[Oil And Gas Marketing Issues In Exploration And Production Contracts: Case Study Analysis Of Saudi Arabia And Yemen]

by

ACKNOWLEDGEMENT

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible.

DECLARATION

I, [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

Signed __________________ Date _________________

ABSTRACT

This dissertation is to discuss and recommend an oil and gas marketing contract issues in Saudi Arabia. The basic concept is the fact that oil is a deplet- able resources representing over 95 percent of Saudi Nation- al income. Two exogenous constraints face the government in its efforts to develop an efficient conservation policy. The first is the membership of Saudi A~abia in the Organiza- tion of Petroleum Exporting Countries. The second is t.he world energy market. These two constraints hinder the ability of Saudi Arabia to use an appropriate social rate of discount to allocate oil revenues efficiently. Using social rate of discount implies that Saudi oil reserves would be allocated over time according to a rate that reflects the Saudi Society's time preference. A high discount rate means that oil production would be pushed from the future to the present, whereas a low discount rates means that Saudi Arabia prefers producing oil in the future rather than the present. A strategy based on social rates of return on domestic and foreign investment seems to be appropriate for Saudi Arabia. But the existence of the exogenous constraints and also events of 1983 and 1984 in the domestic economy and world energy market impose restrictions on using discount rate. It is appropriate for Saudi Arabia in the meantime to deal with the deteriorating situation in the world energy market. This may be accomplished by reducing the elasticity of demand by reducing the price of oil and increasing production. The huge oil reserves and the hiyh productive capacity of Saudi Arabia are the major sources of strength for accomplishing such policy.

TABLE OF CONTENT

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1: INTRODUCTION1

Background of the Problem1

Statement of the Problem3

Need of the Study4

Significance of the Problem5

Significance of the Study to the Field of Leadership6

Nature of the Study7

Hypotheses10

Theoretical Framework11

CHAPTER 2: LITERATURE REVIEW13

Discovery of Oil15

a. 1940-195916

b. 1960 - the early 1970s18

Oil Conservation in Saudi Arabia23

Developments in the theory of exhaustible resources25

Saudi Arabian social rate of discount27

Alternative29

Early History31

History of the Saudi Arabian natural gas industry supply35

Collection and use of associated natural gas: the MGS pipeline (1975 to 1985).36

MGS, gas-based feedstock and downstream processing plants38

Inclusion of non-associated natural gas (1985 onwards).40

Expansion in natural gas processing demand in 2000s41

The gap between natural gas demand and supply47

Natural gas as the domestic energy source50

Diversification from Saudi Aramco on the downstreaming natural gas demand side54

Economics of Oil Production59

The Price of Oil60

OPEC61

Excess Capacity62

Secrecy64

Economics and Saudi Oil Policy65

Politics of Saudi Oil Production66

Saudi Oil Policy 1988-199167

Saudi Oil ...