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Saudi Aramco is the national energy corporation of Saudi Arabia. It produces natural gas liquids (NGL), gas and five grades of crude oil. Its various refineries and gas plants make gasoline, naphtha, ethanol, liquefied petroleum gas and other products. It exports about three-quarters of its crude oil, partly in its own tankers; naturally, it supplies almost all of Saudi Arabia’s domestic energy needs as well. Its products are used to make not only gasoline, diesel fuel and heating oil, and cooking gas, but also an enormous range of other things, from fertilizer to bicycle helmets to car parts to the ink on this page. In crude oil, Saudi Aramco is the largest single producer in the world: Roughly one out of every 10 barrels of oil anywhere comes from Saudi Aramco.


Saudi Aramco sends more than half of the crude oil, refined products and NGL that it produces to the Far East. The United States receives about 16 percent of Saudi Arabia’s crude oil but less than five percent of its refined products and about three percent of its NGL. Altogether, Saudi Aramco ships more oil around the world than any other single company or country. In 2007, it shipped an estimated 1.25 billion barrels to countries in East and Southeast Asia; it shipped approximately 493 million barrels to the United States—less than what arrived in the US from Canada, and a bit more than came in from each of Mexico, Venezuela and Nigeria.


In 1933, when Saudi Arabia allowed Standard Oil of California (SOCAL, now Chevron) to come in and explore, SOCAL assigned the job to a subsidiary it established, the California Arabian Standard Oil Company (CASOC). In 1936, the Texas Company (later Texaco) bought half of that subsidiary, and in 1944, the partnership renamed itself “Aramco.” In 1948, the predecessor companies of today’s ExxonMobil joined the partnership. This four-company consortium made up Aramco until 1980, when the Saudi government completed a gradual buyout of Aramco’s assets. In 1988, the successor com pany was established as the “Saudi Arabian Oil Company (Saudi Aramco)” to recognize both its binational history and its good reputation.


“Aramco” was an acronym for “Arabian American Oil Company,” a name selected after the earlier “California Arabian Standard Oil Company” was made obsolete by Texaco’s participation. No one today remembers why the “O” of “Oil” was skipped, but certainly the three syllables of “Aramco” roll off the tongue more easily—in both ENGLish and Arabic—than the four-syllable “Aramoco.”


These are three insider terms that can help anyone understand how petrochemical companies organize themselves. Think of a hill with an oil well on top of it, a refinery halfway down, and a gas station at the foot of the hill. The oil flows out of the well, down to the refinery and on down to the consumer. The upstream part of the business involves exploring for and producing the oil. Refining, transporting and marketing the oil and its products make up the downstream part. Historically, most of Aramco’s business has been on the upstream side, and that’s partly why most of us, who live on the downstream side, have hardly been aware of Aramco: no retail gas stations. These days, as Saudi Aramco ex pands on the downstream side, it has become an integrated company —one that includes both upstream and downstream components—as well as an international one.


Despite producing millions of barrels of crude oil daily for decades, the amount of oil Saudi Aramco can tap for future production—its reserves—has actually increased over time to an estimated 260 billion barrels, the largest in the world. Two things explain this phenomenon: First, the amount of oil it has discovered, in almost every year, has been greater than the amount it produced in that year; second, tech nological advances in such areas as reservoir characterization and drilling methods make more oil accessible that couldn’t be reached before. Oil isn’t the only reserve that’s important, though: Saudi Aramco also holds the world’s fourth-largest reserves of natural gas, and they, too, grow steadily larger for the same reasons.


Since the late 1970’s, Saudi Aramco has positioned itself as the only major oil corporation with significant spare capacity—the difference between the oil it actually produces and the oil it could produce. This difference, currently more than 2 million barrels a day, can be brought “on stream” (it takes a month or more) to partially cushion severe shocks to the world oil market, such as those caused by the Iranian Revolution in 1979, the Iran–Iraq War of the early 1980’s or Iraq’s invasion of Kuwait in 1990.


In 1950, Aramco completed the 1212-kilometer (753-mi) Trans-Arabian Pipeline (Tapline), at the time the longest in the world. From then until 1983, Tapline linked eastern Saudi Arabia to the Mediterranean Sea, sharply cutting the time and the cost of Aramco’s exports to Europe. The pump stations along Tapline’s desert route were linked by new roads, and with water wells and medical care for their staffs, they attracted Bedouins, many of whom settled into what became towns. In 1981, Aramco completed the East–West NGL Pipeline, which ran nearly the same distance from the Eastern Province to the Red Sea, fueling the transformation of Yanbu‘ from a fishing town to an industrial city that is attracting a new generation of settlers.


Crude-oil trading prices were set by a handful of major oil producers until March 30, 1983, when the New York Mercantile Exchange (NYMEX) began trading crude oil on its commodities market. After that, oil prices depended much more on minute-by-minute transactions for both “spot prices”—oil for immediate delivery—and “futures,” or oil to be delivered in a month or more. In 1986, Saudi Arabia linked its oil price to the spot market. Today, Saudi oil prices are tied to spot markets in the United States, Dubai and Oman, and to Brent futures in Europe. (The Organization of Petroleum Exporting Countries [OPEC] sets production quotas, not prices.)


