The Kingdom of Saudi Arabia WT/TPR/S/256 
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IV. TRADE POLICIES BY SECTOR 
(1) AGRICULTURE AND RELATED ACTIVITIES  
(i) Main features 
1. Agriculture, forestry and fishing have grown sl owly over recent year s and in 2010 contributed 
4.6% to Saudi Arabia's real GDP (Chapter I(1)).  Traditional crops still intensively cultivated are date 
palms and dates.  The sector faces development pr oblems related largely to Saudi Arabia's harsh 
desert climate, extremely poor in water resources (on average, less than 100 mm of rain falls per 
year).   
2. Cultivated land area decreased to 834,900 hectares in 2009 (Table IV.1).  The area cultivated 
with grain declined to 328,700 hectares in 2009 from 469,200 hectares in 2008, with grain production 
decreasing to 1.6 million tonnes in 2009.  The declin e was in response to gove rnment policy aimed at 
reducing water-intensive crops, particularly grai n and fodder.  Projects specialized in animal 
production for 2008-09 can be seen in Table IV.2. 
Table IV.1 
Cultivated land area and production, 2008-09 
 Area (hectares) Production ('000 tonnes) 
 2008 2009 % change 2008 2009 % change 
Wheat 326,161 195,884 - 39.9 1,986 1,153 - 42 
Millet 3,061 3,760  23 7 8 14.2 
Sorghum 103,572 92,757 - 10.4 252 244 -3.2 
Corn 28,966 29.498 1.8 163 161 - 1.2 
Barley 3,964 3,472 -12.4 24 20 -16.7 
Sesame 3,114 2,925 - 6.0 5 5 0.0 
Other grain 426 429 0.7 1 1 0.0 
Total grain 469,264 328,725 - 29.9 2,438 1,592 - 34.7 
Tomato 14,699 15,127 2.9 522 543 4.0 
Watermelon 17,618 16,783 - 4.7 364 338 -7.1 
Other vegetables 76,706 74,851 - 2.4 1,810 1,796 - 0.7 
Total vegetables 109,023 106,761 -2.0 2,696 2,677 - 0.7 
Dates 157,074 161,975 3.1 986 992 0.6 
Other fruits 75,439 77,172 2.3 630 627 - 0.4 
Total fruits 232,513 239,147 2.9 1,616 1,619 0.1 
Green fodder 160,808 160,356 - 0.28 2,984 2,974 - 0.3 
Grand total 971,608 834,989 - 14.0 9,734 8,862 - 9.0 
Source:  Information supplied by the Saudi authorities. 
3. Agriculture production in Saudi Arabia dr opped to 8.8 million tonnes in 2009, from 
9.7 million tonnes in 2008.  Production of red meat, poultry, and fish meat increased to 
761,000 tonnes in 2009 (Table IV.3);  and dairy- sector production has increased in recent years 
(1.7 million tonnes in 2009) to meet domestic dema nd, with a small quantity being exported to GCC 
states.  Saudi Arabia is self-sufficient and an ex porter of table eggs, with domestic production of 
191,000 tonnes in 2009. WT/TPR/S/256 Trade Policy Review 
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Table IV.2  
Projects specialized in animal production, 2008-09 
 Number of projects  Production (head) 
 2008 2009 %  2008 2009 % change 
Sheep raising and fattening 20 18 -10  774,899 650,426 -16 
Calf raising and fatteninga 31 31 0.0  139,974 150,416 7.4 
Dairy production (tonnes) 27 27 0.0  1,370,394 1,508,377 10.0 
a Including dairy-farm calves. 
Source:  Information supplied by the Saudi authorities. 
Table IV.3 
Output of animal products, 2008-09 
('000 tonnes ) 
 2008 2009 % change 
Red meat 170 171 0.6 
Poultry 459 494 7.6 
Fish 93 96 3.2 
Total output 722 761 5.4 
Dairy 1690 1718 1.65 
Table eggs 170 191 12.3 
Source : Information supplied by the Saudi authorities. 
4. Saudi Arabia exports some fru its and vegetables to the GCC region, including watermelon, 
grapes, citrus fruits, onions, squash and tomatoes .  The Research Centre at Jizan is improving and 
developing tropical fruits, including pineapples, paw-paws, bananas, mangoes, and guavas.  The 
annual production of dates, estimated at around 1 million tonnes and comprising 450 different types is 
consumed locally although some is used as intern ational humanitarian aid.  A total of 1.6 million 
tonnes of fruits and 2.7 million tonnes of vegeta bles were produced in 2009 .  Main agricultural 
products produced in Saudi Arabia are noted in Table IV.4. 
Table IV.4 
Value of some main agricultural products, 2006-09 
(SAR million) 
Product 2006 2007 2008 2009 
Wheat 2,727 2,230 1,985 1,152 
Dates 5,609 7,835 5,981 6,017 
Livestock 3,705 4,275 4,360 4,385 
Poultry 4,425 5,100 5,202 5,761 
Dairy 4,423 4,921 5,791 5,886 
Source:  Information supplied by the Saudi authorities. 
(ii) Agricultural policy 
5. From a traditional nomadic and animal hus bandry background, in the 1970s and 80s 
Saudi Arabia's Government moved to transform and diversify the agriculture sector.  This included 
support for and assistance in the development of wh eat, barley, sorghum, and other grains, as well as 
assistance to expand the production and husbandry of  livestock.  Since 2000, the Government has 
sought to reduce this assistance to better manage scarce natural resources.  The Ministry of 
Agriculture is responsible for the development and encouragement of the sector.  It formulates and 
implements agricultural policies and is responsib le for SPS matters (Chapter III(1)(vi)(b)).  Other The Kingdom of Saudi Arabia WT/TPR/S/256 
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government agencies involved include two fully  state-owned enterprises:  the Agricultural 
Development Fund (ADF)1, which disburses subsidies, and grants  interest-free loans;  and the Grain 
Silos and Flour Mills Organization (GSFMO), whic h purchases and stores wheat, constructs flour 
mills, and produces animal feed.  The Government also  offers indirect support to farmers, such as 
extension, training, pest and disease control services, and agricultural research.  
6. The private sector has played a major role in Saudi  Arabia's agricultural development.  This is 
mostly due to government programmes that offere d long-term, interest-free loans, technical and 
support services, low-cost water, fuel and electric ity, and reduced duties on imports of raw materials 
and machinery.  
7. In order to increase food security, Saudi Arabia has encouraged companies to invest in farm 
projects abroad.  The King Abdullah Agricultural Initiative, announced in January 2009, aims to 
improve long-term food security by enabling private Saudi businesses to invest in agricultural projects 
in other country.  Products targeted by the initia tive include wheat, barley, corn, sorghum, soybeans, 
rice, sugar, oil seeds, green fodder, livestock, and fish.2  According to the authorities, any country 
with available resources and with attractive investment regulations is a target country.  The initiative 
makes available SAR 3 billion (about US$800 milli on) through a holding company belonging to the 
Government (SALICO).   
8. During its WTO accession negotiations, Saudi Arab ia made certain commitments on domestic 
support and export subsidies.3  Since its accession to the WTO, it has provided some notifications on 
domestic support and export subsidies (Table II.1).   
9. Following a 2007 government decision4, Saudi Arabia's agriculture sector is being 
restructured to focus on value-added crops such as fruits and vegetables, and to implement new water-
saving and irrigation technologies.  In the 2010 Budge t, the Government allocated US$12.3 billion for 
water, agriculture, and related infrastructure ( 30% increase in comparison to 2009).  A further 
US$12.9 billion has been disbursed by government  credit institutions for developing agriculture, 
industry, and infrastructure.  The ADF is also being restructured. 
10. Substantial population growth has exacerbated Saudi Arabia's food production shortfall, and 
as a result most agricultural products are imported.  Saudi Arabia's food imports are expected to top 
US$17 billion in 2011.5  The Ministry of Agriculture estimat es that Saudi Arabia annually requires 
about 3 million tonnes of wheat, 1.1 million tonnes of rice, and 5.8 million tonnes of barley.  
In general, livestock requires 14 million tonnes of animal feed each year. 
11. New farms, halal abattoirs, and cold storag e facilities are under construction to meet rising 
domestic and regional demand.  Sa udi Arabia is planning additional investments for developing 
fisheries, flour mills, and associated agri-food industr ies, as well as infrastructure development, such 
as the Prince Abdulaziz Bin Mousaed Economic City in the city of Hail.6 
                                                      
1 The ADF replaced the Saudi Arabian Agricultural Bank. 
2 Viewed at:  http://www.isdb.org/irj/go/km/docs/documents/IDBDevelopments/Internet/English/IDB/ 
CM/Publications/IDB_AnnualSymposium/20thSymposium/8-AbdullaAlobaid.pdf [April 2011]. 
3 WTO document WT/ACC/SAU/61and WT/ACC/SAU/61/Add.1, 1 November 2005. 
4 Council of Ministers Resolution No. 335 of 9.11.1428H (19 November 2007). 
5 Viewed at:  http://www.bordbia.ie/industryserv ices/alerts/pages/SaudiArabia FoodImportsvalueda 
over$174b/aspx?src=home [April 2011].  
6 Viewed at:  http://www.saudi-agriculture.com [April 2011]. WT/TPR/S/256 Trade Policy Review 
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12. In 2007 and 2008, Saudi Arabia provided support for production of wheat, livestock, poultry, 
and dates.  Input (feed) subsidies were provided for imports of barley7;  and the ADF provided 
interest-free loans to producers.  Market price suppor t was provided in respect of wheat (there was no 
eligible barley or dairy production).8   
13. Since its accession to the WTO, Saudi Arabia's  domestic wheat production has continued to 
decline, falling from 2.6 million tonnes in 2005 to 1.2 million tonnes in 2009.  Market price support 
was paid to producers during 2007 (SAR 815 million, i.e. 2.4 million tonnes) and 2008;  (SAR 593 million, i.e. 1.7 million  tonnes).  In view of the high water consumption of wheat, Saudi Arabia is phasing down its domestic producti on.  The shortfall will be met by increased 
imports, with the expectation that Saudi Arabia  will import all its wheat by 2016.  In 2011, 
Saudi Arabia is expected to produce around 1 million tonnes of wheat.   
14. Barley production has also continued to decline, from 47,000 tonnes in 2005 to some 
20,000 tonnes in 2009.  No subsidies were paid for production of barley in 2007 and 2008.  Purchase 
of domestically produced barley by the GSFMO for sale as feed to livestock producers stopped in 
2003.
9  In 2007 and 2008, the Government continue d to subsidize imported barley for use as a 
livestock feed:  6.4 million tonnes in 2007 (total support of SAR 499 million), and 8.6 million tonnes 
in 2008 (SAR 1,800 million).   
15. Imports of certain foodstuffs are subject  to certification or SPS requirements 
(Chapter III(1)(vi)(b) and Table AIII.4).   
16. In 2009, the Agricultural Development Fund (ADF) replaced the Saudi Arabian Agricultural 
Bank (SAAB).10  The ADF had initial capital of SAR 20 billion available for disbursement.  In 2008, 
the ADF gave 2,701 loans with total value of SAR 791.8 million, and in 2009 total loans increased by 
8.1% to 856.1 million.  Annual loan repa yments increased by 21.8% from 2008 to 2009, to 
SAR 645.3 million in 2008.  At the end of 2009, to tal outstanding loans amounted to SAR 5.3 billion, 
up 1.3% from the preceding year.  Total loans disb ursed by the ADF since its establishment in 1963 
reached SAR 41.6 billion in 2009. 
17. The Grain Silos and Flour Mills Organization (GSFMO), established in 1972, operates as a 
grain storage, flour, and animal feed production conglomerate.  Its purchasing activities are designed 
to stabilize the market for grains, and minimize th e impact of price fluctuations on consumers 
(farmers and domestic consumers).  In Saudi Arab ia's notifications for 2007 and 2008, GSFMO 
engaged in public stockholding for food security  purposes by managing and controlling the storage 
and distribution of grains to the value of SAR 35.76 million in 2007, and SAR 24.29 million in 2008.  
GSFMO pays a regulated price to wheat producers.11 
                                                      
