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THE Saudi Arabia Thread pt 6

A forum for discussion of regional topics including oil depletion but also government, society, and the future.

Re: Saudis Fear US Shale Oil Boom

Unread postby ROCKMAN » Mon 16 Dec 2013, 18:31:49

Pstarr - I'm still lost. From 2005 through 2007 oil prices hung around $60/bbl. And that was a 100% increase from 2003. So how did doubling the price of oil benefit the US? And that period was just prior to oil more than doubling again by 2008. Of course when the global economy collapsed that drove prices to $40/bbl for short while but I'm pretty sure that wasn't a KSA plan to help the US. From my limited knowledge of macroeconomics the KSA seems to have always prices their oil for the max the market could bear. But, then again, so have I and ExxonMobil...and we're your "friends". LOL.

But I suspect you were just joshin'.
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How MERS Could Topple the House of Saud

Unread postby EdwinSm » Sat 07 Jun 2014, 01:26:17

Not directly Peak Oil, but the following article talks about reduced oil flow. It largely deals with the economic fall out that could happen if pilgrimages to Saudi Arabia were disrupted. I suppose this follows the idea of a politically induced 'Peak Oil' whereby flows of oil from Saudi Arabia are reduced.

http://www.thetyee.ca/Opinion/2014/06/04/How-MERS-Could-Topple-the-House-of-Saud/

Statistically, the bug now known as Middle East respiratory syndrome coronavirus (MERS-CoV) is a trivial threat. In the two years we've known about it, the World Health Organization has officially recognized just 635 cases of MERS, with 193 deaths. All appear to have originated in the Middle East, chiefly Saudi Arabia and the United Arab Emirates.

By comparison, Saudi Arabia suffered 6,596 traffic fatalities in 2010, and about 20% of the people in the Persian Gulf region suffer from diabetes.

But look again at those MERS deaths: a 30% case fatality rate, where SARS had a rate of 8%. A disease that deadly will get attention, especially when it comes from a previously unknown virus and it flourishes in hospitals. The Gulf monarchies also have political reasons to fear MERS, and Saudi Arabia just announced that it's been fudging the case numbers for a year -- a confession likely to have major repercussions.

A recent book argues that Saudi Arabia and its Gulf neighbours are "rentier states," living off the revenues from oil. Some of the oil money is distributed in a kind of ethnic socialism: native-born Saudis and Emiratis get cheap housing, education and fuel, as well as undemanding government jobs. In return, they allow the monarchies to do as they please.

Part of this "ruling bargain" is to import cheap labour in vast numbers, for everything from housecleaning to business management. The money and working conditions are atrocious, but usually better than those available at home. One of the benefits of the ruling bargain is a good health-care system, and the Saudis have an extensive one. In many ways, it is indeed good.
.....
The virus is now stressing two key institutions: the mandatory pilgrimage to Mecca that all Muslims are supposed to make at least once in their lives, and the expatriate workforce that Saudi Arabia and the other monarchies rely on for everything from housemaids to surgeons.

Over three million Muslims a year now take part in the Hajj (which this year falls in early October) and the Umrah, a pilgrimage that can be made at any time of year. The pilgrims bring in astounding revenues; a single Vancouver pilgrim flying to Saudi Arabia on a 15-night package can expect to spend at least $8,450,
....
Meanwhile, MERS has sickened and killed several expat health-care workers, mostly Filipinos. But you don't have to be a Filipino in health care to worry. Saudi Arabia has over nine million expatriates compared to 19.8 million Saudis. Expats make up 87% of the population of the United Arab Emirates, and 85% of Qatar's population. Few stay more than a few years, and if they leave in unusual numbers to escape falling ill, or are not replaced, the Gulf economies will face a disastrous labour shortage.
.....
Since SARS, WHO has been very careful about issuing such travel advisories. .... WHO might just pull the trigger, issue a travel warning, and reduce the Hajj by hundreds of thousands.

