Zhongzhi Weiye Information | Over $20 Billion! Will the Oil Giant Make Another Move?

Regardless of whether Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) ultimately acquire Santos—the largest oil and gas producer in Australia—Santos remains uniquely attractive. Its assets span Australia, Alaska, Papua New Guinea, Timor-Leste, and the United States. In recent years, its liquefied natural gas (LNG) business has drawn keen interest from bidders—especially its stake in PNG LNG (Papua New Guinea LNG), a company that produced 91.7 million barrels of oil equivalent last year and held 1.661 billion barrels of oil equivalent in proven and probable reserves as of year-end. Market analysts believe that potential involvement by Middle Eastern energy giants would further boost Santos’s market valuation and likely trigger heightened attention—and competitive bidding—from other international energy companies. 02. Saudi Aramco’s Drive to Build Natural Gas Dominance On Thursday, July 4, a spokesperson for Saudi Aramco stated: “Recent media reports suggesting that Saudi Aramco is considering acquiring Santos are inaccurate.” Although Saudi Aramco publicly denied the acquisition rumor, its ambition to expand natural gas investments and establish global dominance in the sector is indisputable. Last year, Saudi Aramco announced plans to raise its oil production from 12 million barrels per day to 13 million barrels per day by 2027, with an investment commitment of $40 billion between 2024 and 2028. However, earlier this year, the company announced it would no longer pursue significant increases in crude oil output, shifting its strategic focus instead toward natural gas. Just on June 30, Saudi Aramco announced it had signed contracts worth over $25 billion for Phase II expansion of the Jafurah gas field and Phase III expansion of the main natural gas network. Jafurah—the Kingdom’s largest unconventional non-associated gas field—holds enormous reserves: 229 trillion cubic feet of natural gas and 75 billion barrels of condensate. Developing Jafurah is expected to further cement Saudi Arabia’s position as a top-tier global natural gas producer. In pursuing natural gas leadership, Saudi Aramco is going all-in. Last September, it acquired a minority stake in MidOcean Energy for $500 million—marking its first foray into the international LNG market. Amin Nasser, President and CEO of Saudi Aramco, stated: “We are also interested in the U.S. We are engaging in discussions with several companies and partners in the U.S. and elsewhere, as this is a high-growth, critically important market. We are actively seeking growth opportunities to expand our footprint in the LNG sector.” The company aims to increase its natural gas production by more than 60% by 2030 compared to 2021 levels. At the end of June this year, Saudi Aramco’s official website announced that the company and Sempra had reached agreement on equity participation and LNG offtake for the Port Arthur LNG Phase II project. Under the agreement, Saudi Aramco will further consider acquiring a 25% equity stake in the Port Arthur Phase II project.

Saudi Aramco: Why Is It the ‘Uncrowned King’ of the Global Energy Industry?

Saudi Aramco is not merely an oil company—it is a central player shaping the global energy landscape. Through a business model built on resource monopoly, cost dominance, full-value-chain control, and pricing power, it has erected barriers in the global energy industry that are virtually insurmountable—earning it the well-deserved title of ‘Uncrowned King.’ Its core competitiveness and developmental logic manifest across the following dimensions: I. A Century-Long Evolution: From Foreign Exploration to Petroleum Empire Saudi Aramco’s history mirrors Saudi Arabia’s transformation from a desert kingdom into an energy superpower—and serves as a living textbook of global petroleum industry development. Four distinct phases mark its qualitative leaps: 1. Incubation Period (1933–1976): U.S.-backed exploration launched Saudi Arabia’s oil era; the discovery of the Dammam field ushered the nation into the petroleum age. Though resources were initially controlled by foreign capital, this period laid vital technical and industrial foundations. 2. Nationalization Period (1976–1999): The Saudi government gradually repurchased shares, culminating in the formal establishment of Saudi Aramco in 1988—achieving 100% state ownership of petroleum resources and cementing the company’s role as the cornerstone of the national economy. 3. Expansion Period (2000–2018): Global integration across the entire value chain, including control over world-class fields such as Ghawar and Safaniyah, enabled it to slash upstream costs to just $2 per barrel—making it the world’s largest oil producer. 4. Transformation Period (2019–2026): Completion of the world’s largest IPO aligned with Saudi Vision 2030, transitioning the company from a traditional oil enterprise into a diversified, full-spectrum energy conglomerate—with strategic bets placed on natural gas, digitalization, and new energy sources. II. Four Core Advantages: Building the ‘Ceiling’ of the Global Energy Industry Saudi Aramco’s strength lies not in any single dimension—but in comprehensive, overwhelming superiority—explaining why it faces virtually no true competitors: 1. Resource Monopoly: Unreplicable Scarcity It controls one-fifth of the world’s proven crude oil reserves (over 260 billion barrels), operates the world’s largest onshore field (Ghawar) and largest offshore field (Safaniyah), and enjoys reserve lifespans exceeding a century—a resource endowment unmatched by any other energy enterprise. 2. Cost Dominance: Unrivaled Cost Efficiency Its crude oil production cost stands at only $2 per barrel; its natural gas production cost is just $1 per barrel of oil equivalent—far below the $40–$60 per barrel average for international oil companies. Even amid sharp oil price declines, Saudi Aramco maintains profitability—demonstrating globally unparalleled resilience against market volatility. 3. Full-Value-Chain Control: Layered Profit Enhancement and Reduced Intermediary Losses From upstream exploration and production, through midstream storage, transportation, and trading, to downstream refining, petrochemicals, and beyond—Saudi Aramco commands the entire value chain. It further extends into technical services and digital operations, maximizing crude oil’s added value and escaping the profit limitations of mere commodity sales. 4. Pricing Power Leadership: Steering Global Oil Supply, Demand, and Prices As a core OPEC member, Saudi Aramco effectively steers oil output and pricing policy. Its stable daily output of 12 million barrels acts as the ‘ballast stone’ of global oil markets—allowing it to directly influence oil prices via production hikes or cuts, thereby retaining absolute initiative in market regulation. III. Financial Strength: World-Leading Profitability and Cash Flow So Robust That ‘No Financing Is Needed’

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