7 There was no eligible domestic production of barley during 2007 and 2008.  See WTO document 
G/AG/N/SAU/2.   
8 WTO documents G/AG/N/SAU/2 and G/AG/N/SAU/3. 
9 Royal Decree No. 4/B/49434 of 8.12.1423H (10 February 2003). 
10 SAAB was founded pursuant to Royal Decree No. 58 of 3.12.1382H (28 April 1963), in order to be 
the government financial institution to assist in the development of agriculture and improve agricultural 
productivity.  See, for example, Table DS/9 of WTO document G/AG/N/SAU/4, 19 April 2011, describing 
SAAB's disbursements in 2007 and 2008. 
11 See also WTO documents G/AG/N/SAU/2, G/AG/N/SAU/3, G/AG/N/SAU/4. The Kingdom of Saudi Arabia WT/TPR/S/256 
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18. The Ministry of Agriculture is responsible fo r the operation of the GSFMO and the Minister 
of Agriculture is the Chairman of the Board of Directors.12  GSFMO has 11 facilities in Saudi Arabia:  
5 integrated silo, flour mill, and feed factory fac ilities, 4 integrated silo and flour mill facilities, and 
2 silo facilities.  It operates on a commercial basi s in competition with the private sector.  The 
GSFMO's facilities have been earmarked for privati zation in accordance with the Saudi privatization 
strategy (Chapter III(3)(iii)).   
19. Wheat flour produced by the GSFMO is sold under price controls with the aim of providing 
all people, including those with low incomes, with  a stable, lowest possibl e cost food source.  
Although the GSFMO owns all mills and silos in Sa udi Arabia, there is no legal measure preventing 
the construction and operation of additional facilities by the private sector.  Private-sector importers of 
grains may request the GSFMO to mill the grains at an agreed commercially viable rate.  In practice 
however, most flour imported by the private sector is already in processed form.  
20. The GSFMO had previously benefited from a monopoly over the importation of wheat, wheat 
flour, and barley.  Its exclusive right to import wheat products was terminated in 198713, and its 
exclusive right to import barley finished in 1999.14  Approximately 17 private firms now import 
barley.  Since 1999, the GSFMO's international trad ing activities had been limited to importing corn 
and soybeans, to be used as feed additives and by poultry and dairy farmers as animal feed.   
21. The GSFMO does not receive financial support from the Government to import grains.  
It competes with the private sector under interna tional market conditions.  Its import decisions are 
based on conditions of market supply and demand.   The GSFMO procures wheat from Saudi farmers 
at regulated prices, but does not export wheat or  any other product.  It receives support from the 
Government for domestic wheat purchases.15   
22. Saudi Arabia's average MFN applied tariff on ag ricultural products is 6. 1% (WTO definition), 
and 3.5% on the basis of ISIC Revision 2 (Major Division 1) (Tables III.2 and AIV.1).  The importation of certain agricultural products (s uch as alcohol and pork and swine products) is 
prohibited.  Saudi Arabia did not make any binding commitments in respect of those items.  The tariff 
rate for tobacco and t obacco products is 100% ( ad valorem  part of the mixed duty).  Saudi Arabia has 
also undertaken seasonal tariff bindings for certain products, although seasonal tariffs have never been 
applied (Chapter III(1)(iii)(a),(b) and Table III.2). 
(iii) Fisheries 
23. Saudi Arabia has a fishing fleet of 10,500 vessels.   In 2009, landings were estimated at about  
95,500 tonnes from fisheries situated on both its we stern and eastern coastlines.  Saudi Arabia also 
has a small, but expanding aquaculture industry.   Fishing catch from Saudi Arabia's 3,400 km 
coastline is diverse, comprising groupers, empe rors, scads and jacks, shrimp, and kingfish.  
Traditional or artisanal and industrial fisheries operate on both coasts. 
24. On the eastern coast, the industrial sector is focused on shrimp production, with vessels 
trawling for demersal fish stocks and shrimp.  In  Dammam, the industrial fleet exclusively targets 
shrimp, although its fish by-catch is also landed and marketed. 
                                                      
12 The Board of Directors has six members.  The Government appoints five members, of whom three 
are government officials and two are from the private sect or, in addition to the Director General of GSFMO.   
13 Royal Decree No. 115/8 of 27.1.1407H (2 October 1986). 
14 Royal Decree No. 184 of 24.9.1419H (14 December 1998). 
15 See WTO document WT/ACC/SPEC/SAU/1/Rev.9, 28 April 2004. WT/TPR/S/256 Trade Policy Review 
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25. On both coasts the majority of production com es from the artisanal sector.  The artisanal 
fishing fleet of Saudi Arabia includes 10,234 boats  of which 8,336 operate on the eastern coast and 
1,898 in the western coast waters.  The industrial fleet consists of 160 boats on the western coast and 
29 boats on the eastern coast.  The majority of fishermen are Saudi nationals, while most fishery 
workers are non -Saudi nationals.  
26. The industrial and artisanal sectors are subject to restrictions on the number of vessels, net 
mesh size regulations, fish size limits, and closed  areas and seasons.  There are closed zones on both 
coasts for shrimp and fish.  There are no controls on outputs, and no fishery is managed under a quota 
system.  Legislation and controls on fishing and rela ted regulations are enforced and regulated by the 
Ministry of Agriculture (Fisheries Affairs Directorat e) as well as the Coast Guard.  Fish production in 
Saudi Arabia in 2007-08 is described in Table IV.5 
Table IV.5 
Fish production, 2007-08 
(tonnes) 
 2007 2008 % change 
Fish catch from the western coast 26,710 25,027 - 6.3 
Fish catch from the eastern coast 40,052 43,489 8.5 
Production from fish farms 18,465 22,300 20.7 
Total 85,000 91,000 7.0 
Number of fishermen 28,075 28,110 0.1 
Number of fishing boats 10,423 10,500 0.7 
Source: Ministry of Agriculture.   Marine Catch Fi sh Department.  
27. The Government of Saudi Arabia has unde rtaken a number of coastal environment 
rehabilitation projects, including the replanting of mangroves on both coasts and the release of sea 
bream and grouper fry to restock.  Saudi Arabia is  running rehabilitation projects for the coastal and 
marine environment on the east coast, which was a ffected by the Gulf War, in order to increase 
production.  The General Environmental Law and its implementation procedure require 
environmental impact assessment studies for all coastal and marine projects, and periodical 
monitoring as well as rehabilitation of the polluted area. 
28. Fisheries must strictly observe the General Environmental Law, and an environmental impact 
assessment is required prior to the issue of a licence.  The Government does not provide any kind of subsidies, privileges or grants to the fishing sector;  assistance is only in the form of interest-free loans 
for the development of traditional fishing, includi ng loans for engine purchase, and upgrading fishing 
equipment.  
29. Saudi Arabia has a developing fish-farming industr y, as part of the Government's efforts to 
promote food self-sufficiency and sustainability.
16  In 1982, the Ministry of Agriculture, with the 
cooperation of the FAO, established the Fish Farm ing Centre (FFC) on the eastern coast, as a marine 
aquaculture research institution.  The FFC undert akes research and development programmes to 
identify suitable fish and shrimp sp ecies for culture in Saudi Arabia.  The FFC has also worked with 
local feed manufacturers to develop standard fish feeds.   
30. Saudi Arabia's MFN applied tariff on fishery pr oducts average 1.2% with rates ranging from 
zero to 5% (Table AIV.1). 
                                                      
16 Viewed at:  http://www.fao.org/docrep/field/003/AC296E/AC296E00.htm [April 2011]. The Kingdom of Saudi Arabia WT/TPR/S/256 
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(2) MINING AND ENERGY  
(i) Overview 
31. The mining and energy sector has underpinned Saudi Arabia's economic development, 
growth, and prosperity.17  Although the sector has been centred overwhelmingly on the extraction and 
export of hydrocarbons, Saudi Arabia has accelerat ed the development and expansion of mining, 
particularly in the "Arabian Shield" region.  Sa udi Arabia now has a substantial downstream industry 
consuming and processing raw mineral inputs and producing refined ores and other products, which 
includes phosphate-based fertilizers and smelted aluminium.   
32. Article 14 of the Basic Law on Governance pr ovides that all mineral resources are 100% 
owned by the State.  The extraction of mineral re sources is a fundamental part of Saudi Arabia's 
economic base.  Mining falls under the responsibi lity of the Ministry of Petroleum and Mineral 
Resources, which oversees and administers the allocation of mining and extraction licences.  Saudi 
Arabia undertook GATS commitments on services incidental to mining.18 
(ii) Mining and quarrying 
33. The mining and quarrying sector (excluding crude  oil and natural gas) contributed 0.4% to 
Saudi Arabia's real GDP in 2010 (Chapter I(1)).  Wi th extensive mineral resources, access to low cost 
energy resources, expanded development, and a c onstruction boom, Saudi Arabia has seen strong 
growth in mining (as well as downstream processing  and manufacture of metals).  Saudi Arabia's 
mineral resources include bauxite, iron ore, phosphat es, zinc, copper, and gold ores.  Production of 
zinc has increased significantly in recent years (Table IV.6). 
Table IV.6 
Production of selected minerals, 2005-10 
 2005 2006 2007 2008 2009 2010 
Gold (kg) 7,459.4 5,181.8 4,440.3 4,527.0 4,857.5 4,471.1 
Silver (kg) 13,501.2 9,103.5 9,028.0 8,232.0 7,527.0 7,670.0 
Copper (tonnes) 668.0 730.0 737.0 1,465.0 1,719.0 1,603.0 
Zinc (tonnes) .. 983.0 716.0 3,663.0 5,507.0 4,218.0 
.. Not available. 
Source : Deputy Ministry fo r Mineral Resources. 
34. The non-hydrocarbon mineral extraction sector is administered by the Saudi Arabian Mining 
Company (Ma'aden).19  The Government of Saudi Arabia thr ough the Public Investment Fund retains 
50% of ownership, while institutional and individu al investors own the remaining 50%, acquired with 
capital of SAR 9.25 million.  It has no monopoly over mineral rights, which are allocated by the 
Ministry of Petroleum and Mineral Resources.  The company extracts minerals and exports refined gold, copper, and zinc.  It does not have an export monopoly;  exporters in the private sector are also 
permitted to export these products. 
35. Ma'aden is subject to privatization under th e Saudi privatization strategy approved by the 
Council of Ministers in 2004 (Chapter III(3)(iii)).  The precious and base metals industry was 
                                                      
17 Viewed at:  http://www.mopm.gov.sa/mopm/detail.do?content=history_oil_and_gas [April 2011]. 
18 WTO document WT/ACC/SAU/61/Add.2, p. 13. 
19 Ma'aden was established by Royal Decree No. M/ 17 dated 14/11/1417H (23 March1997);  its initial 
public offering (IPO) was in July 2008.   WT/TPR/S/256 Trade Policy Review 
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privatized in 2006, and the phosphate, bauxite and industrial minerals industries were privatized 
during 2008-10.  Ma'aden is registered as a comme rcial enterprise with full management powers given 
to the Board of Directors.20 
36. Ma'aden's by-laws require it to operate in acco rdance with commercial considerations.  The 
Mining Investment Law, issued in 2004, opened th e mining sector to private investors;  it does not 
discriminate between local and foreign applicants fo r licences.  The Law defines investors as natural 
or juristic persons whether Saudi or non-Saudi.  Ar ticle 5 states that any "natural person or corporate 
person (whether foreign or local) shall have the ri ght to undertake reconnaissance, exploration, or 
collection of materials only after obtaining the relevant license authorizing such operation."  
Article 11 requires applicants to ha ve "adequate technical and financ ial ability that enable them to 
fulfil the obligations effectively according to c onditions and roles stated in the implementation 
regulations".  Article 12 enshrines the first-come-first-served principle, stating that "in the event of parity, priority shall be based on the date of the application".  Mining licences granted during 2005-10 
is shown in Table IV.7. 
37. Mined phosphates are used, in conjunction w ith natural gas, to produce diammonium 
phosphate (DAP) and monammonium phosphate (MAP) fertilizer (see below).  Many other ores and 
minerals are used in the production of finished commodities by other enterprises in Saudi Arabia.  
Limestone and clay are used in the production of cement clinker.  Major downstream joint ventures 
include use of phosphates in DAP production with SABI C (see section (3)(i) below), as well as plans 
to progress from mining of bauxite towards a fully integrated aluminium production plant and smelter 
in Ras Al-Kair.  Ma'aden is seeking to commercia lize deposits of industrial minerals including 
refractory clay, magnesite, low-grade bauxite, silliman ite minerals, graphite, bentonite and attapulgite, 
diatomite, silica, garnets, wollastonite, and brine type minerals.
21  Its industrial minerals operations 
currently consist of: the Az Zabirah kaolin and i ndustrial grade bauxite deposit and processing plants;  
the Al Gazalah magnesite deposit and the Al Madinah magnesite processing plant (in 
commissioning), with a target capacity of 80 kt pa DBM and CCM (dead burn magnesia and caustic 
calcined magnesia). 
Table IV.7 
Number of licences, 2005-10 
 2005 2006 2007 2008 2009 2010 
Reconnaissance licences 78 65 55 84 75 43 
Exploration licences 32 32 47 61 119 121 
Mining and raw materials quarry licences 34 41 52 57 66 69 
Building materials quarry licences 1,024 1,093 1,111 1,148 1,232 1,313 
Total 1,198 1,269 1,314 1,408 1,564 1,618 
Source :  Deputy Ministry for Mineral Resources. 
38. There are no incentives or subsidies prov ided specifically to the mining sector. 
39. MFN applied tariffs on mining and quarrying (maj or division 2 of ISIC, Revision 2) average 
5%, with rates ranging from zero to 15% (Table AIV.1). 
                                                      
20 The Board of Directors consists of nine members, to be appointed by the ordinary general assembly 
for three years, one of whom  shall be president of the company.  Four members repr esent the Government as far 
as the Government owns 50% of the company.  The Board is responsible for the policy-making and operations 
of the company. 
21 Viewed at:  http://www.maaden.com. sa/eng/exploration.htm [April 2011]. The Kingdom of Saudi Arabia WT/TPR/S/256 
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(iii) Petroleum 
40. Although Saudi Arabia imports no crude oil, the MFN tariff binding is 8%. 
41. Saudi Arabia's economy is underpinned by the e xploitation of vast petroleum reserves, first 
commercialized in 1933.  Since that time, the industry has expanded considerably, including the 
upstream and downstream sectors.  Since the 19 90s, the Government has been implementing a 
development strategy aimed at diversifying its economy away from oil.  Nonetheless, oil and gas 
revenues continue to contribute around 90% of government receipts and 86% of export earnings 
(Chapter I(1)). 
42. Under its "Negative List" Saudi Arabia restrict s foreign investment in the exploration and 
extraction of hydrocarbons.  Foreign investment is not permitted in oil exploration, drilling, and 
production, except in services related to the mining sector (Table II.2). 
43. In recent years, foreign investors have made significant investments in the upstream 
development of non-associated gas, as well as in refining and downstream oil and gas industries.   
44. Saudi Arabia is a world leader in terms of  petroleum reserves, production, exports, and 
refining capacity.  It has one quarter of global reserves, and is responsible for 13% of global 
production and more than 20% of petroleum sales.  Saudi Arabia has a refining capacity of more than 
3.5 million barrels per day (mmbd).  Its oil is prod uced in five grades:  Arabian heavy, Arabian 
medium, Arabian light, Arabian extr a light, and Arabian super light.22  The largest oil field in the 
world, Ghawar, situated in the east of Saudi Arabia, produces 5 mmbd.   
45. In 2009, OPEC estimated that Saudi Arabia he ld 264.59 billion barrels of crude oil in proven 
reserves (approximately 25% of proven OPEC member reserves).23  This does not include probable 
and possible reserves, or reserves currently not rec overable with available technologies (estimated at 
approximately 100 billion additional barrels).   
46. Crude oil production during 2006-10 is shown in  Table IV.8.  In April 2011, Saudi Arabia's 
daily crude oil production was estimated to be 8.8 MMBD.24  Saudi Arabia's dom estic consumption of 
oil and refined products has continued to increase,  and in April 2011 was estimated at 1.9 mmbd. 
Table IV.8  
Daily crude oil production, 2006-10 
(1,000 barrels per day)  
 2006  2007  2008  2009 2010 % change 
2009-2010 
Daily production 9,207.9  8,816.0  9,198.0  8,184.0 8,165.6 -0.2 
Source : OPEC (2011) Annual Statistical Bulleti n, 2010/2011.  Viewed at:  http://www. opec.org/opec_web/st aticfiles_pect  
 media/downloads/publications/ASB2010_2011.pdf. 
47. Saudi Arabia's production of refined products  decreased to 697.5 million barrels in 2009 
(721.4 million barrels in 2008).  Total domestic cons umption of petroleum (refined products and 
crude oil) and natural gas is shown in Table IV.9 .  The increase in domestic consumption during 2009 
                                                      
