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Saudi Aramco Is World’s Most Profitable Company, Far Exceeding Apple
- tw04 8y agoFortunately Apple doesn't use their wealth to assassinate detractors...
- qaq 8y agofor now, but who knows how things will look like in a 100 years
- stcredzero 8y agoEven in 2019, one mostly doesn't assassinate detractors in the US. Instead, they're bought off or discredited.
- moultano 8y agoEither it stops being profitable because we stop using its product and civilization survives, or it stops being profitable because we stop using its product because civilization collapses. Either way, the long term outlook isn't good.
- rbranson 8y agoThis could essentially be said about any corporation.
- tetrep 8y agoI don't think the latter is true. Crude oil is still a great source of fuel and even in the worst case society collapse people will still need fire.
- revscat 8y agoThat's making the rather bold assumption that the climate will be habitable for humankind.
- londons_explore 8y agoI can see a potential future where we destroy the environment so badly we decide to permanently live indoors with artificial atmosphere, yet we still burn oil outdoors...
- coldtea 8y agoThat's the case for every corporation ever!
- PeterisP 8y agoOil is a wonderful resource with many uses that will remain valuable long after we stop relying on fossil fuels; it forms the basis for most of chemical industry from plastics to pharmaceuticals. It's just that currently it's so extremely cheap and abundant that we simply burn most of it.
- lawnchair_larry 8y agoYet people think they need money badly enough to hack Bezos nudes and try to extort him?
- return0 8y ago> Somewhere around two-thirds of Saudi nationals work for the government. Many of these people do virtually nothing, they are employed simply for social purposes, to keep the population happy. Thus, their incomes are very similar to universal basic incomes. The Saudi government gets 90 percent of its income from oil revenue, which given the ease of producing oil in Saudi Arabia and the use of foreign partners to do much of the producing makes this revenue source pretty similar to simply printing money. In Saudi Arabia money doesn’t grow on trees, but it does bubble out of the ground. Saudi has been running a real large scale UBI experiment for decades, showing how you end up a stagnant, backwards and authoritarian society. https://www.forbes.com/sites/jeffreydorfman/2016/10/03/saudi-government-budget-cuts-prove-basic-income-is-no-solution-to-slow-economic-growth/#3d440ead4bbe https://www.forbes.com/sites/jeffreydorfman/2016/10/03/saudi...
- joosters 8y ago'End up?' What do you think the Saudi economy/society was like before the oil?
- return0 8y ago> Until the 1960s, most of the population was nomadic or seminomadic; due to rapid economic and urban growth, more than 95% of the population is now settled. you would expect that the massive population explosion, enrichment and urbanization would empower at least some liberalization some 3 generations later, or at least catch up with average middle east culture
- joelthelion 8y agoIt's not hard to be profitable when you're not paying for your externalities...
- markdown 8y agoIn being the factory of the world, it's the Chinese who pay while we all enjoy our shiny new phones.
- rcMgD2BwE72F 8y agoWhat externalities are you talking about? Sure these poor workers are suffering for our comfort, but there must be poor neighbors closer to you that are more to be pitied (they depend on you more than the Chinese). Also, the externalities of Saudi Aramco are mostly about the environment (climate, air pollution, war, terrorism, dictatorship). That's a whole different story, isn't it?
- deleted 8y ago[deleted]
- amelius 8y agoBut for how long?
- jak92 8y agoRight? Didn't all the peak oil fanatics say we'd run of oil years ago?
- rcMgD2BwE72F 8y agoPeak "conventional" oil has been reached years ago. The reason why oil production keeps rising is because Big Money finances shale oil and tar sands, both of which are highly unprofitable. For some reasons, peak oil fanatics never thought Wall Street (or the Fed?) would lend free money to money-losing ventures that are literally ruining our planet. Tell me, who are the fanatics again?
- pembrook 8y agoThey are not “highly unprofitable.” Trust me, oil companies are not doing this for charity. Of course, when the price of oil is driven downwards on purpose by the Saudis ramping up production (as it was a few years ago), these higher cost methods of extraction can become unprofitable. But the price of oil is again in a range where these methods are profitable.
- progfix 8y agoWe probably will never run out of oil, because we find new deposits, new ways of extraction, etc. What people have said and are saying is that with the deposits we know of and with current equipment we will run out in X years.
- rmah 8y agoThe amount of proven oil reserves is higher now than at any time in history. IOW, humans are discovering new oil at a faster rate than we are pumping it out of the ground.
- tmh79 8y agoSaudi Aramco is essentially part of the Saudi government, not an apples to apples comparison IMO. If they're going to discount the free mineral rights given to Aramco, then they should also account for the social services that the government uses Aramco to pay for, because without the social services, you're not getting free mineral rights.
