- Oil and energy resources of Saudi Arabia
Current Oil Production
At its current state the country of
Saudi Arabia produces slightly over 11 million barrels of oil per day. [ The World Factbook www.cia.gov ] This amount of oil production is vital in global markets as Saudi Arabia exports a reported 8.9 million barrels/day. [ The World Factbook www.cia.gov ] The difference in production versus shipping accounts for the amount of internal oil use by the nation of Saudi Arabia. A current Saudi investment of over $71 Billion seeks to increase oil production to near 12 million barrels per day by 2009 and up to 12.5 million barrels per day by 2015. [ Energy Information Agency, Country Analysis Briefs 2007, www.eia.doe.gov ] This may be attributed to the report that 700,000 barrels of excess capacity are needed to compensate for a natural decline in availability. [ Energy Information Agency, Country Analysis Briefs 2007, www.eia.doe.gov ]hipping
The oil produced in Saudi Arabia leaves the nation through several different modes of transportation. The majority of the oil is loaded onto super tankers where it is then taken to refineries around the world. Three major ports are used for the shipping, Ras Tanura which is recognized as the world's largest offshore oil loading facility and it has a 6 million bbl/d capacity. The Ras al-Ju'aymah facility is located on the Persian Gulf and it is here where near 75% of the exports are loaded. The last of the three largest terminals is the Yanbu terminal located on the
Red Sea . [ Energy Information Agency, Country Analysis Briefs 2007, www.eia.doe.gov ] . The enormous sea shipping capacity is vital to Saudi Arabia as they do not operate any international pipelines.Oil as a Part of Saudi Economy
The
International Monetary Fund , reported that in 2005 Oil accounted for 90% of Saudi Arabia’s export earnings, 70-80% of state revenue and 44% of the GDP. [ Energy Information Agency, Country Analysis Briefs 2007, www.eia.doe.gov ] These figures accurately display the reliance of the Saudi economy on the oil industry. Until 1973 the government of Saudi Arabia was not receiving a share of the oil drilled within its boundaries. In 1973 the Saudi government gained a 25% share of the interest from Aramco. [ Saudi Aramco History www.saudiaramco.org ] In 1980 the Saudi government purchased nearly 100% of the Aramco oil business. This purchase gave Saudi government officials complete control over the oil prices and production. By 1988 the oil company was renamed Saudi Aramco, which is its current name. . [ Saudi Aramco History www.saudiaramco.org ] Oil has helped to make Saudi Arabia a nation with a GDP of $20,700/person. [ Energy Information Agency, Country Analysis Briefs 2007, www.eia.doe.gov ] The company is controlled by the government but also has a board of advisors and a CEO. The current CEO and President of Saudi Aramco is A Bdallah S. Jum’ah. [ Saudi Aramco History www.saudiaramco.org ]Projected Reserves
As of January 2007, Saudi Aramco, the national oil company of Saudi Arabia owns 259.9 billion barrels of proven oil reserves. [ Saudi Aramco History www.saudiaramco.org ] A part of these reserves is the Ghawar oil field, which is the largest oil field in the world. The Ghawar field is home to over 70 billion barrels of the proven Saudi oil reserve and is able to produce 5 million barrels of oil per day. [ Saudi Aramco History www.saudiaramco.org ] Aramco announced 100,000 bbl/d expansion and integration with neighboring petrochemical plants upgrades for Ras Tanura and Yanbu by 2010 to 2012. [ Energy Information Agency, Country Analysis Briefs 2007, www.eia.doe.gov ]
New Oil Fields in Development
The following new oil fields will introduce up to 3.6 million barrels per day to the production capacity by 2011.
*Haradh
*Khurais
*Khusaniyah
*Manifa
*Neutral Zone (shared with Kuwait)
*Nuayyin
*Shaybah I II & IIIOther Energy and Non- Energy Resources
Natural Gas
Often related to the discovery of oil fields is the discovery of natural gas deposits. As a result Saudi Arabia has the fourth largest reserve of Natural Gas in the world. The Saudi natural gas reserve is 240 trillion cu ft and 1/3 of this reserve is found in the Ghawar Oil field. [ Energy Information Agency, Country Analysis Briefs 2007, www.eia.doe.gov ] Prior to the Master gas system being developed the oil company was forced to flare(burn) the gas as it came from the oil well. Up until recently the production of Natural Gas has been heavily controlled as it is so closely linked to oil production. However the government of Saudi Arabia and Saudi Aramco were criticized for providing heavily subsidized Natural Gas to its consumers by the World Trade Organization. According to the Energy Information Agency the price was $0.75 MMBtu American dollars. [ Energy Information Agency, Country Analysis Briefs 2007, www.eia.doe.gov ]
Electricity
The electrical generation needs of Saudi Arabia are projected to hit 60 GW which is equivalent to the energy requirements of South Korea. [ Energy Information Agency, Country Analysis Briefs 2007, www.eia.doe.gov ] The electricity that is currently generated in Saudi Arabia is 65 % from Natural Gas 27% from steam and 8% from oil. The current generation capacity is some where around 30 Gw. [ Energy Information Agency, Country Analysis Briefs 2007, www.eia.doe.gov ] This will serve to create an energy shortage in the near future which is why Saudi Arabia is searching for new ways to generate energy.
Water
Water is also becoming a resource issue in Saudi Arabia as its desert climate lacks vital freshwater resources. No current water figures were available but the government of Saudi Arabia has recently spent $50 Billion to meet the nations water needs by the year 2020.
New Energy
The government of Saudi Arabia has recently approved the construction of a $300 million dollar facility that is designed to turn waste into energy. The facility, will combust 180 tons of waste per day, in order to produce 6MW of generating capacity and 250,000 gallons of distilled water. [ Energy Information Agency, Country Analysis Briefs 2007, www.eia.doe.gov ]
Political Obstacles and Control
In Saudi Arabia, Saudi Aramco and OPEC set the amounts and prices of Oil. According to
OPEC , oil will continue to supply 90% of the worlds commercial energy needs until the year 2030. [ World Oil Outlook 2007, OPEC, www.opec.org ] Asia is to account for nearly 60% of the increase in global energy needs, and Saudi Arabia exports 50% of its oil to Asia. [ World Oil Outlook 2007, OPEC, www.opec.org ] New business and control over the non renewable energy resource of oil will serve as a global obstacle to energy prices. Other factors that influence oil availability out of the region are war and terrorism. As Saudi Arabia is home the the relgious sites ofMecca andMedina the nation often faces religious and cultural stress. Instability in the country or the region could serve to disrupt the oil supply as production was interrupted during theIran-Iraq War .References
Library of Congress Country Study: Saudi Arabia, http://lcweb2.loc.gov/frd/cs/satoc.html
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