22 Viewed at:  http://www.mopm.gov.sa/mopm/de tail.do?content=sp_polic y [March 2011].   
23 Viewed at:  http://www.opec.org/opec_web/en/data_graphs/330.htm [March 2011].   
24 Viewed at:  http://www.jodidata.org. WT/TPR/S/256 Trade Policy Review 
Page 62 
  
tracked a 6.4% rise in public consumption and a 16.0%25 fall in oil industry (processing and 
downstream) consumption. 
Table IV.9 
Domestic consumption of refined products, crude oil, and natural gas, 2005-09 
(Million barrels)  
Product 2005 2006 2007 2008 2009 
Public consumption      
Liquefied petroleum gas 12.19 11.86 12.46 13.01 13.21 
Premium gasoline 108.79 115.30 126.71 136.70 145.12 
Jet fuel and Kerosene 20.50 20.40 21.09 22.63 22.24 
Diesel  164.51 178.97 191.85 208.12 214.80 
Fuel oil 86.28 93.20 105.93 105.93 76.09 
Crude oil 58.79 60.79 69.06 80.46 159.63 
Asphalt 15.76 17.89 18.78 22.77 21.68 
Lubricating oil 1.99 1.60 1.58 1.85 1.83 
Natural gas 336.33 345.88 349.05 381.35 380.79 
Sub-total 805.14 845.89 891.82 972.81 1,035.38 
Oil industry consumption      
Liquefied petroleum gas 1.04 1.27 2.45 2.57 2.64 
Fuel oil 9.36 8.30 8.00 8.05 7.18 
Diesel 4.11 4.97 2.45 3.35 6.01 
Fuel gas 19.07 19.44 18.29 25.11 12.10 
Crude oil 0.23 0.20 0.33 0.30 0.34 
Natural gas 80.56 77.02 90.92 96.32 85.46 
Others 4.42 -0.78 4.43 2.21 2.14 
Sub-total 118.79 110.42 126.87 137.89 115.86 
Grand total 923.93 956.32 1,018.68 1,110.70 1,151.25 
Source:  Ministry of Petroleum and Mineral Resources. 
48. With a production rate of 9.5 mmbd, Saudi Arabia's reserves could last for approximately 
80 years, based on proven reserves.  Since 2005, Saudi Arabia has invested to increase production 
capacity to 12.5 mmbd.  This investment reflects an expectation that global demand for oil will 
continue for many years.  The increase in capacity al so allows Saudi Arabia to maintain an adequate 
additional production capacity of around 1.5 mmbd .  Additional spare production capacity helps 
efforts to stabilize the oil market by pumping more oil during supply shortages or unexpected high demand.  Saudi Arabia is concurrently taking step s to stabilize domestic consumption of oil, which 
will effectively free up additional oil for export.   
49. As a result of Saudi Arabia's geographic pos ition and lack of pipeline connection to its 
markets, crude oil and its products are exported via tankers from the ports of Ras Tanura and Ju'aymah on the eastern coast, and Yanbu' on the wester n coast (section (4)(iv) below).  In 2009, Asia 
purchased 69.5% of Saudi Arabia's cr ude oil exports (Table IV.10).   
(a) Crude oil production 
50. The (upstream) oil extraction industry in Saudi Arabia is operated exclusively by the Saudi 
Arabian Oil Company (Saudi Aramco).  Saudi Aramco is a wholly state-owned company established by Royal Decree in 1988.  The company conducts its activities on a commercial basis subject to 
government regulations, including those related to the exploitation of national natural resources.  The 
                                                      
25 SAMA (2010), p. 154.   The Kingdom of Saudi Arabia WT/TPR/S/256 
 Page 63 
 
 
objective and purpose of Saudi Aramco is the exploitation of crude oil and natural gas, including their 
derivative products.   
Table IV.10 
Exports of crude oil and refined productsa (by region), 2007-09 
(Million barrels)  
 2007 2008 2009 % share in 2009 
Exports to Crude oil Refined 
products Crude oil Refined 
products Crude oil Refined 
products Crude oil Refined 
products 
North America 571.78 11.04 590.66 5.82 386.12 4.67 16.88 1.27 
South America 22.34 9.36 23.03 8.97 23.01 7.48 1.01 2.03 
Western Europe 306.04 36.28 310.97 38.90 228.45 31.32 9.99 8.51 
Middle East 113.06 61.04 110.23 56.66 104.25 71.77 4.56 19.50 
Africa 71.76 45.31 74.70 49.42 60.33 40.03 2.64 10.88 
Asia and Far East 1,453.23 249.66 1,560.86 224.27 1,482.61 211.71 69.5 57.52 
Oceania  2.95 2.97  1.97 2.23 2.89 1.08 0.13 0.29 
Total  2,541.16 415.66 2,672.42 386.27 2,287.66 368.06 100.00 100.00 
a Including liquefied petroleum and natural gas. 
Source:  Ministry of Petroleum and Mineral Resources. 
51. The Chairman of the Board of Directors of Aramco is the Minister of Petroleum and Mineral 
Resources.  Three of the remaining 11 directors are government officials, 4 are members of the 
company's management, and 4 are from the private sector, including 3 non-Saudi nationals.  Although 
owned by the Government, Saudi Aramco is run by independent management and the Board of 
Directors.  The Government does not play any role in setting company policy or in making operational decisions.
26   
52. Saudi Aramco conducts its business ba sed on commercial considerations.27  In its purchases, 
the company follows market-based procuremen t policies consistent with customary business 
practices.  Under its official procurement policies, its major contracting objectives are:  completion of 
work on schedule, conformance with demanding techni cal standards, and lowest overall cost to Saudi 
Aramco.  Saudi Aramco also seeks to encourage the development of local contractors in its area of 
operation.  Its procurement procedures afford full opportunity for all qualified suppliers of goods and 
services of WTO Member countries to participate in competitive bidding.28  The company selects the 
most technically and financially qualified contract or whose bid represents the least overall cost to 
Saudi Aramco. 
53. Saudi Aramco is the sole concessionaire produc ing crude oil in Saudi Arabia, with the 
exception of one enterprise in the Saudi Arabia-Kuwait Divided Zone.29  Saudi Aramco produces over 
95% (by both value and volume), of the crude oil exported from Saudi Arabia, and is the only supplier 
of crude oil for domestic refineries.  It enjoys certa in exclusive rights and privileges in the gas sector, 
pursuant to Council of Ministers Resolution No. 163 of 20.6.1424H (18 August 2003).   
54. Saudi Aramco sells crude oil to domestic refine ries, joint-venture refineries abroad, and other 
foreign refineries. 
                                                      
26 WT/ACC/SAU/61, p. 21. 
27 WTO document WT/ACC/SAU/61, paragraph 44. 
28 WTO document WT/ACC/SAU/61, paragraph 44(vi).   
29 Operated also by Chevron Texaco. WT/TPR/S/256 Trade Policy Review 
Page 64 
  
(b) Downstream petroleum sector:  refining 
55. Crude oil that is not directly exported requi res refining into different hydrocarbons and 
fractions before it can be consumed or marketed.  Saudi Arabia has made substantial investment in 
additional refining capacity over the last ten years, tr acking a lack of global capacity in refining, and 
an increase in domestic consumption of petroleu m products.  Domestic consumption of refined 
petroleum products has increased substantially in recen t years (Table IV.9).  Saudi Arabia's petroleum 
refining industry is open to foreign joint-venture investments. 
56. Saudi Arabia's refineries produce substantia l quantities of petrol, diesel, LPG, propane, and 
butane (Table IV.11).  In addition to the domestic co nsumer market for petrol, diesel, and heating oil, 
refined petroleum products are used by domestic industrial consumers as a feedstock.  Refined 
petroleum products are also exported;  Saudi Arabia  has become one of the world's largest exporters 
of LPG.30 
Table IV.11  
Output of refined products, 2005-09 
(Million barrels)  
      % change 
Product 2005 2006 2007 2008 2009 2008 2009 
Liquefied petroleum gas 12.74 14.73 11.52 11.30 12.69 -1.9 12.3 
Premium gasoline 114.30 102.57 128.38 124.01 129.62 -3.4 4.5 
Naphtha 84.57 83.85 60.26 76.60 65.36 27.1 -14.7 
Jet fuel and kerosene 80.91 77.33 67.28 69.68 63.50 3.6 -8.9 
Diesel 236.37 241.79 238.50 247.44 227.69 3.7 -8.0 
Fuel oil 177.97 181.00 174.39 174.38 181.61 0.0 4.1 
Asphalt 13.78 14.16 15.04 17.96 17.04 19.4 -5.2 
Total  720.64 715.43 695.37 721.37 697.51 3.7 -3.3 
Source:  Ministry of Petroleum and Mineral Resources. 
57. Saudi Aramco operates three domestic joint-vent ure refineries:  with ExxonMobil in Yanbu' 
(SAMREF);  with Shell in Jubail (SASAREF);  a nd with Sumitomo Chemical at Petro Rabigh (an 
integrated oil refinery and petrochemical plant, fed by crude oil, ethane, and butane).  Total refining 
capacity in Saudi Arabia is roughly 2.1 mbbd.31 
58. Saudi Aramco supplies purchasers throughout Saudi  Arabia.  Its plants and aircraft-fuelling 
units supply thousands of bulk customers with produ cts ranging from gasoline and jet fuel to fuel oil 
and liquefied petroleum gas.  Aramco also maintain s tank farms that enable terminal exports of crude, 
natural gas liquids, and refined products  from the eastern and western coasts.  
59. In June 2010, Total and Saudi Aramco agreed a joint-venture in respect of a 400,000 b/d 
Jubail refinery, which is scheduled to become ope rational in 2013.  Saudi Aramco is planning a 
further project in Yanbu, (400,000 b/d).  A thir d project, Jazan Refinery, will have a capacity of 
400,000 b/d and is envisaged to be completed by end 2016. 
60. Saudi Aramco has partnered with foreign comp anies to develop three new export-oriented 
refineries at a cost of US$18 billion, and is pl anning a series of expansions and upgrades to its 
                                                      
30 LPG is derived from refining crude oil and from processing "wet" gas into commercial quality "dry" 
gas.  
31 Viewed at:  http://www.saudiaramco.com/irj/portal/anonymous?favlnk=%2FsaudiAramcoPublic% 
2Fdocs%2Four+Business%2FRefining+%26+Distribution&ln=en [April 2011]. The Kingdom of Saudi Arabia WT/TPR/S/256 
 Page 65 
 
 
existing refineries.32  Further private refining projects are also under consideration.  Together, these 
projects will offer substantial investment opportunities in  related services, with large-scale capacity to 
process local heavy and sour crude.  These facilities will be designed to reduce their environmental 
impact in comparison to older facilities. 
61. Saudi Arabia's exports of refined petroleu m products supply around 3,000 tankers per year, 
from facilities at Ras Tanura and Ju'aymah on th e eastern coast, and Yanbu', Jiddah, and Rabigh on 
the western coast. 
62. Domestic sales of heavy naphtha to industrial consumers in Saudi Arabia are at the prevailing 
international price.  Export prices for heavy naphtha  are based on the international market price.  
63. Refined gasoline is sold at the regulated pri ce of 45-60 halalas per litre (Table IV.12).  Diesel 
is subject to a regulated maximum price of 25 halalas per litre. 
Table IV.12 
Regulated prices of refined petroleum and gas products, 2011 
(SAR 1 = 100 halalas) 
No. Item Current regulated price  HS classification  
1. Fuel Oil  4.9-6 halalas/litre 
 27101140 
2. Gasoline 45-60 halalas/litre 
 27101121 
3. Diesel 25 halalas/litre 
 27101130-3 
4. Kerosene 43.5 halalas/litre 27101129 
5. Liquefied Petroleum Gas (LPG) (Cooking 
Gas) 72 halalas/litre 271110 
6. Natural Gas Liquids 
- Propane 
- Butane - Natural Gasoline Pursuant to Council of Ministers 
Resolution No. 260* 27111200 
27111300 
27101114 
7. Asphalt 300 SAR/tonne 2714 
8. Natural Gas (Ethane and Methane) 281 halalas/mmbtu 271111 
9. Crude Oil (Used as Fuel) 6.3-10 halalas/litre 
 2709 
Source : WTO Document WT/A CC/SAU/61 (Annex A-1). 
(iv) Natural gas 
64. Until the 1970s, gas produced in  Saudi Arabia was mainly a by-product of oil production, or 
"associated" (i.e. gas released as a by-product of the extraction of crude oil) and was flared (burnt at 
the oil well head).  In the late 1970s, the Government  began to capture and commercialize gas, with a 
view to its domestic consumption.  This included the use of gas as a feedstock to industry, replacing 
oil (thus freeing up additional quantities of oil for export). 
65. During the same period, Saudi Aramco develope d a national gas infrastructure, the "master 
gas system".  The master gas sy stem has been expanded and furthe r enhanced in order to reflect 
expanded domestic and industrial co nsumption, and is now one of the largest gas networks in the 
                                                      
