Aramco The Resilient

Aramco probably isn't going to IPO now, but what this whole process has done is teach them a bit of a lesson. So they are still restructuring regardless and will come out leaner and meaner. 

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Remember, a fundamental challenge for Aramco is paying for the Kingdom, and doing completely non-related business, not the cost per barrel produced and how many produced. In 1980 there were roughly 10 million people in Kingdom. In 1987, the year Saudi's took over the senior leadership 14 1/2 million, and today 33 million. Give them 100 a barrel oil, extraction costs always under $10 barrel, and they are still in a heap of trouble unless they diversify their wealth creation, the question is when, not if. Look at how much Aramco produced in the early 80s, and with how many people, and then not hiring EPCs and oil services companies to do most of the work for them. Aramco doesn't do leaner and meaner, that flies against the patronage that keeps the peace. An IPO, where you could change the workforce, would be leaner and meaner and definitely have to know it's own costs and where they spend it (they don't today). But the political cost to be leaner and meander might be too high, even for an absolute monarch. And leadership there has no idea how to run a public company. The political skills required for the last two generations are out of sort for a western style public company. Some of the technical skills are fine. That is the easy part.

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