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									MANAGEMENT GUIDE                                                         Section 4
SAUDI ARABIAN OIL COMPANY                                   APPROVAL AUTHORITY




                     APPROVAL AUTHORITIES - TABLE OF CONTENTS




                     GENERAL SUBJECT                                      PAGE
  DELEGATION OF APPROVAL AND SIGNATURE AUTHORITIES                             2
  BUDGETS & APPROPRIATIONS - APPROVAL AUTHORITY                                3
  BUDGETS & APPROPRIATIONS - REMARKS                                           5
  DONATIONS BUDGET                                                             10
  NON-CAPITAL PROJECTS AND PROGRAMS                                            10
  MANPOWER                                                                     11
  NET DIRECT EXPENDITURE BUDGET                                                11
  MATERIAL AND EQUIPMENT - APPROVAL AUTHORITY                                  12
  MATERIAL AND EQUIPMENT - REMARKS                                             17
  COMPANY PROPERTY: REMARKS                                                    20
  PERSONNEL ACTIONS                                                            21
  CONTRACTS                                                                    26
  GENERAL BANKING INVESTMENT & OTHER FINANCIAL ACTIVITIES                      30
  MISCELLANEOUS AUTHORITIES                                                    34




Date Issued:             Replaces:
                                                                Page 1 of 38
   January 1, 1998        July 1, 1997
MANAGEMENT GUIDE                                                                                        Section 4
SAUDI ARABIAN OIL COMPANY                                                              APPROVAL AUTHORITY


                     DELEGATION OF APPROVAL AND SIGNATURE AUTHORITIES

 PURPOSE OF SECTION 4
 For quick reference, these summary schedules tabulate the approval authorities granted below the President &
 CEO. This document reflects those authorities in effect at the date noted below. The Automated Approval
 Authority System is continuously updated and should be referred to for the most current approval and signature
 authorities.
 SOURCE OF APPROVAL AUTHORITY
 Approval Authority is derived from statutes, the Articles of Incorporation, the By-Laws, the Board of Directors’
 resolutions and re-delegations by the President & CEO and other Corporate Management.
 The By-Laws specify:
    “The President shall have and exercise general supervision over the business and affairs of the corporation,
    and shall supervise and direct all of the officers, agents and employees of the corporation and prescribe such
    of their duties not otherwise prescribed by law or by these By-Laws or by the Board of Directors.”
 The By-Laws also prescribe other duties and related authority for Company Officers and General Counsel not
 delegated by the Chief Executive Officer.
 Approval authorities delegated to Executive Vice President positions are limited to each Executive Vice
 President's operational area of responsibility, and do not apply outside the respective areas of control.
 SOURCE OF SIGNATURE AUTHORITY
 The By-Laws specify authority to affix the signature of the corporation as follows:
 “The President, each Vice President, the Secretary, the General Counsel, the Treasurer, and the Controller may
 affix the signature of the corporation to all deeds, conveyances, mortgages, leases, promissory notes, contracts,
 obligations, certificates and other papers and instruments in writing which, in the usual course of business, may
 require signature; and may authorize each of their assistants to affix the signature of the corporation to such
 papers and instruments, subject to such limitations and restrictions as the authorizing officer may designate.”
 The authority to affix the signature of the Company is subject to having obtained the appropriate Signature
 Authority. It is also subject to such other policies and procedures as have been adopted relating to the
 preparation, execution and distribution of such documents. Elected officers may use their signature authority
 when designated to fill another Executive or Corporate Management position, and may sign for that position with
 all authorities delegated to that position up to and including the Senior Vice President level.
 MAINTAIN AND INTERPRET
 The Controller’s Organization responsibilities related to Approval Authorities are as follows:
 -   Interpret approval authorities with assistance from the Law Department and other parties, as required.
 -   Receive and evaluate suggestions for revisions in terms or amounts from any interested party. A key criteria
     to consider in making delegations to subordinates is that the delegation of authority be reasonably consistent
     in regard to the level of the position and its function.
 -   Implement approved delegations through an on-line approval authority system, responding to inquiry, and as
     found appropriate, instituting means to assure systematic monitoring and compliance.



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   January 1, 1998            July 1, 1997
MANAGEMENT GUIDE                                                                                                    Section 4
SAUDI ARABIAN OIL COMPANY                                                                        APPROVAL AUTHORITY


                         BUDGETS & APPROPRIATIONS - APPROVAL AUTHORITY
                                                                                     CAPITAL

                      SUBJECT                                                                               RELEASE
                                                                                                        AGAINST BOARD
                                                        BUDGETED ITEMS
                                                                                                           APPROVED
                                                            (B.I’s)
                                                                                       Miscellaneous        MASTER
                                                                                          Capital       APPROPRIATIONS

                                                     Greater than                      Appropriations
  BUSINESS LINE                                                                          (BI-1900)      Authority limited to
  Corporate Management                               $10 Million     Greater than
                                                                                        (See page 7)    master appropriations
    Executive Management                            or Designated   $2 Million but
                                                                                                           for which the
        General Management                           for Specific    not over $10
                                                                                                          approver is the
                                                        Board       Million (CEO)
                                                                                                             proponent
                                                      Approval
                                                    No Authority    No authority
  Executive Vice Presidents                         See Remarks     See Remarks             Full         See Remarks Page 7
                                                       Page 4          Page 4                                  and 8
  EXPLORATION AND PRODUCING
    Vice President, Exploration                                                       $250,000          None
     Vice President, Pet. Eng. & Develop                                              $250,000          See Remarks Page 8
         Gen. Mgr., Petroleum Engineering                                             $ 75,000          None
         Gen. Mgr., Drilling & Workover                                               $ 75,000          $ 100,000
         Gen. Mgr., Expec Computer Center                                             $ 75,000          None

  PRODUCING OPERATIONS                                                                $500,000          See Remarks Pages
  Senior Vice President                                                                                 7 and 8
     Vice President, NA Producing                                                     $250,000          $ 500,000
                                                                                                        See Remarks Page 8
     Vice President, SA Producing                                                     $250,000          $ 500,000
                                                                                                        See Remarks Page 8
     Vice President, Producing Plants & Pipelines                                     $250,000          $ 500,000
         Gen. Mgr., Pipelines                                                         $125,000          $ 250,000
  MANUFACTURING OPERATIONS
   Vice President, Ras Tanura Refining                                                $250,000          $ 500,000
       Gen. Mgr., Ras Tanura Refining                                                 $125,000          $ 250,000
  Executive Director, Power Systems                                                   $250,000          None
  REFINING & DISTRIBUTION
  Senior Vice President                                                               $500,000          $1,000,000
    Vice President, Jeddah/Riyadh Refining                                            $250,000          $ 250,000
     Executive Director, Yanbu Refining                                               $250,000          $ 250,000
     Vice President, Distribution Operations                                          $250,000          $ 250,000
  INTERNATIONAL OPERATIONS
  Senior Vice President                                                               $500,000          $1,000,000
     Vice President, Sales & Marketing                                                $ 50,000          None
     Vice Pres, Downstream Dev. & Coord.                                              $250,000          None



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   January 1, 1998                July 1, 1997
MANAGEMENT GUIDE                                                                                                 Section 4
SAUDI ARABIAN OIL COMPANY                                                                       APPROVAL AUTHORITY


                                                                                    CAPITAL

                      SUBJECT                                                                              RELEASE
                                                                                                       AGAINST BOARD
                                                       BUDGETED ITEMS
                                                                                                          APPROVED
                                                           (B.I’s)
                                                                                      Miscellaneous        MASTER
                                                                                         Capital       APPROPRIATIONS

                                                    Greater than                      Appropriations
  BUSINESS LINE                                                                         (BI-1900)      Authority limited to
  Corporate Management                              $10 Million     Greater than
                                                                                       (See page 7)    master appropriations
    Executive Management                           or Designated   $2 Million but
                                                                                                          for which the
        General Management                          for Specific    not over $10
                                                                                                         approver is the
                                                       Board       Million (CEO)
                                                                                                            proponent
                                                     Approval
  ENGINEERING & OPERATIONS SVCS                                                      Full              See Remarks Page 7
  Senior Vice President                                                                                and 8
     Vice President, Engineering Services                                            $500,000          $ 500,000
         Chief Engineer                                                              $ 75,000          None
     Vice President, Project Management                                              $500,000          None
         Gen. Mgr., Southern Area Projects                                           $250,000          None
     Exec. Dir., CC&OS                                                               $500,000          $ 500,000
     Exec. Dir., Industrial Services                                                 $500,000          $ 500,000
     Vice President, Materials Supply                                                $500,000          $ 500,000
         Gen. Mgr., Storehouse Operations                                            $250,000          None
  FINANCE & RELATIONS
       General Auditor                                                               None              None
     Controller                                                                      $ 50,000          None
        Asst. Controller, Operations Accounting                                      None              None
     Treasurer                                                                       $ 50,000          None
     Executive Director, Safety & Ind’l Sec.                                         $250,000          $ 100,000
         Gen. Mgr., Ind’l Security Operations                                        None
     Vice President, Saudi Aramco Affairs                                            $250,000          $ 250,000
         Gen. Mgr., Public Affairs                                                   $ 50,000          $ 100,000
         Gen. Mgr., Government Affairs                                               $ 10,000          None
  INDUSTRIAL RELATIONS
  Senior Vice President                                                              $500,000          $1,000,000
     Vice President, Employee Relations & Trng                                       $250,000          None
         Gen. Mgr., Training & Career Dev.                                           $ 75,000          None
     Vice President, Community Services                                              $250,000          $ 100,000
     Executive Director, Medical Services                                            $250,000          $ 250,000
         Gen. Mgr., Clinical Services                                                $ 75,000          None
  ADMINISTRATIVE & GENERAL
    Vice President, Corporate Planning                                               $ 50,000          None
    Executive Director, Management Services                                          $ 75,000          None
  General Counsel                                                                    None              None
    Associate General Counsel                                                        None              None


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                                                                                                       Page 4 of 38
   January 1, 1998                  July 1, 1997
MANAGEMENT GUIDE                                                                                     Section 4
SAUDI ARABIAN OIL COMPANY                                                             APPROVAL AUTHORITY


                                 BUDGETS & APPROPRIATIONS - REMARKS
 Board of Directors resolutions of March 14, 1989 and November 12, 1980; EXCOM resolution of December 9,
 1976; and Management Committee minutes of July 21, 1990 govern:
 Major Capital Budget Items (BI’s greater than $2 million in value)
 The President & CEO recommends proposed Capital Budgets and the Board approves. Individual Expenditure
 Requests (ER’s) within the Board approved Capital Budgets are subject to the following ER appropriation and
 cost overrun approval delegations:


                                                                                Approval Authority
                                                                        Board   Pres.
                             Description                                  or      &       Corp.      Exec.
                                                                        Excom   CEO       Mgmt.      Mgmt
 Original ER’s for BI's of value exceeding $10 million                    X
 Original ER’s for BI’s of value greater than $2 million and not ex-
 ceeding $10 million:

     BI in the current approved Capital Budget and not designated                 X
     by the Board for special review

     BI not in the current approved Capital Budget (If the BI is also    X
     not in current approved Business Plan, the ER must be submit-
     ted to the Board and not the Excom.)

 Note: If the scope of a BI incurs a major change after the Capital
        Budget is approved but before the ER is approved, the ER
        will need to be submitted to the Board or Excom for approv-
        al regardless of the ER value.
 Redefinition ER’s:
     All ER's regardless of value                                        X
 Note: Redefinition ER’s are required for major changes in the ba-
       sic design or scope of a project regardless of whether or not
       the total cost of the project is changed. When their signifi-
       cance is not otherwise obvious, scope changes should be
       considered major when the total value of either proposed
       additions or deletions, considered separately, exceeds the
       lesser of $10 million or 10% of the current approved Orig-
       inal or Redefinition ER funds.