32 The Jazan refinery is not a joint venture;  the Re d Sea (Yanuba) refinery pr oject is currently only 
subject to an MOU, and is not yet a joint venture.  The only joint venture in the sector is Saudi Arabian Total Refining and Petrochemical Company (SATORP). WT/TPR/S/256 Trade Policy Review 
Page 66 
  
world.  In 2010, the production capacity of the m aster gas system was 7.5 billion cubic feet per day.33  
Raw gas production was 8.6 bcf/day in 2009.34 
66. Saudi Arabia ranks 4th in global gas reserves (associated a nd non-associated).  Its total (i.e. 
associated and non-associated) natural gas reserves we re estimated at 284 trillion cubic feet in 2010. 
67. In 2010, public consumption of dry (processed) gas accounted for 82% of total production, 
with the oil industry (upstream and downstre am) consuming 18% of natural gas production.35 
68. Saudi Aramco is a concessionaire in the natural gas sector, particularly in associated gas.  
There have been significant investments by fore ign investors in the upstream development of 
non-associated natural gas since Saudi Arabia's WT O accession.  Major joint-venture gas-extraction 
agreements have been signed with  Shell, Total, Lukoil, SINOPEC, Repsol, Eni, and Saudi Aramco. 36 
69. Large-scale gas projects such as Hawiyyah, Ha radh, and Khurasaniyah have made available 
additional volumes of natural gas to meet growing demand in industry and public utilities (particularly 
for power generation a nd water desalination). 
70. Saudi Arabia has recently begun to de velop its unconventional gas resources.37  Recent 
estimates suggest that these reserves could double Saudi Arabia's known gas resources.38 
(a) Gas processing 
71. Saudi Arabia has seven natural gas plants pro cessing 8.6 bcf/day.  Wet or raw gas (whether 
associated or non-associated), requires processing before  it is fit for consumption or sale as natural 
gas.  After capture, raw gas is processed in Saudi Arabia. 
72. Processing of wet gas produces dry gas, which is of commercial fuel quality, stripped of 
contaminants (water, various other heavier hydr ocarbons (including ethane , propane, butane, and 
natural gasoline, NGLs)).  Wet gas can also be par tially processed in order to yield an intermediate 
feedstock for industry (as gas containing trace amounts of nitrogen). 
73. For several decades, Saudi Arabia has made av ailable petroleum-based and natural-gas-based 
products to domestically located consumers (Saudi or  foreign owned) at regulated prices.  The price 
level of natural gas supplied to domestic industry (i ncluding methane and ethane) is different from the 
price of natural gas liquids (NGLs) (Table IV. 12).  NGLs consumed by industry are priced on a 
commercially agreed basis.39  Natural gas is currently not sold for export due to the high costs of 
liquefying and transport.   
74. Natural gas is supplied to users in Saudi Arabia  at a regulated price of 281 halalas per million 
BTU (US$0.75 per million BTU).  This pricing leve l was determined based on a combination of 
commercial and environmental concerns.  Natural gas is used by many sectors in Saudi Arabia, 
                                                      
33 The master gas system has also allowed Saudi Arabia to become a substantial LPG exporter. 
34 Saudi Aramco (2009). 
35 SAMA (2010), p. 154, provisional figures.   
36 OPEC (2010), figure 1.12.   
37 Unconventional gas is natural gas extracted thro ugh unconventional means, such as hydro-fracking 
of gas-bearing rock. 
38 Viewed at:  http://www.ft.com/cms/s/0/8ef12f f6-bf77-11df-965a-00144feab49a.html#axzz1JPb 
haALA [April 2011]. 
39 See WTO document WT/ACC/SAU/61, paragraphs 31-37. The Kingdom of Saudi Arabia WT/TPR/S/256 
 Page 67 
 
 
including oil refining, gas processing, power comp anies, desalination plants, cement manufacturers 
and petrochemical plants.   
75. Council of Ministers Resolution No. 260 of 23.10.1422H (7 January 2002) is the basis for 
commercial pricing of NGLs used as feedstock in Saudi Arabia, requiring that pricing of NGLs 
supplied to domestic users be commercially based .  Decision No. 15 of the Supreme Council for 
Petroleum Affairs implements Council of Minist ers Resolution No. 260 and reflects a negotiated 
pricing structure that also ensures full recovery of production costs and a reasonable profit (Table IV.12).
40  NGLs are available to all users within Saudi Arabia on a non-discriminatory basis, 
whether Saudi or non-Saudi. 
76. Natural gas and NGLs are also used to su pply fuel and feedstock requirements of 
Saudi Arabia's electricity, water, and petrochemical industries.  The processing of natural gas also 
results in the production of around 4 10.2 million barrels of NGLs per year41 (around half of which is 
exported).42  Domestic consumption is split into hou sehold use and petrochemical feedstock for 
industry.43  NGLs (propane, butane, and natural gasoline)  in excess of domestic demand are sold for 
export.44  
77. Saudi Arabia has promoted gas as a replacement  for petroleum in uses such as electricity 
generation and desalination.45 
(v) Electricity 
78. Saudi Arabia consumes approximately 228 milli on barrels of oil on electricity production.46 
During 2010, its production of electrical power was 239,892 GWh an increase of 10.4% over the 
previous year.  Prices are applied on a commercial basis.  
79. Domestic demand for electricity is expected to reach 710,000 GWh in 2032.  Current 
projections suggest that electrical power generation could consume 900 million barrels of oil per year 
as of 2032.  The Saudi Electricity Company was registered as a stock company in 2002;  the 
Government owns 70% of its shares and the rest is owned by the private sector.  
80. Saudi Arabia has begun trialling the use of renewable energy sources for the production of 
electricity.  Research and development on solar th ermal electricity generation will be undertaken by 
the King Abdullah City for Nuclear Energy and Re newable Energy in Riyadh.  Saudi Aramco and 
Japan's Showa Shell have also agreed a joint ventur e to develop a solar thermal plant.  In a joint 
venture with Saudi Aramco, Areva is also devel oping a pilot project on solar thermal energy to 
evaluate the technology at the King Abdulla h University of Science and Technology. 
                                                      
40 Saudi Arabian NGLs, are produced as by-products of oil and gas production rather than as a primary 
product.  See WTO document WT/ACC/SAU/61, paragraphs 31-37. 
41 Figures for 2009. 
42 Viewed at:  http://www.mopm.gov.sa/mopm/ detail.do?content=sp_policy [March 2011]. 
43 The pricing of NGLs as a dom estic feedstock is explained in WTO document WT/ACC/SAU/61. 
44 Viewed at:  http://www.saudiaramco.com [April 2011].  
45 Viewed at:  http://www.interna tionalsustainableenergy.com/new s/siemens-receives-major-order- 
from-Saudi-Arabia [March 2011]. 
46 Saudi Arabia is seeking to reduce its consumption of  oil in power stations, turning to gas, alternative 
or renewable power generation capacity, in conjunction with the private sector. WT/TPR/S/256 Trade Policy Review 
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81. Saudi Arabia is also exploring the use of nuclear energy.  It signed a cooperation agreement 
on civil nuclear technology with the United States in  2008, and has held talks with France and Russia 
on similar agreements.47   
82. The MFN tariff on imports of electricity is 5% (Table AIV.1). 
(vi) Water 
83. Water is a very scarce resource in Saudi Arabia.  An increasing population, and experiments 
with water-intensive agriculture have drawn heavily  on limited reserves of aquifer water.  In recent 
years, the Government has taken steps to curtail unsustainable use of aquifer water, and no longer 
encourages the production of water-intensive cr ops, such as wheat or barley.  Nevertheless, 
consumption of aquifer water is steadily increasing.   As a result, Saudi Arabia has supplemented its 
water resources through desalination.  
84. Present technologies make desalination an energy-int ensive process.  Saudi Arabia is trialling 
solar photovoltaic powered desalination plants48, which could produce up to 100,000 cubic metres of 
potable water per day.  Other emerging technologies herald a further improvement in this regard.49  
85.  Total production of drinking water in Saudi Ar abia reached 2.352 billion cubic meters in 
2010:  desalinated water accounted for 55% and underground water and dams for 45%.  Around 55% 
of drinking water consumed in Saudi Arabia is desalinated.50  There are 18 desalination plants (public 
and private) some of which, such as Jubail II Industr ial Zone in Saudi Arabia's Eastern Province, also 
produce and supply electricity to the domestic market .  Total desalination plant electricity generation 
is around 16,000 GWh.  Additional plants are being developed.  Dedicated desalination plants are 
administered by the Saline Water Conversion Corporation (SWCC).51  The SWCC is 100% 
government-owned, and owns 7 desalination plants (4 on the western coast and 3 on the eastern coast) 
in addition to a group of junior plants (mainly on th e western coast).  Saudi Arabia's desalinated water 
output exceeded 1.3 billion cubic meters in 2010.  The private sector contributes almost one third of 
the desalinated water produced.  Since 2008, all ne w desalination facilities have been privately owned 
and operated.   
86. SWCC is an independent entity under the Ministry  of Water and Electricity.  Its funding is 
provided by the Government with a contributio n from sales of excess electricity to the Saudi 
Electricity Company.  The Government appoints the members of the Board, the Minister of Water and 
Electricity is the Chairman of the Board of Director s.  The Ministry of Water and Electricity and the 
Ministry of Finance provide regulatory and procedural oversight of the company.   
87. SWCC produces and sells desalinated water on co mmercial terms to local water authorities 
and the National Water Company (NWC).52  SWCC does not distribute, purchase or receive any other 
                                                      
47 Viewed at:  http://www.energy.gov.sa/default-en.htm. 
48 South Korea's Hanwha Engineering and Construc tion won a US$1.05 billion order to build power 
and seawater desalination facilities in Saudi Arab ia.  See http://arabnews. com/economy/article367784.ece 
[April 2011] and http://circleofblue.org/waternews/ 2010/world/saudi-arabia-to-use-solar-energy-for-
desalination-plants [April 2011]. 
49 Such as solar thermal plants, which boil saline water to drive steam turbines, potentially producing 
commercial quantities of condensed potable water. 
50 Viewed at:  http://www.greenprophet.com/2009 /05/saudi-arabia-desalination [April 2011]. 
51 Established pursuant to Supreme Economic Council Decision 5/23 of 23/3/1423H (4 June2002).  
52 Council of Ministers Decision No.5 13/1/1429H (21/1/2008).  The NWC is a joint-stock company;  it 
also markets aquifer water. The Kingdom of Saudi Arabia WT/TPR/S/256 
 Page 69 
 
 
payment for water.  It does not have an exclusive c oncession, or any other special rights or privileges.  
Its procurements are commercially based in accordance with customar y business practices.53  SWCC 
is in the early stages of privatization. 
(3) MANUFACTURING  
(i) Overview 
88. Manufacturing contributed 12.6% to Saudi Arabia 's real GDP in 2010 (Chapter I(1)).  Much 
of the manufacturing sector has developed downstr eam from the petrochemical and mining sectors, 
making use of Saudi Arabia's comparative advantages of accessible energy and raw materials.  As a 
result, the industrial output also necessarily includes the downstream sectors and mineral processing (section (2) above).  Current industrial production includes ceramics, plastics, chemicals, steel, 
aluminium, building materials, textiles, and foodstuffs (Table IV.13).   
Table IV.13  
Industrial units by activity, 2009 
(Financing in million Riyals) 
 New factories   Total factories (2009) 
Industrial activity No. of 
units Financing % of 
financing  No. of 
units Financing % of 
financing 
Food and beverages 18 161.4 1.8  720 39,205.8 9.9 
Textiles products 0 0.0 0.0  87 4,367.9 1.1 
Cloth products 1 2.9 0.0  75 733.0 0.2 
Leather products 0 0.0 0.0  47 657.9 0.2 
Wood industry and products 0 0.0 0.0  53 843.2 0.2 
Paper industry and its products 4 85.4 0.9  125 7,006.4 1.8 
Printing, press and copying of 
recorded multi-media 0 0.0 0.0  117 3,722.0 0.9 
Refined petroleum and nuclear fuel 
products 1 6,000.0 66.4  80 153,814.3 39.0 
Chemical materials and products  9 116.3 1.3  475 47,893.0 12.2 
Rubber and plastic products 18 141.9 1.6  489 12,749.9 3.2 
Other non-metal products 25 503.9 5.6  749 52,683.7 13.4 
Basic metal products  1 49.9 0.6  312 36,814.0 9.3 
Construction metal products 12 37.4 0.4  313 8,294.0 2.1 
Machines and equipment industry  3 126.9 1.4  228 5,110.2 1.3 
Office and accounting terminals as 
well as computer 0 0.0 0.0  5 660.2 0.2 
Electric machines and terminals 
(unclassified elsewhere) 5 830.3 9.2  109 9,344.2 2.4 
Radio, TV and telecommunication 
equipment and terminals 0 0.0 0.0  21 963.3 0.2 
Medical terminals, optic tools and all 
types of watches 0 0.0 0.0  13 82.8 0.0 
Engine and trailer motors 3 5.2 0.1  138 2,398.5 0.6 
Other transportation equipment 0 0.0 0.0  15 294.2 0.1 
Furniture and products unclassified 
elsewhere 6 976.0 10.8  312 6,449.1 1.6 
Recycling 0 0.0 0.0  3 40.0 0.0 
Total 106 9,037.4 100.0  4,513 394,127.6 100.0 
Source:  SAMA (2010), 46th Annual Report , Table 12.3.  Viewed at:  http:// www.sama.gov.sa/sites /samaen/Reports  
 Statistics/ReportsStatis ticsLib/5600_R_Annual_EN_2010_11_14.pdf. 
                                                      
