikely to Shift Under New Minister
    News Release, 9 May 2016 Saudi Energy Policies Unlikely to Shift Under New Minister Saudi Arabia’s energy policies are unlikely to change despite the fact that longtime energy minister, Ali al-Naimi, was removed on May 7 and Khalid al-Falih appointed as his successor. There has already been much speculation and concern about the kingdom’s energy policies under King Salman. Questions about the future of Saudi Arabia’s oil policies are important given the prevailing period of glut and low oil prices. A few facts, however, should be considered. An expected change: The appointment of energy ministers has traditionally coincided with dynastic shifts in the kingdom. Saudi Arabia has had five oil ministers since 1960. Abdullah Tariki served from 1960 to 1962. King Faisal appointed Ahmed Zaki Yamani as his successor. Yamani served from 1962 to 1986. King Fahad appointed Hisham Nazer to succeed Yamani. Nazer served from 1986 to 1995. And King Abdullah appointed al- Naimi energy minister in 1995. Al-Naimi’s removal, therefore, should come as no surprise. It should also be seen in the context of the “shake up” of the kingdom’s broader energy and economic policies being planned by Deputy Crown Prince Mohammad bin Salman. Al-Naimi, who is in his eighties, has on several occasions indicated his desire to retire. Al-Falih, who is also President and Chief Executive of Saudi Aramco, was a natural choice to replace al-Naimi considering that he is from the same team that al-Naimi previously led. Traditional trend: Saudi Arabia has traditionally appointed a person with technical expertise as energy minister and as head of Saudi Aramco rather than choosing a member of the royal family.
    [Show full text]
  • Kissinger's Trip - Vol
    Scanned from the Kissinger Reports on USSR, China, and Middle East Discussions (Box 4 - March 7-22, 1975 - Kissinger's Trip - Vol. II (5)) at the Gerald R. Ford Presidential Library ~\)!!E~ ",«? ,= 0' ~ - Gerald R. Ford Presidential Library and Museum www.fordlibrarymuseum.gov Library: 1000 Beal Ave., Ann Arbor, MI48109 (734) 205-0555 fax (734) 205-0571 Museum: 303 Pearl Street, NW, Grand Rapids, MI49504 (6/6) 254-0400 fax (6/6) 254-0386 The documents in this folder continue from the previous folder. A Presidential Library Administered by the National Archives and Records Administration MEMORANDUM l THE WHITE HOUSE WASHINGTON SECRET/NODIS/XGDS MEMORANDUM OF CONVERSATION PARTICIPANTS: Yitzhak Rabin, Prime Minister of Israel Yiga1 Allon, Deputy Prime Minister and Minister of Foreign Affairs Shimon Peres, Minister of Defense Simcha Dinitz, Ambassador to the United States Lt. Gen. Mordechai Gur, Chief of Staff Mordechai Gazit, Director General, Prime Minister's Office Avraham Kidron, Director General, Ministry of Foreign Affairs Dr. Henry A. Kissinger, Secretary of State and Assistant to the President for National Security Affairs ~} ~. ., .". Amb. Kenneth Keating, U. S. Ambas sador to Israel Joseph J. Sisco, Under Secretary of State for Political Affairs Alfred L. Atherton, Jr., Assistant Secretary of State for Near Eastern and South Asian Affairs Harold H. Saunders, Deputy Assistant Secretary of State for Near Eastern and South Asian Affairs Robert B. Oakley, NSC Staff Peter W. Rodman, NSC Staff fWrt.­ DATE AND TIME: Wednesday, March 19, 1975 8:45 - 10:20 a. m. PLACE: Prime Minister's Residence Jerusalem Kissinger: The only thing that happened on our side since yesterday is that Sadat has written a letter to Ford to complain about the negotiation, and it went directly to Washington.
    [Show full text]
  • Energy to the World: the Story of Saudi Aramco Volume 2
    ENERGY TO THE WORLD: TO ENERGY ENERGY TO THE WORLD: THE STORY OF SAUDI ARAMCO OF SAUDI THE STORY THE STORY OF SAUDI ARAMCO VOLUME 2 VOLUME 2 VOLUME www.saudiaramco.com J ENERGY TO THE WORLD : VOLUME ONE TITLE K VOLUME TWO Energy to the World The Story of Saudi Aramco II ENERGY TO THE WORLD : VOLUME ONE VOLUME TWO Energy to the World The Story of Saudi Aramco Supertankers load crude oil at Ras Tanura Sea Island Terminal in 2003. Contents Copyright First Edition Volume One Volume Two © 2011 by Aramco Services Company Printed in 2011 Preface xi Illustration: Saudi Arabia viii ISBN All rights reserved. No part of this book Illustration: Saudi Arabia xiv 1 National Resources 1 978-1-882771-23-0 may be reproduced, stored in a retrieval system or transmitted in any form or 1 Prospects 1 2 Boom Time 27 Library of Congress by any means, electronic, mechanical, 2 Negotiations 33 3 Transformation 67 Control Number photocopying, recording or otherwise, 200922694 without the written permission of 3 Reading the Rocks 59 4 Rising to the Challenge 99 Aramco Services Company, except by 4 The War Years 93 5 Achieving the Vision 131 Written by a reviewer, who may quote a brief Scott McMurray passage for review. 5 Expansion 123 Appendix 168 6 Growing Pains 153 A. Upstream 170 Produced by The History Factory 7 Balancing Act 189 B. Downstream 184 Chantilly, Virginia, USA List of Abbreviations 215 C. Operations Data 194 Project Coordinators Notes on Sources 216 Company Leadership 204 Theodore J. Brockish, Kyle L.
