Energy
From The Report: Saudi Arabia 2015
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The recent fall in oil prices means that the energy sector’s contribution to Saudi Arabia’s economic growth will be limited in 2015, with expansion to be driven more by the non-oil sector, which is forecast to increase by about 5% in 2015. Saudi Arabia’s crude oil production averaged 9.71m bpd in 2014, compared to 9.63m in 2013 and 9.76m in 2012. However, despite lower oil prices, the Kingdom has increased production in 2015, with its output climbing above 10m bpd to reach 10.3m in March. The country had proven oil reserves of 269.5bn barrels, or 15.8% of the world total, at the end of 2013, and natural gas reserves totalling 290.8trn cu feet, or 4.4% of the global total. In the face depressed prices, and in a bid to expand and diversify its offering, the sector is continuing to invest in new downstream technology, feeding state-owned Saudi Aramco’s transformation from an oil and gas producer into an integrated energy company, with a growing emphasis on oil refining and petrochemicals.

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Overview

In the spotlight: The fall in oil prices brings fresh attention to the role of the world’s largest oil exporter
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The drop in global oil prices in the second half of 2014 thrust Saudi Arabia’s energy sector into the spotlight, but the consequences for the Kingdom vary significantly depending on whether they are measured in terms of production, price or perception. Production Viewed purely in terms of barrels of crude oil produced, Saudi Arabia has steered a very steady course through volatile conditions in the last three years, with figures from the Joint Organisations Data Initiative (JODI) suggesting average…

Analysis

Diversifying production: The Kingdom invests in a broad range of areas both upstream and downstream
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When OPEC’s member states announced that their crude oil production target would remain at 30m barrels per day (bpd) at a meeting in Vienna on November 28, 2014, Saudi Arabia was accused of waging a price war to preserve market share. The implication was that the country wanted to see the price of Brent crude fall so low that drillers in the US shale boom would no longer be able to break even. The OPEC decision sent the price of US crude tumbling by 10% on that Friday’s trading, its steepest…

Analysis

Variety on tap: From refining to associated gas, the Kingdom’s product offerings are thriving
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Although gas production increased by more than 70% between 2003 and 2013 according to BP figures, harnessing its potential presents a number of challenges. Saudi Arabia has no plans to export gas, seeing it as feedstock for local power, desalination and petrochemical plants in order to free up more oil for export. Gas Production Saudi Aramco’s 2013 annual report, published in April 2014, revealed that its raw gas output for such plants was 4.02trn standard cu feet, the most in a single year in…

Analysis

Breaking new ground: Research has led to a range of alternative technologies and solutions
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Local scientists and engineers working in Saudi Arabia’s laboratories and on its test rigs have been making significant research and development (R&D) gains in the energy technology sector in recent years. In 2014, Saudi Aramco set a new record for inventiveness and innovation – 99 patents were granted to the company in the US, while an additional 154 applications were filed with the US Patent and Trademark Office for consideration during that year. The total number of patents granted to…

Analysis

No cuts: OPEC’s largest producer keeps on pumping oil
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Production from Saudi Arabia’s oilfields will remain at near-record levels in the short to medium term, with Riyadh looking to maintain above-average output despite low prices. At its June 2015 meeting, OPEC decided to keep the bloc’s production at 30m barrels per day (bpd), the level that had been agreed the previous November. According to the International Energy Agency (IEA), combined output from the 12 member states for May 2015 was 31.3m bpd, with Saudi Arabia remaining by far the largest…