53 WTO document WT/ACC/SAU/61, p. 23. WT/TPR/S/256 Trade Policy Review 
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89. Saudi Arabia has recently released a revised Comprehensive Industrial Strategy and Future 
Vision for the Industrial Sector.  The Ministry of Commerce and Industry is preparing a vision of Saudi Arabia's industrial future up to 2020, and a strategy to accelerate competitive development and 
enhance industrial diversification, away from a single basic source of income.  
90. The strategy includes three major components:  enhancing industrial competitive capabilities; 
providing a basic environment and services for the i ndustrial sector;  and streamlining the legal and 
regulatory framework for business.  The Ministry w ill establish a network to formulate and implement 
policies related to industrial capability, and identify the future development of the industrial sector.  
The Ministry will provide supporting services for the industrial sector by promoting investment, 
technological upgrading, support for small and medium -size enterprises, application of international 
standards, the upgrading of management and hum an resources, and building business information 
networks. 
91. The Ministry of Commerce will also supervise th e development of the support infrastructure.  
The Saudi Authority for Industrial Cities and Technology Zones (SAITZ) will administer a 
transparent system for granting developed industr ial land, allocated on a market-based mechanism.
54  
Rents will be set at a level that covers maintenance and development costs.  The private sector is 
expected to provide financial resources for the de velopment, operation, and management of the new 
industrial cities.  SAITZ will assign the management  of the cities to the private sector through 
competitive tenders, on a transparent basis.   
92. Saudi Arabia considers many of its industries to be emerging industries, struggling to become 
internationally competitive, particularly in the cont ext of Saudi Arabia's low tariff levels.  Saudi 
Arabia is seeking to set standards (e.g. technical, saf ety, quality) or improve such standards to attract 
more local and foreign industrial investments. 
93. A major player in industrial manufacturing is SABIC (Saudi Basic Industries Corporation).  
70% of which is government-owned;  the remaini ng 30% has been privatized (Table III.10).  The 
Government appoints the Chairman of the Board, the CEO and three other Board members.  Other 
two Board members represent the private sector and are nominated and selected by shareholders at a 
general meeting.  The Government is represented on the Board, but does not play any role in setting 
company policy or in making operational decisions.   
94. SABIC is one of the main petrochemical pr oducers in Saudi Arabia and the major Raw 
material producer for a number of downstream pe trochemical products and manufacturers (Chemical 
and petrochemical).  SABIC is the largest non-oil company in the Middle East, with industrial 
complexes operated by 18 affiliates in Saudi Arabia  alone.  In 2010, SABIC's production reached over 
66 million tonnes worldwide.  In addition, thre e companies have been established to produce 
petrochemicals.  
95. SABIC has joint-venture partnerships with in ternational companies, including ExxonMobil, 
Shell Oil, Hoechst-Celanese, and Duck Energy;  it is a partner in three joint ventures in Bahrain;  and 
has manufacturing plants in Europe, the United States,  and Asia.  SABIC has an ownership interest in 
the Saudi Arabian Fertilizer Company listed on the Saudi stock market, and 57% owned by private 
shareholders), which is an exporter of urea and ammonia.  SABIC also fully owns Saudi Iron and 
Steel Company (Hadeed), which manufactures a variet y of steel products.  SABIC's paid-up capital is 
SAR 30 billion. 
                                                      
54 Government Resolution Industrial Modon 25/8/1422H (12 November 2001). The Kingdom of Saudi Arabia WT/TPR/S/256 
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96. SABIC conducts its business based on commercial considerations.55  It does not benefits from 
any special or exclusive privileges.  There are no legal impediments to competition with SABIC.  
97.  The Saudi Industrial Development Fund (SIDF)  contributes to the development of the Saudi 
industry by providing loans to finance new industrial projects. 
98. MFN customs tariffs on manufactured goods (major division 3 of ISIC, Revision 2) average 
5.3%, with rates ranging from zero to 100% on tobacco manufacturing, and from zero to 20% excluding tobacco processing (Table IV.1).  The positive tariff escalation in some industries e.g. 
textiles and apparel, and wood products, reflects re latively high effective rates of protection, which 
somewhat impede Saudi Arabia's export co mpetitiveness of those manufactured products 
(Chapter III(1)(iii)(a)). 
(a) Cement 
 
99. Drawing on its resources of gas and minerals, Saudi Arabia produces substantial quantities of 
cement and clinker.
56  The cement sub-sector consists of 13 companies with 9 listed on the Saudi 
Stock Exchange.57  As Saudi Arabia is undertaking ma jor building and construction projects, 
including commercial and residential projects as well as government-funded infrastructure, cement demand and factories' production has been incr eased as a result of expansion in recent years.
58 
100. Total production of the cement companies operating in Saudi Arabia was about 32 million 
tonnes during 2009, up from 30 million tonnes in 2008 (Table IV.14).  Cement sales to the domestic 
markets was 31.1 million tonnes, or 97.4% of domestic production during 2009.  The remaining 
cement was exported  
101. The MFN customs tariff on cement is 5% (Table AIV.1). 
Table IV.14  
Cement production 2007-09 
 Production ('000 tonnes) % of output in 2009 
Company 2007 2008 2009 
Yamamah Cement - Riyadh 4,593.4 4,222.6 4,993.7 15.6 
Saudi Cement - Hufuf 5,289.8 5,368.9 5,575.0 17.4 
Arabian Cement - Rabigh 2,955.3 2,744.0 2,996.0 9.4 
Yanbu' Cement – Yanbu' 4,621.8 4,336.3 3,919.6 12.3 
Al-Qassim Cement - Buraydah 3,463.8 3,220.9 4,250.5 13.3 
Southern Region Cement – Ja zan 4,613.5 4,822.3 5,158.1 16.1 
Eastern Region Cement - Khafji 3,453.5 2,961.5 3,007.0 9.4 
Tabuk Cement – Tabuk 1,361.0 1,150.4 1,300.5 4.1 
Saudi White Cement - Riyadh 168.6 213.6 197.1 0.6 
National Gypsum - Riyadh 537.6 615.2 578.4 1.8 
Total 31,058.3 29,656.0 31,975.9 100.0 
Source : SAMA (2010), 46th Annual Report , Table 12.4.  Viewed at:  http:// www.sama.gov.sa/sites /samaen/Reports 
 Statistics/ReportsStatis ticsLib/5600_R_Annual_EN_2010_11_14.pdf. 
                                                      
55 WTO document WT/ACC/SAU/61, paragraph 44. 
56 Cement clinker is produced by extended heating of crushed minerals, principally limestone, and clay. 
57 These include Jouf Cement, Riyadh Cement, City Cement, Northern Cement.  
58 Viewed at:  http://www.yanbucement.com [April 2011].   WT/TPR/S/256 Trade Policy Review 
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(b) Metals 
102. Saudi Arabia's metals manufacturing sector is growing in response to a domestic construction 
boom.  Aluminium and steel are in very strong demand, particularly in view of the construction of the 
economic cities and other ma jor development projects.59 
103. Saudi Arabia currently has no aluminium pr oduction facilities (smelters);  14 downstream 
companies specialize in supplying finished aluminium products. 
104. In 2009, Ma'aden announced a joint venture with  Alcoa to establish an integrated aluminium 
production plant using Saudi Arabia's advantages in f eedstock, and raw miner materials.  The facility 
will be constructed in Raz Az Zawr on the east coast.  The joint venture is intended to be a lowest-cost 
supplier of primary aluminium, alumina and alumin ium products.  The project will eventually be a 
fully integrated industrial complex, starting fro m a bauxite mine with an initial capacity of 
4,000,000 tonnes per year;  an alumina refinery w ith an initial capacity of 1,800,000 metric tonnes per 
year (mtpy)60;  an aluminium smelter with  an initial capacity of ingot, slab, and billet of 740,000 
mtpy; and a rolling mill, with initial hot-mill cap acity of between 250,0 00 and 460,000 mtpy.  
105. The mill will focus initially on the production of sheet, end, and tab stock for the manufacture 
of aluminium cans, as well as other products fo r the automotive foil stock and building and 
construction industry.  The complex will utilize lo w-cost and clean power generation, as well as 
existing and future port and rail facilities, de veloped by Saudi Arabia's Government.  
106. Bauxite feedstock for the alumina refinery w ill be transported by rail from a new mine at 
Al Ba'itha, near Quiba, in the north.  First pr oduction from the aluminium smelter and rolling mill is 
anticipated in 2013, and first production from the mine  and refinery is exp ected in 2014.  Capital 
investment is expected to be approximately SA R 40.5 billion (about US$10.8 billion).  Ma'aden will 
own 74.9% of the joint-venture, and Alcoa will control the remaining 25.1%.  Alcoa will invest 
approximately US$1.1 million over a four-year period and will be responsible for a pro rata share of 
the project financing, in addition to specific completion commitments.61 
107. Caustic soda is used as feedstock for refini ng bauxite into alumina (produced from the 
electrolysis of brine, along with chlorine, which is later used in the manufacture of ethylene dichloride 
(EDC)).  Ma'aden is expecting to engage in a 50/50 joint-venture with  Sahara Petrochemical 
Company to produce 250,000 mtpy of caustic soda and 300,000 mtpy of EDC for export by the fourth quarter of 2012.  The plant is to be located at Jubail Industrial City to allow ethylene to be 
delivered by pipeline from the Tasnee Ethane Cracker.
62 
108. MFN customs tariffs on basic metal industries average 4.9% (Table AIV.1). 
                                                      
59 Viewed at:  http://www.sagia.gov.sa/en/Key-s ectors/Energy/Mining-and-Metals [April 2011]. 
60 Alumina or aluminium oxide is refined bauxite. 
61 Viewed at http://www.alcoa.com/saudi_arabia/ en/news/releases/2009_Maaden_partnership.asp 
[April 2011]. 
62 Viewed at:  http://www.maaden.com.sa/eng/other_p rojects.htm [April 2011].  Sahara Petrochemicals 
signed two agreements with Ma'aden on 8 May 2010.  The first was for the formal incorporation of a 50:50% 
joint venture to develop a complex in Jubail with capacity to produce 250,000 tonnes/year of caustic soda and 300,000 tonnes/year of ethy lene dichloride (Arab Oil and Gas.Com, 16 December 2010).  Th e second agreement 
provides for Ma'aden to lift all the caustic soda produced by the plant.  It is required as feedstock for the 
aluminium smelter Ma'aden is developing at Ras Al Zour, which will utilize technology licensed from the German company Uhde.  The project is costing an es timated US$750 million (Arab Oil and Gas.Com, 2011). The Kingdom of Saudi Arabia WT/TPR/S/256 
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(c) Fertilizer 
109. Saudi Arabia has been a producer of fertilizer si nce the late 1960s, due to the local availability 
of inputs to fertilizer production;  natural gas, phosphate rock and sulphur.  Global consumption of 
nitrogen, potash and phosphate-based fertilizer has gr own by 2.5 to 5.0% annually since 2000 and 
now stands at 154 million tonnes per year.  Saudi Ar abia is well positioned to  continue to provide 
fertilizers to the global market.  Saudi Arabia produces around 7 million tonnes of fertilizer per annum, around 2.3 million tonnes of which is exported  to growing markets in Asia.  In addition, 
around half million tonnes is exported to each of the following regions:  Americas, Oceania (Australia 
and New Zeland), and Africa.  Currently, the Ma'a den Phosphate Company (MPC), a joint-venture 
with SABIC, aims to produce 3 million tonnes per annum of DAP starting during 2011. 
110. Fertilizer producers may make use of natural gas at a fixed price available to all users in 
Saudi Arabia (see Table IV.12 above).  Presently all compound fertilizer is produced from imported raw materials such as phosphoric acid.  Diammoni um phosphate-based fertiliz er (DAP) production in 
Saudi Arabia is set to expand with Ma'aden's jo int-venture DAP-production facility at Ras Al-Kair, 
which will begin processing some of Saudi Arabia 's 3.1 billion tonnes of phosphate deposits.  
Developments on the Al Jalamid site will include a beneficiation plant, to produce 5.0 mtpy of 
phosphate concentrates.  The phosphate concentrates ar e to be processed in a chemical complex with 
related infrastructure at Ras Al-Kair.  The four ch emical process plants are a sulphuric acid plant 
(SAP) with capacity of 4.5 mtpy, a phosphoric acid plant (PAP) with capacity of 1.5 mtpy, an ammonia plant (TAP) with a capacity of 1.1 mtpy.  The complex is designed to convert the 
concentrates to 2.922 mtpy of diammonium phosph ate fertilizer (DAP), using local sulphur and 
natural gas.  Processing facilities at the Ras Al-Kai r have also been designed to permit the production 
of MAP if there is sufficient market demand.  Mo st DAP produced by the Phosphate Project will be 
exported.  The project will also produce and ma rket surplus quantities of ammonia and phosphoric 
acid.  The Phosphate Project will be developed in  a joint venture with SABIC, through a limited 
liability company, Ma'aden Phosphate Company (MPC), incorporated in Saudi Arabia.
63 
111. The Saudi Arabian Fertilizer Company (SAFCO) was established by Royal Decree No. M/13 
(11-05-1385H/1965).  Currently, SABIC owns 42.99% of shares in SAFCO.  The remaining 57.01% is owned by the private sector.  SAFCO's capita l is SAR 2,500 million.  Annual production of urea 
2.6 million tonnes and 2.3 million tonnes of ammonia.
64 
112. MFN customs tariff on fertilizers and pes ticides average 5.2% (Table AIV.1) 
(4) SERVICES  
(i) Overview 
113. Services (including wholesale and retail trade, restaurants, hotels, transportation, storage, 
telecommunication, finance and insurance services, real estate, business services, collective, social 
and personal services, and producers of government  services) contributed 50.6% to Saudi Arabia's 
real GDP in 2010 and employed about three quarters of the workforce (Chapter I(1)).  Saudi Arabia 
undertook very broad commitments in all services sectors under the GATS.65  Services is a key 
component of Saudi Arabia's efforts to diversify its economy away from the traditionally dominant oil 
and hydrocarbons sectors. 
                                                      