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   January 1, 1998            July 1, 1997
MANAGEMENT GUIDE                                                                                    Section 4
SAUDI ARABIAN OIL COMPANY                                                            APPROVAL AUTHORITY


                                                                               Approval Authority
                                                                       Board   Pres.
                            Description                                  or      &       Corp.       Exec.
                                                                       Excom   CEO       Mgmt.       Mgmt
 Supplement ER’s:
     ER value, inclusive of the proposed Supplement amount, ex-         X
     ceed $10 million.
     ER value, inclusive of the proposed Supplement amount,                      X
     does not exceed $10 million and original BI was not previ-
     ously designated by the Board for special review.

 Note: Supplement ER’s are required when:
        a) Previously approved Original, Redefinition and Partial
           Cancellation ER’s have forecasted cost overruns ex-
           ceeding the lesser of $10 million or 10% of approved
           funds.
        b) Previously approved Supplement ER’s with forecasted
           costs greater than $10 million have forecasted cost
           overruns exceeding the lesser of $1 million or 10% of
           the last approved Supplement amount.
        c) Previously approved Supplement ER’s with forecasted
           costs greater than $2 million but not over $10 million
           have forecasted cost overruns exceeding the lesser of
           $100,000 or 10% of the last approved Supplement
           amount.
 See section on ER cost overruns when forecasted cost overruns are
 less than the limits in notes a), b) and c) above.
 Partial Cancellation ER’s:
     ER value prior to Partial Cancellation exceeds $10 million         X

     ER value prior to Partial Cancellation does not exceed $10 mil-             X
     lion original BI was not previously designated by the Board for
     special review

     ER is an expired master appropriation, regardless of value                  X

 Note: Partial Cancellation ER’s are required when the forecasted
       cost underrun is greater than 10% of approved funds and
       exceeds $5 million. For expired master appropriation ER’s,
       the forecasted cost underrun should be greater than 10% of
       approved released funds and exceed $5 million.

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MANAGEMENT GUIDE                                                                                   Section 4
SAUDI ARABIAN OIL COMPANY                                                         APPROVAL AUTHORITY


                                                                              Approval Authority
                                                                      Board   Pres.
                            Description                                 or      &       Corp.      Exec.
                                                                      Excom   CEO       Mgmt.      Mgmt
 Redefinition & Supplement ER’s:
    All ER Redefinition & Supplement actions regardless of value       X
 Redefinition & Partial Cancellation ER’s:
    All ER Redefinition & Partial Cancellation actions regardless      X
    of value
 ER cost overruns for ER’s of value exceeding $ 10 million:
     Overruns up to 10% and not exceeding $10 million for Original                        X
     ER’s, Partial Cancellation ER’s and Redefinition ER’s (includ-
     ing Redefinition & Supplement and Redefinition & Partial
     Cancellation ER’s)
     Overruns up to 5% and not exceeding $5 million for Original                                        X
     ER’s, Partial Cancellation ER’s and Redefinition ER’s (includ-
     ing Redefinition & Supplement and Redefinition & Partial
     Cancellation ER’s)
     Overruns up to 10% of the last approved Supplement amount                            X
     and not exceeding $1 million for Supplement ER’s
    Overruns up to 5% of the last approved Supplement amount                                            X
    and not exceeding $500,000 for Supplement ER’s
 ER cost overruns for ER’s of value greater than $2 million and not
 exceeding $10 million:
     Overruns up to 10% and not exceeding $1 million for Original                         X
     ER’s, Partial Cancellation ER’s and Redefinition ER’s (includ-
     ing Redefinition & Supplement and Redefinition & Partial
     Cancellation ER’s)
     Overruns up to 5% and not exceeding $500,000 for Original                                          X
     ER's, Partial Cancellation ER’s and Redefinition ER’s (includ-
     ing Redefinition & Supplement and Redefinition & Partial
     Cancellation ER’s)
     Overruns up to 10% of the last approved Supplement amount                            X
     and not exceeding $100,000 for Supplement ER’s
     Overruns up to 5% of the last approved Supplement amount                                           X
     and not exceeding $50,000 for Supplement ER’s




Date Issued:                 Replaces:
                                                                                         Page 7 of 38
   January 1, 1998            July 1, 1997
MANAGEMENT GUIDE                                                                                          Section 4
SAUDI ARABIAN OIL COMPANY                                                               APPROVAL AUTHORITY


 CAPITAL - MISCELLANEOUS CAPITAL APPROPRIATIONS (BI 1900)
 The President & CEO recommends and the Board or EXCOM approves, in total, Budget Item 1900 for
 Miscellaneous Capital Appropriations consisting of items, the total cost (capital plus expense) of which is
 $2,000,000 or less. Individual items within BI 1900 are subject to the following ER (appropriation) delegations:
 1. Subsequent to approval by the Board, the President & CEO approves the allocation of BI 1900 funds to
    Business Centers.
 2. All Executive Vice Presidents and the Senior Vice President-Engineering & Operations Services will have
    full authority in their respective areas within the limits of their available funds for the following activities
    related to BI-1900:
     a. Allocation of the approved funds within their Business Center;
     b. Designation of the portion of the funds to be retained under the category of “Executive Vice President
        Unallocated”;
     c. Approval of individual releases;
     d. Approval of individual project overruns (provided the total cost (capital plus expense) of the project does
        not exceed $2,000,000);
     e. Reclassification of project funds into MAMI funds; and
     f. Distribution of Executive Vice President Unallocated funds.
 3. The President & CEO has redelegated approval authority for BI 1900 ER’s as shown on pages 4 and 5.
 4. Overruns in excess of 10% of the approved appropriation:
     a. Overruns in excess of 10% of approved capital funds on a Miscellaneous Capital Appropriation release
        requires supplement capital funding which may be approved by the original approval authority, or higher,
        provided the new release total is within his authority limit and the total cost (capital plus expense) of the
        project does not exceed $2,000,000. If the supplement causes the Business Center’s allocation to be
        exceeded, approval of the President & CEO is required.
     b. The President & CEO has full authority to approve an overrun of capital funds on a BI 1900 project
        provided the total cost (capital plus expense) of the project does not exceed $2,000,000 and the total of all
        appropriations does not exceed the BI 1900 appropriation.
 CAPITAL -MASTER APPROPRIATION EXPENDITURE REQUEST
 The President & CEO recommends and the Board or EXCOM approves Master Appropriation Budget Items.
 These individual Budget Items are included in the overall Capital Programs and Budgets. They authorize the
 purchase of equipment or undertaking of certain projects, the full scope of which cannot be defined at the time
 the budget is presented and when the ER is approved. Examples are Drilling Equipment, Motor Equipment,
 Communication Equipment and Maintain Potential Projects. The life of the master appropriation must be
 specified for each item in the Budget and the ER and will ordinarily extend from inception to the end of the
 calendar year.
 1. Authorization to disburse funds provided on a Master Appropriation ER is controlled by the preparation and
     approval of ER releases identifying the equipment to be purchased or work to be done.
 2. Releases are prepared for equipment or work to be performed which is required during the period specified in
     the Master Appropriation ER and the release must be made within the stated period. No release can be
     authorized prior to the effective date or after the expiration date as stated in the Master Appropriation ER.


Date Issued:                  Replaces:
                                                                                                Page 8 of 38
   January 1, 1998             July 1, 1997
MANAGEMENT GUIDE                                                                                                          Section 4
SAUDI ARABIAN OIL COMPANY                                                                             APPROVAL AUTHORITY


 3. Life of the Master Appropriation ER extends until all expenditures against related releases are complete.
 4. Scope additions (new work) to releases for expired Master Appropriations are not permitted.
 5. ER’s for release of funds for a specific project within a Master Appropriation ER shall not be split in order to
    keep releases within the approval authority delegated to a certain position.
 6. Overruns on each release may be approved by the original approving authority, or higher, provided that the
    new revised total is within his authority limits. Overrun authority is 10% of the released amount for each
    individual release. Overrun amounts greater than 10% for releases against expired Master ER’s must be
    approved by new releases against currently open Master ER’s.
 7. Approval Authorities governing Releases Against Master Appropriation are as follows:


 POSITION                            APPROPRIATION                                                 AUTHORITY
 President & CEO                     All categories                                                Full Authority up to
                                                                                                   amount of approved ER
 Executive Vice President            Exploration Program                                           Full Authority up to
     Exploration & Producing         Development Program (Land Acquisition & Drilling)             amount of approved ER
                                     Drilling Equipment
                                     Maintain Potential (Platforms, Flowlines & Associated
                                        Facilities)
                                     All other categories                                          $5,000,000
 Executive Vice President-
      Finance & Relations            All other categories                                          $5,000,000
      Manufacturing Operations       All other categories                                          $5,000,000
 Senior Vice President-
      Eng & Ops Services             All other categories                                          $5,000,000
 Senior Vice Presidents              All categories                                                $1,000,000

 Senior Vice President               Exploration Program                                           Full Authority up to
      Producing Operations           Development Program (Land Acquisition & Drilling)             amount of approved ER
                                     Maintain Potential [Onshore Flowlines & Onshore
                                        Associated Facilities
                                     All other categories                                          $1,000,000
 Vice President                      Development Program (Drilling)                                Full Authority up to
      Pet. Eng. & Development                                                                      amount of approved ER
                                     Maintain Potential (Onshore Flowlines)                        $1,000,000
                                     Expec Computer Center Support Equipment                       $ 500,000
                                     Drilling Equipment                                            $ 500,000
 Vice President-                     Maintain Potential (Onshore Flowlines)                        $ 500,000
      Southern Area Producing
 Vice President-                     Maintain Potential (Platforms, Flowlines                      $ 500,000
      Northern Area Producing

 All Items exceeding $5,000,000 that require approval by the President & CEO (except releases for the purchase of replacement
 equipment) must first be reviewed by the Management Committee.
 Executive Vice President - Exploration & Producing has the authority to approve Releases against Pipeline Master Appropriations up to
 $5,000,000. Authority extends only to releases against Master Appropriation Budget Items for which the approver’s organization i s the
 proponent.


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                                                                                                                Page 9 of 38
   January 1, 1998                 July 1, 1997
MANAGEMENT GUIDE                                                                                      Section 4
SAUDI ARABIAN OIL COMPANY                                                            APPROVAL AUTHORITY


 CAPITAL - STATUS REPORTS
 The Finance Organization issues status reports to the Board Executive Committee and Management of approval
 actions for Budget Items, Miscellaneous Capital Appropriations, and Master Appropriation Expenditure
 Requests.
 The Operations Services Organization prepares a Budget Item Summary Report on a quarterly basis which is
 issued to the Board Executive Committee.
 FACILITIES PLANNING DEPARTMENT REVIEWS
 To ensure that project scopes are well defined and cost estimates are of high quality, all projects valued at
 $500,000 or more require review by the Facilities Planning Department.
 ENGINEERING FUNDS TO ARRIVE AT DEFINITIVE CAPITAL PROJECTS
 The following positions have the authority to approve new engineering work orders authorizing sufficient
 engineering to arrive at ER quality scope and cost estimates until full approval is obtained. They may authorize
 new work order funds over a stated time period or up to the total amounts for that time period specifically
 authorized by the Board, whichever is lower.
 President & CEO or Executive VP-Exploration & Producing- Full Authority.
 Senior Vice President, Engineering & Operations Services- Full Authority up to 3% of the total Capital Program.