Or the Philippines, much as it relies on remittances from expat workers, might recall its workers from the Arabian Peninsula and ban further travel. India, already jittery about MERS, might do the same with its expats.

With no one to do the chores, and native-born populations expecting idleness or unable to do skilled jobs, the Saudis and the other Gulf monarchies would learn what happens when a rentier economy can't pay its own rent.

So would the rest of us, as we watched Gulf oil shipments dwindle and Canadian gas prices soar, while political upheaval erupted from the Persian Gulf to the Red Sea.

The Gulf monarchies survived the stress of the Arab Spring, which started with the suicide of a single unknown young Tunisian. But they may not survive the stress of a single virus, unknown to the world just two years ago. [Tyee]
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Re: How MERS Could Topple the House of Saud

Unread postby Paulo1 » Sat 07 Jun 2014, 09:12:31

Except for the fact that this illness is tragic for sufferers and their families, the article appears to be a positive incentive for people to pull their heads out and attempt to adjust to a ff constrained existence. The sooner the better.

If it isn't Mers, it will be something else. Sooner or later the puppet totalatarian regimes friendly to western oil consumers will topple. It is all conjecture at this point, but one day a news event will indicate the toppling has begun.

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Re: How MERS Could Topple the House of Saud

Unread postby Subjectivist » Sat 07 Jun 2014, 09:31:55

KSA is built on a generous wealth sharing system where the rapidly growing population is already straining the oil income budget. If MERS relieved he population pressure for a while it might even help the Royal Family hold on for another generation.
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Re: How MERS Could Topple the House of Saud

Unread postby PrestonSturges » Sat 07 Jun 2014, 12:03:11

Turn that shit lose in the Russian prison system and it would be like one of those zombie movies where the military ends up nuking the entire town.
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Saudi Arabia: Canary in the oil glut coal mine

Unread postby C8 » Wed 17 Feb 2016, 18:10:45

Sound familiar?

Young Saudis See Cushy Jobs Vanish Along With Nation’s Oil Wealth

http://www.nytimes.com/2016/02/17/world ... .html?_r=0

RIYADH, Saudi Arabia — In pressed white robes and clutching crisp résumés, young Saudi men packed a massive hall at a university in the capital city this month to wait in long lines to pitch themselves to employers.

It was one of three job fairs in Riyadh in two weeks, and the high attendance was fueled in part by fear among the younger generation of what a future of cheap oil will mean in a country where oil is everything.

For decades, the royal family has used the kingdom’s immense oil wealth to lavish benefits on its people, including free education and medical care, generous energy subsidies and well-paid (and often undemanding) government jobs. No one paid taxes, and if political rights were not part of the equation, that was fine with most people.

But the drop in oil prices to below $30 a barrel from more than $100 a barrel in June 2014 means that the old math no longer works. Low oil prices have knocked a chunk out of the government budget and now pose a threat to the unwritten social contract that has long underpinned life in the kingdom, the Arab world’s largest economy and a key American ally.

The shift is already echoing through the economy, with government projects delayed, spending limits imposed on ministries and high-level discussions about measures long considered impossible, like imposing taxes and selling shares of Saudi Aramco, the state-run oil giant that is estimated to be the world’s most valuable company.

The proposal announced on Tuesday by the oil ministers of Saudi Arabia, Russia, Qatar and Venezuela to freeze output levels is one attempt to stabilize world oil prices, but it remained uncertain how effective it would be if other countries, like Iran and Iraq, declined to follow suit.

For younger Saudis — 70 percent of the population is under 30 — the oil shock has meant a lowering of expectations as they face the likelihood that they will have to work harder than their parents, enjoy less job security and receive fewer perks.

“For the older generation, it was easier,” said Abdulrahman Alkhelaifi, 20, during a break from his job at McDonald’s. “They’d get out of university and get a government job. Now you need an advanced degree.”

Of his generation, he said, “The weight is on our necks.”

