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Liam Denning

Saudi Aramco’s Double-Edged Advantage

Its location is its greatest asset and its greatest risk.

Look beneath the headline numbers.

Look beneath the headline numbers.

Photographer: FAYEZ NURELDINE/AFP/Getty Images

Saudi Arabian Oil Co. doesn’t do “small.”  It wants to raise about $10 billion in the international bond market to buy a majority stake in Saudi Basic Industries Corp., the country’s largest listed company, in what effectively shuffles state assets from one pocket to another. So the state-owned oil giant just dropped a prospectus weighing in at almost 500 pages. As my colleagues at Bloomberg News note, the document reveals, among other things, that Saudi Aramco made a net profit last year of $111 billion, more than five times that of Exxon Mobil Corp.

What really sets Aramco apart, though, are the numbers that aren’t bigger. Total assets at the end of 2018 were a shade under $359 billion. That makes Aramco’s balance sheet only about 4 percent bigger than Exxon’s, despite big differences in production, profits and cash flow. Royal Dutch Shell Plc, another listed peer, actually has a slightly bigger balance sheet than Aramco’s.