Kingdom of Saudi Arabia in Shanghai

Oil and Gas Sector:

For decades, Saudi Arabia’s economic development has been driven by the strong success its oil industry. Saudi Arabia is the world’s largest producer and exporter of petroleum liquids and is currently the world’s second largest crude oil producer behind Russia. Saudi Arabia’s economy remains heavily dependent on oil and petroleum-related industries, including petrochemicals and petroleum refining. According to the International Monetary Fund, oil export revenues account for around 90 percent of total Saudi export earnings and above 40 percent of the country's gross domestic product (GDP). Meanwhile, Saudi Arabia is also the Middle East’s fastest growing consumer of energy, due in part to its rapidly growing population and large-scale development projects. Domestic consumption has also been stimulated by historically high oil prices and large government fuel subsidies.

Saudi Arabia's long-term goal is to further develop its lighter crude reserves including the Shaybah Field, located in the Empty Quarter (Rub al-Khali) area bordering the United Arab Emirates, the Abu Hadriya, Fadhili and Khursaniyah (AFK) fields and the giant Khurais Field. In 2005, the Saudi Ministry of Petroleum and Mineral Resources announced an ambitious goal of increasing capacity to 12.5 million barrels per day (bpd) by the end of 2009. While production levels dipped slightly in the late 2008, the government remains confident that it will achieve its production target. The Saudi government has even given mention to production targets following 2009, including an increase to 15 million bpd after 2011. To reach these ambitious production targets and to meet the growing demand for energy around the world, the country will invest billions of dollars to boost production capacity by developing new projects and upgrading existing ones.

While the global recession that began in 2008 has presented new economic challenges, Saudi Arabia is pushing forward with many of its development projects in the oil and gas sector, as it is a strategic component of not only the Saudi economy but also the global economy. Saudi Aramco has extended deadlines for EPC bids in a number of other projects, including the export refineries at Jubail and Yanbu, in order to encourage more competitive bidding that reflects declining construction costs. In March 2009, the Saudi Arabian Ministry of Petroleum and Mineral Resources announced plans to spend approximately $60 billion on upstream and downstream operations through 2014. The budget includes allocations for 144 projects, including 17 mega-projects (those valued at more than $1 billion), 30 large projects, 17 medium-sized projects, and 80 small schemes.

Increased spending means more business opportunities for private firms. In 2002, the Supreme Economic Council (SEC) approved a privatization strategy directed at advancing Saudi Arabia’s privatization drive and expanding the role of the private sector and foreign investors in the Kingdom, including petroleum and energy support services.

Further, Saudi Aramco has announced that industry expansion and new production targets will be met largely through increased private investment. For further Information:

• Saudi Aramco Oil Operations

• Saudi Aramco Gas Operations

Petrochemical Sector in KSA:

Today, Saudi Arabia is a major player in the field of petrochemicals where it became the tenth largest producer of petrochemicals by Saudi Basic Industries Corporation (SABIC).

The production capacity of polypropylene is 1.7 million tons annually, which represents 46% of the total production capacity in the Middle East.

SABIC is currently the largest exporter of granular urea and the second largest source for EG and methanol, and fuel additives global MTBE (Methyl Tertiary Butyl Ether).

The Corporation (SABIC) has become the third largest exporter in the world of polyethylene (PE) and the sixth producer of polypropylene (PP). Overall, SABIC today is the fourth largest producer of polyolefin in the world.

The majority of the current installed capacity owned by the Company (SABIC) and / or partners in joint ventures but that this situation will change with the operation of other private companies such as Chevron, Saudi Poly olefins and Saudi petro-chemical Co., and Gulf Advanced Chemical and other new projects.

Saudi Aramco Petrochemical Projects:

Perhaps even more significant than our portfolio of domestic and international refinery projects is our shift to integrate refineries with petrochemical facilities, creating an economic multiplier effect. More of our liquids production can travel farther down the value chain rather than being exported as crude oil, refined products or natural gas liquids. Leveraging the country's hydrocarbon assets in this fashion will create more opportunities for industries and associated businesses to contribute to the economic development and diversification of the Kingdom.

Petro Rabigh, our joint venture with Sumitomo Chemical Co. of Japan, successfully executed its initial public offering of 25 percent of the company's capital in January 2008 and raised 4.6 billion riyals ($1.223 billion) for the company's operations. During the subscription process, over 5 million retail investors contributed more than 16.5 billion riyals ($4.4 billion), translating to the offering being three times oversubscribed. Eleven receiving banks participated in the IPO, providing ample opportunity for public participation.

The listing of Petro Rabigh on the Saudi stock market, Tadawul, marks a first for a Saudi Aramco venture to be listed on the Kingdom's stock exchange.

Progress was made on the implementation of the Rabigh Conversion Industrial Park (RCIP), which will provide business opportunities for industries to convert raw materials from the plant into manufactured goods. In 2008, work on the contracts for engineering, procurement and construction for the industrial park utilities and support facilities was nearly complete.

The Ras Tanura Integrated Project (RTIP) is a proposed joint venture with The Dow Chemical Co. to integrate a world-scale chemicals and plastics production complex with our Ras Tanura Refinery. Scoping of the project was completed in 2008. In addition to the chemicals and plastics production units, the proposed complex will include power and utilities facilities to support the project and an associated Value Park for local and foreign private sector companies to build industries to utilize products produced at RTIP. Ownership of the joint venture will be divided among Saudi Aramco, Dow and public investors, with a portion of the equity to be offered to the Saudi public through a proposed IPO.