It is hard to overstate the importance of oil in the development of modern Saudi Arabia. In decades, it rocketed a poor, mostly rural country to affluence, with most of its 21 million citizens now living in cities festooned with skyscrapers and streets filled with S.U.V.s. Oil wealth also allowed the ruling Al Saud family to maintain its grip on power, wield clout abroad through checkbook diplomacy and invest billions of dollars in promoting an austere interpretation of Islam around the world.

The oil boom over the past decade helped all of this, and was good for Saudis at home. Household incomes rose, and the number of men and women pursuing higher education multiplied. But the fat years left the economy poorly structured, economists say: 90 percent of government revenues are from oil; 70 percent of working Saudis are employed by the government; and even the private sector remains heavily dependent on government spending.

Nor did advances in education create a large professional class or inculcate a culture of hard work. Most of the country’s engineers and health care workers are foreign, and many government employees vacate their offices midafternoon, or earlier.

But with oil revenues crashing and the numbers of young people reaching the work force growing by the day, those jobs have become harder to get as the government cuts costs and pushes Saudis toward the private sector, where job security and salaries are lower on average.

“There is an issue with the sustainability of the economic model in Saudi Arabia, and the oil price can be seen as a wake-up call,” said Fahad Alturki, chief economist at Jadwa Investment in Riyadh.

Saudi Arabia still has room to maneuver, he said, thanks to large cash reserves, low public debt and lots of new infrastructure that can aid economic growth.

But the generational differences are clear.

One woman who recently earned a Ph.D. in a medicine-related field in the United States said that her father had been tracked into the military, where he got training abroad, free housing, medical care and schooling for his children. When her mother finished her degree in Arabic, she immediately got a job near her house — and a cash bonus from the state, just for graduating.

Their daughter has struggled to find work, despite being better educated and fluent in English. Her husband, also educated in the United States, is also unemployed, and they live with her family.

“My parents had great opportunities,” she said, requesting anonymity so as not to hinder her job search. “They provided well and we had a comfortable life, so I always thought it would be the same for us.”

These economic stresses come at a time of chaos in the Middle East and of generational change in the royal family.

Spearheading economic policy is Prince Mohammed bin Salman, whose father, King Salman, passed over older and more experienced princes to put the 30-year-old in charge of many of the country’s most important affairs, stirring private anger among some other royals.

Prince Mohammed, who is also the defense minister and second in line to the throne, has launched a costly war in Yemen and talks about radical changes to the economy, like raising fuel prices, imposing taxes on undeveloped land and some consumer goods, and privatizing state-run companies.

But details on implementation are scarce, causing uncertainty over many issues like what it will cost to fill a gas tank or power a factory in five years. That has made it hard for businesses to plan for the future, which further undermines the sputtering economy.

At the same time, Saudis are not accustomed to the government taking bold, fast action. Change tends to be introduced incrementally. That cultural trait is now complicating the need to move fast to meet the economic and demographic challenges.

A Saudi executive in the construction industry said that change was needed, but that moving too fast could hurt businesses.

“It has to be done and I am with it, but you can’t change decades’ worth of problems in a few years,” he said, speaking on the condition of anonymity so as not to jeopardize his business interests. “No way.”

Economists say that at least 250,000 young Saudis enter the job market every year, and that making them effective members of the work force is a major challenge.

The glut of graduates was clear at the job fair, where most applicants had come from large public universities that often fail to give students the language and technical skills employers want. Most of those interviewed had never had a job before and said their fathers worked for the government. While some thought private companies offered better experience, many wanted the perks of a government job.

“It’s a good experience, but there is no rest and no job security,” said Ali al-Ariyani, 24, who worked at a private hospital and wanted a change. “The days are long and you can’t even go out to smoke.”

At a separate location for women, many applicants complained that their degrees had not given them the skills, like fluency with computers, that employers want. One group of women had earned degrees in microbiology only to learn that they lacked the required licenses for hospital jobs.

