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Saudi Arabia Racing to Move Beyond Oil Dependency

Saudi Arabia relies on oil exports for around half its revenues, but as low oil prices raise the country’s deficit, non-oil economic growth has been slowing too. Bloomberg’s Willem Marx reports on efforts by some Saudis to diversify the Kingdom’s economy.

33 Comments on "Saudi Arabia Racing to Move Beyond Oil Dependency"

  1. Plantagenet on Fri, 31st Jul 2015 3:35 pm 


    If this article is correct, and the export of 12 million bbls of oil per day only provides half of KSA revenues, then what could possibly be providing the other half?

    Date and Fig exports? Camel exports? Sand exports?


  2. Apneaman on Fri, 31st Jul 2015 3:37 pm 

    The ME is heating up in more ways than one. Is there anything not going wrong in that part of the world?

    Killing Heat — It Felt Like 165 Degrees in Iran Today

    “In Iran it was 115 degrees Fahrenheit today (46 C). Add in humidity and the heat index was a stunning 165 F (74 C). But what they really should be concerned about is the wet bulb reading…

    A Limit to Human Heat Endurance

    Thirty five degrees Celsius. According to recent research, it’s the wet bulb temperature at which the human body is rendered physically unable to cool itself in the shade. At which evaporation not longer cools the skin. A temperature that results in hyperthermia, heat exhaustion and heat stroke — even when sitting still and out of direct sunlight over the course of about 1-3 hours. Basically, it’s the physical limits of human heat endurance.”

  3. peakyeast on Fri, 31st Jul 2015 5:03 pm 

    I suppose the other half is bribes to the royal family so they continue to play nice with USA. 🙂

    quote: “Saudi Arabia’s economy is highly dependent on oil exports (87 percent of total exports)”

  4. Jimmy on Fri, 31st Jul 2015 7:00 pm 

    CIA FActbook has a good breakdown.

    ‘The petroleum sector accounts for roughly 80% of budget revenues, 45% of GDP, and 90% of export earnings’

    They have a hot little financial market so I imagine that increased stock evaluations and financial services/’taking in each others laundry’ accounts for some GDP. They no doubt have some tourism from Hadj. I can’t imagine what else they do other than pump ground water for crops.

  5. Makati1 on Fri, 31st Jul 2015 9:29 pm 

    “As the Greeks discovered when the energy flow stopped going into their arenas, they began to disintegrate. Without constant energy input, money embedded in concrete, glass and steel can only show a return if more money (energy) is constantly added to resist the ultimate certainty of entropy. No one has pointed out that while Saudi towers may be designed to last 100 years, the oil-energy that supports them will run out in less than 30, maybe as few as 20 years. (It has been suggested that Saudi might become an oil importer by 2030, though exactly where the imported oil will come from, or how it might be paid for, is not clear). Then the towers will start to fall apart just as the Saudi economy will fall apart because the oil-energy they use to fuel such vanities is borrowed from their own future. And they will have no means of repaying it; their creditors are not foreign bankers, but their own young and dispossessed. They will violently reject the certainty of a life as goat herders and camel traders if only for the reason that they wouldn’t know how.”

    Worth reading this weekend.

  6. Makati1 on Sat, 1st Aug 2015 12:01 am 

    In other news:

    “Mastery of “narratives” could potentially be used to manipulate the perception of a population using platforms of communication like television to subtly and potently make a person think a certain way. Many people know this tactic by a more familiar term: propaganda.” Add in: movies, YouTube plants, magazines, websites, newspapers, etc.)

    When you look at the ‘developed’ nations you can see that this is very, very effective. The sheeple don’t even realize that they are being manipulated and programmed…lol.

  7. James Tipper on Sat, 1st Aug 2015 12:05 am 


    I heard that one day it actually physically got up to 145(F) in Saudi Arabia. Not real feel but actual temperature, to me that seems unbelievable.

  8. Boat on Sat, 1st Aug 2015 12:30 am 

    When you look at the ‘developed’ nations you can see that this is very, very effective. The sheeple don’t even realize that they are being manipulated and programmed.

    I think most know Mr Mak. Watch MSN and then Fox spin a subject. How could you not know.
    What I don’t understand is why you spend so much time making these types of comments when you know your wrong. People choose what they want to believe.
    PHD experts are a dime a dozen and for a few dollars can spin with the rest. Like 40 years ago there was no way the earth could still function with 5 billion people. Were at 7+ now. BC thinks were crashed in less than 5 1/2 months. You want to jump on that band wagon?

  9. Apneaman on Sat, 1st Aug 2015 12:35 am 

    That crazy! I have experienced some high 90’s high humidity summer days in Georgia and that was more than enough for me.

