Saudi Arabia to net $163bn in oil receipts
James Cordahi






Bloomberg

RIYADH — Saudi Arabia is likely to generate $163bn in oil revenue this year, the most in more than two decades, on higher oil prices and more crude exports, said Samba Financial Group, the country’s second-largest bank.

The price of Saudi crude oil would average $51 a barrel in 2005, 45% more than 2004’s $35,17 a barrel, the Riyadh-based lender said in a report on the economy at the weekend.

“This boom is coming at a time when the region as a whole has identified important gaps in physical infrastructure after years of neglect,” said Ala’a Al-Yousuf, chief economist at Manama, Bahrain-based Gulf Finance House said.

That was encouraging governments and companies to spend more on property development and industrial projects, Al-Yousuf said yesterday.

Unemployment among Saudi males of about 9% is helping underpin a militant campaign to overthrow the ruling al-Saud family. Militants with suspected links to wealthy Saudi dissident Osama bin Laden’s al-Qaeda terrorist network have been targeting westerners and other foreigners in the kingdom in a bid to scare them out.

Crude oil prices in New York have risen almost 43% this year to $60,63 a barrel on Friday, according to Bloomberg data.

Saudi Arabia’s oil revenue last year was $106bn.



Higher oil and other revenue to the government would offset spending by as much as $55,5bn this year, more than twice last year’s budget surplus of $26,1bn, Samba said.

Gulf Finance is an investment bank helping finance more than $5bn of property projects in the Persian Gulf region, according to its website.

Saudi Arabia, Kuwait, the United Arab Emirates and three other Persian Gulf monarchies will generate a record $305bn of oil revenue this year, a third more than in 2004, on higher international oil prices, according to UK bank Standard Chartered.

The Saudi central bank will have foreign assets of about $141bn by year-end, Samba said.


Meanwhile, in Helsinki, World Trade Organisation (WTO) chief Pascal Lamy said on Saturday that Saudi Arabia could be admitted to the Geneva-based group this year.

Saudi Arabia has said it aims to join the 148-state world trade body this year.


WTO sources said earlier this month the world’s largest oil producer had moved close to entry this year after completing a package of documents setting out the terms of its membership. These would be submitted to a key meeting this coming Friday, the sources said. With Reuters

i hope they use this money wisely. they should invest heavily in their own infrastructure, education and develop industry that allows diversification from oil. also if they just invested 1% of that in Pakistan that would be 1.63 billion dollars. That would make us very happy!

Why stop at just 1%?

I think that the Gulf monarchies could easily afford to invest around 10-15% of their oil revenues for the forseeable future in poor Muslim countries such as Pakistan, Bangladesh and Indonesia. This should be bring in around $30 - $50bn a year into those economies. Just imagine what a kick-start that would give to those countries and, in the long-run, the Gulf regimes would gain a steady source of income.

i fear that the yanks will not allow this to happen. through their "advisers" they will tell the sheikhs to invest in america and europe.

1% is negligible in terms of percentage but significant in terms of real dollars invested and with the multiplier effect even this investment will grow several fold. If just 1% was invested in pakistan per annum we would see a huge change in the wealth of the nation. Then of course you can increase the amount steadily as the trust factor comes in. As a start this would be good. The Arabs have to realise at some point that the hundreds of billions they have invested in Europe and America are not safe anymore. They need to turn East. Pakistan would be a good start.

Yaar the saudis have been building thier country for the last 30 years and still if you post a letter from Jeddah to Riyadh it doest even get there in time.

I think last year saudi budget was something like $70 billion - and they where in deficit and in debt.

now last i herd they are in surplus of about $50 billion - without debt.

i dont think they will spend 10-15% on other countries because they need that money to diversify their own economy - they realise 1) oil wont last for ever 2) if some other oil source comes along or other energy form oil will soon be back at $10/barrel in no time.

i dont think they will waste it like last time building junk like that huge bike and those cars stuck in that concreate block [you must have all seen those pictures?]

kinda goes to show though, when you pray to the all mighty in the correct way you are better off...rather than pray to the graves of the pirs etc.

[compare stability/finance of pak vs saudi and you will see who is better off - remember it doesnt matter that our army is better we still bow to pressure to uncle sam and our Jawans die for them on the afghan border.]

thr problem is that the Saudis went from Bedouins to billionaires within one generation. Organised civil society was an alien concept to them and they are still having trouble with it. It will take another 2 or 3 decades and a lot of education before the Saudis can start to build a 'country'. Hopefully their oil will still be around and they will get much better at utilising their resources.

they are already learing it fast. They have a new generation of saudis learned from harvard and yale etc. and they have lots of consultants.

It is true that they have problems but if you see how they are developing properties in mecca, medina and the hajj business, then you see that they are really making progress. And this business alsone is enough to keep them alive, even if oil stops.

i think they will now start concentrating on industry as well.

Hajj wont keep them afloat, that have something like 20million people mostly young educated [growing at a very fast rate] who dont have jobs.

that extra 50billion will come in handy to build up some commerical sector - even if state owned - it will do them a world of good.

anyway russians say oil doesnt run out anyway - just refills upfrom the bottom...thats why russian oil companies produce more for longer than other oil companies from similar oil fields.

paknet: " dont think they will spend 10-15% on other countries because they need that money to diversify their own economy - they realise 1) oil wont last for ever 2) if some other oil source comes along or other energy form oil will soon be back at $10/barrel in no time. "

This money isn't a giveaway but will be an investment. Just imagine how much wealth these investments will generate over the coming decades. These hundreds of billions of dollars will churn out literally trillions of dollars in profits for the Gulf countries over the coming decades.

Good for Saudi Arabia. They lost a lot of money in the GulfWar l and ll. Now they need to build up their reserves and diversify....and spend billions to update their millitary to next generation weapon systems.

One of the main problems with Saudi Arabia is the high birth rate, Lets be honest here these people dont have to work and live a life of luxury compared to most people around the world, that is why they have problems like obesity and high-birth rate.

Hopefully one day obesity will cause low fertillity rates and then the Saudi can live an even higher standard of living.

LOL...are you an indian Gynacologist living in saudi arabia?? And what the hell does your rantings about Saudis being obese have to do with their oil wealth / petro dollars????

Im not sure they ate learning that fast, they are still in $200 billion debt from the first gulf war and are still paying for the GWII, KSA supplied all of the aircraft with avaiation fuel from 1991-1993 for any operations against iraq they were the largest importer of refined aviation fuel from 1991-1993. They guys have spent more on the gulf war then anyone, the Gulf wars has left saudi in massive debt.


Saudi needs to move away from the US and enter the chinese markets and open up its trade consessions witrh the ASEAN. They have depended to much on the west and compared to how much oil they have been drilling it doesnt really be justified. Saudi has a very long way to go before they are less dependent on oil.

they made a plus of 70 billion last year and it seems 160 billion this year. Thus they should be out of debt of 200 billion from which they paid a large portion already.

but its correct that they should move away not only from yanks but also europe and turn towards china and oic members. They can make much more money there and be safe and also increase their influence.