                                             DONATIONS BUDGET
 The President & CEO recommends to the Ministry of Petroleum and Minerals Resources and the Board for
 approval. The Donations Committee administers, Chairman & Vice Chairman of the Donations Committee have
 approval authority up to $5,000 and SR 25,000.

                                NON-CAPITAL PROJECTS AND PROGRAMS
 The Capital Budget presented to the Board of Directors includes the following categories of non-capital, or
 expense type projects and programs:
      - Home Ownership and Community Development
      - Saudi Aramco Built Government Schools
      - Major Roads & Other Non-Capital Projects
 The President & CEO recommends the proposed Non-Capital Projects and Programs and the Board approves.
 Individual items within these approved programs are subject to the same ER (appropriation) procedures as for
 Capital Budget Items.
 HOUSING LOANS
 The Home Ownership & Community Development Division of the Employee Relations Services Department
 administers the program for housing loans to employees. Incumbents of General Management & above positions
 have the authority to approve housing loans to employees, as provided for in the approved Home Ownership &
 Community Development Budget. Home Ownership & Community Development Division of the Employee
 Relations Services Department has the authority to approve the release of approved loan funds to borrowers.
 The area representative of Home Ownership has the authority to approve all first home loans and all supplements
 to the first or second loans. Administrator, Home Ownership & Community Development Division approves all
 second home loans.

Date Issued:                Replaces:
                                                                                           Page 10 of 38
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MANAGEMENT GUIDE                                                                                        Section 4
SAUDI ARABIAN OIL COMPANY                                                              APPROVAL AUTHORITY


 COMMUNITY DEVELOPMENT
 Vice President-Employee Relations & Training has the authority, with a monetary limit of $50,000, to approve
 each budgeted item as provided for under the approved Home Ownership & Community Development Budget.

                                                     MANPOWER
 For purposes of accountability, total Business Center/Line manpower levels or total Expatriate manpower levels
 (including STC) are not to be exceeded without President & CEO approval. Substitutions between Expatriate
 nationality categories must be approved by the Business Line Head.
 In those instances where reorganizations within a Business Center/Line require the transfer of Manpower Budget
 from one Department or Administrative Area to another, the Manager, Programs, Forecasts & Analysis
 Department should be informed on a timely basis. The request should be signed by the appropriate
 Administrative Area Head, and include a schedule showing the original budget and the details resulting in the
 restated budget.
 Requests for Budget transfer between Business Centers/Lines due to reorganizations should be submitted, in
 writing, to the Executive Vice President - Finance & Relations, on a timely basis. The request for budget transfer
 should be signed by the appropriate Business Center/Line Heads, and include a schedule showing the original
 budget and the details resulting in the restated budgets.

                                      NET DIRECT EXPENDITURE BUDGET
 General
 The Net Expenditure Budget is approved by EXCOM. The President & CEO is authorized to approve overruns
 up to 5% for each Business Center/Line as well as 5% of the total budget.
 All anticipated overruns must be approved by the President & CEO in advance. Business Center/Line Heads
 have the authority to offset overruns with underruns within their Business Center/Line.
 Reorganization Requiring Budget Transfers
 Transfer Between Business Centers/Lines: Budget transfer of Net Direct Expenditures between Business
 Centers/Lines due to reorganizations should be submitted, in writing, to the Executive Vice President - Finance
 & Relations, on a timely basis. The request for budget transfer should be signed by the appropriate Business
 Center/Line Heads, and include schedules showing details of the original and restated budgets.
 Transfer Within Business Centers/Lines: In those instances where reorganizations within a Business Center/
 Line require the transfer of the Net Direct Expenditure Budget from one Department or Administrative Area to
 another, the Manager, Programs, Forecasts & Analysis Department should be informed on a timely basis. The
 request should be signed by the appropriate Administrative Area Head, and include schedules showing the
 original budget and the details resulting in the restated budget.




Date Issued:                 Replaces:
                                                                                             Page 11 of 38
   January 1, 1998            July 1, 1997
MANAGEMENT GUIDE                                                                                                               Section 4
SAUDI ARABIAN OIL COMPANY                                                                                  APPROVAL AUTHORITY


                                MATERIAL AND EQUIPMENT - APPROVAL AUTHORITY
                                                               MATERIAL AND EQUIPMENT PURCHASE REQUISITION

                                                          DIRECT CHARGE                           INVENTORY
                                                                                                                            AIR FREIGHT
  BUSINESS LINE                                                                          1.   SAMS
                                                        PROJECTS
                                                                                         2.   Community Services
                                                       COVERED BY                                                          MSO recommends
  Corporate Management                                  APPROVED                         3.   Commissary
                                                        EXPENDI-
                                                                        EXPENSE                                            and CEO approves
    Executive Management                                                                 4.   Drilling
                                                          TURE                                                             delegation of author-
                                                                                         5.   Refinery Chemicals
        General Management                              REQUESTS                                                           ity. See Automated
                                                                                         6.   Gas Plant Chemicals
                                                                                                                           Approval Authority
  Note: Full authority is limited by the appropriate   Authority limited to items spe-                                     for details.
        approved budget and applicable approval        cifically identified as an ele-
        procedures and policies.                       ment of the Approved Budget.

  EXPLORATION & PRODUCING
  Executive Vice President                                                               Nos. 4 & 6 -Full Authority        Full Authority
     Vice President, Exploration                                                         None                              Full Authority
     Vice President, Pet. Engrg & Development                                            No. 4 - Full Authority            Full Authority
         Gen. Mgr., Petroleum Engineering                                                None                              $25,000
         Gen. Mgr., Drilling & Workover                                                  No. 4 -$200,000                   $25,000
         Gen. Mgr., Expec Computer Center                                                None                              $25,000
  PRODUCING OPERATIONS
  Senior Vice President                                                                  Nos. 4 & 6 - Full Authority       Full Authority
     Vice President, Northern Area Producing                                             None                              Full Authority
     Vice President, Southern area Producing                                             None                              Full Authority
     Vice Pres., Producing Plants & Pipelines                                            No. 6 - Full Authority            Full Authority
         Gen. Mgr., Pipelines                                                            None                              $25,000
  MANUFACTURING OPERATIONS
  Executive Vice President                                                               Nos. 5 & 6 -Full Authority        Full Authority
     Vice President, Ras Tanura Refining                                                 Nos. 5 & 6 -Full Authority        Full Authority
         Gen. Mgr., Ras Tanura Refinery                                                  No. 5 - $1,500,000                $25,000
     Executive Director, Power Systems                                                   Nos. 5 & 6 -Full Authority        Full Authority
  REFINING & DISTRIBUTION
  Senior Vice President                                                                  Nos. 5 & 6 - Full Authority       Full Authority
     Vice President, Jeddah/Riyadh Refining                                              No. 6 - Full Authority            Full Authority
     Executive Director, Yanbu Refining                                                  No. 6 - Full Authority            Full Authority
     Vice President, Distribution Operations                                             None                              Full Authority
  INTERNATIONAL OPERATIONS
  Senior Vice President                                                                  None                              Full Authority
     Vice President, Sales & Marketing                                                   None                              Full Authority
     Vice President, Downstream Dev. & Coord.                                            None                              Full Authority
  ENGINEERING & OPERATIONS SVCS
  Senior Vice President                                                                  Nos. 1,2 & 3 - Full Authority     Full Authority
     Vice President, Engineering Services                                                None                              Full Authority
         Chief Engineer                                                                  None                              $25,000


Date Issued:                       Replaces:
                                                                                                                    Page 12 of 38
   January 1, 1998                  July 1, 1997
MANAGEMENT GUIDE                                                                                                               Section 4
SAUDI ARABIAN OIL COMPANY                                                                                  APPROVAL AUTHORITY


                                                               MATERIAL AND EQUIPMENT PURCHASE REQUISITION

                                                          DIRECT CHARGE                           INVENTORY
                                                                                                                            AIR FREIGHT
  BUSINESS LINE                                                                          1.   SAMS
                                                        PROJECTS
                                                                                         2.   Community Services
                                                       COVERED BY                                                          MSO recommends
  Corporate Management                                  APPROVED                         3.   Commissary
                                                        EXPENDI-
                                                                        EXPENSE                                            and CEO approves
    Executive Management                                                                 4.   Drilling
                                                          TURE                                                             delegation of author-
                                                                                         5.   Refinery Chemicals
        General Management                              REQUESTS                                                           ity. See Automated
                                                                                         6.   Gas Plant Chemicals
                                                                                                                           Approval Authority
  Note: Full authority is limited by the appropriate   Authority limited to items spe-                                     for details.
        approved budget and applicable approval        cifically identified as an ele-
        procedures and policies.                       ment of the Approved Budget.

     Vice President, Project Management                                                  None                              Full Authority
         Gen. Mgr., Southern Area Projects                                               None                              $25,000
     Exec. Dir., Comp Comm & Office Systems                                              None                              Full Authority
     Executive Director, Industrial Services                                             None                              Full Authority
     Vice President, Materials Supply                                                    No. 1 - Full Authority            Full Authority
         Gen. Mgr., Storehouse Operations                                                None                              $25,000
  FINANCE & RELATIONS
  Executive Vice President                                                               Nos. 2 & 3 -Full Authority        Full Authority
         General Auditor                                                                 None                              $25,000
     Controller                                                                          None                              Full Authority
        Asst. Controller, Operations Accounting                                          None                              $25,000
     Treasurer                                                                           None                              Full Authority
     Executive Director, Safety & Ind’l Security                                         None                              Full Authority
         Gen. Mgr., Ind’l Security Operations                                            None                              $25,000
     Vice President, Saudi Aramco Affairs                                                None                              Full Authority
         Gen. Mgr., Public Affairs                                                       None                              $25,000
         Gen. Mgr., Government Affairs                                                   None                              $25,000
  INDUSTRIAL RELATIONS
  Senior Vice President                                                                  Nos. 2 & 3 -Full Authority        Full Authority
     Vice President, Community Services                                                  Nos. 2 & 3 -Full Authority        Full Authority
     Vice President, Employee Rels & Training                                            None                              Full Authority
         Gen. Mgr., Trng & Career Development                                            None                              $25,000
     Executive Director, Medical Services                                                None                              Full Authority
         Gen. Mgr., Clinical Services                                                    None                              $25,000
  ADMINISTRATIVE & GENERAL
    Vice President, Corporate Planning                                                   None                              Full Authority
    Executive Director, Management Services                                              None                              Full Authority
  General Counsel                                                                        None                              Full Authority
        Associate General Counsel                                                        None                              $25,000




Date Issued:                      Replaces:
                                                                                                                    Page 13 of 38
   January 1, 1998                 July 1, 1997
MANAGEMENT GUIDE                                                                                               Section 4
SAUDI ARABIAN OIL COMPANY                                                                 APPROVAL AUTHORITY


                                                                PURCHASE REQUISITION CANCELLATION

                                                                                 COST INCURRED
                                                   NO COST
                                                  INCURRED          DIRECT CHARGE                     INVENTORY
  BUSINESS LINE
                                                                                           1.   SAMS
  Corporate Management                                             ITEMS CHARGABLE TO      2.   Community Services
                                                   Authority     EXPENSE OR TO PROJECTS    3.   Commissary
    Executive Management                          same as for     COVERED BY APPROVED      4.   Drilling
         General Management                        Initiation    EXPENDITURE REQUESTS      5.   Refinery Chemicals
                                                                                           6.   Gas Plant Chemicals

