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OUTLOOK AND DIRECTIONDespite diversification efforts,the Saudi economy remainsprimarily dependent onhydrocarbonsIn spite of the ongoing diversification efforts, the Saudi economy looks certain to remain heavilyreliant on oil for the foreseeable future. The contribution of the oil sector to the country’s GDPincreased from 33.5% in 1999 to 54.5% in 2006. It contributed almost 82.5% (USD88bn) to thebudget revenues of USD106.67bn in 2007. With oil prices plummeting since last year andprojections of demand destruction still being revised upward, the near-term outlook for the oilprice is weak. Latest IEA figures forecast a 1 mbd drop in global oil consumption in 2009 to 84.8mbd. Moreover, OPEC, which pumps approximately 40% of the world's oil, cut output by 4.2mnbpd during the second half of 2008 in a bid to counter falling prices, the largest-ever such cut. Inline with the OPEC decision, Saudi Arabia lowered its oil output to about 8.1mn bpd in Jan 09.Despite production cuts by the OPEC since September 2008, it has failed to raise oil prices tothe level sought by the members, as the global recession erodes demand. The average price inthe first quarter of 2009 was USD43.32 per barrel, which was 56.0% lower than a year earlier.While production cuts are certain to be implemented to a degree, enforcing discipline has beena persistent problem for OPEC members in the past, which may limit the impact of the cuts onprices.Exhibit 12: KSA - crude oil production (mn barrels)4,000103,00082,000641,000201999 2000 2001 2002 2003 2004 2005 2006 2007 2008Total crude oil productionDaily crude oil production (RHS)0Source: SAMAWeak crude oil demand andprice likely to depress KSAeconomy in 2009, but asignificant pick-up expected in2010Going forward, oil prices will be critically dependent on the demand outlook. Beyond 2010, themarket outlook will be determined above all by emerging markets, with China, India and theMiddle East expected to account for 80% of incremental oil demand up to 2030, accordingto IEA estimates. Demand from Asian emerging economies is set to double from the 14.8mnbpd level in 2004 to 29.8mn bpd in 2030. Growth in other key emerging regions is likely toexceed 70% over the same period. With a number of mature oil fields around the worlddeclining, the oil market is likely to be fairly tight, which should sustain higher oil prices,themselves a precondition for additional investment in the sector.Emerging economies to definethe dynamics of oil demandgrowthKSA’s oil export market is dominated by Asia and the Far East, North America, and WesternEurope. The share of Asia and the Far East has been steadily increasing. The importance of theAsian market will be a key driver of the likely expansion of Saudi production and exports in thecoming years.JUNE 2009SAUDI ARABIA FACTBOOK16
OUTLOOK AND DIRECTIONExhibit 13: KSA’s exports of crude oil by destination (mn barrels)YearNorthAmericaSouthAmericaWestEuropeMiddleEastAfricaAsia &Far East Oceania Total1999 534.20 26.95 454.33 68.97 73.66 921.77 7.80 2,087.682000 577.17 22.47 483.80 60.44 79.45 1,044.67 14.38 2,282.382001 560.06 36.76 405.86 57.44 64.62 1,067.98 10.38 2,203.102002 488.80 22.08 343.12 49.46 68.36 942.89 14.18 1,928.892003 596.92 23.84 434.86 72.69 96.34 1,149.87 6.33 2,380.852004 558.38 22.32 459.56 95.45 88.74 1,251.06 11.26 2,486.772005 530.93 23.79 440.67 112.87 86.02 1,435.34 1.62 2,631.242006 534.50 23.78 374.80 109.48 79.01 1,440.63 3.52 2,565.722007 571.78 22.34 306.04 113.06 71.76 1,453.23 2.95 2,541.16Source: OPEC, SAMAKSA is also well positioned to benefit from the growing interest in natural gas, driven by pollutionconcerns and efficiency considerations. KSA possesses gas reserves of 252.6 trillion cubic feetand ranks fourth in the world after Russia, Iran and Qatar.Exhibit 14: KSA – gas statistics2001 2002 2003 2004 2005 2006 2007Reserves (trillion scf) 227,946 234,673 238,492 241,323 243,648 252,607 257,954Number of discovered fields 12 12 13 14 14 - -Gas production (bn cu m) 57 61 68 76 81 85 -Gas consumption (‘000s barrels) 305,080 327,008 339,796 376,140 416,897 422,905 436,960Source: Ministry of Petroleum and Mineral Resources, Govt. of KSAKSA to witness strong growthin domestic natural gasdemand from utilities andindustryDomestically, Saudi Arabia uses gas for electricity generation, water desalination, and as apetrochemical feedstock. Gas thus plays a critical role in the ongoing and projecteddiversification ventures in the Kingdom. Saudi Arabia's natural gas demand is expected to reach14.5bn cubic feet-a-day (cf/d) over the next 25 years, compared with around 5.5bn cf/d atpresent. Though Saudi Aramco plans to increase the exploration of gas, the growth in naturalgas output under the current expansion plans may in fact fail to meet the soaring demand.Moreover, since much of KSA’s gas production is associated with oil production, the cut in oiloutput to support prices could lead to disruptions in natural gas supply for the industrial andutility sector.JUNE 2009SAUDI ARABIA FACTBOOK17
