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MANAGEMENT GUIDE SAUDI ARABIAN OIL COMPANY

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									MANAGEMENT GUIDE                                                                                       Section 1
SAUDI ARABIAN OIL COMPANY                                                 THE CORPORATE ORGANIZATION


      The Corporate Organization
      The powers of the Saudi Arabian Oil Company (Saudi Aramco) are vested in the Supreme Council,
      the Board of Directors, Committees of the Board, and the Corporation’s officers.


                                            THE SUPREME COUNCIL


      The Supreme Council of the Corporation is constituted under the chairmanship of the President of the
      Council of Ministers or his designated representative.


      The Supreme Council is empowered to determine the General Policy of the Corporation, appoint a
      President for the Corporation, appoint members for the Board of Directors and resolve all other mat-
      ters presented by the Board of Directors. Specific functions of the Supreme Council are:


      1. *      To appoint a President of the Corporation and members for the Board of Directors.

      2.        To approve the annual report of the Board of Directors.

      3.        To endorse the Corporation’s five year Business Plan, including its programs for crude oil
                production, exploration and development of new hydrocarbon reserves, and its five year pro-
                gram for capital investments after its review and acceptance by Saudi Aramco’s Board of
                Directors or Executive Committee.

      4.        To discuss the Auditor’s report and approve the Corporation’s balance sheet and profit and
                loss account.

      5.        To decide on increasing or decreasing the Corporation’s capital or the participation of others
                therein.

      6.        To resolve all other matters presented by the Board of Directors.




Date Issued:                   Replaces:
June 15, 1998                  November 1, 1989            * Denotes Changes                     Page 1 of 6
MANAGEMENT GUIDE                                                                                      Section 1
                                                                       THE CORPORATE ORGANIZATION
SAUDI ARAMCO OIL COMPANY




                                         THE BOARD OF DIRECTORS


        The Board of Directors of the Corporation is constituted under the Chairmanship of the Minister of
        Petroleum and Mineral Resources.


        Subject to the provisions of law, the Corporation’s Articles of Incorporation, its By-Laws and without
        prejudice to the powers of the Supreme Council, the Board of Directors has the authority to discharge
        the Corporation’s functions and to manage the Corporation on a purely commercial basis. Specifi-
        cally and without limitations the Board of Directors shall be empowered to:


        1.     Establish By-Laws for its own operations.

        2.     Nominate a President of the Corporation and appoint such other officers of the Corporation as
               the Board deems necessary.

        3.     Manage and direct the ongoing operations of the Corporation in a cost effective and efficient
               manner.

        4.     Direct the preparation of the Corporation’s Business Plan and approve its annual budgets.

        5.     Approve the Corporation’s internal, financial, administrative, technical and personnel poli-
               cies.

        6.     Authorize the Corporation’s officers to sign on behalf of the Corporation within the limits of
               the rules established by the Board of Directors.

        7.     Establish Committees and assign them powers as deemed appropriate by the Board for the
               resolution of matters brought before them.

        8.     Coordinate between the various committees of the Board of Directors.

        9.     Approve the establishment of corporate subsidiaries, branches, offices and agencies.

        10.    Authorize the contracting of loans and mortgages.

        11.    Authorize the investment of the Corporation’s liquid assets.




Date Issued:                Replaces:
November 1, 1989                                         * Denotes Changes                     Page 2 of 6
MANAGEMENT GUIDE                                                                                  Section 1
SAUDI ARABIAN OIL COMPANY                                             THE CORPORATE ORGANIZATION




                                     THE EXECUTIVE COMMITTEE


      The Executive Committee designated by the Board of Directors, shall have the power and authority
      delegated to it by the Board of Directors. Specific functions of the Executive Committee are:


      1.     To review and approve the Mid-Year and Annual Accountability Reports of the Corporation.

      2.     To review and approve expenditure requests for items covered in approved business plans and
             budgets and programs.

      3.     To review and approve redefinitions, cancellations and supplements of previously approved
             expenditure requests.

      4.     To consider and approve the appointment of officers of the Corporation.

      5.     To review and approve proposed retirements, abandonments, or other disposals, without
             financial consideration, of surplus corporate property having more than nominal salvage value
             or, regardless of salvage value, net book value of $100,000 or more.

      6.     To consider and approve annual operating plans and budgets.

      7.     To consider reports submitted to it in accordance with specific functions and subjects dele-
             gated by the Board of Directors from time to time.

      8.     To receive informational reports on miscellaneous subjects and advise Management thereon.

      9.     To consider and endorse specific elements of the proposed operating plans, business plans and
             programs, including new capital investment proposals.


                                  THE COMPENSATION COMMITTEE


      The Compensation Committee, designated by the Board of Directors, shall consider and approve pro-
      motions, salaries and other compensation matters and administer any incentive compensation plan of
      the Corporation which may be in effect from time to time in accordance with the power and authority
      delegated to it by the Board of Directors.