In some underground reservoirs, oil contains natural gas the way a soda contains carbon dioxide (carbonation). Other reservoirs contain natural gas independent of oil. Beginning in the 1970’s, Aramco began building Saudi Arabia’s Master Gas System that today eliminates the waste of flaring off (burning) once unwanted gas and taps a resource with a current energy equiva lent of about 1.3 million barrels of oil a day. This multi billion dollar nationwide system supplies all of the kingdom’s gas needs and fuels major export industries based largely at Jubail, on the east coast, and Yanbu‘, on the west coast.


The move from US-owned Aramco to Saudi-owned Saudi Aramco was the largest amicable acquisition of corporate assets in American history, notable both for what did happen and for what didn’t happen: no forcible takeover, no expropriation, no diplomatic chaos (or worse). Beginning in 1973, Saudi Arabia negotiated ever-larger interests in the company, and by 1980 the Saudi buyout was complete. Because a stable transition was in the interests of Saudi Arabia, the United States and world markets, the government of Saudi Arabia continued the process—under way since the 1970’s—of training and advancing Saudi professional and executive personnel into the company’s management.


Masmak: In 1902, ‘Abd al-‘Aziz Al Sa‘ud recaptured the Masmak fort in Riyadh to reclaim the city from which his family had ruled central Arabia for most of the 19th century. It was the first step toward founding the Kingdom of Saudi Arabia three decades later.

Hofuf: In 1913, he captured the fort in Hofuf in the eastern province of al-Hasa from Ottoman Turkish forces. In expelling the Turks from this region, he unknowiNGLy secured the world’s largest oil reserves for the future kingdom.


Heir to his family’s plumbing business, Charles R. Crane was a well-traveled philanthropist with an interest in the development and self-determination of emerging nations; he had lent assistance in Turkey, China and Yemen. He had also watched the successes of King ‘Abd al-‘Aziz Al Sa‘ud. In 1931, the king took up Crane’s offer to discuss possible assistance and, as a result, the king and his advisors met Crane in Jiddah. At the king’s request, Crane assigned a Vermont-born mining engineer named Karl S. Twitchell, who had been working for Crane in Yemen, to survey Saudi Arabia’s natural resources. Although his foremost concern was water, Twitchell also identified formations in the east that he reported might hold oil. In 1933 the SOCAL men regarded Twitchell’s reports, and the previous year’s discovery of oil in Bahrain, as sufficient to make the concession a risk worth taking.


The 1933 concession agreement between Saudi Arabia and Standard Oil of California (SOCAL) went like this: SOCAL could search for and produce oil in eastern Saudi Arabia—a region 20 percent larger than the state of Texas—for 60 years; it also received preferential rights to explore elsewhere in the future. The kingdom received an immediate loan of £30,000 in gold and, 18 months later, another loan of £20,000 in gold—an amount equivalent to about $250,000 today—plus yearly rentals of £5000 and royalties of four shillings in gold—about $1—per ton of oil produced. (Only later would oil be measured in barrels.)


Why did King ‘Abd al-‘Aziz grant the concession to SOCAL, an American company with less regional familiarity than the Iraq Petroleum Company, which had a British, French and Dutch pedigree? The answer is both financial and political: It was 1933, the depth of the worldwide Great Depression, and though the one-year-old kingdom was short of cash, it was also wary of colonialist designs from beyond its borders. SOCAL lawyer Lloyd Hamilton’s financial offer topped the one the king had received earlier from the Iraq Petroleum Company. Beyond that, in August 1945 writer Marquis Childs recalled in Collier’s magazine that the king’s representatives had told Hamilton he enjoyed an advantage because “‘Your country … had no imperial designs. And besides,’ they added in the king’s own words, ‘you are so far away.’”


As political tension mounted in Europe, the discovery of Saudi oil in 1938 set off a rush by future World War II combatants to secure new energy supplies. Britain, Germany, Italy and Japan all aNGLed to explore in Saudi Arabia outside CASOC’s concession area. In May 1939, during the ceremonies marking the first tanker shipment of Saudi oil, CASOC representative William J. Lenahan met with the king and key Saudi officials to discuss a supplemental concession agreement. The deal increased CASOC’s concession by more than one-third to an area roughly the size of present-day France, Germany and the United Kingdom combined in return for extra payments and the construction of a refinery at Ras Tanura. As The New York Times put it in a headline, “California Standard Paying Ibn Saud $1,500,000 and Royalties—Axis and Rivals Lose.”


Six words in Article 23 of the concession agreement opened the industrial age to Saudis: SOCAL was to employ “Saudi nationals as far as practicable.” By the end of 1939, the first full year of commercial production, the payroll showed 3,178 Saudis, 322 Americans and 141 other employees. Today’s workforce numbers more than 45,000 Saudis and 6,600 expatriates from some 50 other countries.


In May 1939, King ‘Abd al-‘Aziz Al Sa‘ud made his first trip to Dhahran, from where he traveled north to Ras Tanura to send the first crude oil into the hold of the D. G. Scofield. (The ship, named after a co-founder of SOCAL, held less than 1/20th as much as a modern supertanker.) As Wallace Stegner wrote about the occasion in Discovery!, written for the company in 1956, the king “reached out the enormous hand with which he had created and held together his kingdom … and turned the valve on the line through which the wealth, power and responsibilities of the industrial 20th century would flow into Saudi Arabia.”