  10. Boat on Sat, 1st Aug 2015 1:31 am 

    I worked in a PVC pipe plant for 15+ years tearing down dies for order changes. The plant ran 105 degrees near the extruder and die area. These dies are heated to 350-380. The largest ones were the size of a small car. It took an hour to get the plastic cut out before you could use a fan. When it’s hot and it’s tough work I have a couple of suggestions. Drink lots of water early and often, then suck it up and take it like a man.

  11. Makati1 on Sat, 1st Aug 2015 3:52 am 

    Boat, you are somewhat correct. People DO believe what they want. Or do they? If a child is born into a Muslim family, does the indoctrination from birth make a difference in what he will believe as an adult? What if he was born into a Christian family? Hindu? Agnostic? Buddhist? Doesn’t the indoctrination)brainwashing/propaganda) make a difference in what he chooses to believe?

    And how is that different from the propaganda/indoctrination by his government? Most Americans don’t see the real world. Granted, some don’t want to see it, but most have no idea that they are not hearing the truth.

    My B-in-Law ONLY watches FOX. Nothing else. Likewise, most only watch the one they like, IF they watch any news at all. But the indoctrination is in every movie made in the US, every magazine in the US, every TV program in the US, etc. If you don’t believe me, start watching and reading with a critical eye, looking for the slant/spin. You will see that it is everywhere in America, the exceptional/indispensable country.

  12. Makati1 on Sat, 1st Aug 2015 3:58 am 

    Yep, you had some hot work. I can relate. I worked in a manganese steel mill lab and if I got too close to the ladle when I got my sample, it would blister my face. I only did that once. Still have a few nice scars where a BB sized spark burned through my heavy leather boots before I could get them off. 2,000F is hot! Yep. Just suck it up.

  13. Davy on Sat, 1st Aug 2015 6:14 am 

    Sure Mak and your Asia is a beacon of truth. You are such a cultural bigot. Just look at the grand game your wonderful China is playing to get a dose of nothing much different from what is happening in the US. In fact China is far past the US in deception and deceit with this market collapse they are in. Your P’s is too poor to care about much of what is going on. Maybe the rich assholes you try to keep up with in Makati talk about these things but for the most part in the P’s you have poor people struggling with daily needs in a country in overshoot.

  14. davey thompsony on Sat, 1st Aug 2015 6:19 am 

    Saudi Arabia is a portal, into the financial dystopian future of human industrial scale failure.

  15. Davy on Sat, 1st Aug 2015 7:24 am 

    Dave, you might add with money to buy them some time.

  16. Boat on Sat, 1st Aug 2015 9:28 am 

    Boat, you are somewhat correct. People DO believe what they want. Or do they? If a child is born into a Muslim family, does the indoctrination from birth make a difference in what he will believe as an adult?

    I agree 100% at the attempts by governments, religions and business to spin things their way. This is why I consider myself an independant because of the blatant lying about points on issues/spin.
    Once again I believe the majority of people have enough common sense to see manipulation.
    America, the exceptional/indispensable country
    You choose to use these words a lot: I don’t believe any of that. So there is at least one American that is different. I was brought up to believe that all are equal and give deference to other beliefs if possible.

  17. ghung on Sat, 1st Aug 2015 9:32 am 

    @James Tipper: According to several sources, and quoting Guinnes here:

    “On 13 September 2012 the World Meteorological Organisation disqualified the record for the highest recorded temperature, exactly 90 years after it had been established at El Azizia, Libya, with a measurement of 58 C. The official highest recorded temperature is now 56.7 C (134 F), which was measured on 10 July 1913 at Greenland Ranch, Death Valley, California, USA.

    …and Wikipedia:

    “The standard measuring conditions for temperature are in the air, 1.5 meters above the ground, and shielded from direct sunlight (hence the term, x degrees “in the shade”).[2] The following lists include all officially confirmed claims measured by those methods.

    Temperatures measured directly on the ground may exceed air temperatures by 30 to 50 °C.[2] A ground temperature of 84 °C (183.2 °F) has been recorded in Port Sudan, Sudan.[3] A ground temperature of 93.9 °C (201 °F) was recorded in Furnace Creek, Death Valley, California, USA on 15 July 1972; this may be the highest natural ground surface temperature ever recorded.[4] The theoretical maximum possible ground surface temperature has been estimated to be between 90 and 100 °C for dry, darkish soils of low thermal conductivity.[5]

    That wasn’t so hard.

  18. Apneaman on Sat, 1st Aug 2015 10:12 am 

    “suck it up and take it like a man.” I’m not really into that sort of thing, but whatever floats your boat, Boat. It is the 21st century after all.