  EXPLORATION & PRODUCING
  Executive Vice President                                      Full Authority             Nos. 4 & 6 - Full Authority
    Vice President, Exploration                                 Full Authority             None
    Vice President, Pet. Engrg & Development                    Full Authority             No. 4 - Full Authority
        Gen. Mgr., Petroleum Engineering                        $50,000                    None
        Gen. Mgr., Drilling & Workover                          $50,000                    No. 4 - $50,000
        Gen. Mgr., Expec Computer Center                        $50,000                    None
  PRODUCING OPERATIONS
  Senior Vice President                                         Full Authority             Nos. 4 & 6 -Full Authority
    Vice President, Northern Area Producing                     Full Authority             None
    Vice President, Southern Area Producing                     Full Authority             None
    Vice Pres., Producing Plants & Pipelines                    Full Authority             No. 6 - Full Authority
        Gen. Mgr., Pipelines                                    $50,000                    None
  MANUFACTURING OPERATIONS
  Executive Vice President                                      Full Authority             Nos. 5 & 6 - Full Authority
    Vice President, Ras Tanura Refining                         Full Authority             Nos. 5 & 6 -Full Authority
        Gen. Mgr., Ras Tanura Refinery                          $50,000                    No. 5 - $50,000
    Executive Director, Power Systems                           Full Authority             Nos. 5 & 6 -Full Authority
  REFINING & DISTRIBUTION
  Senior Vice President                                         Full Authority             Nos. 5 & 6 -Full Authority
    Vice President, Jeddah/Riyadh Refining                      $25,000                    No. 6 - Full Authority
    Executive Director, Yanbu Refining                          $25,000                    No. 6 - Full Authority
    Vice President, Distribution Operations                     $25,000                    None
  INTERNATIONAL OPERATIONS
  Senior Vice President                                         Full Authority             None
    Vice President, Sales & Marketing                           Full Authority             None
    Vice President, Downstream Dev. & Coord.                    $25,000                    None
  ENGINEERING & OPERATION SVCS
  Senior Vice President                                         Full Authority             Nos. 1, 2 & 3 -Full Authority
    Vice President, Engineering Services                        Full Authority             None
        Chief Engineer                                          $50,000                    None
    Vice President, Project Management                          Full Authority             None
        Gen. Mgr., Southern Area Projects                       $50,000                    None



Date Issued:                      Replaces:
                                                                                                  Page 14 of 38
   January 1, 1998                 July 1, 1997
MANAGEMENT GUIDE                                                                                               Section 4
SAUDI ARABIAN OIL COMPANY                                                                 APPROVAL AUTHORITY


                                                                PURCHASE REQUISITION CANCELLATION

                                                                                 COST INCURRED
                                                   NO COST
                                                  INCURRED          DIRECT CHARGE                     INVENTORY
  BUSINESS LINE
                                                                                           1.   SAMS
  Corporate Management                                             ITEMS CHARGABLE TO      2.   Community Services
                                                   Authority     EXPENSE OR TO PROJECTS    3.   Commissary
    Executive Management                          same as for     COVERED BY APPROVED      4.   Drilling
         General Management                        Initiation    EXPENDITURE REQUESTS      5.   Refinery Chemicals
                                                                                           6.   Gas Plant Chemicals

    Exec. Dir., Comp Comm & Office Systems                      Full Authority             None
    Executive Director, Industrial Services                     Full Authority             None
    Vice President, Materials Supply                            Full Authority             Nos. 1, 2 & 3 -Full Authority
        Gen. Mgr., Storehouse Operations                        $50,000                    None
  FINANCE & RELATIONS
  Executive Vice President                                      Full Authority             Nos. 2 & 3 - Full Authority
        General Auditor                                         $25,000                    None
    Controller                                                  $25,000                    None
       Asst. Controller, Operations Accounting                  $25,000                    None
    Treasurer                                                   $25,000                    None
    Executive Director, Safety & Ind’l Security                 $25,000                    None
        Gen. Mgr., Ind’l Security Operations                    $25,000                    None
    Vice President, Saudi Aramco Affairs                        $25,000                    None
        Gen. Mgr., Public Affairs                               $25,000                    None
        Gen. Mgr., Government Affairs                           $25,000                    None
  INDUSTRIAL RELATIONS
  Senior Vice President                                         Full Authority             Nos. 2 & 3 -Full Authority
    Vice President, Community Services                          Full Authority             Nos. 2 & 3 -Full Authority
    Vice President, Employee Rels & Training                    Full Authority             None
        Gen. Mgr., Trng & Career Development                    $25,000                    None
    Executive Director, Medical Services                        Full Authority             None
        Gen. Mgr., Clinical Services                            $25,000                    None
  ADMINISTRATIVE & GENERAL
    Vice President, Corporate Planning                          $25,000                    None
    Executive Director, Management Services                     $25,000                    None
  General Counsel                                               $25,000                    None
         Associate General Counsel                              $25,000                    None




Date Issued:                     Replaces:
                                                                                                  Page 15 of 38
   January 1, 1998                July 1, 1997
MANAGEMENT GUIDE                                                                                                           Section 4
SAUDI ARABIAN OIL COMPANY                                                                           APPROVAL AUTHORITY


                                                      RETIREMENT & DISPOSAL OF COMPANY                             INVENTORY
                                                                 PROPERTY                                         ADJUSTMENTS
                                                     RETIREMENT &                                               1. SAMS
                                                    REINSTATEMENT                      DISPOSAL                 2. Community Services
  BUSINESS LINE                                     (Original Book Cost)                                        3. Commissary
                                                                                                                4. Drilling
                                                                               WITHOUT            FOR           5. Refinery Chemicals
  Corporate Management                              1. Oil, Gas & Water                                         6. Gas Plant Chemicals
                                                                              FINANCAL        FINANCAL
     Executive Management                              Well                  CONSIDER-        CONSIDER-         7. Aviation
         General Management                         2. Other Plants &           ATION            ATION          8. Crude Oil/Ref. Prod./LPG
                                                       Equipment              See Remarks      See Remarks      9. Project Materials
                                                                             Pages 18 & 19    Pages 18 & 19     10. Local Product Sales

  EXPLORATION & PRODUCING                           Nos. 1 & 2 -             $99,999         Full Authority     Nos. 4, 6 & 8 -
  Executive Vice President                          Full Authority                                              Full Authority
     Vice President, Exploration                    None                     None            None               None
     Vice President, Pet. Engrg & Development       No. 1 - Full Authority   $25,000         $50,000            No. 4 -
                                                    No. 2 - $50,000                                             Full Authority
         Gen. Mgr., Petroleum Engineering           None                     None            None               None
         Gen. Mgr., Drilling & Workover             None                     None            None               No. 4 - $50,000
         Gen. Mgr., Expec Computer Center           None                     None            None               None
  PRODUCING OPERATIONS                              Nos. 1 & 2 -             $49,999         Full Authority     Nos. 4, 6 & 8 -
  Senior Vice President                             Full Authority                                              Full Authority
     Vice President, Northern Area Producing        No. 2 - $50,000          $25,000         $50,000            None
     Vice President, Southern Area Producing        No. 2 - $50,000          $25,000         $50,000            None
     Vice President, Producing Plants & Pipelines   No. 2 - $50,000          $35,000         $70,000            Nos. 6 & 8 -Full Authority
         Gen. Mgr., Pipelines                       No. 2 - $25,000          None            None               None
  MANUFACTURING OPERATIONS                          No. 2 -                  $99,999         Full Authority     Nos. 5, 6, 8 & 10 -
  Executive Vice President                          Full Authority                                              Full Authority
     Vice President, Ras Tanura Refining            No. 2 - $50,000          $35,000         $70,000            Nos. 5, 6, 8 & 10 -
                                                                                                                Full Authority
         Gen. Mgr., Ras Tanura Refinery             No. 2 - $25,000          None            None               None
     Executive Director, Power Systems              No. 2 - $50,000          $35,000         $70,000            Nos. 5, 6, 8 & 10 -
                                                                                                                Full Authority
  REFINING & DISTRIBUTION                           No. 2 -                  $49,999         Full Authority     Nos. 5, 6, 8 & 10 -
  Senior Vice President                             Full Authority                                              Full Authority
     Vice President, Jeddah/Riyadh Refining         No. 2 - $50,000          $35,000         $50,000            No. 6 - $50,000
     Executive Director, Yanbu Refining             No. 2 - $50,000          $35,000         $50,000            No. 6 - $50,000
     Vice President, Distribution Operations        No. 2 - $50,000          $35,000         $50,000            None
  INTERNATIONAL OPERATIONS                          No. 2 -                  $49,999         Full Authority     None
  Senior Vice President                             Full Authority
     Vice President, Sales & Marketing              None                     None            None               None
     Vice President, Downstream Dev. & Coord        None                     None            None               None
  ENGINEERING & OPERS SERVICES                      No. 2 -                  $49,999         Full Authority     SAMS/Non-SAMS
  Senior Vice President                             Full Authority                                              Full Authority
                                                                                                                Nos. 2, 3 7 & 9
                                                                                                                Full Authority



Date Issued:                       Replaces:
                                                                                                              Page 16 of 38
   January 1, 1998                  July 1, 1997
MANAGEMENT GUIDE                                                                                                          Section 4
SAUDI ARABIAN OIL COMPANY                                                                          APPROVAL AUTHORITY


                                                       RETIREMENT & DISPOSAL OF COMPANY                           INVENTORY
                                                                  PROPERTY                                       ADJUSTMENTS
                                                      RETIREMENT &                                             1. SAMS
                                                     REINSTATEMENT                    DISPOSAL                 2. Community Services
  BUSINESS LINE                                      (Original Book Cost)                                      3. Commissary
                                                                                                               4. Drilling
                                                                              WITHOUT            FOR           5. Refinery Chemicals
  Corporate Management                               1. Oil, Gas & Water                                       6. Gas Plant Chemicals
                                                                             FINANCAL        FINANCAL
     Executive Management                               Well                CONSIDER-        CONSIDER-         7. Aviation
         General Management                          2. Other Plants &         ATION            ATION          8. Crude Oil/Ref. Prod./LPG
                                                        Equipment            See Remarks      See Remarks      9. Project Materials
                                                                            Pages 18 & 19    Pages 18 & 19     10. Local Product Sales

