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Oil, Power and Security in Saudi Arabia

Oil, Power and Security in Saudi Arabia. by Nawaf Obaid. Overview. Petroleum Policymaking in Saudi Arabia The Struggle for the Saudi Soul National Security Imperatives Conclusion. Deutsche Bank Global Oil & Gas Conference, New York, September 27 - 28 - Obaid (Unclassified).

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Oil, Power and Security in Saudi Arabia

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  1. Oil, Power and Security in Saudi Arabia by Nawaf Obaid

  2. Overview • Petroleum Policymaking in Saudi Arabia • The Struggle for the Saudi Soul • National Security Imperatives • Conclusion Deutsche Bank Global Oil & Gas Conference, New York, September 27 - 28 - Obaid (Unclassified)

  3. Petroleum Policymaking in Saudi Arabia

  4. Overview • World’s largest proven reserves • 260 billion barrels • 25% of world total • Largest spare production capacity • Sustainable capacity of 10.3 mbd in September 2004 • Arabian Super Light - 200,000 • Arabian Extra Light - 1,400,000 • Arabian Light - 6,200,000 • Arabian Medium - 1,300,000 • Arabian Heavy - 1,200,000 • Historic role as swing producer • Saudi Arabia is only country with the will and capacity to manage global prices • Played critical role attempting to curtail 2004 price spike Deutsche Bank Global Oil & Gas Conference, New York, September 27 - 28 - Obaid (Unclassified)

  5. Petroleum Security Infrastructure • Over $750 million allocated in past 2 years to increase security at all oil facilities • 25 – 30,000 men protect Kingdom's petroleum infrastructure • These forces comprise nearly all branches of the military and security services • Coast Guard and Navy protect from the sea • Anti-aircraft batteries protect major installations • Petroleum infrastructure has great redundancy Deutsche Bank Global Oil & Gas Conference, New York, September 27 - 28 - Obaid (Unclassified)

  6. Meeting Global Petroleum Demand • Upgrades at Abu Safah and Qatif fields recently went online, adding 550,000 b/d by Nov. 2004 • More drilling and technological advances slowing decline of mature fields such as Shaybah • Dormant fields, such as Khoreis and Maneefa, will slowly be brought back online • Natural gas projects coming online will free up more oil for export Deutsche Bank Global Oil & Gas Conference, New York, September 27 - 28 - Obaid (Unclassified)

  7. Struggle for the Saudi Soul

  8. Challenges Facing Saudi Arabia • In 2003, King Fahd outlined challenges confronting the Kingdom in 4 main spheres: • Economic • Social • Educational • Religious • Leadership realizes that reform is necessary for the Kingdom to thrive in the modern world Deutsche Bank Global Oil & Gas Conference, New York, September 27 - 28 - Obaid (Unclassified)

  9. Economic Reform • Preparation for WTO accession • Privatization • Opening to foreign investment • Confronting unemployment • Diversification • Increasing transparency & accountability • Saudization of workforce Deutsche Bank Global Oil & Gas Conference, New York, September 27 - 28 - Obaid (Unclassified)

  10. Political Reform • National Dialogues instituted • Petitions accepted • Press criticism of government officials allowed • Municipal elections scheduled for Feb. 2005 • Shura Council elections to be considered Deutsche Bank Global Oil & Gas Conference, New York, September 27 - 28 - Obaid (Unclassified)

  11. Social Reform • Empowerment of women • Increased opportunities / tolerance for religious minorities • Human rights commissions formed • Educational reform Deutsche Bank Global Oil & Gas Conference, New York, September 27 - 28 - Obaid (Unclassified)

  12. Reducing Extremism • National dialogues address controversial religious challenges • Increased oversight of clerics and sermons • Extremist teaching removed from curriculum • More control over charitable activities • National Commission for Charitable Works Abroad established Deutsche Bank Global Oil & Gas Conference, New York, September 27 - 28 - Obaid (Unclassified)

  13. National Security Imperatives

  14. Saudi Intelligence & Security Community Deutsche Bank Global Oil & Gas Conference, New York, September 27 - 28 - Obaid (Unclassified)

  15. Counter-Terrorism Forces Deutsche Bank Global Oil & Gas Conference, New York, September 27 - 28 - Obaid (Unclassified)

  16. Failures • Several major successful terrorists attacks • Over 90 killed and several hundred injured since May 2003 • Full confidence not restored in ability to protect compounds and foreign workers Deutsche Bank Global Oil & Gas Conference, New York, September 27 - 28 - Obaid (Unclassified)

  17. Successes • 11 major terrorist attacks foiled since May 2003 • 12 leading al-Qaeda operatives captured or killed (inside and outside Saudi Arabia) • All 5 known domestic and 2 international al-Qaeda cells infiltrated and all but 1 eradicated • More than 700 arrests in counter-terrorism operations since May 2003 • Huge amounts of explosives captured; in July 2003, over 20 tons found in Qassim province alone Deutsche Bank Global Oil & Gas Conference, New York, September 27 - 28 - Obaid (Unclassified)

  18. The Future • Saudi Arabia will remain the world’s sole oil superpower • Stability and progress can only be assured through a vigorous reform program • Terrorism does not pose an existential threat to the monarchy, but will remain a challenge for the foreseeable future Deutsche Bank Global Oil & Gas Conference, New York, September 27 - 28 - Obaid (Unclassified)

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