GLOBAL OIL

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Saudia Arabia sits atop more petroleum than any nation on earth.

It has almost one-quarter of the world's proven reserves of oil. With a well-developed petroleum infrastructure and low production costs, Saudi Arabia will likely remain the largest producer and exporter of petroleum for the forseeable future.

Two-thirds of Saudi petroleum is light or extra light grades of oil with the rest medium or heavy. The country has over 80 oil and gas fields with more than 1,000 wells. Half of its reserves, however, are in just eight fields, especially Ghawar (world's largest) and Safaniya (largest offshore field).

Most Saudi oil is exported from the Persian Gulf through the huge Abqaiq processing facility. A pipeline also runs to the Red Sea. The country operates eight refineries.

While Saudi Arabia remains a major oil supplier to the United States and Europe. Asian nations such as Japan, China, India and South Korea now import about 60% of Saudi crude oil exports.

The state-owned oil firm Saudi Aramco has a monopoly on Saudi oil development.

Saudi Arabia has enjoyed a revenue windfall due to high oil prices in 2004 to 2006. The country is flush with foreign reserves. But diversification has proceeded slowly. Petroleum export revenues make up 70 to 80% of the total government budget, and over 40% of the entire countries Gross Domestic Product (GDP). The Saudi government is using the surplus for education, development, public welfare, and to pay down debt.

Saudi Arabia is faced with a growing terrorism threat, some of it directed against the oil infrastructure. Domestic security budgets continue to rise.