     Vice President, Engineering Services            No. 2 - $50,00         $25,000         $50,000            None
         Chief Engineer                              No. 2 - $25,000        None            None               None
     Vice President, Project Management              No. 2 - $50,00         $25,000         $50,000            No. 9 - Full Authority
         Gen. Mgr., Southern Area Projects           No. 2 - $25,000        None            None               None
     Exec. Dir., Computer Comm & Office Sys          No. 2 - $50,00         $25,000         $50,000            None
     Exec. Dir., Industrial Services                 No. 2 - $50,000        $35,000         Full Authority     No. 7 - Full Authority
     Vice President, Materials Supply                No. 2 - $25,000        $35,000         Full Authority     SAMS/Non-SAMS
                                                                                                               Full Authority
         Gen. Mgr., Storehouse Operations            No. 2 - $15,000        $25,000         $50,000            SAMS/Non-SAMS
                                                                            Scrap Only                         $100,000
  FINANCE & RELATIONS                                No. 2 -                $99,999         Full Authority     Nos. 2 & 3 -
  Executive Vice President                           Full Authority                                            Full Authority
         General Auditor                             None                   None            None               None
     Controller                                      No. 2 - $5,000         None            None               None
        Asst. Controller, Operations Accounting      None                   None            None               None
     Treasurer                                       None                   None            None               None
     Executive Director, Safety & Ind Security       No. 2 - $5,000         $35,000         Full Authority     None
         Gen. Mgr., Industrial Security Operations   None                   None            None               None
     Vice President, Saudi Aramco Affairs            No. 2 - $10,000        $35,000         Full Authority     None
         Gen. Mgr., Public Affairs                   None                   None            None               None
         Gen. Mgr., Government Affairs               $5,000                 None            None               None
  INDUSTRIAL RELATIONS                               No. 2 -                $49,999         Full Authority     Nos. 2 & 3 -
  Senior Vice President                              Full Authority                                            Full Authority
     Vice President, Community Services              No. 2 - $50,000        $35,000         Full Authority     Nos. 2 & 3 -
                                                                                                               Full Authority
     Vice President, Employee Rels & Training        No. 2 - $25,000        $35,000         Full Authority     None
         Gen. Mgr., Trng & Career Development        None                   None            None               None
     Executive Director, Medical Services            None                   $35,000         Full Authority     None
         Gen. Mgr., Clinical Services                None                   None            None               None
  ADMINISTRATIVE & GENERAL
    Vice President, Corporate Planning               None                   None            None               None
    Executive Director, Management Services          None                   None            None               None
  General Counsel                                    None                   None            None               None
    Associate General Counsel                        None                   None            None               None


Date Issued:                     Replaces:
                                                                                                             Page 17 of 38
   January 1, 1998                July 1, 1997
MANAGEMENT GUIDE                                                                                        Section 4
SAUDI ARABIAN OIL COMPANY                                                             APPROVAL AUTHORITY


                                 MATERIAL AND EQUIPMENT- REMARKS
                                Material and Equipment Purchase Requisition
 Direct Charge
 The Materials Supply Organization (MSO) is the sole agency authorized to purchase materials and equipment.
 The MSO may delegate this authority from time to time.
 Direct Charge (DC) materials are charged to an approved ER or to a Net Direct Expenditure Budget.
 All positions indicated on pages 11 and 12 have authority to initiate purchase requisitions for specific DC
 materials included in (a) an approved ER or (b) in their approved Net Direct Expenditure Budget.
 Materials Supply Organization checks standardization and availability or substitution from company stock.
 Refer to Management Guide Section 3, Services Review Committee, and Contracting Manual Procedure 17 for
 further details.
 Inventory
 The authority to purchase materials for inventory is limited by the requirement to maintain a balanced inventory
 investment adequate to meet operating and construction requirements. The MSO administers procedures to
 optimize inventory balances. Requisitions for materials to maintain inventory levels to meet operations
 requirements are controlled through review of inventory-position, past usage, consultations with users and
 forecasts from users on future programs.
 Requisitions of materials to maintain inventory levels to meet construction requirements are limited to approved
 funds for Capital Budgets and Programs. Drilling supplies inventory is limited to the approved Development
 Budget and future program.
                                       Purchase Requisition Cancellation
 No Costs Incurred
 Authority to cancel purchase requisitions is the same as for purchase initiation provided that no vendor costs are
 incurred.
 Costs Incurred
 When valid cancellation costs are incurred the positions indicated on pages 13 and 14 have the authority limit
 indicated to authorize the responsible Company purchasing agency to accept and approve payment.
 The initiator of the purchase requisition is charged for any cancellation costs incurred. These costs are either
 charged against the approved Net Direct Operating Expenditure Budget or an approved ER depending upon the
 original source of funds for the purchase requisition. Refer to the Approval Authority System for details.




Date Issued:                 Replaces:
                                                                                             Page 18 of 38
   January 1, 1998            July 1, 1997
MANAGEMENT GUIDE                                                                                          Section 4
SAUDI ARABIAN OIL COMPANY                                                               APPROVAL AUTHORITY


                                              Inventory Adjustments
 Some examples of adjustments to reflect physical gains and losses of materials and supplies are as follows:
 (a) Loss adjustments in connection with movement of incoming materials and transfers which are non-
     recoverable or below established claim minimums.
 (b) Petroleum products gains or losses due to temperature and other similar adjustments.
 (c) Revaluation adjustments resulting from damage or deterioration.
 (d) Inventory adjustments resulting from differences between number of actual items versus number of items per
     inventory records. (Includes theft, breakage after receipt, etc.)
 Authority limits are indicated on pages 15 and 16. The monetary limits specified are for adjustments for each
 stock number. Adjustment limits are to include a factor for materials overhead prorates.


                                 COMPANY PROPERTY - REMARKS
 EXCOM Resolution August 7, 1968 as interpreted by CEO approved letter dated April 16, 1969 governs.
                                 Retirement and Disposal of Company Property
 Retirement and Reinstatements of Plant and Equipment
 The authority to retire plant and equipment is limited depending upon the factors of original book cost, net book
 value and whether or not the plant and equipment to be retired subsequently results in receipt of financial
 consideration or is disposed of without financial consideration. (See below).
 Except for retirement action with respect to oil, gas and water wells, the positions indicated on pages 15 and 16
 have authority, for the retirement of Plant and Equipment assets under their jurisdiction which can no longer be
 economically used in any Company operation, through monetary limits indicated with respect to any single unit
 based on original book cost. The authority limit on a retirement involving multiple items resulting from
 inventory loss or the retirement of a complete facility shall be based on the original book cost of the total action
 rather than individual items or components.
 The positions indicated on pages 15 and 16 also have authority to approve the reinstatement of retired plant and
 equipment within the same limits as for retirement.
 Transfers
 Transfer authority shall not apply to actions that would result in a complete facility being reduced to an
 inoperable status or changed in its basic identity. Such actions will require the same authority and limits as for
 retirement of the complete facility.




Date Issued:                 Replaces:
                                                                                              Page 19 of 38
   January 1, 1998            July 1, 1997
MANAGEMENT GUIDE                                                                                         Section 4
SAUDI ARABIAN OIL COMPANY                                                              APPROVAL AUTHORITY




 Retirement and Subsequent Disposal Without Financial Consideration
 All proposed actions resulting in abandoning, demolishing, giving away or otherwise disposing of Company
 property without financial consideration where the net book value of any one disposition is $100,000 or more
 (regardless of net salvage value) requires approval of the Board of Directors or EXCOM. Such approval is also
 required when the net book value of any one disposition is under $100,000 if the net salvage value is not
 nominal.
 The President & CEO has the authority to decide what could reasonably be considered as nominal under the
 circumstances.
 The President & CEO and each Executive Vice President has authority to abandon, demolish. give away or
 otherwise dispose of Company property without financial consideration provided the property has only nominal
 or no net salvage value to the Company and the net book value of the property constituting any one such
 disposition does not exceed $100,000 at the time of disposition.
 The authority limit on disposal involving multiple items shall be based on the net book value of the total
 disposition rather than individual item or components.
 Retirement and Subsequent Disposal for Financial Consideration
 Financial consideration is defined as receipt of money or equivalent which, under the circumstances and from the
 viewpoint of good business standards, represents a reasonable monetary realization.
 The Material Supply Organization (MSO) is the agency responsible for disposal of materials and equipment
 through sale or by scrapping. Accordingly, that organization is responsible for assuring that Company policies
 and procedures are complied with and that any Government requirements are met. Incumbents of the positions
 (on pages 15 & 16) from organizations other than MSO, have the authority to retire Company property and the
 authority to decide to dispose of Company property.
 Sales shall only be made when it is in the Company’s interest to do so and does not impair Company needs or
 anticipated requirements. Individuals approving sales shall assure themselves that users have been consulted
 concerning their requirements and that sale will not result in supply shortages. Where surplus. obsolete or
 deteriorated equipment is involved, consideration shall be given to the disposal of appurtenances or spare parts of
 that equipment which would otherwise become surplus or obsolete.
 In-Kingdom sales (except special order, used light vehicles, furniture and accommodation sales) shall be
 conducted in accordance with the provisions of Decision 31, issued by the Ministry of Finance and National
 Economy. Saudi Aramco is required to submit a quarterly report to the Ministry of Petroleum and Mineral.
 Resources on the surplus or obsolete materials and equipment sold.
 Proposed sales wherein delivery to the purchaser will take place or title will pass outside Saudi Arabia shall be
 referred to the Law Department for review and recommendations concerning tax matters.
 Sales for which payment will be made in other than US Dollars or Saudi Riyals and those involving the extension
 of credit require the prior approval of the Treasurer’s Organization.



Date Issued:                 Replaces:
                                                                                              Page 20 of 38
   January 1, 1998            July 1, 1997
MANAGEMENT GUIDE                                                                                                         Section 4
SAUDI ARABIAN OIL COMPANY                                                                           APPROVAL AUTHORITY



                                                 PERSONNEL ACTIONS

             SUBJECT                                                     SALARY CODE
    PERSONNEL ACTIONS                     18 +                   17 to 15                 14 to 11               10 & Below
                                         Remark (2)

     MERIT ACTIONS:
       IN POLICY                    Corporate Management    General Management          Department Heads          Division Heads
       Remark (1)                                                                                                   Remark (3)

      OUT-OF-POLICY -                 President & CEO      Corporate Management       Executive Management      General Management
        INCREASE UP TO 20%
      OUT-OF-POLICY -                 President & CEO      Executive Vice President   Corporate Management     Executive Management
        INCREASE OVER 20%



                                                        REMARKS
 (1) In policy merit action refers to planned merit actions with an increase not to exceed 15%.
 (2) This approval applies only for processing SA 8000 merit actions. All merit actions and reclassifications of
     employees in Salary Code 18 and above are reviewed and approved by the Compensation Committee,
     regardless of salary level or nationality of the employee. When the Annual Salary Plan for such employees
     has been approved by the Compensation Committee, the necessary documents to implement the changes will
     be prepared by the Executive Compensation Office and routed for endorsement. (Board of Directors’
     resolution of April 15, 1980 and President & CEO revisions to approval authorities dated September 15,
     1997, govern.).
 (3) Department head continues to approve any merit increases which include an adjustment amount up to 5% to
     bring employees salary closer to the salary code minimum.
 Salary and Promotional actions are based upon approved salary plans which take into consideration annual
 performance category reports and grade code level.
 Assignment of any individual to an unplaced job requires the same approval authority as out-of-policy merit
 actions, even though merit action may not be anticipated at the time of the assignment. The Director,
 Management Development Department reviews Salary Code 15 and above incumbents in unplaced jobs. Any
 subsequent merit treatment, after a person has been assigned to an unplaced job, would be handled as within
 policy.
 The Senior Vice President, Industrial Relations, has authority to approve job replacement recommendations for
 physicians, and merit actions for physicians up to 110% of the mature salary within physician maturity curves.
                     (For further details, refer to Industrial Relations Manual, Chapter 2)




Date Issued:                 Replaces:
                                                                                                             Page 21 of 38
   January 1, 1998            July 1, 1997
MANAGEMENT GUIDE                                                                                             Section 4
SAUDI ARABIAN OIL COMPANY                                                                  APPROVAL AUTHORITY




         SUBJECT                                        POSITION AND SALARY CODE
  PERSONNEL ACTIONS              All Department      All Division/Sec-           All Unit Heads        All Salary Code10
                                     Heads              tion Heads                     and                  & Below
                                       and                  and                 Salary Code 14 to
                                Salary Code 18 +     Salary Code 17 to                 11
                                  Professionals             15                    Other Levels
                                                       Professionals
                                  Remark (1)
    PROMOTIONAL INCREASES:
      IN POLICY                   President & CEO    Corporate Management       Executive Management     Department Heads
      OUT-OF-POLICY               President & CEO   Executive Vice Presidents   Corporate Management    General Management

