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Saudi Arabia Oil And Gas Report Engineering Essay

Paper Type: Free Essay Subject: Engineering
Wordcount: 1287 words Published: 1st Jan 2015

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Saudi Arabia’s economy heavily depends upon the petroleum industries. Ministry of petroleum and mineral resources has estimated that 90 percent of export revenues are the result of oil export. The export contributes 40 percent into the country’s GDP (Gross Domestic Product). Moreover, Saudi Arabia is believed to be the world’s second largest petroleum producer, Crude oil producer and oil exporter. Saudi Arabia has around 266 billion barrels of oil reserves, approximating to one fifth of the predictable world oil reserves. Although Saudi Arabia has about 100 chief oil and gas fields, over half of its oil assets are limited to only eight fields. (EIA)

With 179 billion barrels, Canada is second only to Saudi Arabia in term of proven oil reserves. Alberta’s oil sands contain the largest bitumen resource in the world; with 1.7 to 2.5 trillion barrels of bitumen in-place. Following table shows the ranking of countries that produce oil in large quantity (2009) (NRC):

World’s Top Oil Reserves (Billion Barrels)



Billion Barrels


Saudi Arabia*





















Saudi Arabia: largest oil producer

According to the U.S. Energy Information Administration, Saudi Arabia holds the world’s largest crude oil production capacity. In year 2009, its production capacity of crude oil was estimated to be 11 million bbl/d. However the ministry of petroleum and mineral resources had plans to increase the capacity to 12.5 million bbl/d by 2009. According to the July 2009 Short-Term Energy Outlook, EIA expected Canadian oil production to increase to 3.41 million bbl/d in 2009 and 3.48 million bbl/d in 2010. (EIA)

The 2008 reports about Saudi Arabia’s petroleum production tell that on average 10.8 million bbl/d of total oil was witnessed. Not only that, Saudi Arabia has experienced a rise in demand for NGLs from many developing countries such as India.

Saudi’s chief oil producing fields include:

Ghawar (onshore): Ghawar is one of the world’s biggest oil field. It generates more than 5 million bbl/d Arabian Light crude, Safaniya (offshore), Shaybah (onshore), Zuluf (offshore) and Abqaiq.(EIA)

Canada’s major oil producing Fields are located in Alberta, Saskatchewan, British Columbia, Manitoba, Ontario, East Coast Offshore and Mack. (NRC)


Though Saudi Arabia is the largest oil producer in the Middle East, its oil consumption is also largest in the whole region. It was estimated that in 2008, Saudi Arabia alone consumed roughly 2.4 million bbl/d of oil. The reasons for such a great consumption were the subsidized prices and sturdy economic growth. 8 to 10 percent increase in demand is expected for the year 2010. (The Economist) The industry reports quoted that the demand would hike up generally in the NGLs production and because Saudi Arabia will need to burns crude oil for power generation in summers. (Arab News) On the other hand, Canada consumed an estimated 2.32 million bbl/d of oil in 2008. (NRC)This shows that Canada is consuming oil as much as Saudi is but is not parallel to Saudi Arabia in producing oil.

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In 2008, Saudi Arabia exported an estimated 8.4 million bbl/d of oil, the majority of which was crude oil. 50 percent of Saudi Arabia’s crude oil exports go to Asian countries, including Japan, South Korea, China, and India. Also, majority of Saudi’s refined petroleum product goes to these Asian countries. However, Japan is the sole remnant that exports largest share of 50 percent export of Saudi crude in Asia. On the contrary Canada exports 99 percent of its oil to the U.S. (EIA)

So as to clear petroleum for export, Saudi Arabia keeps on exploring natural gas resources to meet domestic requirements. Oil and Gas Journal reports that Saudi Arabia has 258 trillion cubic feet (Tcf) proven natural gas reserves. (Oil and gas journal)

Canada on the contrary had 57.9 trillion cubic feet (Tcf) of proven natural gas reserves in January 2009 which is approximately one fifth of Saudi’s gas reserves. (EIA)

However, the greater part of the gas fields in Saudi Arabia are associated with petroleum deposits, or found in the same fields as crude oil, and plans to increase production of this type of gas remain linked to an increase in oil production. Saudi Arabia’s proven natural gas reserves are consistent with 57 percent of associated gas at the giant onshore Ghawar field and the offshore Safaniya field. The Ghawar oil field is a larger natural gas reserve than other fields. It accounts for about one-third of Saudi Arabia’s proven natural gas reserves.

Brisk reserve expansion is necessary for Saudi Arabia’s plans to stimulate the growth of the petrochemical sector, as well as for electricity generation and for water desalination.

According to OPEC and other sources, natural gas production (estimated at 2.7 Tcf in 2007) stays limited, as soaring costs of production, exploration, dispensation and distribution of gas have constricted the supply, while an expected 13 to 14 percent of total production is lost to venting, flaring, reinjection and natural processes. Saudi Arabia has no net imports or exports of natural gas. (EIA)

Future prospects

Although most of its natural gas reserves are from associated gas, Saudi Arabia is not likely to boost its gas production from these reserves because of OPEC crude oil production restraints. However, a 50 Tcf addition of non-associated reserves by 2016 through new discoveries was announced by the Petroleum Ministry and Saudi Aramco. $9-billion strategy is set for that project. (EIA)

Canadian production capacity is predicted to increase from 40 percent today, to approximately 80 percent by 2020. (NRC) This will pose a little challenge to Saudi Arabia. The EIA projects Canadian oil sands could produce 2.2 million barrels a day by 2025 compared with the current level of about 700,000 b/d, which already represents more than a fourth of total Canadian output of 3.1 million b/d. Canadian Industry sees more Oil Sands Potential. (EIA) The Canadian Association of Petroleum Producers estimates current projects will raise Alberta oil production to 1 million b/d this year, and steady development will elevate it up further to 1.8 million b/d by 2010. (Walsh)


Natural Resources Canada (NRC), Crude oil Market, 12 Jan, 2009, Web. June 27, 2010. <http://www.nrcan-rncan.gc.ca>

EIA, Country Analysis briefs, July, 2009, Web. June 27, 2010. <http://www.eia.doe.gov/>

The Economist, Oil to spare, June 10, 2009, Web. June 26, 2010. < http://www.economist.com >

Rense.com, Canada’s oil reserves, Campion Walsh, n.d. Web. June 27, 2010. <http://www.rense.com>

BBC, Country profile: Saudi Arabia, June 16, 2010, Web. June 27, 2010. < http://news.bbc.co.uk/2/hi/middle_east/country_profiles/791936.stm#facts >

Oil and Gas Journal: Industry statistics, June 21, 2010. The Alberta Energy Utilities Board and the Canadian Association of Petroleum Producers, Web. June 28, 2010. < http://www.ogj.com/index/industry-stats.html>

Arab News, Saudi firm focuses on power needs, Shaheen Nazar, June 28, 2010 Web. June 28, 2010 <http://arabnews.com/economy/article74633.ece>


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