In the early days, it took oilmen about a month to travel from North America to Saudi Arabia. Take paleontologist Nestor Sander, who set out in November 1938 from the west coast. First crossing the United States by train, he and his colleagues sailed on a German liner from New York to France. They stopped briefly in Paris, where they boarded the Orient Express for Istanbul. Crossing the Bosporus by ferry, they caught another train south through Turkey, Syria and Iraq to Basra, where they boarded a steamship to Bahrain. They stayed there a few days and then sailed the last few kilometers to Saudi Arabia on a dhow. Saudis tell stories, too: When Fahmi Basrawi joined Aramco as a teacher in the mid-1940’s, he crossed the Arabian Peninsula from Jiddah to Dhahran by riding atop sacks of wheat on a truck for 131½ hot, dusty days.


The American oilmen who were most successful in the kingdom were the ones who quickly established rapport and camaraderie with Saudis. The first geologists grew beards and donned local dress to fit in; they drank tiny cups of cardamom-flavored coffee and quickly learned that shared stories around the campfire bonded guests and hosts. Geologist Tom Barger, who arrived in Dhahran in 1937 and went on to become a president and CEO of Aramco, learned Arabic and soaked up local customs through books and by practice with Bedouin guides. His personal communication skills and friendly relations with Saudi employees helped build a culture of mutual respect and cooperation that remains a guiding ideal for intercultural relations within the company today.


Traditional Saudi men’s clothing reflects a confluence of Islamic values—notably the need for modesty in the public sphere— and the desire for comfort in a hot environment, where ventilation and sun protection are equally important. Men traditionally wear the thawb, an ankle-length shirt, and a ghutrah, or head cloth, but in industrial enterprises like Saudi Aramco, western clothing usually prevails. This is often for practical reasons: A flowing thawb is more likely to get caught in machinery, and its expanse of white fabric shows dirt far more quickly than western pants and shirts. Today, employees often choose between western and national dress depending on their job.


A special “Aramco dialect” sprang up over the years as ENGLish terms used in the workplace were adopted by Saudi employees and became part of the wider community’s spoken expression—sometimes losing all connection to their original ENGLish meanings. An example is the “Aramco Arabic” word weyt, which means “tank.” The term was originally given to tank-trucks that transported water to workers in Ras Tanura in the 1960’s. The trucks were white; by extension, all tanks came to be called weyt. Another example is wanayt, the colloquial name for the pickup truck. All Aramco pickups had serial numbers on their doors that started with the numerals 1–8, or “one-eight,” and that distinction was Arabicized to wanayt, the term that distinguished those vehicles from other types of truck. Arabic grammar was usually preserved in these borrowings, however. The ENGLish word “hose” was taken into local Arabic as hawz and, naturally, embellished with a properly formed dual and plural: hawzayn and ahwaz.


Arabic proved a valuable culture-bridging tool for Americans working in Saudi Arabia from the earliest days of the oil enterprise. The earliest Arabic “courses” were the everyday exchanges among Americans and Saudis involved in exploration and drilling. In 1945, Aramco produced booklets of work terms in Arabic for its American employees and offered a $50 bonus to anyone who finished a related course. From 1948 to 1957, the company offered intensive two- to four-week programs for all new Amer ican employees, first in Riverhead, New York and then in Sidon, Lebanon, teaching them—depending on their future assignments —at least basic words and phrases and Arab customs before they traveled to Saudi Arabia. The company continued to offer Arabic courses for employees in the kingdom through the 1980’s.


In January 1947, King ‘Abd al-‘Aziz made his second and last visit to Dhahran. The highlight of this visit was a meeting with dozens of expatriate families in front of the tennis courts along the aptly named King’s Road. The occasion made lasting impressions on both the Americans and the Saudis who attended—so much so that a reenactment of the famous meeting is planned as part of the company’s 75th-anniversary celebrations this year. Carol DuPriest Houg had been living in the camp for less than a year when she was among the Americans who met the king. He was, she said, “so tall and handsome. When he spoke, it was as if the voice carried across the whole yard, and yet it was soft…. I remember to this day the big wonderful smile and a great feeling of warmth and protection from this man who I had been told was a great warrior. He gave me a string of pearls that day, and I still have them. I can still feel his strength whenever I put them on.”


When the company contracted geologist and pilot Dick Kerr to map its concession from the air in 1934–1935, Kerr had to think about how he could land and take off in soft sand. He ordered a light airplane and had it fitted with the largest low-pressure tires it could take, which he inflated to a minimal 12 pounds of pressure. Later, when Kerr joined the company, he continued to experiment with low-pressure tires, and today the company routinely uses oversize vehicles to carry materials weighing sometimes hundreds of tons off-road, across the desert, without getting stuck, thanks to low-pressure tires.


After a lone Italian plane dropped a few bombs on Dhahran in October 1940 —apparently mistaking it for the British refinery in Bahrain—the company evacuated women and children. By early 1941, more than half the American workers, and nearly half the Saudi workers, were off the payroll. The com pany pulled exploration teams in from the field and made plans to evacuate employees across the Rub’ al-Khali to Aden in Yemen, if necessary. Though the company sealed 10 of its 16 wells atop the Dammam Dome, it continued to ship 12,000 to 15,000 barrels of oil every day to Bahrain by barge to help fuel British ships. In the winter of 1942–1943, spurred by fears that a shortage of airplane fuel could cripple the war effort, President Franklin D. Roosevelt backed US government purchase of a majority stake in CASOC; however, the company persuaded the government it could be a greater asset to the war effort without government control. Roosevelt later allocated scarce steel to enable the company to build a large new refinery in Ras Tanura in order to help fuel US forces in the Pacific theater.