                                                    REMARKS
 (1) The approval for Salary Code 18 and above (except physicians) applies only for processing SA 8000
     promotional actions that have already been approved by the Compensation Committee or the President, as
     applicable. All promotional actions of employees in Salary Code 18 and above are reviewed and approved
     by the Compensation Committee, regardless of salary level or nationality of the employee. When the Annual
     Salary Plan for such employees has been approved by the Compensation Committee, the necessary
     documents to implement the changes will be prepared by the Executive Compensation Office and routed for
     endorsement. (Board of Directors’ resolution of April 15, 1980 and President & CEO revisions to approval
     authorities dated September 15, 1997, govern.).
 Salary and Promotional actions are based upon approved salary plans which take into consideration annual
 performance category reports and grade code level.
 Management Development concurrence is required for all promotions into Division Head Level or Salary Code
 15 and above positions.
 The Senior Vice President, Industrial Relations, has authority to approve job replacement recommendations for
 physicians, and promotional actions for physicians up to 110% of the mature salary within physician maturity
 curves.
                     (For further details, refer to Industrial Relations Manual, Chapter 2)




Date Issued:                 Replaces:
                                                                                                  Page 22 of 38
   January 1, 1998            July 1, 1997
MANAGEMENT GUIDE                                                                                        Section 4
SAUDI ARABIAN OIL COMPANY                                                             APPROVAL AUTHORITY




           SUBJECT                                                   SALARY CODES
                                        17               16               15          14 to 11        10 & Below
  PERSONNEL ACTIONS
  SALARY OFFERS:
                                     Corporate        Executive         General     Department Head   As Redelegated
     0%-25% IN RANGE                Management       Management        Management                     By Dept. Head

                                   Executive Vice     Corporate         Executive     General          Department
     28%-50% IN RANGE                Presidents      Management        Management    Management          Head

     ABOVE 50% IN RANGE           President & CEO   Executive Vice      Corporate     Executive         General
                                                      Presidents       Management    Management        Management


                                                    REMARK
 Personnel Requisitions and Salary Offers (New Employees Only):
 All Personnel requisitions for expatriate employees, regardless of nationality, must be approved by a member of
 Corporate Management.
 All Personnel requisitions involving positions in Salary Codes 18 and above require the approval of the President
 & CEO. Salary offers to candidates in Salary Code 18 and above including loanees from the US Companies
 require the approval of the Compensation Committee.
 Formal personnel requisitions are not required for Saudi Arabs. However, salary offers to Saudi Arabs require
 approvals as set forth above.
 The approval authority of the respective Executive Vice President is required for any expatriate employee who
 requires more than a three bedroom Company house at the time of hire.
 The Senior Vice President, Industrial Relations has authority to approve salary offers for physicians up to l10%
 of the mature salary within physician maturity curves.
 Manpower requisitions and new hire employment offers that involve professional ladder positions at the SC 15+
 level should be endorsed by the Management Development Department prior to requesting approval by the
 Executive Vice President.
 Transfer to SAO from ASC and AOC require a requisition approved by General Management or above.
                            (For further details, see Industrial Relations Manual)




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   January 1, 1998            July 1, 1997
MANAGEMENT GUIDE                                                                                    Section 4
SAUDI ARABIAN OIL COMPANY                                                          APPROVAL AUTHORITY




                                               CORPORATE             EXECUTIVE             GENERAL
                 SUBJECT
                                              MANAGEMENT            MANAGEMENT            MANAGEMENT
  EMERGENCY WAGE AND SALARY
    ADVANCES                                          Current Month’s Accrued Less Fixed Deduction
    (Remarks No. 1 & 4)
  JOB ASSIGNMENTS
    Permanent                                                    Through Division Level
    Temporary                                                   All Subordinate positions
    (Remark No. 2)                                  (See Chapters 7 and 8, Industrial Relations Manual)
  JOB PLACEMENT                                                     See Remark No. 3
  PERSONAL LOANS TO EMPLOYEES
    AND INSTALLMENT PAYMENTS                        $5,000                $3,000                $1,000
    (Remark No. 4)
  OVER PAYMENTS TO EMPLOYEES                                            Controller          Asst. Controller
    DUE TO COMPANY ERROR                                               Over $10,000            $10,000
    (Remark No. 5)
  TERMINATION AND RESIGNATION
  (Chapter 10, IR Manual)                                        See Remarks No. 6 & 6a
  SPECIAL BENEFITS
    Other Special Benefits & Out of Policy                           See Remark No. 7

                                                 REMARKS
 NO. 1 - EMERGENCY WAGE & SALARY ADVANCES
 Not to be automatic or repetitive. Due and payable by end of month granted. Remark No. 4 under Personal
 Loans to Employees and Installment Payments is also applicable.
 NO. 2 - JOB ASSIGNMENTS
 Permanent assignments to jobs in Salary Codes 15 and above covered by Replacement Tables are limited to
 selection from candidates appearing thereon or on a slate of candidates prepared by the Management
 Development Department, unless approved by the President & CEO or the respective Executive Vice President.
 The Director of Management Development reviews promotions prior to action being taken. Replacement Tables
 should also be used as a guide for temporary assignments.
 Assignment of any individual to an unplaced job requires the same approval authority as out-of-policy merit
 actions, even though merit action may not be anticipated at the time of assignment. The Director of Management
 Development Department reviews Salary Codes 15 and above incumbents in unplaced jobs.
 NO. 3 - JOB PLACEMENT
 Organization and Industrial Engineering Department evaluates and recommends placement of all new or
 redesigned jobs. Placement approval is as follows:
     Through SC 13    Department Head                          SC 16 & 17       Executive Vice President
     SC 14            General Manager/Vice President           SC 18 through 20 President & CEO
     SC 15            Senior Vice President                    Above SC 20      Compensation Committee


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MANAGEMENT GUIDE                                                                                      Section 4
SAUDI ARABIAN OIL COMPANY                                                            APPROVAL AUTHORITY


 Job placements recommendations for SC 16 through 20 are reviewed by the Management Development and
 Organization Committee, prior to approval by the appropriate authority as shown above.
 NO. 4 - PERSONAL LOANS TO EMPLOYEE AND INSTALLMENT PAYMENTS
 The approval of loans and payment deferral of amounts owed the Company shall not be automatic or repetitive.
 Approving individuals shall satisfy themselves that a bonafide hardship case exists and that an urgent and
 genuine need for the action cannot practicably be resolved except through Company assistance. Deferral of loans
 and amounts owed to the Company are required to be settled within six months unless approved otherwise by the
 President & CEO or the respective Executive Vice President.
 The justification for approved action is required to be included on the approval document.
 NO. 5 - OVERPAYMENTS TO EMPLOYEES DUE TO COMPANY ERROR
 Proposed repayment schedules require the prior concurrence of the employee’s department manager.
 NO. 6 -TERMINATION AND RESIGNATION
 In the event that an SC 11+ Saudi Arab employee resigns, the Company is obligated to inform the Ministry of
 Petroleum and Minerals.
 1. Concurrence is required from the Director - Personnel, for the following terminations or resignations:
     a. All Saudi Arab employees in Salary Codes 16 and above;
     b. US Dollar Payroll employees not vested in the Retirement Income Plan, where resignation benefits are to
         be paid;
     c. Director - Personnel has delegated to Area Personnel Administrator the signature authority to concur to
         voluntary resignation of Saudi Arab employees in salary code 11 -15.
 2. Concurrence is required from the Area Personnel Administrator for all resignations, except those listed above
     in a & b.
 NO. 6a -TERMINATIONS
 Approval authority to terminate.
       SC 10 & Below                         Gen. Mgt. or Dept. Head
       SC 11 to 14                           Exec. Mgt.
       SC 15                                 Corp. Mgt.
       SC 16                                 Corp. Mgt.
       SC 17                                 Executive Vice President
       SC 18 & Above                         President & CEO
 No. 7 - SPECIAL BENEFITS
 Special Benefits actions are recommended by employee’s department head or above and are endorsed by the
 Director of Employee Relations Services. The actions are reviewed and approved by the Special Benefits
 Committee for all cases except those without precedent. For those unusual cases President & CEO approval is
 required.




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   January 1, 1998           July 1, 1997
MANAGEMENT GUIDE                                                                                       Section 4
SAUDI ARABIAN OIL COMPANY                                                            APPROVAL AUTHORITY




                                   CORPORATE                     EXECUTIVE                    GENERAL
          SUBJECT
                                  MANAGEMENT                    MANAGEMENT                   MANAGEMENT

                                                  CONTRACTS

     Contract Signature
     Authority (including
                              See Remarks
     Rental, Lease &
                              By-Laws and Approval Authority Guidelines authorize officers to execute leases
     Charters)
                              and contracts for required facilities and services. Additionally the Company has
                              established criteria that are to be followed with respect to Rentals, Leases, or Char-
                              ters. Item (2) or (3) must apply. When leasing is proposed but buying is also possi-
                              ble one or more of the items under (1) must apply. When amounts exceed those
                              shown in (3) a & b, SRC recommendation and President & CEO approval is
                              required. Executive Vice Presidents and Senior Vice Presidents may approve up to
                              the amounts shown in (3) a &b and may also redelegate this authority.


                              1. a. The terms of the contract are of equal or better economic attractiveness as
                                    compared to Saudi Aramco ownership, based on a current value of money
                                    rate established by Treasurer’s.
                                 b. The need to be served is fluctuating or temporary.
                                 c. Testing and experience are required because the goods or services are
                                    unknown or unevaluated in the Saudi Aramco environment.
                                 d. Obsolescence is a significant condition making purchase a high risk.
                                 e. Required resources such as manpower, housing, management, technical
                                    skills and specialized maintenance not readily available on an ownership
                                    basis can be temporarily acquired with a lease.
                                 f. Required resources can be obtained in a timely manner on a lease basis
                                    but are not otherwise available within an acceptable time frame.
                                 g. Items not critical to Company operations, as determined by Management,
                                    could be obtained through rentals, leases and charters, if the economics
                                    prove this method of acquisition to be financially attractive.
                                 h. Economic development in the local Saudi Arabian Community can be
                                    better encouraged by leasing, renting or chartering than by other
                                    alternatives.




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MANAGEMENT GUIDE                                                                                       Section 4
SAUDI ARABIAN OIL COMPANY                                                            APPROVAL AUTHORITY



                                     CORPORATE                   EXECUTIVE                    GENERAL
          SUBJECT
                                    MANAGEMENT                  MANAGEMENT                   MANAGEMENT

                                                  CONTRACTS
     Contract Signature       2. The approved Capital, Exploration, Development, Home Ownership and
     Authority (including        Community Development or Net Direct Expense budgets include sufficient
     Rental, Lease &             funds specifically allocated or identified for such purpose to cover the costs
     Charters)                   involved, or

                              3. Individual commitments chargeable against expense beyond the approved
                                 budget year:

                                   a. Do not exceed $500,000 ($1,000,000, President & CEO) annually extending
                                      over a period longer than 4 years, or
                                   b. Do not exceed a total of $2 million ($4 million, President & CEO) during a
                                      period less than 4 years, or
                                   c. Specifically cover the utilization of certain fleet type equipment (such as
                                      motor cars, buses, trucks, tractors, cranes, welding machines, air
                                      compressors, forklifts, helicopters and other airplanes) which has been
                                      previously secured via leases as a part of a continuing program.