- ip26 8y agoWe sell mineral rights in the US for next to nothing, so is it really exceptional?
- onetimemanytime 8y agoSo if oil is found in Fed land in Alaska, Exxon will get to pump it for "next to nothing"? No special taxes, per barrel fee?
- ip26 8y agoIt's not actually free, but my vague memory is that most fees are something like 20% of the going market rate on private land.
- r00fus 8y agoAlaska has a profit sharing deal with its residents so they always get some cash for the exploitation of lands. The rest of the US is a different story.
- planteen 8y agoWyoming has mineral severance taxes to the point that there is no income tax in the state. Over 50% of the state's revenue comes from mineral severance. There is also a permanent trust there. Colorado gets something like $100 million per year from mineral severance. I'd be shocked if other oil producing states didn't collect severance taxes. What state are you referring to that doesn't collect anything?
- yingw787 8y agoThis isn't terribly surprising to me. Pulling money out of the ground is a high-margin, low (relative) cost deal. Like selling $1 for $2. I do wonder how many people know that the wealthiest companies are private, just like how the wealthiest people/families/syndicates do not publish nor reveal their wealth in any meaningful way. It's like the universe's dark matter. At some point, money becomes power, and power always whispers.
- sphinxpy 8y agoThis is a very true statement. And in a very literal way, the dark matter analogy is spot on.
- Phlarp 8y agoOil extraction has wildly varying costs. Saudi Arabia is lucky in that they have large deposits that are quite shallow. As such Saudi Arabia can produce oil with a very low marginal cost per barrel ($15 or $20). Compare that to tar sands, offshore rigs or shale gas with horizontal drilling, exotic injection techniques, high water usage, deeper oil deposits, saturation divers and royalties on the extraction techniques. North American oil producers have much tighter margins.
- yingw787 8y agoYeah, but many of those are fixed costs, given immutable characteristics of the fields themselves, which means given a certain profitability threshold, you have a very predictable income stream. That given of course varies on the highly variable price of petroleum commodities, but given the oligopolistic nature of the O&G industry, getting subsidies to tide over the bad times and prevent extensive capital depreciation is reasonably easy. Saudis make a lot of crude, and the crude they pump is good quality. Hence, they print money.
- Phlarp 8y agoThe fixed low marginal costs of Saudi infrastructure also allows them to keep the higher cost producers on a tight leash. If US domestic production gets too robust for their liking; they can simply enforce a price regime low enough to put other producers out of profitability, and hold it there long enough that even the most cash rich extractors will pack it in and attempt to shift that capital to other ventures.
- Talyen42 8y agoIf aramco is a company, so is the united states IMHO
- cphoover 8y agoRight... if we are counting nationalized entities it's not a fair comparison really.
- gcbw2 8y agoAnd where do you draw the line? Most US based telCos today are based on a government backed monopoly of wireless spectrum and all of them received several billions dollars until last year to improve infrastructure (which none of them did, and had zero consequences)
- dajohnson89 8y agosource please?
- coldtea 8y agoFor what? Both are widely known facts. https://en.wikipedia.org/wiki/Universal_Service_Fund https://en.wikipedia.org/wiki/Universal_Service_Fund https://www.wired.com/story/the-dangers-of-big-city-subsidies/ https://www.wired.com/story/the-dangers-of-big-city-subsidie... https://arstechnica.com/tech-policy/2018/08/isps-want-to-be-utilities-but-only-to-get-more-money-from-the-government/ https://arstechnica.com/tech-policy/2018/08/isps-want-to-be-...
- gcbw2 8y agohttps://www.reddit.com/r/explainlikeimfive/comments/6c5e97/eli5_how_were_isps_able_to_pocket_the_200_billion/ https://www.reddit.com/r/explainlikeimfive/comments/6c5e97/e... https://www.reddit.com/r/explainlikeimfive/comments/6c5e97/eli5_how_were_isps_able_to_pocket_the_200_billion/
- monochromatic 8y ago
- deleted 8y ago[deleted]
- stevespang 8y agoThis is black money, dark money now - - based upon an industry that is heavily contributing to global warming, and is time goes on will be under increasing environmental pressure. As the world transitions to electric cars and solar/wind - - - - petro will likely continue in chemicals, asphalt and fuel for what, tanker ships and airplanes ?
- DeonPenny 8y agoTo bad they will never publish their books.
- deleted 8y ago[deleted]
- gandalfian 8y agoWeirdly behind very closed doors it's said to still be run as a modern American western company. No body wants to mess with what works. Of course the trillion dollar question is how much oil is truly left?
- evancox100 8y agoI'm very puzzled, if they're generating $25 billion in profit/quarter, why do they need to get a loan? They could just pocket the earnings for a couple months.
- glbrew 8y agoIf those are rules we are playing by I would say the US Mint is the most profitable company.