Production of Oil in Saudia Arabia

About the Country

Saudi Arabia, in its present form, came into existence in 1932 when the areas controlled by Ibn Saud (who returned from exile in Kuwait to seize Riyadh in 1902) were unified under the Kingdom of Saudi Arabia, with Ibn Saud declared king. The country gained prominence after the discovery of oil in its territory. Despite changes to its economic landscape, there has been little alteration to its political structure. The country is currently ruled by a king, and religious traditions are given the utmost significance in matters relating to politics. Although current ruler King Abdullah has attempted to introduce reforms such as the establishment of a legislative council and local elections, he has not deviated from the country's traditionally conservative practices, and seeks the approval of religious clerics during the policymaking process. Since no opposition of the ruling government is tolerated and restrictions on media remain in place, the political landscape of Saudi Arabia may not experience any major changes in the coming years. King Abdullah's regime is expected to enjoy stability given his popularity and his strong relations with religious leaders. It is expected that the country's presence in the Middle East will be strengthened by its increasing influence in regional politics. The country is also expected to have a major say in all affairs relating to oil prices, especially given the present context of a global slowdown and falling oil rates.

Overview of Oil Production

Saudi Arabia was the biggest producer of sum petroleum liquids and 2nd biggest producer of crude oil behind Russia in the entire world. As of 2010, it was the biggest exporter of total petroleum products to the world. Economy of Saudi Arabia continues to be greatly dependent on production and subsequently export of crude oil. Oil export the total revenues generated from the export of crude oil is estimated to be approx. 80 -90 % of total proceeds earned by the Saudi. Moreover, export revenue accounted for approx. 40% of the GDP (Gross domestic product) of the country. Recently, Saudi Arabia has been transferring its attention beyond enlarging its oil production upstream in view of the fact that Saudi Aramco, the country's biggest company in oil industry, declared that it had accomplished its target production capacity which was set to be 12 million bpd (barrels per day). Additionally, its production capacity of spare oil is already a lot greater than Saudi Arabia's claimed target of 1.5-2 mbpd. Afterward, Saudi Arabia is progressing to broaden the horizons of its economy by make bigger its petrochemicals, refining, and mineral products sectors (for instance high-value fertilizers). Kingdom of Saudi Arabia's (KSA) hydrocarbon segment operations are overlooked by the Saudi Aramco, a state-controlled oil company. This is one of the major oil companies in the world in terms of proven reserves as well as production capacity and actual production of hydrocarbons. Supreme Council for Petroleum and Minerals as well as Ministry of Petroleum and Mineral Resources of Saudi Arabia has been supervising the ...