2: - [Narrator] This map shows the major infrastructure

4: of Saudi Aramco, the worlds most profitable company.

8: The dark spots clustered to the east

10: are deep reservoirs of oil and natural gas,

13: the life blood of Aramco's business and the global economy.

17: For nearly a century, Aramco's oil has powered

20: cars, planes, and industries,

22: and electrified homes around the world.

24: In 2018, the company produced 13.6 million barrels

28: of oil a day, more than any other company.

32: Then in 2019, Aramco's IPO valued the company

35: at 1.7 trillion,

37: in the worlds biggest ever public offering.

40: But the forces that propelled Aramco's growth

42: from a single well to the biggest producer in the world

46: are changing underfoot.

48: And some analysts say the company won't be able

50: to sustain the kind of growth it will need

52: to keep investors happy.

54: To understand these changes, you have to understand

57: how Aramco got so big in the first place.

63: The company was founded in the 1930s

65: on a barren tract of desert, with no natural river

68: or body of water and little vegetation.

71: - It was completely pre-modern.

73: I mean it really looked basically like it had

76: since the 1700s, the 1800s.

78: - [Narrator] The kingdom's leader IBBEN SAUD,

80: was low on cash to fund development,

83: so in 1933 he struck a deal with an American oil company.

86: Standard Oil of California, or SoCal,

89: won the right to search for oil

91: near the eastern coast, in Al Hasa.

93: Five years and several dry wells later,

96: SoCal and it's partner, Texaco, hit oil, a lot of it.

100: Quickly, well number seven was producing

102: commercial quantities,

104: around 4,000 barrels of crude oil a day.

108: Workers began construction on a pipeline to the sea.

111: By spring of 1939, the SoCal tanker, D.G. Scofield

115: docked at Ras Tanura and filled its first shipment

118: of oil to leave Saudi Arabia for the global markets.

122: The country with nothing to sell had found

124: what everyone wanted to buy.

126: Over the following decades, the American Group

129: found more and more mineral wealth beneath the Saudi sand.

132: By 1970, that oil would play a crucial role in a market

136: halfway around the world.

138: A market so big it would lift Aramco's profits

140: and push Saudi Arabia to alter the future

142: of oil markets everywhere.

146: What happened is that in 1970, Texas tapped out.

151: After more than a century of growth,

153: U.S. oil production began to fall.

156: At the time, Americans were driving to work

158: in gas guzzlers like these.

160: The average fuel consumption for this type pf vehicle

163: was 13 and a half miles per gallon.

165: To fuel these cars, the U.S. turned overseas.

169: You can see it on this chart, which shows the countries

171: imports of crude oil.

174: Aramco, still an American company,

176: had plenty of oil to sell.

178: Wald said that between 1972 and 1973,

182: production grew from five point four million to

185: eight point four million barrels a day.

187: According to Aramco, in 1971, shipments of crude oil

191: and petroleum products from Ras Tanura

193: had surpassed one billion barrels a year.

196: Saudi Arabia and other oil producing nations

199: took notice of all this demand.

201: - OPEC, this organization of petroleum exporting companies,

204: which had been created in the 60s but didn't do anything

207: for years, they would essentially negotiate

210: with the big international oil companies,

212: like Exxon and BP and Shell,

214: and they would negotiate a price for oil.

216: And they were basically selling all of their oil

219: to these international companies that had

221: distribution outlets around the world.

222: And 1973 comes along and the countries say,

226: you know what, we know what's happening with demand.

229: We know that we're supplying most of your market.

232: We need a higher price for oil.

233: - [Narrator] When OPEC tried to raise prices,

235: the international companies said No.

238: So, Saudi Arabia's' oil minister Ahmed Zaki Yamani,

242: took a different approach.

243: - So right at that exact same time,

245: was the Arab-Israeli War and a lot of the countries in OPEC

250: wanted to basically help out their fellow Arab countries

253: by raising the price of oil and both embargoing it

257: to the countries that were helping Israel,

260: namely the United States and its allies.

262: And the Saudis were actually the least interested

264: in doing this, but once it became clear that they

266: couldn't negotiate an increase in the price of oil,

269: Yamani looked at this situation and he said,

271: we can use this political situation to our advantage.

274: - [Narrator] Here's Yamani in December of 1973.

277: - When the Israelis accept to withdraw

282: from the occupied territories,

285: and the U.S. government guarantees

290: that decision,

291: then immediately we can lift the embargo.

295: This could happen anytime.

298: - [Narrator] The plan worked.

300: This chart shows the U.S. price for oil

302: before and after the embargo.

304: - [Newscaster] President Nixon said the gas crisis

306: has dissolved into a problem.