Page 1 and 2: NCB Capital Research DepartmentJune
Page 3 and 4: KSA ECONOMY AND NATION 5Outlook and
Page 5 and 6: KSA: Economy and NationSearching gr
Page 7 and 8: OUTLOOK AND DIRECTIONat a CAGR of 5
Page 9 and 10: OUTLOOK AND DIRECTIONpropel growth
Page 11 and 12: OUTLOOK AND DIRECTIONThe dramatic c
Page 13 and 14: OUTLOOK AND DIRECTIONExhibit 7: Sov
Page 15: OUTLOOK AND DIRECTIONStrong hydroca
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Page 26 and 27: History and overviewThe leading GCC
Page 28 and 29: HISTORY AND OVERVIEWExhibit 25: Bre
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Page 40 and 41: Banking and FinancialsLeveraging th
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Page 44 and 45: BANKING AND FINANCIALSExhibit 50: A
Page 46 and 47: PetrochemicalsCost advantage fuelli
Page 48 and 49: PETROCHEMICALSExhibit 55: Compariso
Page 50 and 51: CEMENTExhibit 60: Sector details% w
Page 52 and 53: RetailBetting on increasing consume
Page 54 and 55: RETAILExhibit 69: Revenue of compan
Page 56 and 57: Energy and UtilitiesPrivatizing is
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Page 60 and 61: ENERGY AND UTILITIESincrease the ut
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Page 64 and 65: AGRICULTURE AND FOODExhibit 91: Ave
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TELECOM AND ITline penetration stan
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TELECOM AND ITZain started trading
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INSURANCEExhibit 103: Country wise
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INSURANCE(YoY), despite growth in r
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Multi-investmentLight at the end of
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MULTI-INVESTMENTExhibit 114: Revenu
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Industrial InvestmentFacing the imp
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INDUSTRIAL INVESTMENTExhibit 122: R
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Building and ConstructionHealthy pi
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BUILDING AND CONTRUCTIONThe buildin
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BUILDING AND CONTRUCTIONSaudi Aramc
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REAL ESTATE AND DEVELOPMENTExhibit
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REAL ESTATE AND DEVELOPMENTsection
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REAL ESTATE AND DEVELOPMENTExhibit
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TRANSPORTATIONRoad transportRoad tr
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TRANSPORTATIONNational Shipping Com
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TRANSPORTATIONfears, and plunging f
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MEDIA AND PUBLISHINGExhibit 159: Re
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MEDIA AND PUBLISHINGExhibit 166: Av
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HOTEL AND TOURISMSeparately, leisur
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HOTEL AND TOURISMIn 2008, the secto
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THIS PAGE IS INTENTIONALLY LEFT BLA
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BANKS AND FINANCIAL SERVICESAl Rajh
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BANKS AND FINANCIAL SERVICESBanque
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BANKS AND FINANCIAL SERVICESAlinma
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BANKS AND FINANCIAL SERVICESSABBAls
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BANKS AND FINANCIAL SERVICESBank Al
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BANKS AND FINANCIAL SERVICESBank Al
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PETROCHEMICAL INDUSTRIESSaudi Basic
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PETROCHEMICAL INDUSTRIESSaudi Kayan
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PETROCHEMICAL INDUSTRIESSaudi Indus
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PETROCHEMICAL INDUSTRIESRabigh Refi
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PETROCHEMICAL INDUSTRIESYanbu Natio
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PETROCHEMICAL INDUSTRIESNama Chemic
