Entrepreneurship in the Kingdom of Saudi Arabia

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Is There a Larger Role for Saudi Aramco?

January 12, 2010


Today we present for your consideration a guest blog post from Abdulateef Al-Mulhim discussing an expanded role for Saudi Aramco in the public life of the Kingdom His commentary has appeared in Arab News and we look forward to your feedback on our guest bloggers’ perspectives and all of the SUSRIS offerings.

What Norway’s Statoil did, that Saudi Aramco has not done
Abdulateef Al-Mulhim

Abdulateef Al-Mulhim, Commodore, Royal Saudi Navy (Retired)

Oil was discovered in Norway in 1969. Three years later Statoil was created as an integrated state-owned oil company. I studied the effect this company had on Norway in my graduate studies in Political Science at Old Dominion University. My focus on “the politics of oil” included the study of the “seven sisters” a consortium of oil companies, but all our talk in class was about Aramco and Statoil. The resemblances were more than I would have thought.

Oil was discovered in Saudi Arabia in 1938 when the geologists in Bahrain saw similarities with some sites in Saudi Arabia. The discovery of gas by Esso and Shell in 1959 at Groningen in the Netherlands in 1959, prompted some companies to look further north. Discovery of other fields in the North Sea continued and Norway became a very strong player in the oil and gas industry. Norwegian oil production has always been around two million barrels per day and it is exporting oil and gas technology.

Among the most important things Statoil did was to be listed on the Oslo and New York stock exchanges in 2001. The company also got involved in the daily life of the Norwegian people. Not long ago Norway announced that the government pension fund generated by the oil wealth rose to $500 billion. This means every Norwegian man and woman, young and old, has about $120,000 in their bank account. The revenues have contributed to supported for arts and sports, and development of talent among the people.

Saudi Aramco has served the Saudis in every day life. They improved agriculture and had one of the best health care services in the world. They have educated young Saudis since the 1930s. They built roads and schools and education centers. They have a housing fund for their employees that has no parallel in the world. They run a good library and I remember borrowing books when I was 13 years old. They have a mobile library as well. Aramco even has programs for orphans in the area.

Saudi Aramco is a social institution in every aspect. People want Saudi Aramco to be the planner, the budgeter and the builder. We have faith in their planning. Oil prices are always going up and their projects are in the billions. All of this means Saudi Aramco can have a larger role in society.

Saudi Aramco still imports technologies after 77 years of progress. Why” And why did they stop building schools when people were waiting for them to build a university or an institute outside their camp? When I heard of the multibillion-dollar projects that were planned by Saudi Aramco, I hoped to see a newspaper report the next day talking about new job openings for Saudis. In the West, when a billion dollar project is announced, there inevitable reports of new jobs associated with the project. Otherwise the public will have little interest in such news.

If Statoil can do for the Norwegians what they did with two million barrels per day of oil production, just think what Saudi Aramco could do in Saudi society with its exports of about ten million barrels per day.

— Abdulateef Al-Mulhim retired at the grade of Commodore from the Royal Saudi Navy. He can be contacted at: almulhimnavy@hotmail.com

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