Oil and gas market in Saudi Arabia
Industry highlights
50%
Oil and gas contribution to country’s GDP
70%
of Saudi exports in 2022 generated from oil
#1
Exporter of oil accounting for 10% of global oil supply
#1
Largest oil company in the world, Aramco’s value estimated at $2.5 trillion CAD
$5 billion CAD
Total bilateral trade between Canada and Saudi Arabia in 2022
#2
largest oil producer after the U.S. with 9 million barrels per day
15%
World total oil reserves
#6
Saudi Arabia is one of the top emerging market ranking in the 2023 Kearney’s Investment Attractiveness Index
Saudi Arabia is the largest economy in the MENA region, 14th globally, with a GDP value of CAD 1.1 trillion. The country has a young population, 63% are under the age of 30 years old. The Saudi petrochemical industry is vital to its non-oil economy with chemical and plastic exports comprising a substantial 60% of total non-oil exports. Saudi Arabia represents 6% of the global petrochemicals market and diversification in the value chain is set to increase the value of production in the coming years.
Key opportunities for Canadian oil and gas companies in Saudi Arabia:
- Significant unexplored areas, including onshore unconventional and offshore in the Red Sea.
- Continued expansion of refining and petrochemicals capacity.
- New e-visa system enabling easy access to the country Saudi eVisa.
- Open to foreign investments. Government encourages international joint ventures (JVs).
Notable challenges for Canadian oil and companies in Saudi Arabia:
- Establishing a presence is time and money consuming.
- Business methods are complicated, and the bureaucracy is difficult to penetrate.
Saudi Arabia business landscape:
- According to the In-Kingdom Total Value Add Program (IKTVA), (under Vision 2030), Aramco encourages partnerships between international and local companies therefore it prefers to procure locally from foreign companies through joint ventures with Saudi-owned businesses
- Canadian suppliers wishing to become approved Aramco vendors have to register with Aramco Services Company (ASC) office in Houston.
- Learn more about becoming an Aramco supplier
- Review the sourcing list available at Aramco Americas
Latest sector developments
- Saudi Arabia is targeting an aggressive ramp-up in gas production for use in domestic industrial and power generation sectors, releasing crude oil for export.
- Aramco aims to increase investment in upstream oil and gas to meet global demand for oil and gas since energy alternatives are not ready yet.
- Saudi Ministry of Energy and Aramco have emphasized the State enterprise’s mandate to raise . oil production capacity to 13 million barrels per day by 2027, and increase gas production by 50% by the end of this decade.
Summary
Saudi Arabia is an attractive market for foreign investment offering considerable proven reserves, an established services sector and a stable operating environment. Canadian companies can be successful in this market by engaging with the right partners. Saudi Arabia is looking for innovative and different technologies which are not already available.
For more information on oil and gas in the Saudi market please contact maya.el-khoury@international.gc.ca
