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Refining
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Saudis make up the bulk of Saudi Aramco's technical and managerial work force
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In the 1960s, Saudi Arabia began to build refineries for domestic and export production. Prior to that, the Kingdom had to send its crude oil to foreign refineries for processing and import refined products for its own use. The country rapidly expanded its refining capacity under the development plans in the 1970s. Today, there are nine refineries, ranked among the world's most technologically advanced. Production of petroleum products at these refineries rose from only 616,000 barrels per day in 1970 to more than 1.8 million barrels per day in 1992. These products include gasoline, fuel and diesel oil, liquefied petroleum gas (LPG), jet fuel, kerosene, asphalt and other commodities.
Saudi Arabia's oil policy also emphasizes expanding its downstream operations abroad. As a first step, Saudi Aramco and Texaco Inc. established a joint-venture company, Star Enterprise, to refine and market petroleum products in the United States. The company, which began operation on January 1, 1989, owns approximately 10,000 gasoline stations and a number of distribution centers in 26 states in the eastern U.S. It also owns and operates three refineries with a combined capacity of over 600,000 barrels per day. Saudi Aramco entered into a second joint venture operation with Ssang Yong Company of South Korea for the refining and marketing of petroleum products in South Korea and Southeast Asia. Under the agreement, Saudi Aramco became joint owner of two refineries with a capacity of 260,000 barrels per day and part owner of other refining, marketing and distribution facilities. In January 1994, Saudi Aramco purchased 40 percent of Petron, the largest refiner and distributor of petroleum products in the Philippines.
The expansion of Saudi oil refineries and joint venture agreements for the refining and distribution of petroleum products abroad are part of the Kingdom's strategy to diversify and expand its oil industry.
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