63 Viewed at:  http://www.maaden.com.sa/e ng/phosphate_project.htm [April 2011]. 
64 Viewed at:  http://www.safco.com.sa [May 2011]. 
65 See WTO document WT/ACC/SAU/61/Add.2. WT/TPR/S/256 Trade Policy Review 
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114. Several state-owned enterprises participate in the services sector on the basis of commercial 
considerations according to the authorities.  These include the National Commercial Bank, 
Agricultural Development Fund, Saudi Industrial De velopment Fund, Real Estate Development Fund, 
Saudi Real Estate Company, Tawuniya66, Saudi Arabian Airlines Company, Saudi Railway 
Organization, Saudi Telecom Company, and Saudi Post (Chapter III(3)(iii)).   
(ii) Financial services 
115. Saudi Arabia has one of the largest financial services sectors in the GCC.  The Saudi Arabian 
Monetary Agency (SAMA) supervises banks, money exchangers, and cooperative insurance 
industries, while the Capital Market Authorit y (CMA) supervises other financial services.  
116. Under the GATS, Saudi Arabia undertook broa d commitments on protection and savings 
insurance;  non-life insurance, (gen eral insurance and health insuran ce);  reinsurance and retrocession; 
insurance intermediation (brokerage and agency);  and services auxiliary to insurance (consultancy, 
actuarial, risk assessment, and claims settlement services).67 
(a) Banking 
117. Saudi Arabia has the biggest banking sector in the GCC.68  In 2010, its assets were around 
68% of GDP, and were valued at  SAR 1,415 billion (US$377 billion).69  In its WTO accession terms, 
Saudi Arabia undertook broa d commitments in banking.70   Under market access, commercial 
presence is permitted with the limitation that a bank must be a locally incorporated joint-stock 
company or a branch of an international bank.  No n-Saudi participation in a joint-venture in Saudi 
Arabia is permitted up to 60% (since accession).71  
118. The banking sector has been stable and growing in recent years, despite the global financial 
crisis.72  Projections are for continued growth and expansion in the coming years.73  In 2009, GCC 
leaders decided that the future GCC Central Bank will be headquartered in Riyadh.  The Islamic 
Development Bank is headquartered in Jeddah.   
119. Banks are regulated by SAMA, pursuant to the Banking Control Law.74  SAMA also acts as 
the central bank of Saudi Arabia (Chapter (I)(2)).75  During 2005-10, SAMA introduced new 
prudential and regulatory requirements, as well as pr ocedures to enhance capital adequacy, liquidity, 
                                                      
66 Tawuniya was previously called the Nationa l Company for Coopera tive Insurance (NCCI). 
67 WTO document WT/ACC/SAU/61/Add.2. 
68 KAMCO Research, (2010), Table 1.   
69 Viewed at:  http://www.sama.gov.sa/sites/samaen/News/Pages/ViceGovernorSymposiumon 
Insurance.aspx. 
70 WTO document WTT/ACC/SAU/61/Add.2, 7.B, pp. 22 and 23.   
71 Commercial presence restrictions ar e maintained in sub-sectors 7.B(a)-(l), and that "these financial 
services are to be provided by commercial banks except that asset management "i.2" and advisory services "k." 
may be provided by non-commercial banking financial institutions under the capital market law."  Commercial 
presence is "unbound" for all domestic settlement and clearing services pr ovided exclusively by SAMA.  See 
WTO document WT/ACC/SAU/61/Add.2. 
72 SAMA sought to minimize its banking sector's ex posure to international sub-prime debt, and to 
minimize risk exposu re in particular. 
73Viewed at:  http://www.arabbankers.org/dow nload/123321_U127360__745375/BMG%20Saudi% 
20Banks%20Results%20Review [March 2011]. 
74 Royal Decree No. M/5 dated 22.2.1386 (11 June 1966).  The Charter of SAMA is contained in 
Article 1 of Royal Decree No. 23  23-5-1377H (15 December 1957). 
75 WTO document WT/ACC/SAU/61, p. 35. The Kingdom of Saudi Arabia WT/TPR/S/256 
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and risk management, among others.76  In January 2008, SAMA completed implementation of the 
three pillars of Basel II.  As a consequence, commercial banks have improved risk-management 
systems and improved management of their financial resources. 
120. The banking sector has expanded substantially  since Saudi Arabia's WTO accession in 
2005.77  There are 11 licenced foreign bank bran ches and 12 commercial banks operating in 
Saudi Arabia.78 
121. Since 2005, the banking industry in Saudi Arabia  has grown steadily, providing the full range 
of banking services, including Shari'ah-compliant produc ts.  The share of Shari'ah-compliant products 
in the banking industry has increased steadily.  Currently, three banks provide fully Shari'ah-
compliant products, while other banks are in creasing their efforts to meet this demand.79   
122. The three largest banks are the National Co mmercial Bank (NCB), Sa mba Financial Group, 
and Al Rajhi Bank, which account for 45% of total a ssets.  Public ownership is present in four banks 
and is currently 69.3% in the National Commercial Ba nk.  Five specialized credit institutions (SCIs), 
designed to complement bank lending , provide medium- to long-term loans to industry.  Assets of the 
five SCIs account for 14% of total financial system  assets, and their loan portfolios represent 24% of 
bank credit to the private sector.  The other non-ba nk financial institutions (NBFIs) account for a 
marginal share of the total financial system's assets.80 
123. Foreign liabilities of commercial banks fell by  11.4% to SAR 99.7 billion in 2009 against a 
rise of 6.9% in the preceding year.  Net foreign assets of commercial banks increased by 167.9%, to SAR 111.2 billion, compared to a rise of 2.3% in the preceding year.  Commercial banks' profits 
dropped by 10.4% to SAR 26.8 billion at the end of 2009 (SAR 29 .9 billion in 2008).
81 
124. The NCB is a Saudi closed joint-stock compan y that operates through 287 branches in Saudi 
Arabia and two overseas branches (Lebanon and Bahrain).82  The objective of NCB is to provide a full 
range of banking services, including Islamic financing projects.  NCB's paid-up capital in 2010 was at 
SAR 15 billion.  The Government owns 69.30% of th e stock of NCB.  The remaining stock is owned 
privately.83  The Government does not have a role in setting company policy or in making operational 
decisions.  NCB does not benefit from any special or exclusive privileges, and there are no legal 
                                                      
76 Many of SAMA's actions in this regard have been related to the implementation of Basel II 
framework and Saudi Arabia's accession requirements.   
77 Viewed at:  http://www.islamicbanker.com/islamic-finance-banking/saudi-arabia.html [May 2011]. 
78 Foreign bank branches operating in Saudi Arabia are:  Gulf International Bank;  Emirates NBD;  
National Bank of Bahrain;  National Bank of Kuwait;  Muscat Bank:  Deutsche Bank;  BNP Paribas;  JP Morgan Chase N.A.;  National Bank of Pakistan;  State Bank of India;  T.C. Ziraat Bankasi A.S (SAMA 
online information, "Saudi Banks and Licensed Bank Branches".  Viewed at:  http://www.sama.gov.sa 
/sites/samaen/Links/Pages/InternationalBanks.aspx).  Th e Saudi commercial banks are the National Commercial 
Bank;  the Saudi British Bank;  Saudi Investment Bank;  Alinma Bank;  Banque Sauid Fransi;  Riyad Bank;  
Samba Financial Group;  Saudi Hollandi bank,  Al Rajhi Bank;  Arab National Bank;  Bank Albilad;  Bank 
AlJazira (SAMA online information, "Saudi Banks".  Viewed at:  http://www.sama.gov.sa/sites/samaen/Links 
/Pages/SaudilBanks.aspx). 
79 SAMA online information.  Viewed at:  http://www.sama.gov.sa/sites/samaen/Links/Pages/ 
Home.aspx [March 2011]. 
80 Viewed at:  http://www.imf.org/external/pubs/ft/wp/2010/wp1087.pdf. 
81 SAMA (2010) p. 29.   
82 The NCB was established by Royal Decree No. M/19, 31 March 1997. 
83 The Board of the NCB comprises a Chairman (from the private sect or), and Board members;  all 
Board members, including the Chairman, are elected by shareholders.  Two of nine directors in the NCB are 
government officials. WT/TPR/S/256 Trade Policy Review 
Page 76 
  
impediments to competition with this company.  It conducts its business based on commercial 
considerations.84 
125. In 2010, the banking sector continued to perform  strongly, with annual growth in credit 
extension (4.6%) and customer deposits (4.7%), as well as in the number of bank branches (to 1,591), 
and in the number of automatic teller machines (t o 10,885).  Growth was common in the corporate 
and retail sectors.  At the end of  2010, the Saudi Banking system had high liquidity with a liquid 
assets ratio of 34%.  The Basle capital adequacy ratio was 17.1% (double the Basle minimum of 8%).  Non-performing loans (NPLs) declined to 3% of tota l credit, while the coverage ratio of provisioning 
over the NPLs was 116%.
85 
126. Corporate loans by banks are diversified, with  trade being the main sub-sector, accounting for 
25% of total loans.  Household loans are diversif ied with no dominating sub-sector.  Real estate loans 
in Saudi Arabia are low compared to the GCC regi on, at less than 10% of total loans.  Prudential 
regulations in Saudi Arabia curb credit growth ri sks by requiring banks to obtain SAMA's approval 
for foreign lending and by imposing st atutory caps on indi vidual indebtedness.86 
127. A Real Estate Mortgage Law is under development.   This law is expected to stimulate profits 
in the banking sector by permitting banks to reta in ownership of, and permit foreclosure upon, the 
secured asset if required.  The entry into force of  this law is also expected to stimulate the 
construction and housing industries.  Concurrently, King Abdullah has created a Ministry of Housing 
and Construction.  These two steps are expected to help to increase the supply of housing in 
Saudi Arabia. 
128. Consumer credit companies in Saudi Arabia ma inly finance the purchase of cars, machines, 
and household appliances, as well as real estate, resi dential apartments, and villas.  At the end of 
2008, there were 300 licensed instalment companie s with a total capital of SAR 18.1 billion. 
(b) Securities 
129. The Capital Market Law87 established the Saudi Stock Exchange (Tadawul) as a joint stock 
company operating as the only authorized entity to trad e securities in Saudi Arabia.  Since its creation, 
the Tadawul has grown substantially both in the vo lume and value of shares traded, although recent 
years have seen declines (Table IV.15).  The Capita l Market Law also established the Capital Market 
Authority (CMA) as sole regulatory authority.88  The CMA has the authority to promulgate and 
enforce rules for the regulation of all aspects of securities trade.  The CMA has established a 
Committee for the Resolution of Securities Disput es, which has jurisdiction over disputes falling 
under the provisions of the Capital Market Law, its Implementing Regulati ons, and the regulations, 
rules, and instructions issued by the Authority an d the Exchange, with respect to public and private 
actions.89  The Committee's decisions may be appealed before the Appeal Panel within 30 days 
following their notification.90 
                                                      
84 WTO document WT/ACC/SAU/61, p. 19.   
85 SAMA online information.  Viewed at:  h ttp://www.sama.gov.sa/site s/samaen/Links/Pages/ 
Home.aspx [March 2011]. 
86 Viewed at:  http://www.imf.org/external/pubs/ ft/wp/2010/wp1087.pdf;  and SAMA (2010), Table 
4.4. 
87 Royal Decree No. M/30 of 2.6.1424H (13 July 2003). 
88 Under Article 7 of the Law, the CM A's Board comprises five members. 
89 Pursuant to Article 15 of the Capital Market Law. 
90 Capital Market Law, Articles. 15, 25. The Kingdom of Saudi Arabia WT/TPR/S/256 
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130. Direct share trading in Saudi Arabia is restricted to Saudi citizens, GCC nationals, and foreign 
residents, but there are no restrictions on investment  by non-resident foreign investors in Government 
Bonds, Treasury Bills or Saudi investme nts funds, ETFs, and swap agreements.91  Non-GCC nationals 
that hold shares of public joint-stock companies tr aded in the equity share market, must obtain 
permission from the CMA prior to buying or selling their shares.  The CMA has also permitted the 
trading of Sukuk  (deeds and financial certificates) in order to promote a market in instruments less 
exposed to risk than ordinary equities. 
131. Saudi Arabia permits foreigners to invest in open-ended investment funds that invest in the 
Saudi Stock Exchange and are managed by an authorized person licensed by the CMA.92  Foreign 
investors are permitted to participate directly in corporate debt, government debt, and mutual funds.  
The participation of foreign investors in the stock market to buy and sell shares is under consideration 
by the CMA.  ETFs and swap agreements were r ecently added as two additional channels through 
which non-resident foreign investors may invest in the Saudi Capital Market. 
Table IV.15  
Saudi share market indicators, 2005-10 
Year No. of 
shares 
traded 
(billion) Annual 
%  
change Value of 
shares traded 
(SAR billion) Annual 
%  
change Market 
capitalization 
of issued 
shares 
(SAR billion) Annual 
%  
change No. of 
executed 
transactions 
('000) Annual 
%  
change Share 
price 
index Annual 
%  
change 
2005 12.28 19.3 4,138.7 133.3 2,438.2 112.3 46,608.0 249.9 16,712.6 103.7 
2006 73.44 498.0 5,261.9 27.1 1,225.9 -49.7 96,095.9 106.2 7,933.3 -52.5 
2007 61.73 -15.9 2,557.7 -51.4 1,946.4 58.8 65,665.5 -31.7 11,038.7 39.1 
2008 60.82 -1.5 1,962.9 -23.3 924.5 -52.5 52,135.9 -20.6 4,803.0 -56.5 
2009 57.13 -6.1 1,264.0 -35.6 1,195.5 29.3 36,458.3 -30.1 6,121.8 27.5 
2010 33.01 -42.2 759.2  -39.9  1,325.3  10.8 19,536,1  -46.4  6,620.8  8.1 
Source:  Saudi Stock Exchange (Tadawul). 
(c) Cooperative insurance 
132. An alternative to traditional insurance, Saudi Ar abia has developed its insurance market based 
on the "cooperative insurance" c oncept in accordance with the prin ciples of Islamic Shari'a that 
governs all insurance activities in  the Saudi Insurance Market.93  Cooperative insurance in 
Saudi Arabia is based on the principle of "takaf ul", and operated with th e purpose of maintaining a 
fair, safe, and stable insurance market for the benefit and protection of policyholders and 
shareholders. 
133. Saudi Arabia undertook extensive commitments  in this sector, in all modes of supply.94  A 
foreign insurance company may establish a commercial presence but must be in the form of a locally 
incorporated cooperative insurance joint-stock comp any, or as an established direct branch of an 
international insurance company operating in Sa udi Arabia as a cooperative insurance provider.  
Non-Saudi investment in such a joint-stock co mpany in Saudi Arabia is permitted up to 60%. 
134. Insurance is undertaken through licensed public joint-stock insurance companies operating in 
a cooperative manner, as provided by the C ooperative Insurance Companies Control Law.95  SAMA is 
                                                      
