TABLE OF CONTENTS

INTRODUCTION

Table of Contents … 1

Course Learning Outcomes and Syllabus … 2

Brief on Islamic Economy Principles … 3

CHAPTER ONE: HISTORY OF OIL IN SAUDI ARABIA

1.1 The Importance of Oil and Gas Resources in the Middle East … 4

1.2 OPEC, USA, Rest of the World Oil Reserves, Production and Consumption … 7

1.3 History of Oil Discovery in Saudi Arabia … 8

1.4 Major Saudi Arabia Oil and Gas Fields … 11

1.5 Saudi Arabia Oil and Gas Fields List … 17

1.6 Saudi Arabia Geological Column … 20

1.7 Crude Oil Classification … 23

1.8 Carbon Emission … 25

1.9 Carbon Capture, Utilization And Storage (CCUS) … 26

1.10 Saudi Arabia-Kuwait Neutral (Divided) Zone … 26

1.11 Legal Boundaries of Waters and Airspace … 28

CHAPTER TWO: THE INTERNATIONAL OIL INDUSTRY

2.1 Oil and Gas Ownership Types … 29

2.2 National and International Oil Companies and OPEC … 29

2.3 OPEC, OPEC+, OAPEC and IEA … 29

2.4 Swing Produces, Inflation, Depletion, and Energy Sources … 31

2.5 Unconventional Oil and Gas Resources … 31

2.6 The Difference between Oil Shale, Shale Oil and Shale Gas? … 32

2.7 Definition of Oil and Gas Reserves … 34

2.8 Depletion and Depreciation … 35

CHAPTER THREE: OIL PRICES HISTORY AND PRICING CRITERION

3.1 Oil Pricing History … 36

3.2 Oil Pricing Criterion … 38

3.3 OPEC Reference Basket (ORB) Price … 39

3.4 Oil Paper and Wet Barrels … 39

3.5 Law of Supply and Demand … 39

3.6 Law of Oil Equilibrium (Bottom) Price … 40

CHAPTER FOUR: BASICS OF ENGINEERING ECONOMY

4.1 Engineering Economy … 42

4.2 Key Factors For Successful Project … 42

4.3 Investment and Economic Limit … 43

4.4 Capital Expenditure (CAPEX) and Operating Expenditure (OPEX) … 43

4.5 Salvage Value (S), Nominal and Effective Interest Rates … 44

4.6 Complex Interest Rate … 45

4.7 Petroleum Field Exploitation Cost Analysis … 46

4.8 Horizontal Time Line Diagram … 46

4.9 Formulas for Continuous and Lump Sum Flow of Fund … 47

4.10 Mutually Exclusives Selections and Decision Methods … 47

4.11 Decision Screening Yardsticks for Economical Projects … 47

4.11.1 Net Present Value (NPV) … 47

4.11.2 Minimum Rate of Return (ROR) … 49

4.11.3 Payout (Payback) Period (POT) … 52

4.11.4 Profit-to-Investment Ratio (Profitability Index, P/I) … 54

4.11.5 Incremental (Marginal) Analysis (IA) … 55

CHAPTER FIVE: FIELD EXAMPLES BASED ON OIL PRODUCTION DATA

5.1 Field Examples Based On Oil Production Data … 57

CHAPTER SIX: RISK, UNCERTAINTY, ETHICS, ENVIRONMENTAL IMPACTS, AND PEAK OIL THEORY

6.1 Oil and Gas Industry Sectors … 59

6.2 Potential Environmental Impacts of Oil and Gas Activities … 59

6.3 Risk and Uncertainty in the Oil and Natural Gas Industry … 60

6.4 Oil Price Elasticity … 61

6.5 Peak Oil Theory … 62

6.6 SPE Ethics and Professional Responsibility … 63