Saudi Aramco: PRIME time with Rice MBA students
Saudi Aramco not only aspires to expand its operations as the world’s leading integrated energy and chemicals company, but is also committed to playing a key role in strengthening the communities where it does business. Thirty Rice MBAs got an in-depth view of this expansive vision when they spent three hours engaged in probing discussions with executives at Aramco Services Company, the Houston-based subsidiary of Saudi Aramco.
The trip was facilitated by PRIME (Partnership for Research Insight and Management Excellence), a partnership designed to enhance and promote the intellectual capital of the Jones School in the context of the energy industry. An application process ensured that students qualifying for the trip had researched Saudi Aramco in preparation for the visit. “Because of their preparation,” said Ankur Dayal, director of Energy Initiatives at the Jones School, “the interaction with the executives and the Q&A was extremely thought provoking, germane and powerful.”
The students were welcomed by Khalid Alnaji, president of Saudi Refining, Inc. (SRI). They heard from him and other company representatives about several strategic initiatives at Aramco, including joint ventures, upstream technology, energy ventures, and research and development. A key insight for the students was getting an internal perspective on the difference between an integrated oil company (IOC), such as Shell or Exxon, versus a national oil company (NOC), such as Saudi Aramco.
Aramco has a broader mandate that goes beyond shareholder profitability. It also includes a mandate for providing opportunities to citizens of the Kingdom of Saudi Arabia — increasing employment, training and development, as well as enhancing the level of technology and intellectual capabilities of the local companies.
Bill Arnold, professor in the practice of energy management at the Jones School led the students. “The broad topics discussed with students opened them to insights about NOCs and executive decision making,” said Professor Arnold. Other topics discussed included:
- Energy resources and requirements of the Kingdom’s growing economy
- Aramco’s emerging focus on non-associated gas, as well as innovation in renewables
- Aramco’s three new research centers in the U.S. (including Houston)
- Aramco’s partnerships with IOCs like Shell, and the substantial procurement that Aramco undertakes in Houston
Professor of Strategic Management Anthea Zhang also accompanied the students. Professor Zhang, a leading authority on foreign-market entry, will be teaching an integrated course offering (ICO) in the fall 2015 called Managing Foreign Market Entry for the Energy Industry. She recently taught an executive education course for alumni during this spring’s reunion called Managing Political Risk in Global Businesses. “I was fascinated to learn about the substantial R&D presence that Aramco has globally including the U.S. and in China,” said Professor Zhang. “Their approach is markedly different than that of ExxonMobil — both extremely successful companies. I hope to understand these approaches from a research perspective.”
According to Vikas Mittal, J. Hugh Liedtke Professor of Marketing and head of Energy Initiatives at the Jones School, “Saudi Aramco brings a high level of international distinctiveness and credibility to the energy initiative at Rice.” He added, “I have had the distinct pleasure of teaching several executives from Saudi Aramco in our Executive Education programs.”
The Jones School’s energy initiatives have set meaningful goals. “We want to get to know the different companies better so that we can be thoughtful partners,” said Dayal. “If our students intimately understand the decision process, culture and background of each company, they will also make better employees, executives and contributors at those companies.”