308: But it's a problem millions of motorists

309: are still trying to cope with in long lines

312: at their local gas stations.

314: - [Narrator] While America was reeling from the price shock,

316: Saudi Arabia was making plans to increase

319: its control of Aramco.

321: That year, the Kingdom set a deal to buy 25% of the company.

325: - And that was really when the tables turned

328: and it was very clear that it was no longer these

331: big international oil companies.

332: It was no longer the Americans.

334: It was the Saudis that controlled their oil

337: and controlled their commodity.

340: And shortly after that, in 1974, they negotiated to buy

344: another percentage of the company.

346: In 1976, they had more negotiations that led to them

349: eventually completing the purchase

351: for all of Aramco in 1980.

354: - [Narrator] Aramco was now fully owned by the Saudi state.

357: From this point forward, Saudi Arabia along with OPEC

360: would exert enormous control

362: over the price of oil everywhere.

365: In the early 80s, the company set forth on a

367: period of rapid expansion that would take Aramco

370: beyond the Kingdom's oil fields and borders

372: to new markets around the world.

377: - Ali Al-Naimi became the first Saudi CEO of the company,

381: so it was his vision that diversified

383: and really integrated the company

384: and turned it into something that could make money

387: in all parts of the value chain,

389: not just the pumping the oil out of the ground.

391: So they first went to Korea and they negotiated

394: with the South Koreans and they started

395: a joint oil refinery called S-OIL in South Korea.

399: They also negotiated in Japan and they also have a big

402: oil storage facility in Japan.

405: Then finally they got the China, and they have several

408: joint ventures in China for refineries and petrochemicals.

412: - [Narrator] The timing was right to capitalize

414: on a surge in demand for oil.

416: Here's a look at China's GDP over those decades.

420: - They set up in Asia at exactly the moment

422: when Asia took off as a consumer

424: and they were really well positioned.

426: And in fact, Saudi Arabia is currently

428: the largest oil supplier to China right now.

431: - [Narrator] By the 2000s, it was a global conglomerate

434: positioned to profit from a historic rally in oil prices.

437: Supply disruptions in the Middle East and demand

440: in emerging markets, like India,

442: drove the price to new heights.

444: - Price spikes are becoming a way of life

446: in the United States.

447: - Geopolitical certainty in a number of countries

450: in the Middle East and Africa will continue

452: to keep markets on edge.

454: - [Male Newscaster] Gas prices are hitting new highs.

457: - We gotta live with it.

459: They're gonna keep going up.

460: - [Narrator] In 2008, the price of oil

462: hit a record high of $147.

466: In the decade since that peak,

468: many of the factors that lead to Aramco's rise,

471: have shifted.

472: For one, the U.S. came back online

474: as a major oil producer.

476: By 2008, U.S. producers had found new ways

478: to extract oil from places they had thought were tapped out,

481: as well as some new areas.

483: Production surged.

485: This is Nansen G. Saleri, a former Aramco executive.

489: - What the

491: U.S. producers have done though is extraordinary.

495: And with the benefit of new engineering capabilities,

501: especially the fracking capabilities,

505: they're able to produce significant amounts of oil

509: and today you look at the U.S. production,

512: it's approaching 13 million barrels per day.

515: - [Narrator] Meanwhile, cars and homes had become

517: more efficient, curbing growth in demand.

520: The average fuel economy for new cars in the United States

523: is now closer to 25 miles per gallon.

526: That's almost twice what it was in 1970.

529: And at the same time, buyers have slowly

531: started shifting toward cleaner energy sources.

534: - In the new world, it's all about clean BTUs,

539: clean energies, so Aramco now has to compete

543: in the clean BTU era.

546: Nobody in the industry, including the most successful

550: IOCs, including the unconventionals,

554: they cannot say, oh we are totally blind

558: to what's going on as far as global warming,

560: as far as CO2 emissions, or greenhouse emissions.

564: That's somebody else's problem.

567: That is not an answer anymore.

569: - [Narrator] Investors are pumping cash into assets deemed

571: more environmentally friendly, such as so-called ESG Funds,

575: which focus on environmental, social and governance factors.

579: Investors say all of these factors

580: have threatened oil stocks.

582: Here's the performance of oil stocks

584: compared to the broader market.

586: This was the stage being set in 2016

588: when Aramco said it was considering an IPO

591: as part of an effort to diversify

593: the company's economy beyond oil.

595: After setbacks, Aramco launched its IPO in 2019,

599: selling 1.5% of itself on the Tadawul in Riyadh,

603: mostly to Saudi Investors.

606: It's unclear if the company will sell more

607: on international markets

609: and reach the five percent like it had planned.