In August 1944, a Nazi U-boat torpedoed and sank the SS John Barry off southern Oman. Among the lost cargo were 750 wooden boxes containing three million silver Saudi one-riyal coins, minted for the Saudi government in the United States. The coins were destined in part for the pockets of workers building the refinery at Ras Tanura. Paper money was not yet in use in Saudi Arabia then; in those unsettled times, the coins in circulation were more valuable for their silver content than as currency, and both the kingdom and the company were running short. In all, some 49 million riyals were shipped to the kingdom. In 1994, salvors located the wreck and raised more than 1.3 million of the coins.


As U-boats disrupted shipping during World War II, a Bedouin named Mutlaq (his full name is forgotten) mounted three cattle drives, one each winter from 1942 to 1944, from Yemen, 1600 kilometers (1000 mi) across the Arabian Peninsula, to beef up the menu in Dhahran. This supplemented harvests from a farm started by Dhahran commissary chief Steve Furman. All went to help feed a company workforce that had been reduced to a skeleton crew of around 80 Americans and 1600 Saudis.


After World War II, as Aramco grew exponentially, the massive influxes of diverse international workers led to periodic tensions over wages, living conditions and other opportunities. In 1945, there were strikes in Ras Tanura and Dhahran by Saudis seeking better wages and living conditions. In 1947, Italian workers, who had been brought in from Eritrea, where they had been interned by the British during World War II, held a brief strike. In 1953, Saudi and Palestinian workers struck for higher pay and better conditions. That October, Saudi workers struck again, and within a few weeks the company had acceded to most of their demands, increasing wages, providing other job enhancements and boosting housing benefits—all of which ultimately helped create the culture of shared prosperity that has marked the company ever since.

50–50 IN 1950

That year Aramco and the Saudi government agreed that, instead of receiving a fixed royalty for every barrel of oil Aramco produced, the kingdom would receive a 50-percent share of the company’s net income. After this, the government showed a close interest in oil prices, the cost of the company’s operations and its accounting methods. This was the first step toward Saudi ownership of the company.


Aramco confirmed the full size of the “field of dreams”—Ghawar, the world’s largest known oil field—in southeastern Saudi Arabia in 1957. With the field’s reserves put at 80 billion barrels, the US government called Ghawar “the greatest commercial prize in history.” That was six years after the company had discovered the world’s largest offshore field, Safaniya, which itself proved to be part of a still larger field, extending into Kuwait, with estimated reserves of 25 billion barrels.


Lawns weren’t on anyone’s mind when the camp at Dhahran was built, and grass was still nowhere to be seen in 1947 when it was becoming a family community. That year, when Paula Weathers rejoined her husband with their two small children, she carried from Egypt a coffee can containing two clumps of Bermuda grass. That grass became Dhahran’s first lawn, and soon its roots and shoots were transplanted to nearly every home in the camp.


The baseball diamond on King’s Road in the heart of Dhahran was a fixture in the community from its construction in 1952 until 2007, when it was “retired.” On that field, half a world away from the land that invented baseball, some of the best young players in the game pitched, swung and ran: Dhahran’s Arabian American Little League has gone to the Little League World Series 18 times, and in 2007 the team won the regional title for the eighth straight year. Nearly 200 children, expatriates and Saudis alike, continue to play in the company’s youth baseball leagues.


As Aramco grew, it wanted its thousands of new employees to feel a connection to the company offices in New York and, more importantly, to learn about the land and culture they lived in. In 1949, it launched a newsletter which—thanks to Anne Trust, a college sophomore—was named Aramco World. By the mid-1950’s, more than half of Aramco World’s articles dealt with the theme that has endured to this day: the history and culture of the Arab and Muslim worlds and their interconnections with cultures of the West. In the early 1960’s, the magazine was reoriented to serve an external audience in the US and Europe, and in mid-2000, Aramco World became the Saudi Aramco World of today.


The company was also interested in cultivating community and cultural education among its Arabic-speaking employees, and as early as 1953 it launched Al-Qafilah (The Caravan). Now the oldest continuously published cultural magazine in the Arab world, Saudi Aramco’s bimonthly is also among the best known. At the time of its founding, Arabic publications were hard to find in the kingdom, and Al-Qafilah usually published stories related to Saudi Arabia and the Gulf region. Later, prominent writers began contributing articles, making it the international medium for discussion and inspiration it is today.


The shock of Iraq’s invasion of Kuwait in August 1990 led to the evacuation of hundreds of employee dependents in what amounted to a mass charter airlift from eastern Saudi Arabia, particularly to the United States. Iraqi Scud missiles launched toward Dhahran drove those who remained to don gas masks and take shelter, even though most of the missiles were intercepted by coalition defenses. In the end, no missiles damaged either Dhahran or Saudi Aramco oil facilities. Offshore, floating Iraqi mines were an ever-present danger, but most were spotted well before they reached ships or drilling platforms.


After Iraq occupied Kuwait in August 1990, world oil prices more than doubled, to above $40 a barrel. In response, Saudi Aramco ramped up to restore production that it had shut down a few years earlier during the “oil glut.” Within a few months of the Iraqi invasion, the company had raised production 60 percent above its pre-invasion level to 8.5 million barrels a day, making up for about 75 percent of the 4.6 million that the world market had lost. By 1991, prices were back around the $20 level.