  19. steve on Sat, 1st Aug 2015 10:28 am 

    “suck it up and take it like a man. No Apeman there is a lot of truth to this we have very difficult times ahead of us and we will have to keep this attitude in mind as millions will be opting out of life…I have worked with my hands my whole adult life and I run and stay in top physical shape and I see my counterparts that I went to school with have office jobs and they are complete wimps very weak mentally and physically.

  20. Davy on Sat, 1st Aug 2015 11:00 am 

    Steve, part of my doom and prep is staying fit and visit the doctor for preventative medicine. We likely have a physical based world ahead. We likely have a reduced medical based society ahead. Now is the time to prepare with both while you can

  21. ghung on Sat, 1st Aug 2015 11:37 am 

    Apnea said: “I have experienced some high 90’s high humidity summer days in Georgia and that was more than enough for me.” [assuming Georgia, USA]

    I was born in Atlanta and raised without air conditioning. It wasn’t that we couldn’t afford it, but that my mother didn’t want us to get acclimated and reliant upon artificial indoor climate control. We were outdoor people who didn’t retreat indoors when it got a little hot, and our home was built before AC became the norm. Once they paved everything around us and the infamous Atlanta ‘heat dome’ became the norm, my folks eventually installed central AC, but it didn’t get used much; it caused my mom to have sinus problems. We were adapted to high heat and humidity.

    I just got in from the high tunnel (greenhouse) pruning tomatoes, and it’s currently 98F inside with 57% humidity (love these Davis remote weather sensors). Barely breaking a sweat. On a ‘good’ day I’ll drink many liters of water down there, work slow, take breaks to stand in front of the fan, but have had no serious side effects from that heat. In fact, my blood pressure stays lower on days I have a good greenhouse sweat. Perhaps good training for global warming, eh?

    Hyper yankee-ass type-A folks don’t handle the summers down here too well. Then again, I don’t like cold weather much 😉

  22. Apneaman on Sat, 1st Aug 2015 12:02 pm 

    Yes ghung, the great state of Georgia. Suburbs of Atlanta. Marietta or as the old school Southerners pronounce it May-retta. Y’alls from May-retta? Between the urban blacks and old school Southerners it was like learning 2 new languages. I use to supervise work crews, all black guys I would pick up in the hood every morning. Black guy says – Yo let me smoke one wit cha dis morning, Translation – may I borrow a cigarette. Bosses daughter – What kinda Coca colas y’alls want? Translation – would you like something to drink. Lol, I had a blast.

  23. Boat on Sat, 1st Aug 2015 12:50 pm 

    Yez sir, them greens waz so good’n I got’s a headache from my tongue slapping the roof of my mouth clammering fo mo. Lord have mercy.

  24. Apneaman on Sat, 1st Aug 2015 1:16 pm 

    Boat, don’t go confusing my recollections of linguistic cultural differences in the deep south in with your racist bullshit.

  25. ghung on Sat, 1st Aug 2015 1:39 pm 

    Just a few co-rec-shuns:

    It’s never coca cola, it’s co’COla (applies to any sowf drank).

    Morning is pronounced like moanin’ (ahma moanin’ dis moanin’ aftuh las’nat’s pahty. She wuz really sumthin.)

    I won’t even bother with my own suthuhn bloo-bluhd accent.

    Anyway, it’s too damn hot to pronounce all of those extra syl’bles.

  26. Boat on Sat, 1st Aug 2015 4:03 pm 

    My white neighbors sounded like that at times. Btw I lived 8 years 1 hour down 20 from Atlanta. Worked in Greensboro at a plastics plant as a supervisor of quality control. Why are you always so impolite. It’s not very becoming. I would have thought the South might have taught you some manners.

  27. Apneaman on Sat, 1st Aug 2015 5:24 pm 

    Beats stupid any day.

  28. Davy on Sat, 1st Aug 2015 5:32 pm 

    The south starts at the Missouri Ozarks.

  29. DMyers on Sat, 1st Aug 2015 6:13 pm 

    I can hear the ads now.

    “Come own a little space in the newest one and a half billion dollar city, built literally from scratch in Saudi Arabia. It has everything you need in the most modern and classy form: shopping malls, offices, shiny clean factories,lovely walkways, and the best sand in Northern Africa. There’s absolutely everything here that suits and embellishes modern life, except,..well,…except water!! Bring your own! We’ll make it work!”

  30. BobInget on Sat, 1st Aug 2015 8:36 pm 

    Saudis have turned to CO/2 puting more pep into
    oil production.

