$683.8 bn Saudi economy at a glance

LAHORE: Possessing about 16 per cent of the world's proven petroleum reserves and being the largest exporter of petroleum, Saudi Arabia is today ranked as the largest exporter of petroleum on the planet.

The petroleum sector accounts for roughly 87 per cent of the Saudi budget revenues, 42per cent of country's Gross Domestic Product (GDP), and 90 per cent of its export earnings. Pivoted on a GDP of just US$ $5.377 in 1970, the economy of Saudi Arabia is one of the top 20 economies in the world, which represent about two-thirds of the global population, 85 per cent of the international Gross Domestic Product and over 75 per cent of all trade activities taking place on Earth.

In 2017, the Kingdom's budget deficit was estimated at 8.3 per cent of its GDP. However, Saudi Arabia's GDP is expected to jump 29.53 percent to $889.5 billion by the year 2023, according to the October 17, 2018 edition of the "Saudi Gazette."

The Saudi GDP today rests at US$683.8 billion, it has a labour force of 12.34 million, its exports rest at $231.3 billion, its imports stand at $136.8 billion, the country's Gross External Debt was $212.9 billion at the end of December 2017, its Gold Reserves had remained unchanged at 323.10 tonnes in the fourth quarter of 2018, it has a Nominal GDP per capita? of ?$21,120 and it had FOREX Reserves of $487 billion in its kitty.

With a total worth of US$34.4 trillion, Saudi Arabia has the second most valuable natural resources in the world.

The Black Gold and Saudi Arabia's riches since 1933: In 1933, the Saudi government had signed an oil concession agreement with Standard Oil Company of California.

The development in this context was managed mainly by ARAMCO, a company that formed by the partnership of Texaco and Chevron.

By 1949, Saudi oil production had reached 500,000 Barrels Per Day (BPD) and rose then rapidly to one million BPD in 1954.

Remember, ARAMCO's development of Saudi oil after World War II had nearly sextupled revenue from $10.4 million in 1946 to $56.7 million in 1950.

In 1960, OPEC was created with Saudi Arabia as one of its founding members.

During the historic 1973 Oil Crisis, the price of oil rose from $3 per barrel to nearly $12, and the Saudi economy began to grow rapidly.

Its GDP surged from approximately $15 billion in 1973, to approximately $184 billion by 1981.

After gradually purchasing Aramco's assets, the Saudi government nationalized the company in 1980. In 1988, the Saudi-ARAMCO company was established to take over the responsibilities of ARAMCO.

(References: Encyclopedia Britannica, OPEC: Brief History, World Bank, IMF, Robert Henry's book "The dark side of the oil glut," and the Forbes magazine of United States)

In its fairly recent February 12, 2019 edition, the "Financial Times" writes: "Saudi Arabia plans to develop an international energy exploration and production business for the first time, doubling down on oil and gas despite the kingdom's ambitions to curb its reliance on hydrocarbons.

Khalid al Falih, Saudi Arabia's energy minister and chairman of state oil company Saudi Aramco, told the Financial Times that overseas expansion would be a critical part of the company's future."

The 131-year old British newspaper adds: "While Saudi Aramco is the world's largest oil producing company, it has never meaningfully ventured overseas to extract resources, relying instead on its vast domestic reserves. The move underscores how Saudi Arabia is likely to remain dependent on its oil and gas prowess for raising revenues, as it struggles to diversify into new sectors such as technology, tourism, healthcare and mining. The kingdom and Russia are leading global producers to curb supply to support oil prices after they fell by 40 per cent in late 2018. Crude is now hovering near $60 a barrel, while Saudi Arabia's budget requires levels closer to $80."

With revenues resting at US$ 465.5 billion in 2017, the Saudi ARAMCO is one of the largest companies in the world by revenue, and according to accounts seen by Bloomberg News, the most profitable company in the world.

Founded in 1933, Saudi Aramco has both the world's second-largest proven crude oil reserves at more than 270 billion barrels and second-largest daily oil production. It has over 65, 200 employees and its Net Income is in excess of US$33.8 billion.

Saudi Aramco's financial data were leaked in April 2018 and according to Bloomberg's analysts, the company could be valued at $1.2 trillion, significantly lower than the official figure of $2 trillion backed by Saudi officials.