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PETROCHEMICAL INDUSTRIESMethanol Ch
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CEMENTSaudi CementAlso known asSCCP
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CEMENTSouthern CementAlso known asS
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CEMENTYanbu CementAlso known asYCCP
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PriceSR46.5Pricing / Valuation as o
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RETAILJarir Marketing CoAlso known
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RETAILAldrees PetroleumAlso known a
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RETAILAhmed H. Fitaihi CoAlsoknown
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RETAILNational AgricultureAlsoknown
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ENERGY AND UTILITIESSaudi ElectricA
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AGRICULTURE & FOOD INDUSTRIESSavola
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AGRICULTURE & FOOD INDUSTRIESNation
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AGRICULTURE & FOOD INDUSTRIESQassim
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AGRICULTURE & FOOD INDUSTRIESSaudi
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AGRICULTURE & FOOD INDUSTRIESFood P
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AGRICULTURE & FOOD INDUSTRIESHalwan
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AGRICULTURE & FOOD INDUSTRIESTabuk
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TELECOMMUNICATIONSaudi TelecomAlso
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TELECOMMUNICATIONZain KSAAlso known
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INSURANCETawuniyaAlso known asTawun
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INSURANCESABB TakafulAlso known asS
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INSURANCEAl Sagr CompanyAlso Known
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INSURANCEBupa Arabia for Coop InsPr
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INSURANCESaudi IAIC Co-op.Also know
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INSURANCESanad InsuranceAlso known
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INSURANCESaudi Fransi Coop.Also kno
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INSURANCESaudi Indian Co.Also known
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INSURANCESaudi Arabian Co-opAlsokno
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INSURANCEAllied Co-operativeAlso kn
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MULTI-INVESTMENTKingdom Holding CoA
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MULTI-INVESTMENTAl-Baha InvestmentA
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INDUSTRIAL INVESTMENTAlsoSaudi Arab
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INDUSTRIAL INVESTMENTSaudi Pharma.A
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INDUSTRIAL INVESTMENTSaudi Paper Mn
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INDUSTRIAL INVESTMENTAstra Indl Gro
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INDUSTRIAL INVESTMENTAlsoSaudi Indl
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INDUSTRIAL INVESTMENTAlso known asF
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BUILDING & CONSTRUCTIONSA Amiantit
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BUILDING & CONSTRUCTIONAl-Babtain P
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BUILDING & CONSTRUCTIONSaudi Cerami
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BUILDING & CONSTRUCTIONArabian Pipe
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BUILDING & CONSTRUCTIONME Specializ
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BUILDING & CONSTRUCTIONSaudi Indust
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REAL ESTATE DEVELOPMENTDar Al Arkan
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REAL ESTATE DEVELOPMENTMakkah Const
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REAL ESTATE DEVELOPMENTTaiba Holdin
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REAL ESTATE DEVELOPMENTSaudi Real E
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TRANSPORTNational ShippingAlso know
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TRANSPORTUnited InternationalAlso k
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Page 254 and 255:
MEDIA AND PUBLISHINGSaudi ResearchA
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MEDIA AND PUBLISHINGTihamaAlso know
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PricePricing / Valuation as on May
Page 260:
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