Cupertino giant Apple became the world’s first firm to touch $1 trillion mark back in August 2018. A Saudi Arabian firm, Aramco, has beat Apple, which has touched $1.9 trillion. Their shares jumped 10% on December 11, the very first day of trading in Saudi Tadawul exchange.
Aramco raised $25.6 billion in its first public offering, which surpassed Alibaba’s $25 million in its 2014 Wall Street debut. Its market valuation is higher compared to oil companies such as Exxon, Mobil, Shell, etc.
Saudi Arabian Crown Prince Mohammed bin Salman’s strategy has paid off as Aramco’s sale of three billion shares could overhaul the oil economy. It is said to be a part of a high-stakes plan. Financial Times reported that the Saudi government is trying hard to persuade wealthy citizens and organizations to buy Aramco shares to make it reach the $2 trillion mark.
Saudi Energy Minister Prince Abdulaziz bin Salman said, “In a few months from now… I wouldn’t call them by names, but I think they would probably like not to have written those pieces that they have written. We will get Aramco and it will be higher than the two trillion [dollars], and I can bet that this will happen.”
Apple was holding on to the top position since February this year. Its rival Microsoft was not far behind. They even uprooted Apple for a brief period. But Aramco, which was a fully state-owned firm, has some of the biggest oil fields in the world. With crude oil in the ground which are worth decades, the firm is now free to focus on the task of compressing oil from existing fields, like Ghawar, instead of spending on discovering and developing resources deep in the ocean.
Consequently, Aramco’s costs (per barrel) produced accounts to just a fraction of the industry average, and thus it is exceedingly profitable. Though the earnings are expected to fall this year, it will possibly be the world’s most profitable company.