91 Capital Market Authority online information.  Vi ewed at:  http://www.cma.org.sa/en/News/Pages/   
CMA_N434.aspx [May 2011]. 
92 Investment Fund Regulations, Articles 4, 5.  
93 See WTO document WT/ACC/SAU/61, paragraph 290. 
94 See WTO document WT/ACC/SAU/61/Add.2. 
95 Royal Decree No. M/32 of 2.6.1424H (31 July 2003). WT/TPR/S/256 Trade Policy Review 
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tasked with administering the Law as we ll as subsidiary implementing regulations.96  SAMA monitors 
and supervises the entire insurance sector for complia nce with regulatory requirements, and assists in 
the development of future Government policy in the sector. 
135. Cooperative insurance allows policyholders and shareholders to benefit from their 
contributions and investments through the dist ribution of surpluses in the ratio 90% for the 
shareholders and 10% for the policyholders.  The accounting methods for the distribution of surpluses 
are set out in the Law's Implementing Regulations.97  A separate Law on Cooperative Health 
Insurance is concerned primarily  with the consumption side.98  The Council of Cooperative Health 
Insurance headed by the Minister of Health is  responsible for the enforcement of this Law. 
136. Tawuniya is a provider of cooperative insuran ce in Saudi Arabia.  The Government owns  
50% of its shares and the remaining 50% was sold th rough an initial public offering in January 2005.  
The company has been identified for further privatization (Table III.10).  The Chairman of the Board 
is a government official elected by the Board memb ers and two of the seven  members are government 
officials.  The Government does not have a role in setting company policy or in making operational 
decisions.  Tawuniya conducts its business in acco rdance with commercial considerations, and does 
not enjoy any special or exclusive privileges.  There are no legal impediments to competition with 
Tawuniya.99 
137. The insurance market in Saudi Arabia has continue d to grow over the last few years.  This has 
been driven at least in part by the expansion of  compulsory insurance in health care and motor 
vehicles, as well as an expansion in construc tion and additional deve lopment of industrial 
infrastructure.  During 2005-10, gross written premiums (GWP) increased 30%, to reach 
SAR 16.4 billion. 100 
138. There are currently 30 licensed  insurance and reinsurance co mpanies in Saudi Arabia and 
4 other companies in the final stages of the licensing process (Table IV.16).101  In addition, there are 
53 insurance brokers, 27 insurance agencies, 9 loss ad justers, 8 third-party administrators (TPA's), 
6 insurance consultants, and one actuarial services firm.102 
Table IV.16 
Licensed insurance and reinsurance companies, 2011 
Company  Capital (million SAR) Approval date 
National Company for Cooperative Insurance (NCCI) 500 12/2/2004 
The Mediterranean and Gulf Cooperative In surance and Reinsurance (MedGulf) 800 9/11/2007
Malath Cooperative Insurance and Reinsurance Company 300 9/11/2007
Arabian Shield Cooperative Insurance 200 9/11/2007
Saudi IAIC for Cooperative Insurance (SALAMA) 100 9/11/2007
Table IV.16 (cont'd) 
                                                      
96 For the legislation governing the insurance sector , see SAMA online information.  Viewed at:   
http://  www.sama.gov.sa/sites/samaen/Insurance/Pa ges/LawsandRegulations.aspx [April 2011].   
97 For a detailed description of Saudi Arabia's cooperative insurance market, see WTO document 
WT/ACC/SAU/61, paragraphs 289-295. 
98 Royal Decree No. (M/10) of 1/5/1420 H. 
99 WTO document WT/ACC/SAU/61, p. 24. 
100 SAMA (2010), p. 6. 
101 SAMA (2010). 
102 SAMA online information.  Viewed at:  http ://www.sama.gov.sa/sites/sa maen/Insurance/Insurance 
Lib/English_Licensed_List.pdf [March 2011].   The Kingdom of Saudi Arabia WT/TPR/S/256 
 Page 79 
 
 
Company  Capital (million SAR) Approval date 
SA BB Takaful 100 9/11/2007
Saudi Arabian Cooperative Insurance Company  100 9/11/2007
Al Ahli Takaful 100 9/11/2007
Gulf Union Cooperative Insurance Company 220 9/11/2007
Sanad for Cooperative Insurance and Reinsurance (SANAD) 200 3/8/2008
Assurance Saudi Fransi (Allians) 100 3/8/2008
Trade Union Cooperative Insurance Company 250 3/31/2008
Al Sagr Company for Cooperative Insurance 200 3/31/2008
Saudi Indian Company for Cooperative Insurance 100 6/10/2008
Arabia Insurance Cooperative Company 200 6/18/2004
Saudi United Cooperative Insurance Company (Wala'a) 200 7/2/2008
Saudi Re for Cooperative Reinsurance Company (Saudi Re) 1,000 7/21/2008
Bupe Arabia for Cooperative Insurance 400 8/10/2008
United Cooperative Assurance (UCA) 200 12/30/2008
Al-Ahlia for Cooperative Insurance 100 3/9/2009
Allied Cooperative Insurance Group (ACIG) 100 5/10/2009
Al-Rajhi Company for Cooperative Insurance 200 11/17/2009
Ace Arabia Cooperative Insurance Company 100 12/8/2009
AXA Cooperative Insurance Company 200 1/26/2010
Al-Alamiya Cooperative Insurance Company  200 2/13/2010
Gulf general Insurance Company  
Buruj Cooperative Insurance company 
Wataniya Insurance Company 
Amana Cooperative Insurance Company 
Solidarity Saudi Takaful Co. 200 
130 
100 
320 
555 3/6/2010
5/29/2010 
6/16/2010  
7/6/2010 
3/21/2011 
Source:  SAMA (2011). Viewed at:  http://www.sama .gov.sa/sites/samaen/Insurance/InsuranceLib/ 
 SUR_InsuaMarketSurvey2010_En_2010.pdf.  
139. To establish a new locally incorporated public  joint-stock cooperative insurance company, 
a foreign insurance company is required to:  (i) obtain a licence from SAMA (per Articles 4-11 of the 
Cooperative Insurance Companies Cont rol Law);  (ii) obtain approval from SAGIA;  (iii) apply to the 
Ministry of Commerce and Industry pursuant to the Companies Law;  (iv) obtain approval from the 
Council of Ministers (through a Royal Decree);  and (v) obtain an authorization to conduct business from SAMA.   
140. Upon submission of an application the company must comply with capital and capitalization 
requirements as described in the Law and Regulations.
103  Paid-up capital is required upon the 
issuance of the Royal Decree.  Article 6 of the Cooperative Insurance Companies Control Law 
implementing regulations require that applications  for new insurance companies must be processed 
within 90 days.  After the MCI has approved the app lication, a percentage of shares must be floated 
on the Saudi stock market in an initial public o ffering (IPO) in accordan ce with CMA implementing 
regulations (currently a minimum of 30%).  These re gulations require every issue to be underwritten, 
and the CMA to review the prospectus within 45 days of receiving all required information and 
documentation.104  
                                                      
103 (Article 3(3)) sets minimum paid-up capital requirements (administered by SAMA) for locally 
incorporated public joint-stock cooperative insuran ce company (SAR 100,000,000) and for reinsurance or 
insurance companies engaged in underwriting reinsurance activities (SAR 200,000,000).    
104 WTO document WT/ACC/SAU/61, p. 93. WT/TPR/S/256 Trade Policy Review 
Page 80 
  
141. Royal Decree No. 3120/MB permitted the establis hment of branching.  Regulatory reforms 
were aimed at promoting investment in the Saudi  Arabian cooperative insurance market, consistent 
with internationally recognized insurance indus try standards, and principles (including the 
International Association of Insurance Supervisors (IAIS)).105 
(d) Health insurance 
142. The Council of Cooperative Health Insurance, headed by the Minister of Health, is 
responsible for enforcing the Cooperative Health  Insurance Law.  The Cooperative Insurance 
Companies Control Law granted SAMA the authorit y to supervise the entire insurance sector for 
compliance with regulatory requirements.106 
143. Under the Cooperative Insurance Companies C ontrol Law, SAMA's responsibilities include, 
inter alia :  the suspension and withdrawal of regulatory permission;  approval of board members of 
locally incorporated public joint-stock cooperativ e insurance and reinsuran ce companies, and their 
external auditors;  monitoring solvency of insurance and reinsurance companies through the 
establishment of general rules to ensure credit worthiness, capital adequacy, soundness of assets and 
ability to meet obligations to policy holders;  intervention in cases of vi olations of the rules, including 
requiring liquidations.  SAMA also establishes th e pre-conditions for granting licences to provide 
insurance-related services, in particular:  insuran ce brokers, insurance consultants, inspectors and loss 
adjusters, experts in settling insurance claims, and actuaries. 
144. The Cooperative Health Insurance Law covers a ll non-Saudi nationals working in the private 
sector.107  Health insurance is compulsory for those wo rkers.  Saudi Arabian na tionals are not required 
to hold private health insurance, and are eligible  for universal healthcare provided by Saudi Arabia, 
although Saudi citizens working in the private sec tors are currently covered by the compulsory 
cooperative health insurance.  Saudi citizens are able  to acquire additional h ealth insurance coverage 
from the private sector. 
145. In 2009, 25 insurance companies were offering medical insurance in Saudi Arabia, and 1,217 
total health facilities provided health insurance;  1,186 facilities were private and 31 were owned by 
the public sector.108  The health insurance market has doubled  in size since Saudi Arabia's accession 
to the WTO in 2005.   
(iii) Telecommunications and postal services 
146. Saudi Arabia's telecommunications network has grown considerably during the last few years, 
with a substantial number of new companies enteri ng the market, particularly in mobile telephony 
(Chart IV.1).  Licenced telecoms operators earned SAR 77 billion in 2010, including SAR 16.5 billion 
in overseas business. 
147. At end 2010, broadband subscriptions had increased  to 4.4 million, with an annual average 
growth rate of 123% over 2006-10.  This rapid increase in the ta ke-up and provision of broadband 
services resulted in a penetration ratio of 16% of total population, and 41.6% of total households by 
the end of 2010, assuming that 80% of wire- line broadband connections  and 25% of wireless 
broadband subscriptions are for residential use, with the rest being for business or individual use only.  
Digital subscriber lines (DSLs) represented 47.3% of total broadband subscribers;  fixed wireless lines 
                                                      
105 WTO document WT/ACC/SAU/61, p. 94. 
106 Royal Decree No. M/32 of 2.6.1424H (31 July 2003). 
107 Royal Decree M/10 of 1.5.1420H (13 August 1999). 
108 SAMA (2010), p. 33. The Kingdom of Saudi Arabia WT/TPR/S/256 
 Page 81 
 
 
and mobile broadband constituted 51% .  Despite the high growth, there is still growth potential for 
broadband services.  The Saudi Communications a nd Information Technology Commission (CITC) 
expects broadband service to grow owing to expanded competition among service providers, 
increased demand for internet service, and higher awar eness of internet uses and applications, such as 
e-learning, e-government, and e-trade, plus grow ing networks and new services launched by new 
licensed companies.  
4.8 5.5 6.1 6.323.630.538.745.3
2.55.07.29.214.219.728.436.044.851.6
12%23%32%40%60%81%113%138%167%186%
0%20%40%60%80%100%120%140%160%180%200%
0102030405060
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Penetration (%)Subscriptions (million)Post-paid subscriptions Prepaid subscriptions
Total subscriptions Mobile penetration (%)Chart IV.1
Mobile telephony, 2001-10
Source: CITC Annual Report 2010. 
148. Saudi Arabia undertook broad commitments  in telecommunications under the GATS.109  
Saudi Arabia committed itself to allow up to 70% foreign equity ownership in the telecommunications 
sector (basic telecom services and value-added telecom services).  Public telecommunications services are permitted as long as they are provided by a joint-stock company.  Saudi Arabia's 
Schedule of Specific Commitments contains an u ndertaking that after 2006 no legal impediments 
would remain to competition with the Saudi Teleco m Company (STC).  Saudi Arabia also undertook 
commitments on courier services.  
149. The STC was established pursuant to a decision of the Council of Ministers, transferring the 
telecoms activities of the Ministry of Post and Telecommunications to a public joint-stock company. 
The STC had transformed itself, in a relatively short time, into one of the most technically advanced 
telecommunication companies in the Middle East re gion, offering services and products that matched 
other major international telecommunication co mpanies.  The STC's paid-up capital is 
SAR 15 billion.  The Government owns 70% of STC shares;  7% was purchased by the General 
Organization for Social Insurance (GOSI), and 6.6% by the Pension Fund.  There is no timetable for 
further privatization. 
                                                      