“Our main issue is that our university did not prepare us for the job market,” said Khuloud al-Khateeb, 23, adding that many hospitals preferred to hire foreigners for lower salaries.

In recent years, the government has pushed for greater Saudi employment, penalizing companies with few Saudi employees. Many employers hate the program, saying it forces them to swell their payrolls with people who contribute little.

Even companies that have hired lots of Saudis have often had to rely on significant social engineering to get them working.

Saudis made up one-third of the crew at a Riyadh McDonald’s on a recent morning, manning the drive-up window and cash register and making fries.

“Is this spicy?” one yelled to a colleague. “One large fries, please!”

While they do the same work as foreigners, they earn much more. Salaries for foreign crew start at $320 a month, while Saudis get $1,460, part of which is subsidized by the government.

The company also gives Saudis more flexibility and has created fast-track programs to move them into management.

Four Saudi workers gathered in a break room said they liked their jobs but worried that they would not be as successful as their fathers, all of whom worked for the government. They knew the government had less money to employ citizens, which meant their generation would have to work harder.

“The government is good, but our generation is spoiled,” said Ahmed Mohammed, 21. “Everyone wants a government job.”

His colleagues agreed. “Everyone wants to sit at home and get paid,” Mr. Alkhelaifi said.

Sheikha al-Dosary contributed reporting.
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Re: Saudi Arabia: Canary in the oil glut coal mine

Unread postby Plantagenet » Wed 17 Feb 2016, 18:49:56

KSA should just reclassify all those young men looking for work as "discouraged workers" and stop worrying about them.

KSA's numbers would look a lot better then. :)
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Re: Saudi Arabia: Canary in the oil glut coal mine

Unread postby ROCKMAN » Thu 18 Feb 2016, 00:38:34

FYI: for those worrying about them poor Saudis: current GDP per capita is about the same as it was in 2005. Which isn't to say the party won't eventually grind to devastating halt. But they ain't there yet.
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Re: Saudi Arabia groundwater to run out in 13 years

Unread postby GHung » Sat 20 Feb 2016, 09:57:40

Gosh, Cog, seems you left out this part:

Maaden's alumina refinery will use up to 1,350MW of electricity and 25,000m³ per day of water from the project.


As with many of these tech schemes, a big chunk of the production is already spoken for.
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Re: Saudi Arabia groundwater to run out in 13 years

Unread postby Cid_Yama » Sat 20 Feb 2016, 10:01:32

You also missed the word groundwater. As in aquifer. So YES really.
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Re: Saudi Arabia groundwater to run out in 13 years

Unread postby Cog » Sat 20 Feb 2016, 10:16:42

The sun shines in Saudi Arabia.
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Re: Saudi Arabia groundwater to run out in 13 years

Unread postby frankthetank » Sat 20 Feb 2016, 10:28:06

I always assumed all their water comes from desalination. They should be purifying wastewater like the Israelis and using it on crops. They should be spending billions on solar and wind...at least they'll have something to fall back on when the oil runs low.
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THE Saudi Arabia Thread pt 6

Unread postby onlooker » Sat 20 Feb 2016, 14:48:49

As their oil begins to run out, where will they attain the economic capacity to continue to pay run this Desalination Plant? So they are running out of ground water and oil that is truly ominous for them.
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Re: Saudi Arabia groundwater to run out in 13 years

Unread postby Tanada » Sat 20 Feb 2016, 15:19:40

KSA uses a large sea water filtration plant to provide particulate free injection water to keep up their field pressure for oil production at Gahwar and other fields. Based on my reading at first they were worried because they had been using deep saline aquifer water for injection, but that supply ran low so they started substituting sea water which is much less saline. It should be relatively cheap to use that water with a little reverse osmosis to separate out fresh water and still have saline brine for injection into the oil formations.
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Re: Saudi Arabia groundwater to run out in 13 years

Unread postby vtsnowedin » Sat 20 Feb 2016, 15:26:07

I'm surprised that this story is current today. I'm sure I read somewhere three or four years ago that the Saudis had decided to stop growing wheat with fossil ground water and import it from Russia instead. Has it taken that long to implement such an obvious decision?
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Re: Saudi Arabia groundwater to run out in 13 years

Unread postby onlooker » Sat 20 Feb 2016, 15:36:37

It should be relatively cheap to use that water with a little reverse osmosis to separate out fresh water and still have saline brine for injection into the oil formations.