    I don’t know what this indicates. I do know KSA has no ready source of CO/2. Judging from the volume needed to produce even one million barrels a day, the Saudis must be a tad frantic.

    Approximately 60–65% of all Saudi oil produced between 1948 and 2000 came from Ghawar. Cumulative production until April 2010 has exceeded 65 billion barrels. It was estimated that Ghawar produced about 5 million barrels of oil a day (6.25% of global production) in 2009. Ghawar also produces approximately 2 billion cubic feet of natural gas per day

    Saudi Aramco testing C02 to get more oil from giant Ghawar field
    By WAEL MAHDI on 7/31/2015
    ); background-color: #305891; 0% 50%; “>Share on facebook); background-color: #2ca8d2; 0% 50%; “>Share on twitter); background-color: #4498c8; 0% 50%; “>Share on linkedin); background-color: #ce4d39; 0% 50%; “>Share on google_plusone_share); background-color: #738a8d; 0% 50%; “>Share on print
    KUWAIT (Bloomberg) — Saudi Arabian Oil Co. started injecting carbon dioxide to try and boost extraction rates from the world’s biggest oil field as the company steps up plans to recover more crude from its deposits.

    Saudi Aramco, as the company is known, already started injection and will put 40 million cubic ft of CO2 into the Uthmaniyah area south of the Ghawar field, it said Thursday in an Arabic statement on its website. About 40% of what’s injected will be stored in the field.

    “The project aims to enhance oil recovery beyond the more common method of water flooding, and is the largest of its kind in the Middle East,” it said. The project is part of the company’s efforts to reducing domestic carbon emissions and meeting environmental goals, it said.

    Oil-rich nations across the Persian Gulf are seeking ways to continue output from fields that are at least half a century old. While the industry average is for producers to recover about 35% of fields’ total deposits, Saudi Aramco is developing technology that could double that rate, Ahmad al-Khowaiter, chief technology officer, said in March.

    Injecting CO2 into Uthmaniyah will boost oil-recovery rates by 10 to 15 percentage points, Khowaiter said in March. The CO2 for the project will be captured at Hawiyah gas recovery plant and then piped 85 km to the site. The project will be tested for three to five years before Aramco applies the technology to other fields, it said in Thursday’s statement.

    “Saudi Aramco is carrying out extensive research to enable us to lower our carbon footprint while continuing to supply the energy the world needs,” said Amin H. Nasser, acting president and CEO.

    Poster’s notes;

    Bullshit little Eva. CO/2 injection at this stage is a desperation move.
    Note, this news was released Friday night. Always a sign of not wanting to own the story

  31. BobInget on Sat, 1st Aug 2015 8:43 pm 

    Debt for oil producers going higher by the month.
    This debt must be serviced with oil sales.

    Venezuela, Angola and Ecuador. Soon to be former contributors to USA’s crude oil imports.

    Industries | Fri Jul 31, 2015 6:38pm EDTRelated: ENERGY
    UPDATE 1-Ecuador signs $2.5 bln oil supply deal with Thailand
    (Adds details from Petroecuador statement and context)

    (Reuters) – Ecuador’s state oil company Petroecuador has signed a crude oil supply agreement with a division of Thailand’s state-run PTT under which the Andean country will receive a $2.5 billion up-front payment, according to a statement from the company.

    The agreement was signed in June with International Trading Pte Ltd for the sale of 116.6 million barrels of Oriente and Napo crudes, added the statement. (Full text:

    Petroecuador International Trade Manager Nilsen Arias confirmed the deal to Ecuador’s El Universo newspaper.

    Strategic Sectors Minister Rafael Poveda last week had said an agreement would be signed with PTT for about $500 million. The talks between the two companies first became public in May.

    Government officials were not immediately available for comment. Ecuador signed similar agreements with China totaling about $5.5 billion between 2009 and 2014.

    Chinese companies take a large part of Ecuadorian crude exports as debt agreements that are repaid with oil.

    Under the terms of these agreements, it is not obligatory that the oil is delivered to Chinaso many companies resell it on the open market, mainly in the Atlantic basin.

    It is unclear whether the agreement with Thailand will also allow the country to offer the Ecuadorian crude to the highest bidder.

    Low oil prices have hit the economy of Ecuador, OPEC’s smallest member, leading it to seek new funding sources in order to maintain public investments planned for this year.

    Ecuador produces around 550,000 barrels of oil per day. (Reporting by Alexandra Valencia in Quito.; Additional reporting by Marianna Parraga in Houston.; Writing by Brian Ellsworth and Girish Gupta in Caracas; Editing by Jonathan Oatis and Lisa Shumaker)

  32. BobInget on Sat, 1st Aug 2015 9:04 pm 

    Above confirms what I’ve been harping on mor about a year. (my only original deduction)
    As it happens, Asian nations including Vietnam,
    India, of course China are all selling more new and USED cars then ever. Sales are destined to double by 2025 (a decade). One can say demand is growing faster then supply. So I did.