    [Show full text]
  • June 1-15, 1974
    RICHARD NIXON PRESIDENTIAL LIBRARY DOCUMENT WITHDRAWAL RECORD DOCUMENT DOCUMENT SUBJECT/TITLE OR CORRESPONDENTS DATE RESTRICTION NUMBER TYPE 1 Manifest Air Force One – Appendix “C” 6/10/1974 A 2 Manifest Air Force One – Appendix “A” 6/12/1974 A 3 Manifest Air Force One – Appendix “C” 6/14/1974 A 4 Manifest Air Force One – Appendix “B” 6/15/1974 A 5 Manifest Helicopter Passenger Manifest – 6/1/1974 A Appendix “A” 6 Manifest Helicopter Passenger Manifest – 6/2/1974 A Appendix “A” 7 Manifest Helicopter Passenger Manifest – 6/5/1974 A Appendix “A” COLLECTION TITLE BOX NUMBER WHCF: SMOF: Office of Presidential Papers and Archives RC-14 FOLDER TITLE President Richard Nixon’s Daily Diary June 1, 1974 – June 15, 1974 PRMPA RESTRICTION CODES: A. Release would violate a Federal statute or Agency Policy. E. Release would disclose trade secrets or confidential commercial or B. National security classified information. financial information. C. Pending or approved claim that release would violate an individual’s F. Release would disclose investigatory information compiled for law rights. enforcement purposes. D. Release would constitute a clearly unwarranted invasion of privacy G. Withdrawn and return private and personal material. or a libel of a living person. H. Withdrawn and returned non-historical material. DEED OF GIFT RESTRICTION CODES: D-DOG Personal privacy under deed of gift --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    [Show full text]
  • Petromin: the Slow Death of Statist Oil Development in Saudi Arabia
    Steffen Hertog Petromin: the slow death of statist oil development in Saudi Arabia Article (Accepted version) (Refereed) Original citation: Hertog, Steffen (2008) Petromin: the slow death of statist oil development in Saudi Arabia. Business history, 50 (5). pp. 645-667. DOI: 10.1080/00076790802246087 © 2008 Taylor & Francis This version available at: http://eprints.lse.ac.uk/29865/ Available in LSE Research Online: November 2010 LSE has developed LSE Research Online so that users may access research output of the School. Copyright © and Moral Rights for the papers on this site are retained by the individual authors and/or other copyright owners. Users may download and/or print one copy of any article(s) in LSE Research Online to facilitate their private study or for non-commercial research. You may not engage in further distribution of the material or use it for any profit-making activities or any commercial gain. You may freely distribute the URL (http://eprints.lse.ac.uk) of the LSE Research Online website. This document is the author’s final manuscript accepted version of the journal article, incorporating any revisions agreed during the peer review process. Some differences between this version and the published version may remain. You are advised to consult the publisher’s version if you wish to cite from it. Petromin: the Slow Death of Statist Oil Development in Saudi Arabia Steffen Hertog Post-doctoral research associate, Princeton Environmental Institute, 2006-07 Lecturer in Middle East Politics at the School of Government and International Affairs, University of Durham Kuwait Professor, Chaire Moyen-Orient, Sciences Po Paris Abstract: The paper recounts the history of Saudi Arabia’s first national oil company, Petromin, which was originally was supposed to take the place of foreign-owned Aramco.
    [Show full text]
  • From Paris to Riyadh: the Evolution of Oil Producers and Consumers Relationship
    From Paris to Riyadh: The Evolution of Oil Producers and Consumers Relationship From Mistrust to Building Common Future By Dr. Ibrahim Al-Muhanna Advisor, Ministry of Petroleum and Mineral Resources Before 1950, petroleum was already an important and strategic international commodity. Oil’s critical role in fueling modern economies and in enabling countries to project military and economic power beyond their own boundaries was well recognized as far back as the early 1900s. Economic and military might depended on access to oil, as well as the ability of countries to deny access to its enemies. Therefore, it was no surprise that access to oil figured prominently in the strategic planning of both the Axis and the Allies during the Second World War, and that the ability of the Allies to limit the Axis countries’ access to oil was a major factor contributing to the latter’s ultimate defeat. Prior to World War II, the major oil companies from the U.S. and Europe controlled the vast majority of the world’s oil supplies. Their dominant position provided them with significant power over the production, distribution and pricing of world crude supplies. By contrast, most producing countries had little ability to influence the prices they received for their natural resources. The world was awash in oil as new discoveries vastly outpaced the growth in oil 1 demand. With their control over supply and distribution, the majors became the price setters while producing countries were usually relegated to being price takers. The perception in many producing countries was that they were being exploited by the majors who were seen as paying far too little for the crude they lifted.
    [Show full text]