Well then this solves both the need for fresh water and also for producing oil. And if it is not expensive well that gives them time to reverse population momentum and diversify their economy.
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Re: Saudi Arabia groundwater to run out in 13 years

Unread postby Tanada » Sat 20 Feb 2016, 16:07:30

onlooker wrote:
It should be relatively cheap to use that water with a little reverse osmosis to separate out fresh water and still have saline brine for injection into the oil formations.

Well then this solves both the need for fresh water and also for producing oil. And if it is not expensive well that gives them time to reverse population momentum and diversify their economy.


While oil extraction is the largest mining system in KSA it is far from the only one. They mine metals, quarry stone and in general have gone a long way to diversify the raw material export products they can sell.

http://www.saudi-mining.com/

Commerce and Industry Minister Tawfiq Al-Rabiah, Abdulaziz Al-Jasser, president of the Presidency of Meteorology and Environment, Saudi Geological Survey President Zohair Al-Nawab, Deputy Mineral Resources Minister Sultan bin Shawli and Saudi Arabian Mining Company (Maaden) Present Khalid Al-Mudaifer were also present.
“Our mining sector is developing fast and we hope to attract foreign investors to various projects in the sector,” the minister said, hoping that the Kingdom would prepare an attractive climate for the foreign investors who would like to invest in copper, zinc and precious metals .
He added: “We have adequate raw materials in the sector from exploration to production.”
Al-Naimi said the new industrial city in Ras Al-Khair in Eastern Saudi Arabia would contribute to strengthening the country’s industrial sector.
He said the giant industrial projects at Ras Al-Khair would support the Kingdom’s diversification drive and bring good returns to investors and stake holders. It will also help transfer technology to the Kingdom.
“Ras Al-Khair was established to support all phases of industrialization and achieve the highest possible added value inside the country,” he said.
Al-Naimi stressed that the development of the mineral sector would serve the Kingdom and its citizens in the long run.
“It will create thousands of jobs for Saudis, especially technical jobs that provide good returns.”
Ras Al-Khair will also provide attractive investment opportunities for Saudi and foreign investors, the minister said.
Minister Al-Rabiah said: “No doubt, developing mining sector in the Kingdom would provide ample opportunities for the Saudi economy to diversify its income.”
He said that his ministry is following a paper-less concept in dealing with several matters with the members of the public.
He said industrial licenses are issued electronically without the applicants perfecting documents to submit their applications.
Zohair Al-Nawab, president of the Saudi Geological Survey, said: “Mineral deposits in Saudi Arabia are widespread and of many types, ranging from gold to lightweight aggregate.”
He said: “The bulk of metallic mineral resources are contained in Precambrian rocks of the Arabian shield, in the western part of the country.”
He added: “Non-metallic resources are contained in both Precambrian rocks and Phanerozoic rocks that overlie the Arabian shield in the central and northern parts of the Kingdom.”
The chief metallic mineral resources include: gold, zinc, copper and tin-tungsten, while the chief non-metallic resources include: phosphate, high-grade silica sand, feldspar and nepheline syenite, kaolin, basalt and scoria, gypsum and anhydrite, limestone and dolomite, ornamental stone and quartz.

http://www.arabnews.com/economy/news/826806
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Re: Saudi Arabia groundwater to run out in 13 years

Unread postby onlooker » Sat 20 Feb 2016, 16:12:23

thanks T, I did not know that, I presumed as I am sure many do that oil was their thing pretty exclusively.
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