The largest oil spill in the history of the Gulf hit 700 kilometers (435 mi) of Saudi Arabia’s coastline during the 1991 Gulf War. As it drifted south, the oil sank into wet sands and formed layers of tar that poisoned the breeding grounds of fish and crustaceans. Teams from Saudi Aramco worked around the clock to protect vital water-intake channels used for power generation, desalination and injection, and they recovered more than 1.2 million barrels of oil—the largest amount ever collected from a spill—thus sparing hundreds of kilometers of beaches and intertidal areas.


Since 1991, Saudi Aramco has drafted regional and global oil-spill response plans and tested them through regular in-the-field drills. ASC in Houston and AOC in Leiden have done the same. The company has undertaken independent environmental research and also sponsored studies at the Research Institute at King Fahd University of Petroleum and Minerals in Dhahran to assess the impact of hydrocarbons and heavy metals on marine life. Saudi Aramco has built water-treatment plants to remove oily contaminants from discharges into the Arabian Gulf.


Aramco got its start in the book business in 1950, when it published five comb-bound booklets entitled Handbooks for American Employees to provide newcomers to Saudi Arabia with information about the company and the oil business, as well as the society and culture around them. They were combined into a single hardbound volume in 1952 and updated and redrafted several times over the years. The latest edition, A Land Transformed: The Arabian Peninsula, Saudi Arabia and Saudi Aramco, appeared in 2006. Other books published by Saudi Aramco include a volume about marine life entitled Biotopes of the Western Arabian Gulf (1977), Saudi Aramco and Its People: A History of Training (1998) and The Energy Within: A Photo History of the People of Saudi Aramco (2006). The company supported the publication of other titles including Arabian Highlands (1952) and Arabian Oil Ventures (1964) by H. St. John B. Philby, Birds of the Eastern Province (1989) and Natural Remedies of Arabia (2006). In 1956, Aramco commissioned Wallace Stegner—later to win a Pulitzer Prize—to write a history of the company’s early years; this appeared in edited, serialized form in issues of Aramco World from 1968 to 1970 and in an unauthorized paperback in Beirut in 1971, and was subsequently published as a hardback book by Selwa Press, with an added introduction and photographs, as Discovery! The Search for Arabian Oil (2006).


For decades, the Dhahran golf course was famous—some would say notorious—as one vast sand trap with oiled-sand “greens.” But thanks to irrigation with some of the community’s treated, recycled wastewater, it has for a few years now appeared much more like other courses: The real grass makes for a better, if sometimes less challenging, game.


Carbon dioxide (CO2) is produced by nature and by burning fossil fuels. It is a “greenhouse gas” that traps heat, causing the earth’s surface to warm up. CO2 can also be captured and permanently stored, or “sequestered,” so that it will no longer contribute to warming. Saudi Aramco is working on carbon sequestration both independently and as a partner in major industry initiatives in the United States and Canada. The fact that CO2 can be sequestered by injecting it beneath oil fields, thus increasing the underground pressure needed to extract oil and turning the gas into a tool to produce oil more efficiently and reliably, is particularly interesting to the energy industry.


In 2001, Saudi Aramco became the first company in the Middle East to produce and sell only unleaded gasoline. Recently, the company has carried out improvements at refineries and gas plants to reduce sulfur dioxide emissions significantly. The company is also working to make cleaner-burning fuel by removing naturally occurring sulfur from crude oil at the molecular level during refining.


Despite prolific oil and gas production over many years, Saudi Aramco has offset output through additional discoveries, more accurate reservoir characterization and improved recovery percentages. The development and application of advanced technology, including massive computing power, underlies this success. In 2006, computing capacity at the company’s Exploration and Petroleum Engineering Center (EXPEC) in Dhahran reached 34 teraflops—or 34,000,000,000,000 multiplications per second, roughly the equivalent of the computing power of 3100 high-end PC’s. At EXPEC, for example, engineers can manipulate reservoir models and “operate” virtual wells before they are ever drilled. In the nearby Geosteering Center, specialists monitor on their computer screens the progress of a drill bit moving horizontally, directing crews to oil deposits in target zones less than a two meters (6½') wide lying more than 3000 meters (10,000') underground.


Beginning in the 1940’s, Aramco provided technical aid and sometimes financial assistance to promising Saudi employees who wanted to start their own companies. It did this because such investment strengthened the local economy, helped launch careers and in some cases relieved the company of tasks that weren’t central to its mission. Among the early entrepreneurs were Suliman Olayan and Abdul Aziz al-Gosaibi. Olayan joined Aramco as a stockman in 1937, left a decade later to form his own trucking company, and parlayed his earnings and acumen into what is today a global business empire of some 50 companies. Al-Gosaibi, a member of a prominent local trading family, in 1952 established the kingdom’s first Pepsi-Cola bottling plant in al-Khobar, with technical assistance from Aramco. The Al-Gosaibi Group is now one of the kingdom’s largest commercial enterprises.


When oil explorers arrived in eastern Saudi Arabia in 1933, malaria was endemic in the region. In the early 1940’s, in cooperation with the Saudi government, CASOC mounted an anti-malaria campaign that educated residents about preventing the spread of the mosquito-borne illness. Later in the decade, Aramco introduced larvae-eating minnows into the province’s irrigation canals and began using ddt. By the 1950’s, the disease had disappeared from the Eastern Province.


