How Saudi Aramco plans to win the oil endgame

THE MANAGERS of Saudi Aramco could have the cushiest jobs in the energy business. The state-run oil colossus produces 9m barrels of oil a day, more than any other firm and nearly a tenth of the world’s total (see chart 1). It boasts by far the largest remaining proven reserves of the stuff, which would last into second half of the century at current pumping rates. Its piddling production costs of $3 a barrel, a tenth of what many Western private-sector rivals must content themselves with, allowed it to generate an eye-watering $282bn in total net profit over the past two years. And though its oil burns as dirtily as any other, Aramco emits less carbon liberating it from geological formations than competitors do. That makes the company’s product appealing in a world increasingly concerned about global warming but still hooked on hydrocarbons.

As less generously endowed rivals fall by the wayside, Aramco’s market share would, in other words, be almost certain to rise with a few modest investments in maintaining reservoirs. Yet the company’s employees are busier than ever. That is because Aramco is the linchpin of the strategy of Muhammad bin Salman, Saudi Arabia’s crown prince and de facto ruler, to end his country’s reliance on oil, diversify its economy and decarbonise its energy production.