                              Services Review Committee reviews and approves contract actions for lease,
                              rental or charter of facilities or equipment where the contractor does not provide
                              manpower to operate the equipment or facilities and the estimated commitment
                              value exceeds:

                              1.    $500,000 in Saudi Aramco contract costs within 90 contract hire days; and/or
                              2.    $1,000,000 in Saudi Aramco contract costs within 180 contract hire days;and/or
                              3.    $1,500,000 in Saudi Aramco contract costs within 270 contract hire days;and/or
                              4.    $2,000,000.


                              Refer to GIM 20.161 and Contracting Manual, Chapter VII, Procedure 17
                                                       for further details.
                                            For Rental, Lease of EDP Equipment, see page 33.




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MANAGEMENT GUIDE                                                                                       Section 4
SAUDI ARABIAN OIL COMPANY                                                            APPROVAL AUTHORITY



                                   CORPORATE                     EXECUTIVE                    GENERAL
          SUBJECT
                                  MANAGEMENT                    MANAGEMENT                   MANAGEMENT

                                                  CONTRACTS
     Contract Signature                                                                    Authority as Delegated
     Authority (including                Authority governed by Article V                      (See Automated
     Rental, Lease &                 Section 2 of the By-Laws (See Remarks)                 Approval Authority
     Charters)                                                                              System for specific
                                                                                                delegations)
                              Except for matters limited by the Board or EXCOM resolutions, the listed Officers
                              of the Company have full authority to affix the signature of the Company to all
                              deeds, conveyances, mortgages, leases, promissory notes, contracts, obligations,
                              certificates and other papers and instruments in writing which, in the usual course of
                              business, may require signature. They may delegate this authority to specific indi-
                              viduals on items of a routine and repetitive nature on which policies have been
                              clearly established.

                                                    President & CEO        Secretary
                                                    Vice Presidents        Treasurer
                                                    Controller             General Counsel

                              This authority to affix the signature of the Company is subject to having obtained
                              the appropriate Signature Authority. It is also subject to:

                              1. budget and financial controls;
                              2. the Saudi Aramco Contracting Manual; and
                              3. such other policies and procedures as have been adopted relating to the
                                 preparation, execution and distribution of contracts.




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MANAGEMENT GUIDE                                                                                       Section 4
SAUDI ARABIAN OIL COMPANY                                                             APPROVAL AUTHORITY



                                      CORPORATE                    EXECUTIVE                   GENERAL
         SUBJECT
                                     MANAGEMENT                   MANAGEMENT                  MANAGEMENT

                                                    CONTRACTS
  Progress Payments
    Against Letters of                                             (See Remarks)
    Intent
    Type of Letter of
    Intent
    1. No Provision for               Full Authority               Full Authority              Full Authority
        progress or partial
        payment - provided
        no more than
        $10,000 and not
        more than 30% of
        the total estimated
        cost.
    2. Provision for                  Full Authority               Full Authority              Full Authority
        progress payments
        included.
    3. Invoices are for cost          Full Authority               Full Authority              Full Authority
        reimbursement.
    4. Invoices are for cost          Full Authority               Full Authority              Full Authority
        reimbursement and
        fee.                     The following guidelines approved by the Controller, regarding approval of invoices
                                 for progress or partial payments against letter of intent, will apply:

                                 1. Invoices under letters of intent which do not provide for progress or partial
                                    payment will be approved by the respective Executive Vice President. (Unless
                                    under $10,000 and not more than 30% of the total estimated cost, see No. 1 in
                                    subject column).

                                 2. Level of approval authority for all other types of letter of intent shall be as
                                    enumerated in the subject column.


                                 Note: Positions having full authority are limited to the appropriate budget and
                                       applicable Company policies.




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MANAGEMENT GUIDE                                                                                        Section 4
SAUDI ARABIAN OIL COMPANY                                                              APPROVAL AUTHORITY



                                    CORPORATE                     EXECUTIVE                     GENERAL
          SUBJECT
                                   MANAGEMENT                    MANAGEMENT                    MANAGEMENT

               GENERAL BANKING INVESTMENT & OTHER FINANCIAL ACTIVITIES
                               Executive Vice Presidents
     Account Receivable            Full Authority
      Write-off
                                  Sr. Vice Presidents           $25,000 - Controller      $1,000 - Asst. Controller
                                        $50,000                  $25,000 - Treasurer       Accounting Operations
                               Treasurer’s is responsible for credit and collection. Receivables considered collect-
                               ible but for reasons of business policy are to be written-off require concurrence of
                               the head (or designated Representative) of the organization whose action has caused
                               the receivable to be initiated.
     Installment Repayment          Full Authority                       None                     None
                                    (See Remarks)
                               The approval of installment repayments resulting from Company overpayment shall
                               not be automatic. Approving authorities shall satisfy themselves that the circum-
                               stances warrant the payment deferral. Deferrals of amounts owed the Company are
                               required to be settled within six months unless approved otherwise by the President
                               & CEO or the respective Executive Vice President. The justification for the
                               approved action is required to be included on the approval document.
                               This authority shall not be further redelegated.
                               The concurrence of the Asst. Treasurer - Operations shall be obtained prior to the
                               extension of credit. An acceptable type of security shall be obtained whenever
                               required by Treasurer’s.
     Home Loan                 Only in the event of death or permanent total disability of the obligator. Also in spe-
      Outstanding Balance      cial cases at the CEO’s or the respective Executive Vice Presidents’ discretion pro-
      Cancellation             vided they are reported to the Board of Directors annually.
     Assistance to Local        Executive Vice Presidents
      Private Enterprise            Full Authority                   None                      None
                                  Sr. Vice Presidents
      Approval                          $25,000
                                    (See Remarks)
                               EXCOM resolution of August 1, 1973 provides financial assistance to Local private
                               enterprise. (Also see under Corporate Signature).
      Corporate Signature                                          (See Remarks)
                               EXCOM resolution of August 1, 1973 governs. Documents providing financial
                               assistance or stock participation may be executed by the Chairman of the Board, the
                               President, or by any two of the following officers of the Company:
                                                    Vice President                   Treasurer
                                                       Secretary                     Controller


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                                                                                             Page 30 of 38
   January 1, 1998            July 1, 1997
MANAGEMENT GUIDE                                                                                    Section 4
SAUDI ARABIAN OIL COMPANY                                                         APPROVAL AUTHORITY



                               CORPORATE                      EXECUTIVE                    GENERAL
         SUBJECT
                              MANAGEMENT                     MANAGEMENT                   MANAGEMENT

                 GENERAL BANKING INVESTMENT & OTHER FINANCIAL ACTIVITIES
     Banking              BANK ACCOUNTS:

                          1. The President & CEO, any Executive Vice President and any Senior Vice
                             President, acting jointly with the Treasurer or any Assistant Treasurer are
                             authorized and empowered to open or cause to be opened, with the funds of the
                             Corporation, accounts in the name of Saudi Arabian Oil Company with or
                             without further descriptive designation, in such bank, trust or banking
                             companies as they may select, to use such accounts for the Corporation’s
                             business and, at their discretion acting jointly as aforesaid, to close or cause to
                             be closed any such accounts.

                          2. Any of the forgoing accounts may be drawn upon by the President & CEO, the
                             Treasurer, any assistant Treasurer or by such person or persons as any of those
                             officers shall from time to time designate in writing to such bank, trust, or
                             banking company.


     Borrowing            The President & CEO, any Executive Vice President, or any Senior Vice President,
                          each acting jointly with the Treasurer or any Assistant Treasurer are authorized on
                          behalf of the Corporation to borrow from time to time to meet the Company needs,
                          by loans with or without security, including for purposes hereof borrowings evi-
                          denced by notes, or by other forms of debt issues or instruments, from any one or
                          more banks or other lending institutions, or by public or private subscription, funds
                          in United States dollars or other currencies in such amounts, and upon such terms, as
                          they may deem necessary to finance such operations, projects, asset acquisitions or
                          other expenditures or purposes for the Company’s use and benefit as have been pre-
                          viously approved by the Company’s Board of Directors or Executive Committee.
                          They are authorized to deliver to the bank(s) making such loans as evidence of this
                          Corporation’s indebtedness, the contract, undertaking or promissory note of this
                          Corporation and to subscribe provided, however, that no individual borrowing pur-
                          suant to this authority shall have a term greater than ten (10) years and, provided fur-
                          ther that the authority hereby conferred shall be limited to borrowings in an
                          aggregate amount at any time not exceeding five billion ($5,000,000,000) U.S. dol-
                          lars or its equivalent in other currencies.

                          When Saudi Aramco endeavors to raise loans through Saudi banks or syndicated
                          loans through international banks, it should not release to the invited banks the infor-
                          mation they usually demand in such loan transactions, which includes confidential
                          information, unless they execute an explicit and detailed confidentiality agreement.



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   January 1, 1998       July 1, 1997
MANAGEMENT GUIDE                                                                                           Section 4
SAUDI ARABIAN OIL COMPANY                                                                APPROVAL AUTHORITY



                                      CORPORATE                      EXECUTIVE                    GENERAL
          SUBJECT
                                     MANAGEMENT                     MANAGEMENT                   MANAGEMENT

                 GENERAL BANKING INVESTMENT & OTHER FINANCIAL ACTIVITIES
     Cash Differences            Executive Vice President
                                     Full Authority
                                    Sr. Vice President            $50,000 - Controller                  None
                                         $50,000                  $50,000 - Treasurer

                                 IMPREST FUNDS:
                                 All theft and infidelity losses as well as imprest fund cash differences of $100 or
                                 more shall immediately be reported by department heads to the Treasurer and Gen-
                                 eral Auditor. When cash differences are the equivalent of $1,000 or more, the Trea-
                                 surer and General Auditor shall jointly be responsible for coordinating the report to
                                 the Executive Vice President - Finance & Relations.
                                 CASH OFFICES:
                                 Cash Offices shall report to the Assistant Treasurer, any differences equivalent to
                                 $500 or SR1,500. When cash differences are the equivalent of $1,000 or more, the
                                 Treasurer and General Auditor shall be responsible for coordinating the report to the
                                 Executive Vice President - Finance & Relations.
     Out-of-Policy               Executive Vice President
      Disbursements                Senior Vice President                 None                        None
                                            $5,000
                                 The President & CEO has full authority to approve out of policy disbursements cov-
                                 ering all payments outside the normal course of operations including those on which
                                 monetary limitations have been imposed except when such limitations have been
                                 placed by the Board of Directors of EXCOM. Executive Vice Presidents, all Senior
                                 Vice Presidents and the General Counsel in his capacity as the Secretary of the Cor-
                                 poration have the authority to approve out of policy disbursements up to $5,000.
                                 This authority cannot be further redelegated.
     Saudi Riyal Thrift Plan     The President & CEO, any Executive Vice President, or any Senior Vice President,
                                 acting jointly with the Treasurer or any Assistant Treasurer, are authorized and
                                 empowered to open or cause to be opened, with all funds under the Saudi Riyal
                                 Thrift Plan and any accruals thereto, accounts in the name of Saudi Arabian Oil
                                 Company, trustee, with or without further descriptive designation, in such bank,
                                 trust or banking company or companies as they may select, to use such accounts in
                                 the manner and for the purposes specified in the Rules of the Saudi Riyal Thrift
                                 Plan, and, at the discretion of any of them acting jointly as aforesaid, to close or
                                 cause to be closed any such accounts.
     Foreign Exchange            The President & CEO, any Executive Vice President, any Senior Vice President, the
                                 Treasurer, or any assistant Treasurer is authorized and empowered on behalf of the
                                 Corporation to purchase, receive, sell, deliver or transfer for present or future deliv-
                                 ery, foreign monies, bullion, drafts, acceptances, bills of exchange, letters of credit
                                 and instruments representative thereof and to issue, sign, accept, endorse and con-
                                 firm any and all such instruments.