Saudi Aramco has offered home loans to eligible Saudi employees since 1951, giving them the opportunity to buy or build new houses for their families and strengthening the construction sector of the local economy. Nearly 56,000 homes have been financed through subsidized loans, repaid monthly through payroll deductions. Whole new neighborhoods have grown up on company-developed sites in cities like Dammam and al-Khobar near the company’s Dhahran headquarters.


When the company’s television station, HZ-22 TV—Channel 3—went on the air in 1957, it was the first Arabic-language channel in Saudi Arabia. Arabic dialogue was dubbed, while ENGLish-speakers listened to a radio soundtrack broadcast simultaneously. Along with entertainment programming, the station offered educational programs in math, chemistry and Arabic, and many Saudi women learned to read and write by watching Channel 3. The station went off the air in 1998, after a number of other stations had begun broadcasting.


The company began building schools for the children of its Arab and Muslim employees in the Eastern Province in 1953, under an agreement with the government of Saudi Arabia. The agreement called for the company to build and maintain the schools, and pay for their operation; the government provided the curriculum and the teachers. The arrangement lasted for more than 50 years, during which time the company built 139 schools, many of which still operate today.


In 1963, the company helped found the Middle East’s first college of petroleum technology, which in 1986 became today’s King Fahd University of Petroleum and Minerals. The company released land adjacent to its main camp in Dhahran and contributed $11.5 million toward the construction of the campus, which opened in 1970.

In 2006, the Saudi government tasked Saudi Aramco with establishing the King Abdullah University of Science and Technology (KAUST) on a tract of land north of Jiddah. Scheduled to open in 2009, this research university aims to attract institutional partners and graduate students from around the world to study issues in water, environment, bioscience and nanotechnology.


Aramco got involved in large-scale agriculture as early as 1941, when it helped the royal family set up a 2000-hectare (5000-acre) farm south of Riyadh at the oasis of al-Kharj. Guide Khamis ibn Rimthan, geologists Tom Barger and Dick Bramkamp and engineer Les Snyder all surveyed the area and—because they knew about drilling—punched water wells for the farm, which employed between 700 to 900 Saudis. Sam Logan, a graduate of Texas A&M, arrived in 1947 and oversaw grain and vegetable production, poultry raising and the beginnings of what is still one of the major dairy herds in the kingdom. To assist smaller-scale farmers in the Eastern Province, Aramco operated an Agricultural Assistance Department from 1956 to 1993. The company also undertook miscellaneous large assignments, such as the planting of a belt of tamarisk trees to prevent sand dunes from enveloping a village in the al-Hasa Oasis.


King ‘Abd al-‘Aziz Al Sa‘ud combined diplomacy and strong leadership to unite disparate tribes, creating, early in the 20th century, the country that bears his family name. He built the new state on the foundations of those established by his forebears in the 18th and 19th centuries. To this heritage, he added a grasp of international affairs, a willingness to try to conciliate his foes before resorting to force and a readiness to use foreign expertise to find and develop the kingdom’s resources.


An illiterate nine-year-old Bedouin when he walked into Aramco’s school for Saudi youngsters working as office boys and telephone operators in the mid-1940’s, Ali I. Al-Naimi joined the Exploration Department in 1953. He earned bachelor’s and master’s degrees in geology at us universities under company sponsorship in the early 1960’s. He became the company’s first Saudi president in 1984, its CEO in 1988, and in 1995 was named Saudi Arabia’s minister of petroleum and mineral resources—the position he holds today.


The biography of Saudi Aramco’s current president and CEO, Abdallah S. Jum‘ah, is similarly dramatic: Born in 1941 as the son of a pearl diver, he earned a degree in political science from the American University of Beirut in 1968 while on a government scholarship, after which he joined Aramco. In 1995, he was named president and CEO. He is the first company leader in this position not trained as a geologist or engineer.


Early American oil explorers in Saudi Arabia arrived with few maps, if any, and they relied far more on Bedouins to know where they were and how to get from one place to another. The most famous of the guides was Khamis ibn Rimthan, from the Ujman tribe, who took his first trip with Americans in the winter of 1934. His expertise became indispensable to the company, and his cross-desert navigational talents left the geologists awestruck. In later years, the American pioneers reflected fondly on him, describing him as a man of noble character, great natural dignity and a tremendous sense of humor.


Rather than send its own Arabists into the field to record names for the first kingdom-wide mapping project in the late 1940’s and 1950’s, the company instead invited the field to come to Dhahran, in the persons of tribesmen with firsthand knowledge of the territory. These “relators” sat down alongside company experts at tables covered with maps. It was they who named the towns, hills, mountains, dry riverbeds (wadis) and other features. Although they could neither read nor write, they were masters of description.


‘Ajab Khan helped American oil explorers and Saudis understand each other in the early days of the oil enterprise. Originally from Peshawar in today’s Pakistan, he emigrated to Bahrain as a boy and worked as an interpreter for geologists there before coming over to Dhahran, where he became a Saudi citizen and, later, started a business in nearby al-Khobar. The Sons of Ajab Khan Company continues to operate there today.


Son of a camel-owner, Abdullah H. Al-Tariki studied in Kuwait and Cairo and earned a degree in petroleum engineering from the University of Texas in the 1940’s. In the early 1950’s, he joined the kingdom’s Directorate of Oil and Mining Affairs, where he analyzed petroleum statistics from Aramco for the royal family. In 1954, he was named director general of petroleum and mineral affairs. In 1959, Al-Tariki became one of the first two Saudis elected to Aramco’s board of directors. The next year, he was appointed the kingdom’s oil minister, where he argued forcefully for the renegotiation of national oil agreements. He was instrumental in the formation of the Organization of Petroleum Exporting Countries (OPEC) that same year.


