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Oil
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King Abdul Aziz Bin Abdul Rahman Al-Saud in Dammam in 1939. |
In 1933, Saudi Arabia's founder, King Abdul Aziz Bin Abdul Rahman Al-Saud, granted the now-historic right to the Standard Oil Company of California (SOCAL) to prospect for oil in the Kingdom. In 1938, after more than four years of searching, geologists discovered commercially-exploitable quantities of oil at Dammam Oil Well Number 7. The next year, the King himself opened the valve to allow oil to flow into the first tanker at Ras Tanura. In 1944, the oil company was renamed the Arabian American Oil Company (Aramco). By 1949, Aramco was producing 500,000 barrels of crude oil a day, up from 20,000 before 1944. Crude oil production increased by an average of 19 percent a year from 1945 through 1974 - reaching 8.2 million barrels a day that year.
Over the years, the Saudi government assumed an increasingly important role in the oil industry. In 1962, the General Petroleum and Minerals Organization (PETROMIN) was established to develop Saudi Arabia's oil and mineral resources. The government assumed full ownership of Aramco in 1980, renaming it Saudi Aramco and the first Saudi was appointed president of the company in 1984.
Today, Saudi Arabia's proven oil reserves are estimated at 260.1 billion barrels. Most of the Kingdom's known oil reserves are located in the Eastern Province, including the largest onshore field in Ghawar and the largest offshore field, Safaniya, in the Arabian Gulf. However, the introduction of improved recovery technologies, such as horizontal drilling, and discoveries in other regions of the country may substantially increase the Kingdom's proven oil reserves. In the early 1990s, Saudi Aramco undertook exploration of parts of the country. where a search for oil had never before been undertaken. In central Saudi Arabia, the company discovered major deposits of natural gas and oil, including sweet, low-sulfur grades of crude.
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