Saudis Will Form State Oil Firm to Reduce U.S. Role
In a move that furthers a 15-year effort to reduce the role of U.S. oil companies in its oil industry, Saudi Arabia on Wednesday said that it has decided to establish a state oil company.
The official Saudi Press Agency said the Saudi Cabinet had decided to set up the Saudi Arabian Oil Co., but gave few details.
The new state company will apparently take formal control of the kingdom’s vast oil industry from the Arabian American Oil Co., Aramco, a consortium formerly owned by four major U.S. oil companies.
The decision follows several years of uncertainty about the relationship between the Saudi government and the consortium, previously owned by Mobil, Texaco, Chevron and Exxon, but now 100% controlled by the Saudis.
The Riyad government was quick to add that the move would not affect current operations.
Hisham Nazer, the Saudi oil minister, said technical, administrative and marketing arrangements with other oil companies would continue, an apparent reference to the former Aramco partners that still produce, refine and market oil for the kingdom.
Industry sources said the four companies were expected to continue their role as contractors to the Saudis after the new state company begins operation.
Start your day right
Sign up for Essential California for news, features and recommendations from the L.A. Times and beyond in your inbox six days a week.
You may occasionally receive promotional content from the Los Angeles Times.
