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Saudi Arabia factfile

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Oil – the black gold

When most people think about Saudi Arabia, they think of oil. Unevenly distributed around the world, about 50% of all known global reserves are found in the Middle East.

Of all the Arab countries, Saudi Arabia holds the largest reserves, some 25% of the global total. By exporting this oil, Saudi Arabia has been able to generate huge wealth that has enabled the country to embark upon a dramatically rapid period of development, transforming the Kingdom in less than 70 years from a rural economy to a modern, vibrant and predominantly urban one, with four-lane highways, universities and some of the most impressive, hi-tech buildings in the world. In 1970, it was estimated that half of the country’s population lived in rural areas. Today, it is less than 10%, as people have left the desert and moved to the rapidly-growing towns and cities.

Did you know?The media frequently remind us just how important Saudi Arabian oil is to the world, but little attention has been paid to the impact that this discovery has had on the people who live there. During this period of rapid, oil-funded evolution, the government has worked hard to ensure that Saudi culture is not lost amidst the arrival of McDonalds, and other western influences.

The history of oil in Saudi Arabia

The search for oil goes back many centuries, during which seepages of oil and tar were used for a multitude of purposes. In 1923, a British syndicate asked King Abdul Aziz to give them the right to search for oil in the Eastern Province. The initial search found nothing, and must be one of the world’s greatest lost opportunities. In 1930, the King invited an American to visit the kingdom to continue the search, and in 1931 a report of the findings was submitted. The rocks of eastern Saudi Arabia strongly indicated the presence of oil, and in 1933, a US company, Standard Oil of California (later to be known as ARAMCO), offered 50,000 pounds for the exclusive rights to extract and sell oil, for 60 years. In 1938 1,400 barrels per day were being produced, and in 1958 this had risen to over 1,000,000 barrels.

Protecting Arabia's assets

As more and more oil was rapidly found, the government soon realised what they had signed away, and the following years saw them gradually take control over their own precious resource. The towns of Dhahran and Al Khobar in the Eastern Province grew rapidly into important settlements.

Today, the statistics are staggering. Saudi remains heavily dependent on oil, and over 90% of its income comes from this one source. In 2003, this was estimated to be around 70 billion dollars. It is the world’s leading oil producer and exporter, and each day exports an estimated 8.5 million barrels that may sell for up to 28 US dollars a barrel, yet cost less than 2 dollars to produce.

Geologists estimate that the kingdom contains up to 1 trillion barrels of recoverable oil. Due to the geology, most of this is found in the Eastern Province, close to the Arabian Gulf. Despite having over eighty oil fields, more than half of all known reserves are found in eight of these fields, with the Ghawar field being the world’s largest, with an estimated 70 billion barrels.

As the leading producer and exporter of oil in the world, Saudi Arabia plays a prominent role in the Organisation of Petroleum Exporting Countries (OPEC) and will continue to play a key role in world energy well into the future.

mOre To find out more about oil in Saudi Arabia:

This site includes an interactive guide to the world of oil, as well as an archive of historical pictures: www.saudiaramco.com

A more detailed brief on the industry in the kingdom:

Photographs courtesy of Saudi Aramco World / PADIA.

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