Date Issued:               Replaces:
November 1, 1989                                       * Denotes Changes                    Page 3 of 6
MANAGEMENT GUIDE                                                                                      Section 1
                                                                         THE CORPORATE ORGANIZATION
SAUDI ARAMCO OIL COMPANY




                                            THE AUDIT COMMITTEE


        The Audit Committee, designated by the Board, shall review and consider the effectiveness of corpo-
        rate controls, the Corporation’s adherence to its policies, the performance and results of audit activi-
        ties and other matters in accordance with the power and authority delegated to it by the Board of
        Directors.


                                             CORPORATE OFFICERS


        The following sets forth the officers of the Corporation and their respective functions, authorities and
        responsibilities from a corporate standpoint. Other parts of the Management Guide describe the roles
        of the officers in managing and operating the Corporation.


        The By-Laws state that “the Board of Directors shall nominate a President, who, upon appointment
        by the Supreme Council, shall be the Chief Executive Officer of the Corporation. The Board of
        Directors shall annually appoint one or more Vice Presidents, a Secretary, one or more Assistant Sec-
        retaries, a General Counsel, one or more Associate General Counsel, a Treasurer, one or more Assis-
        tant Treasurers, a Controller, and one or more Assistant Controllers. It may also appoint one or more
        Executive Vice Presidents and may designate by resolution one or more of the Vice Presidents as
        Senior Vice Presidents. Two or more offices, other than the offices of President and Secretary and
        other than the offices of Treasurer and Controller, may be held by the same person”.


        THE PRESIDENT AND CHIEF EXECUTIVE OFFICER

        The President and Chief Executive Officer has and exercises general supervision over the business
        and affairs of the Corporation and supervises and directs all the officers, agents and employees of the
        Corporation and prescribes such of their duties not otherwise prescribed by law or by the Corpora-
        tion’s By-Laws or by the Board of Directors. He performs such duties as are prescribed in the Arti-
        cles of Incorporation and as are vested in him by resolution of the Board of Directors and the
        Corporation’s rules and regulations. He may delegate any duties he performs as President and Chief
        Executive Officer, other than his duties in connection with the Executive Committee, to such other
        officer or officers as he may deem advisable.




Date Issued:                 Replaces:
November 1, 1989                                          * Denotes Changes                     Page 4 of 6
MANAGEMENT GUIDE                                                                                     Section 1
SAUDI ARABIAN OIL COMPANY                                               THE CORPORATE ORGANIZATION




      THE VICE-PRESIDENTS


      Each Vice-President performs such duties as may be assigned to him from time to time by the Board
      of Directors or the President and Chief Executive Officer.


      THE SECRETARY


      The Secretary keeps full and complete records of the meetings of the Board of Directors and meetings
      of the Executive Committee. He keeps the seal of the Corporation and affixes the same to all instru-
      ments that may require it. He has custody of the Corporation’s copy of minutes of meetings of the
      Supreme Council the Board of Directors and Executive Committee and performs such other duties as
      pertain to his office and as may be required by the Board of Directors.


      The Assistant-Secretaries

      The Assistant-Secretary or Assistant-Secretaries assists the Secretary in the performance of the Secre-
      tary’s duties and perform such other duties as may be delegated to him or them by the Board of Direc-
      tors.


      THE GENERAL COUNSEL

      The General Counsel has charge of all the legal affairs of the Corporation and supervises the Corpora-
      tion’s contract relations.


      The Associate-General Counsel


      The Associate-General Counsel assists the General Counsel in the performance of the General Coun-
      sel’s duties and perform such duties as may be assigned to him or them by the General Counsel.


      THE TREASURER


      The Treasurer receives and keeps safely all monies of the Corporation, pays out such money in such
      manner as may be prescribed by the Board of Directors and generally performs all such other duties
      as pertain to his office and as may be required by the Board of Directors.




Date Issued:                Replaces:
November 1, 1989                                         * Denotes Changes                     Page 5 of 6
MANAGEMENT GUIDE                                                                                      Section 1
                                                                         THE CORPORATE ORGANIZATION
SAUDI ARAMCO OIL COMPANY




        The Assistant-Treasurers


        The Assistant-Treasurer or Assistant-Treasurers assists the Treasurer in the performance of the Trea-
        surer’s duties and performs such other duties as may be delegated to him or them by the Board of
        Directors.


        THE CONTROLLER


        The Controller has custody of all the Corporation’s books of account, supervises the keeping of the
        books and records of all assets, liabilities and transactions of the Corporation and performs such other
        duties as pertain to his office and as may be required by the Board of Directors.


        The Assistant-Controllers

        The Assistant-Controller or Assistant-Controllers assists the Controller in the performance of the
        Controller’s duties and performs such other duties as may be delegated to him or them by the Board
        of Directors.




Date Issued:                 Replaces:
November 1, 1989                                          * Denotes Changes                     Page 6 of 6

								
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