Max Steineke arrived in Saudi Arabia in the fall of 1934, at the start of the second exploration season. But he quickly made up for any lost time, becoming the chief geologist in 1936 and then, in the spring of 1937, crossing the Arabian Peninsula in both directions, surveying the surface geology all the while. The report he wrote became the basis of all future geological profiles of the country, and it helped him argue for completing Dammam No. 7, the first commercially productive well, in 1938. Steineke and his partners also identified surface features that pointed to several other giant oil fields that were discovered later, including Ghawar, Abqaiq and Qatif.


Aviation started for Saudi Aramco 74 years ago, in 1934, when a Fairchild 71 that was specially modified for long-distance flying and aerial photography arrived in Jubail. The plane chopped months off the time it took to map a concession as big as the states of Texas and Louisiana combined. Dick Kerr, the plane’s pilot, was a geologist himself. He and three other contractors worked with company geologists to map the bulk of the concession in 1934 and 1935. Kerr returned to Saudi Arabia as an employee in 1937 and advised the US Army on desert warfare during World War II. He rejoined the company after the war, working in the producing and transportation fields.


Abdul Aziz Shalfan joined the California Arabian Standard Oil Company (CASOC) in 1934 at age 12, trading a job in the suq in Manama, Bahrain, for one helping geologists explore the eastern part of his homeland. “We didn’t know what to make of these foreigners or how they would treat us,” Shalfan said. “But we found these men to be excellent. All of them spoke some Arabic and tried to learn more. In the evenings we would sit together over coffee and speak. We developed a genuine respect.” Shalfan worked for the company for nearly 49 years, until his death in 1983. He made a name for himself at the company’s Oil Exhibit, where he developed a reputation for his warm and engaging treatment of visitors.


Engineer Frank Jungers joined Aramco in 1947 and quickly built a reputation for his good relations with Saudi employees. He was a natural problem solver, and the company tapped him to manage big jobs in Ras Tanura and Dhahran. He became president of Aramco in 1971 and CEO in 1973, overseeing the creation of the Master Gas System and the Saudi Consolidated Electric Company and opening new education and career opportunities for Saudi men and women, paving the way for a new generation of company leaders. Jungers led Aramco through its most politically difficult period, the 1973 OPEC oil embargo, and he helped steer negotiations that resulted in the Saudi government’s smooth acquisition of majority ownership of the company in the 1970’s.


Fred Davies, a geologist from South Dakota, led SOCAL exploration in Bahrain, east of the Arabian mainland, beginning in 1930. When SOCAL’s subsidiary struck oil there in 1932, it was he who recommended that SOCAL pursue a concession in eastern Saudi Arabia, just 32 kilometers (20 mi) across a ribbon of the Gulf. He later headed Aramco’s exploration and production operations, and rose to serve as president and CEO.


Geologists Robert “Bert” Miller and Schuyler B. “Krug” Henry landed at Jubail on September 23, 1933. Within a week, they were exploring the rugged hills marking what became known as the Dammam Dome—where CASOC would discover oil after five years of prospecting. As their work widened and appeared promising, J. W. “Soak” Hoover, Thomas Koch, Art Brown and Hugh Burchfield joined them. They had been there about a year when Max Steineke came on board, and it was he who urged that deep well Dammam No. 7 not be abandoned too soon: “Dig a little deeper,” he recommended. Well No. 7 hit “the discovery zone” at 1440 meters (4727').


Nassir Al-Ajmi, of Bedouin birth, joined Aramco in the 1950’s as a teenage auto-mechanic trainee. He rose through the ranks and, as executive vice president and a member of the board of directors, became a key leader in the company’s transition to state ownership. With a high-school diploma earned in Lebanon and a company-sponsored US university degree, he personified the transition of Saudi Arabia itself from the pre-industrial to the industrial era. He wrote it down in his 1995 autobiography, Legacy of a Lifetime.


In 1950, after two years of training in the tepid Gulf waters off Ras Tanura, Florence Chadwick, an Aramco secretary, successfully braved the ENGLish Channel from France north to Dover. The next year she did it again, this time from England to France, making her the first woman to swim the Channel in both directions. Back home, New York honored her with a ticker-tape parade, President Dwight D. Eisenhower invited her to a visit in the White House and Hollywood gave her a movie contract. Later, Chadwick swam the Bosporus, the Dardanelles and the Strait of Gibraltar.


The first two diplomats to represent the United States in Saudi Arabia moved into Dhahran, Aramco’s main community, in August 1944—two years before the first US ambassador to the kingdom arrived in Jiddah on the west coast—living and working in a house lent by the company. M. R. Rutherford, US consul in Dhahran from 1949 to 1952, said Aramco had already established strong relationships with Saudis and they “were probably more important than those of our ‘official family.’” In 1952, the new (and current) consulate building was completed nearby. Bringing the story full circle, former Saudi Aramco employee Joe Kenny will become consul general in Dhahran this September.