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MANAGEMENT GUIDE                                                                                    Section 4
SAUDI ARABIAN OIL COMPANY                                                       APPROVAL AUTHORITY



                              CORPORATE                     EXECUTIVE                   GENERAL
         SUBJECT
                             MANAGEMENT                    MANAGEMENT                  MANAGEMENT

                GENERAL BANKING INVESTMENT & OTHER FINANCIAL ACTIVITIES
     Risk Management     New or renewed insurance coverage or endorsements, based on the annual premium
                         cost:
                               President & CEO                                  Full Authority
                               Executive Vice President-Finance & Relations     Up to $5,000,000
                               Treasurer                                        Up to $2,000,000
                               Assistant Treasurer                              Up to $ 200,000

                         1. The Treasurer is authorized to redelegate part or all of his approval or signature
                            authority for new or improved coverage to the Assistant Treasurer.
                         2. The Insurance Administrator has the authority to insure new or additional risks
                            which relate to existing and approved coverages (i.e. additional aircraft, marine
                            units, workers compensation and marine cargo).
                         3. In the unusual case when the Contractor does not assume responsibility for
                            liability, loss, or damage under Company contracts for services (including
                            construction), material or equipment furnished to the Company and the
                            proponent recommends procuring insurance against such risk, such
                            procurement shall be subject to the joint approval of the proponent’s Vice
                            president and the Executive Vice President Finance & Relations, based on a
                            written recommendation prepared by the Treasurer.
                         Unlimited assumption or risk or liability through the following actions:
                                       Action                   Position(s) Authorized To Take Such Action
                         1. Cancellation of Existing             Contract Signatory
                            Insurance Coverages
                         2. Increase in Insurance                Contract Signatory
                            Deductibles or Coinsurance
                         3. Decision not to insure               Executive Vice President - Finance & Rels
                            Identifiable Risk Areas
                         4. Indemnification or hold              Executive Vice President - Finance & Rels,
                            harmless provision in contract       or Treasurer, or Insurance Administrator.
                         Provided however, the authority of the Treasurer and Insurance Administrator to
                         approve indemnification or hold harmless provisions in contracts shall be
                         exercised in a manner consistent with previous approvals by the Executive Vice
                         President - Finance & Relations or any Self-assumption of risk concepts set forth
                         in the Annual Report to the Services Review Committee.
                         NOTE: (Procedure #25 in the Contracting Manual explains the procedures to be
                               used to procure Saudi Aramco’s Insurance Coverages.)


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MANAGEMENT GUIDE                                                                                         Section 4
SAUDI ARABIAN OIL COMPANY                                                            APPROVAL AUTHORITY



                                    CORPORATE                     EXECUTIVE                  GENERAL
         SUBJECT
                                   MANAGEMENT                    MANAGEMENT                 MANAGEMENT

                 GENERAL BANKING INVESTMENT & OTHER FINANCIAL ACTIVITIES
     Short Term Investment     SAUDI ARAMCO BANK ACCOUNTS
                               Board resolution of March 14, 1989 governs:

                               For details refer to the Board resolution noted above and the Statement of Invest-
                               ment Principles and Guidelines.


                                      MISCELLANEOUS AUTHORITIES



     Business Assignment                 Authority, including own, limited to expenses identified as
      Authorized Travel                  an element of the Approved Net Direct Expenditure Budget

                               Executive Management and above positions have authority to approve out of policy
                               business travel requests.



     Travel Advances                     Authority limited to reasonable living expenses, including own

                               Travel Advances controlled by established receivable procedures.



     Expense Reports                         Authority to approve expense reports of subordinates only

                               The Controller reviews expense reports for Corporate Management for compliance
                               to policy and other limitations. Authority limited to expenses identified as an ele-
                               ment of the Approved Net Direct Expenditure Budget.



     Personal Travel           Executive Management and above positions are autho-
                               rized to approve for their own personal travel using
                               Company purchased tickets. Expenses are to be col-
                               lected by the company through the Executive Personal
                               Account.




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MANAGEMENT GUIDE                                                                                     Section 4
SAUDI ARABIAN OIL COMPANY                                                           APPROVAL AUTHORITY



                                    CORPORATE                    EXECUTIVE                   GENERAL
         SUBJECT
                                   MANAGEMENT                   MANAGEMENT                  MANAGEMENT
                                       MISCELLANEOUS AUTHORITIES
     Computer Services                                           (See Remarks)

      Capital/Lease/Rental     Capital/Lease/Rental

                               In addition to the approval and signature authorities established by Business Line,
                               the Corporate Policy Statement dated May 27, 1981, the President & CEO letter
                               dated December 29, 1981, and Management Committee minutes dated May 19,
                               1981 govern:

                               1. Prior to acquisition or installation, ALL computer applications shall be
                                  reviewed by the Executive Director, Computer, Communications & Office
                                  Systems; General Manager, Expec Computer; or Manager, process & Control
                                  Systems Department, as appropriate.
                               2. Process computers exceeding $500,000 which are part of larger BI’s require
                                  Management Committee approval.
                               3. All EDP applications with combined hardware/software value exceeding
                                  $500,000 requires Management Committee approval.
                               4. Use of outside services, including consultants and contract programmer
                                  services, shall be reviewed by the Computer Applications Department or
                                  Process & Control Systems Department as appropriate.


      Outside Services         Executive Vice Presidents       Executive Director                 None
                                    Full Authority            Computer, Comms &
                                                                Office Systems
                                 Senior Vice President           Full Authority
                                Engineering & Ops Svcs
                                    Full Authority



      Project Development           Full Authority               Full Authority              Full Authority

        Feasibility Study      Will be initiated and approved by proponent Management
         Phase
        Stake-out-Study             Full Authority               Full Authority              Full Authority
          Phase
                               Will be initiated and approved by proponent Management with review and concur-
                               rence of Computer Services Management.



Date Issued:                 Replaces:
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MANAGEMENT GUIDE                                                                                   Section 4
SAUDI ARABIAN OIL COMPANY                                                           APPROVAL AUTHORITY



                                    CORPORATE                   EXECUTIVE                  GENERAL
         SUBJECT
                                   MANAGEMENT                  MANAGEMENT                 MANAGEMENT
                                       MISCELLANEOUS AUTHORITIES
     Computer Services

      Project Development

        Design,                  Senior Vice President         Executive Director                None
         Implementation         Engineering & Ops Svcs        Computer, Comms &
         & Evaluation                                           Office Systems
         Stages
                               Up to $500,000 (With prior   Up to $250,000 (With
                               recommendation of            prior concurrence of
                               Review Board and             proponent General
                               concurrence of proponent     Management level and
                               Executive Management         approval of proponent
                               level and approval of        Executive Management.)
                               proponent Business Line
                               Head.)

                                 Senior Vice President
                                 Producing Operations

                               Up to $500,000 for EXPEC
                               Computer Center.


                               Executive VP, Exploration & Producing, has the authority to approve Computer
                               Systems Projects up to $2,000,000 (with prior recommendation of Review Board
                               and concurrence of proponent Business Line Head and approval of proponent Exec-
                               utive VP).

                               The President & CEO has full authority to approve projects with prior recommenda-
                               tion of Review Board and MC review and recommendation.



     Designated Purchasing        Limited Authority                  None                     None
      Agents                         (See Remarks)
                               Executive Vice President and Senior Vice Presidents can designate a purchasing
                               agent to act on behalf of the Company provided that the maximum price for any
                               individual purchase made by such agent does not exceed $5,000.




Date Issued:                 Replaces:
                                                                                         Page 36 of 38
   January 1, 1998            July 1, 1997
MANAGEMENT GUIDE                                                                                         Section 4
SAUDI ARABIAN OIL COMPANY                                                              APPROVAL AUTHORITY



                                     CORPORATE                     EXECUTIVE                    GENERAL
          SUBJECT
                                    MANAGEMENT                    MANAGEMENT                   MANAGEMENT

                                         MISCELLANEOUS AUTHORITIES
     Organization Structure                                       (See Remarks)
                                All proposed organization changes are subject to review by the Organization &
                                Industrial Engineering Department.
                                Changes below the Division level - Approved by Department Heads.
                                Division level changes - Endorsed by General Management, Approved by Executive
                                Management.
                                Department level changes, or lower level changes with significant corporate impact,
                                are reviewed and approved by the Management Development & Organization Com-
                                mittee.
     Normal Operations          Department Heads and above positions have full authority in the normal course of
                                operations to approve expenditures, transactions or activities contemplated or identi-
                                fied in approved business/operating plans to meet corporate objectives. This author-
                                ity does not include approval of actions specifically retained by higher level
                                management for their approval or actions on which specific limitations have been
                                placed by the President & CEO, EXCOM, Board of Directors, or Company By-
                                Laws.

                                Normal operations authority applies only to operations or projects under the approv-
                                ing individual’s direct jurisdiction.
     Outside Law Counsel            General Counsel                     None                Associate Gen Counsel
      Services
                                The authority to affix the signature of Saudi Aramco to agreements for the services
                                of any and all law counsel who are not employees of the Company and approve pay-
                                ment of the billings of said counsel within budgeted limits. However, the engage-
                                ment of counsel by a contract shall be in accordance with contract procedures
                                established by the President & CEO or any Executive Vice President.
     Use of Company             Aviation Department is responsible for utilization of plane space, schedules, timing
      Aircraft                  and routes flown and has authority to make aircraft substitutions.

      Use & Charges

        Saudi Arab                   Full Authority                (See Remarks)                (See Remarks)
         Government
                                Executive Vice Presidents, Senior Vice Presidents and the Vice President, Saudi
                                Aramco Affairs have Full Authority to approve the carriage of Saudi Arab Govern-
                                ment personnel, officials, agents or guests and cargo on Company aircraft within or
                                outside Saudi Arabia and the allocation of charges in connection therewith.


Date Issued:                  Replaces:
                                                                                             Page 37 of 38
   January 1, 1998             July 1, 1997
MANAGEMENT GUIDE                                                                                        Section 4
SAUDI ARABIAN OIL COMPANY                                                             APPROVAL AUTHORITY



                                    CORPORATE                     EXECUTIVE                    GENERAL
         SUBJECT
                                   MANAGEMENT                    MANAGEMENT                   MANAGEMENT
                                       MISCELLANEOUS AUTHORITIES


     Use of Company
      Aircraft

      Use & Charges

        Other                       Full Authority                Full Authority               Full Authority
                                                               (Except Gulfstreams)         (Except Gulfstreams)

                               1. To individuals or organizations performing services for Saudi Aramco under
                                  contractual arrangements.
                               2. To individuals performing special services of such nature that Saudi Aramco
                                  would provide commercial transportation at Company expense where Com-
                                  pany Aircraft is not available.
                               3. To select visitors when it is to the Company’s interest for visitor to visit Com-
                                  pany operations and where there is no commercial transportation.



      Unscheduled              All OOK flights require President & CEO approval.
       Company Flights
       Out-of Kingdom



      In-Kingdom               Members of the Management Committee and the Vice President - Saudi Aramco
        Gulfstreams            Affairs only. All requests for use must be made through the President & CEO’s
                               office.


      In-Kingdom All                Full authority                 Full Authority               Full Authority
        Company Aircraft
        Except Gulfstreams




Date Issued:                 Replaces:
                                                                                             Page 38 of 38
   January 1, 1998            July 1, 1997

								
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