    I remain quite bullish on oil prices bearish on consequences. ($150 inter-day, $125. December 31, 2015.

    There is no way in the next five months Islam’s
    three decade war will not further escalate.
    (Both Turkey and Egypt promise to protect Saudi oil. (with boots) I’ll hasten to add, “as long as Egypt and Turkey are well supplied”.

    Turkey’s Iraq pipeline was blown up once again
    on Friday. Twice in as many weeks. W/O Iraq oil Turkey is turning to Saudi Arabia. (good luck with that)

    Production from EVERY OPEC country is lagging behind quotas. Look it up.

    Sanctions smacktions, we are getting hungry for oil. The glut is so so bad we are importing from Russia.

    July 31, 2015 9:46 am
    The price is right as Russian oil heads west
    By David Sheppard and Anjli Raval

    Short-term trading opportunities due to global crude glut trump geopolitics

    US-Russian relations have been dominated by two major trends over the past few years: the vast rise in US oil output and the biggest increase in tensions between the two countries since the cold war over the Ukraine crisis.

    So it might seem odd to discover that US imports of Russian crude oil in the past two months have averaged their highest level in three years.

    Ship-tracking data shows that in June and July the US imported more than 70,000 barrels a day of Russian crude on average. This is the first time imports have hit that level in two consecutive months since 2012. In total, more than 4.6m barrels of Russian oil have arrived at US refineries over this period.

    So what’s going on? It appears short-term trading opportunities have trumped geopolitics. The global crude glut, which was felt particularly keenly in north-west Europe in June and early July, drove physical cargo prices to multiyear lows in the region, and allowed Russian shipments to flow to the US East Coast.

    Refineries in Delaware, New Jersey and Pennsylvania have been some of the biggest US buyers of Russian crude in the past two months, according to the data.

    That trade has been helped by a narrowing in the price difference between the international Brent and West Texas Intermediate, the US benchmark — the so-called Brent-WTI spread. Brent’s premium to WTI, which traded as wide as $13 a barrel as recently as March, sank to as low $2.65 a barrel in early June.

    Add in discounts on physical cargoes and it was economical for more European crudes to flow west, especially once you calculate in the relatively low cost of sending oil by sea versus railing it from shale fields in North Dakota.

    “It really is all about price — if crude, products or feedstocks are attractively priced it will move to highest valued market as long as [there are] no restrictions”, said Gary Ross, executive chairman at consultancy Pira Energy Group.

    Although sanctions over the conflict in Ukraine have strained Moscow’s relations with the west they have so far allowed Russian oil and gas exports to keep flowing.

    Arguably the collapse in crude oil prices since last summer has done more damage to Russia’s economy than sanctions.

    Another factor behind higher flows has been the large increase in Russia’s exports from the east of the country, which were designed in part to open up new markets in Asia as Europe has threatened to diversify where it imports its energy from.

    Russia’s ESPO crude oil blend, exported from the eastern port of Kozmino on the Sea of Japan, has made its way past Asia to plants in both Hawaii and California, the shipping data shows.

    “With production down in May and June due to refinery and upstream maintenance on the US West Coast, refineries stepped up purchases of Russian ESPO crude,” said Amrita Sen, head of oil research at Energy Aspects in London

    Two cargoes of Russian crude have also sailed across the Atlantic to the US Gulf Coast, including a relatively rare cargo of Siberian light.

    The data most likely reflects a short-term trend rather than a sustained resurgence in Russian oil exports to the US, which as recently as 2009-2010 often topped 300,000 b/d.

    And the shipments make up just a tiny amount of total US crude imports, which still average more than 7m b/d, despite the vast surge in US crude production in the past 5 years.

    But the data show that when oil traders see an opportunity to move or buy a cargo at the best possible price, little things like geopolitics won’t easily stand in the way.

  33. BobInget on Sat, 1st Aug 2015 9:18 pm 

    Speaking of heat, Baghdad is enjoying 50 C.

    Power lines are burning up, most people are using portable diesel generators to run air conditioning. So, KSA is not the only country generating electricity with oil.

    Speaking of power outages. The US passed 10,000 air raids on Syria this week.That’s double Saudi air raids on Yemen. Google fuel milage on F/16’s . I promise, you will be shocked. Hint,
    consumption is measured in seconds.'s+tempature+in+Baghdad&es_th=1

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