In 1964, the company hired a health educator for families in the Eastern Province, Najat Husseini (at right): She was the company’s first university-educated Saudi female employee. Today, Saudi Aramco employs some 560 Saudi women with university degrees. They work in positions from petroleum engineers to nurses, part of a total female workforce of about 1000. The company established the Special Clerical Training Center for Saudi women in Dhahran in 1976. In the mid-1980’s, Naela Mousli became the company’s first female petroleum engineer and first female department manager. Other pioneers include Thuraya Al-Arrayed, the first Saudi woman Ph.D. to live and work in the Eastern Province, and Huda Al-Ghosen, who in 2007 became a director of the company’s shipping subsidiary, Vela International Marine, Ltd.


In 2008, the extent of Saudi Aramco’s international business partnerships—joint ventures, consortia, part ownerships and other arrangements—go beyond easy summary. In Saudi Arabia, two of the company’s seven refining operations involve international partnerships: Shell, in Jubail on the Gulf, and ExxonMobil, in Yanbu‘ on the Red Sea. Also on the Red Sea, Japan’s Sumitomo Chemical Co. has joined in a new refining and petrochemical project at Rabigh. In the Empty Quarter, four gas-exploration programs are under way with European, Russian and Chinese companies. Abroad, there are refining and marketing partnerships with Shell in the US (Motiva Enterprises llc), S-Oil in Korea, Petron in the Philippines and Showa Shell Sekiyu KK in Japan. The company is joining with ExxonMobil, Sinopec Corp. and the provincial government of Fujian, China, to expand refining and petrochemical complexes in Fujian, where Sinopec SenMei, which will market the products, is using the Saudi Aramco logo on service stations—the first such use outside the kingdom. Saudi Aramco has also signed memoranda of understanding with Total of France and ConocoPhillips to build two new 400,000-barrrel-per-day export refineries, one on each coast of the kingdom.


Fahmi Basrawi could read and write Arabic when he signed up to work in the mid-1940’s, but he had never studied ENGLish—the subject he was hired to teach—so he taught himself the language by memorizing words from a textbook. Basrawi flourished in the company’s Jabal School, where Saudis aged eight to 18 studied ENGLish, basic arithmetic and Arabic, and he excelled at organizing youth sports and field trips. He later attended college in Lebanon under company sponsorship, and he became a well-known personality on Aramco television, where he hosted educational programs for 17 years.


Officially CASOC’s assistant resident manager in Dhahran, Floyd Ohliger was the man in charge when five years of exploration paid off with oil in commercial quantities from Well No. 7 in 1938. He had been there since 1934, the year after the first prospectors landed. He became a personal friend of King ‘Abd al-‘Aziz Al Sa‘ud, served as the company’s liaison with the government, served on the board of directors and retired in 1957. Always modest about his contributions to the success of the enterprise, he invariably called the early geologists the company’s true heroes.


In the late 1940’s and 1950’s, many American employees who came to Dhahran were veterans of World War II, and when their families began arriving, they followed a tradition of the US armed services and referred (affectionately) to all employee children as “brats.” After all, it was just a short jump from “Army brat” or “Navy brat” to “Aramco brat,” and camp life did, in some ways, resemble life on an overseas military base. Brats they are to this day—proudly and still affectionately. AramcoBrats Inc., based in the US, boasts about 5000 members in more than 50 countries, and it holds biennial reunions. In 2007, three Brats produced a feature-length film, Home: The Aramco Brats Story, about expatriate children growing up in company communities.


Saudi Aramco’s Dubai-based subsidiary, Vela International Marine, Ltd., owns and operates 19 supertankers—one of the world’s largest fleets. Its vessels log about 1000 voyages annually, transporting roughly two million barrels of crude oil per day to customers in the United States and Europe. Vela also ships crude oil and petroleum products to Arabian Gulf and Red Sea regional markets.


The term “Saudization” entered Aramco’s vernacular in the years after World War II, when the company launched programs to train Saudi employees as skilled workers and, through company-sponsored university educations, to enable them to assume professional positions. Today, 87 percent of the workforce is Saudi, as are nine out of the company’s 12 board members and all but one of its top executives.


Drilling an oil well is not like sticking a straw into an underground tank. It’s a lot more complicated, and good “oil-field management” means maximizing the amount of oil extracted over the entire life of the field. The oil lies in porous underground rock formations like water in a sponge. When you drill into that formation, two things make the oil flow up the well to the surface: the pressure of gas dissolved in the oil, like carbonation in a bottle of soda, and the pressure of water that lies beneath the oil in the rock. If you allow the well to flow too fast, the oil can’t move through the rock toward the well bore fast enough to keep the flow going, and the well runs dry—though the rock still contains oil. Even in a well-run field, both these types of natural underground pressure decrease over time. One way to keep the oil flowing is by injecting water—lots of it—around the edges of the reservoir, under the oil, to push the remaining oil up toward the wells. Aramco began injecting nonpotable groundwater into reservoirs in the 1950’s, but in a land where any kind of water is scarce, the company had to look to the sea. In the late 1970’s, the company built at Qurayyah the world’s largest seawater treatment plant. Today, the plant takes biological matter and impurities out of some nine million barrels of seawater daily and pumps it to the oil fields, and by the end of this year the plant’s capacity will be nearly 13 million barrels. Another way to get the most out of oil fields is to drill into previously inaccessible folds and pockets of oil-bearing rock, or into formations too shallow to be worth going after with conventional, straight-down drilling. Today, oil wells increasiNGLy resemble root systems, curving off the vertical to move at aNGLes, even horizontally, and branching up to four or five times— a number that researchers at Saudi Aramco are hoping soon to triple. They expect such “extreme reservoir contact” wells to boost recovery rates by tenfold or more.