Word: aramco
(lookup in dictionary)
(lookup stats)
Dates: all
Sort By: most recent first
(reverse)
Where will the money go? The oil producers can use some-though not much-to buy out foreign holdings within their own borders. Last year Saudi Arabia paid $500 million for 25% of Aramco, the consortium that pumps and distributes Saudi oil, and last week agreement was reached for a 100% takeover by year's end. Western banks and a handful of investment banking houses have won contracts to direct petrodollars from oil-rich Arab nations to poor or heavily populated ones such as Egypt, Sudan and Yemen. But many of the poorer Arab nations will require years...
Forty percent of the Saudi crude yield belongs to the four members of Aramco-Texaco, Mobil, Exxon and Standard Oil of California. Sixty percent belongs to the Saudi government. The Aramco companies must ante up taxes and royalties on their share, calculated on the basis of a theoretical "posted price." It is this posted price that the Saudis reduced-from $11.65 to $11.25 per bbl. for its Arabian light crude. But at the same time, they sharply raised the taxes and royalties...
...Saudis sell almost all of their 60% share back to the Aramco companies, and dispose of a small part of it on the open market, mostly to European governments and companies. The selling price has been 93% of the posted price. Reportedly, the Saudis will maintain that 93% price for the open-market buyers, but will boost it to 94.8% on sales to Aramco. Doing this, the Saudis may win away many of Aramco's customers...
Lost Profit. The reason is that unless Aramco raises its prices to those customers, it could lose all the profit that Aramco companies now collect on Arabian light crude. Exxon, one of Aramco's owners, estimates its own profit at 34? per bbl. But if Aramco has to pay 94.8% of the posted price as well as the higher taxes and royalties, its costs per barrel could jump as high as 55?, to about $10.35. At a meeting of security analysts in Manhattan last week, Exxon Chairman J. Kenneth Jamieson said he was "somewhat mystified" by the impact...
...increase to Aramco averages out to 50? per bbl., the Saudis will be taking in an additional $1.5 billion a year; this year their oil revenues will be around $25 billion. But offering lower prices to other buyers would do little to alleviate the petrodollar crisis, says Oil Economist Walter Levy...