109 WTO document WT/ACC/SAU/61/Add.2, pp. 14-16.  The Reference Paper on basic 
telecommunications is annexed to and forms part of Saudi Arabia's commitments on telecommunications.   WT/TPR/S/256 Trade Policy Review 
Page 82 
  
1.01.41.82.43.04.87.69.310.311.4
5%6%8%10%13%20%31%37%38%41%
0%5%10%15%20%25%30%35%40%45%50%
02468101214
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Internet users (million)
Internet penetration (%)Chart IV.2
Internet market evolution, 2001-10
Source: CITC Annual Report 2010. 
150. The telecoms sector is supervised by the Communications and Information Technology 
Commission.110  The Commission's functions are set out in the Telecommunications Act, its Bylaw, 
and the Ordinance of the Communications and Information Technology Commission (in Royal 
Decree No. (M/12) of 12/3/1422H). 
151. The Ministry of Communications and Information Technology has been charged with 
introducing e-government and relate d transactions.  The Ministry e-government services programme 
"yesser", was established jointly with the Communi cations and Informati on Technology Commission 
and was launched in 2005.  The programme en ables the implementation and facilitation of 
e-government services. 
152. The Saudi Post Corporation (SPC) is the monopol y provider of mail and postal services inside 
Saudi Arabia.  Over the past several years the SPC has concentrated on offering new services to 
clients, whilst retaining its core, physical postal bus iness.  In addition to maintaining a large network 
of post offices and subsidiary post offices, Express post centres and private postal agencies (offices 
set up and funded by the private sector), SPC pr ovides post box services for subscribers in cities and 
towns.  SPC also provides mobile post offices for v illages and hamlets, covering about 4,632.  During 
2009, SPC handled 690 million postal items of which 99.6% were postal letters, 0.3% express mail 
letters, and the rest post parcels.111  SPC offers electronic access to physical post, as well as email 
services.   
153. Saudi Arabia became a member of the Universal Postal Union on 1 January 1927. 
                                                      
110 Council of Ministers Decision No. 74 of 5/3/1422H, and Council of Ministers Decision No. 123 of 
21/5/1424H. 
111 SAMA (2010). The Kingdom of Saudi Arabia WT/TPR/S/256 
 Page 83 
 
 
154. Under the GATS, Saudi Arabia committed to no  restrictions on market access or national 
treatment across modes 1 to 3 (mode 4 unbound, subject  to listed horizontal restrictions).  Moreover, 
Saudi Arabia committed that foreign express deliv ery operators would have treatment no less 
favourable than the Postal Office.   
155. Six companies offer express courier deliveries in Saudi Arabia. 
(iv) Transport 
156. A large and sparsely populated (mostly city dw elling) country, Saudi Arabia has 27 airports; 
175,000 km of roads;  and 1,379 km of railway s.  Passenger and cargo transport operations for 
2008-09 are described in Table IV.17. 
Table IV.17 
Passenger and cargo transport operations, 2008-09 
 2008  2009 
Type of transport Passengers 
(million) Cargo 
('000 tonnes)  Passengers 
(million) Cargo 
('000 tonnes) 
Air transport 42.15 564.77  41.70 530.60 
Land transport 21.92 3,483.00  21.95 3,515.00 
Railway 1.11 3,483.00  1.10 3,515.00 
Public transport 11.92 n.a.  11.94 .. 
Inter-city transport 6.97 n.a.  6.98 .. 
International 
transport 1.92 n.a.  1.93 .. 
Maritime transport  1.31 154,862.30  1.17 142,306.80 
Total 65.38 15,891.07  64.84 146,352.40 
.. Not available. 
n.a. Not applicable. 
Source : Ministry of Transport, General Au thority of Civil Aviation, General Railway Organization, and General Port 
 Authority. 
157. Foreign investment is not permitted in land tr ansport services, excluding inter-city passenger 
transport by train (Table II.2). 
(a) Aviation transport 
158. Private air carriers are permitted to operate schedul ed flights into and out of Saudi Arabia.  In 
2007 and 2008, around 42 million of pa ssengers per year travelled to or  from Saudi Arabia by aircraft. 
159. The national airline carrier, Saudia, is 100% owned by the Government.  The Ministry of 
Defence and Civil Aviation is responsible for its s upervision.  Saudia operate s both international and 
domestic flights.  Saudi Arabia has signed  bila teral "open skies" agreements with Bahrain, 
European Union, Japan, Kuwait, Oman, Qatar, Syri a, United Arab Emirates, United States (signed in 
March 2011), and Yemen. 
160. Saudia is a public company operated under by-laws and with juridical personality and 
capacity.  The company is managed by a board of directors, presided over by the Minister of Defence and Aviation and composed of board members appoint ed by resolution of the Council of Ministers.  
The Director General is appointed by a decision of the Council of Ministers.  The board of directors manages and controls Saudia's business affairs and sets its general policies, independent of the WT/TPR/S/256 Trade Policy Review 
Page 84 
  
administrative and financial regula tions of government departments.112  Saudia carries out all 
activities relating to commercial and civil air transport,  inside and outside of Saudi Arabia.  According 
to the WTO Working Party Report on the accession of  Saudi Arabia, there is no government control 
of Saudia.113  
161. Cargo flights are open to all licensed carriers, as well as express delivery companies (subject 
to Saudi Arabia's GATS commitments.  Since 1994, several components of Saudia (catering and 
cargo) have been partially privatized.114  Saudi Airlines Cargo continues to dominate air shipment 
business, from airports in Damman, Riyadh and Jeddah:   it transported about 320 million kg of cargo 
in 2009 and 187 million kg during the first half of 2010.115 
(b) Maritime transport 
162. Saudi Arabia's major sea ports are: Jeddah Is lamic port, King Abdulaziz port at Dammam, 
Yanbu Commercial port, Jubail commercial port, Gizan  port, Diba port, King Fahad Industrial port at 
Yanbu, King Fahad Industrial port at J ubail, and Ras Al-Kair.  Saudi Arabia is seeking to increase the 
number of "buy operate transfer" (BOT) projects to manage, rehabilitate, and provide services at 
Saudi ports.116   Saudi Arabia has 660 registered seagoing vessels.   
163. The Saudi Ports Authority (SPA) created in 1976, now contracts out the operations of sea 
ports to the private sector.  Currently, 27 privat e companies provide port services on a contract basis 
for SPA.   
164. The National Shipping Company of Saudi Arabia (NSCSA), created as a public company in 
1979, is 28% owned by the Public Investment Fund  of the Saudi Government117;  the remainder is 
owned by Saudi nationals.  NSCSA is a large sh ipping conglomerate operating multipurpose vessels.  
It is the first national carrier.  NSCSA's activities in clude transportation of ge neral cargo, crude oil, 
chemicals and LPG;  it owns and operates 17 very large crude carriers (VLCCs).  NSCSA LPG transportation activities are based on its 30.3% share holding in Petredec Limited (one of the global 
leaders in LPG transportation).  Through its subs idiary, the National Chemical Carriers (NCC), (in 
partnership with SABIC), NSCSA owns a fleet of 14 chemical carriers.  NSCSA also owns 
four multipurpose vessels, deployed between the eastern coast/Indian subcontinent/western 
coast/Mediterranean/east coast of North America.  The company has a container service yard at the 
Jeddah Islamic port to facilitate container storage and maintenance repair services.  It has signed 
four contracts (with an option for two additional c ontracts) with Hyundai MIPO for ships specialized 
in carrying general, projects cargo, and Roll-on-Roll off ships.  
165. The NSCSA established the Mideast Ship Mana gement Ltd to provide professional ship 
management services to its fleet and other shipping companies.  Through its subsidiary, NCC (a major 
                                                      
112 The board of directors is composed of nine members, including the company's regulating authority, 
the Ministry of Defence and Aviation.   
113 WTO document WT/ACC/SAU/61, p. 22. 
114 Viewed at:  http://arabnews.com/ec onomy/article28121.ece [April 2011]. 
115 Viewed at:  http://www.saudiacargo .com/news_01.php  [May 2011]. 
116 WTO document WT/ACC/SAU/61, p. 15. 
117 The Public Investment Fund (PIF) was established by Royal Decree No. M/24, (25-06-1391H 
(17 August 1971).  The PIF's objectives are to provide financing to economically significant commercial 
projects that cannot be implemented by  the private sector alone.  It has he lped the establishment of:  The Saudi 
Rail Road Company (SAR);  The National Company for Unified Procurement of Medicine;  Al-elm Information 
and Data Security Company;  the Security Exchange Company (Tadaw l) and the Saudi Company for the 
Exchange of Electronic Data (Tabadl).   Viewed at:  http://www.mof.gov.s a/en/docs/ests/sub_invbox.htm 
[May 2011].   The Kingdom of Saudi Arabia WT/TPR/S/256 
 Page 85 
 
 
chemical transportation company), it has a joint- venture agreement with Odfjell of Norway to 
establish an operating company in Dubai to operate th eir combined fleet of coated chemical tankers as 
a pool. 
166. Vela International Marine Limited (Vela), anot her major maritime transport corporation based 
in Saudi Arabia, is a crude oil tanker owner and wholly owned subs idiary of Saudi Aramco.  Vela 
owns and operates a modern fleet of 16 VLCCs.  Vela's tankers primarily ship between the Middle 
East, Europe, and the U.S. Gulf Coast.  Vela also  owns and operates five tankers that transport 
petroleum-based products, primarily on the western and eastern coasts.118  
167. Saudi Arabia's maritime transport services commitments contain no limitations on market 
access or national treatment across the first three modes of supply.119  Mode 4 is unbound on both 
market access and national treatment. 
(c) Rail transport 
168. The Saudi Railways Organization (SARO), established as a fully state-owned entity120, is 
under the jurisdiction of the Ministry of Transportati on.  SARO is responsible for the railway network 
planning, whereas construction and operation may be the responsibility of:  SARO, the Ministry of 
Municipal and Rural Affairs, or the Public I nvestment Fund.  SARO conducts its business in 
accordance with commercial considerations.121 
169. In 2002, Saudi Arabia launched a project to upgrade and expand the railway network through 
the construction of the Saudi Landbridge railway  link on a build, operate and transfer basis.122  The 
Landbridge project will eventually link the eastern and western coasts and permit the transfer of 
cargoes in around 48 hours, instead of 7 days by sea.123  An additional project is to develop a 
north-south rail link, to assist in the exploitation of  mineral resources and particularly mining projects 
and passenger transport.  The north-south project  will link the north-west border of Saudi Arabia 
(Saudi/ Jordan border) with Riyadh. 
(d) Pipeline transport 
170. Saudi Arabia undertook commitments on pipeline transportation in its schedule of specific 
commitments in services.  Saudi Arabia committed to impose no restrictions for both market access 
and national treatment for modes 1 to 3;  mode 4 was and unbound. 
171. Saudi Arabia has 8,664 kilometres of petroleum pi pelines:  212 km for condensate;  1,880 km 
for natural gas;  1,183 km for LPG;  4,241 km for oil124;  and 1,148 km for refined products.  A further 
crude oil pipeline supplying Bahrain is being developed. 
                                                      
118 Viewed at:  http://www.vela.ae [April 2011]. 
119 WTO document WT/ACC/SAU/61/Add.2, p. 26.  
120 Royal Decree M/3 of 22.1.1386H (13 May 1966). SARO budget is covered by the General Budget 
of the Government of Saudi Arabia.  The Government appoints all six Directors and the Chairman of the Board, 
who is the Minister of Transportation. 
121 WTO document WT/ACC/SAU/61, paragraph 61.  
122 Supreme Economic Council Resolution No. 23/3 on 23.3.1423H (5 June 2002). 
123 Viewed at:  http://www.railway-technology.com/projects/saudi-landbridge [April 2011].   
124 This does not include the now defunct trans-Arab pipeline (Tapline), which has not operated since 
the 1990s. WT/TPR/S/256 Trade Policy Review 
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(v) Tourism 
172. Saudi Arabia has extensive archaeological and historical sites as well as sites of natural 
beauty.  In recent years there has seen an increase in the number of domestic tourists and a 
corresponding growth in hotel and short-stay accommodation.  
173. The Saudi Commission for Tourism and Antiquiti es (SCTA) is responsible for planning and 
development of tourism.125  Saudi Arabia is a major site for religious tourism:  each year, around 
5.1 million persons travel to Saudi Arabia to pe rform the Hajj and Umrah pilgrimage to Makkah.  
Saudi Arabia maintains a visa regime for both categor ies of pilgrimage.  The administration of Hajj 
and Umrah visits are the responsibility of the Ministry of Hajj.   
174. Saudi Arabia has not extensively promoted non -religious tourism for foreigners, although the 
domestic and foreign-resident market has grown in recent years.  According to the latest available 
figures, in 2009, the number of domestic tourism trips by citizens and residents reached 32 million (28.8 million in 2008), while tourism visits by foreign citizens to Saudi Arabia dropped to 
10.9 million (14.7 million in 2008).  Expenditure on domestic tourism trips was SAR 33.4 billion in 
2009, 11.2% less than in the preceding year.  Expenditures on outbound tourism trips (excluding 
international transport expenses) rose by 44.5% to SAR 28.4 billion in 2009 (SAR 19.7 billion in 
2008).  The most popular tourism locations in Saudi Arabia are Makkah, attracting 12.7 million visits, 
and 39.9% of total visits in 2009.  The eastern,  Riyadh, 'Asir and Al-Madinah regions received 
4.3 million, 4.1 million, 3.7 million and 2. 8 million trips, respectively, during 2009.
126 
175. Saudi Arabia undertook commitments in touris m and travel related services under the GATS. 
                                                      
125 Council of Ministers Resolution No. 9 of 12/1/1421 H (16 April 2000), and Council of Ministers 
Resolution No. 78 of 16/3/1429 H (24 March 2008G). 
126 SAMA (2010).  Visitors and pilgrim numbers in 200 9 were affected by the global H1N1 epidemic.   The Kingdom of Saudi Arabia WT/TPR/S/256 
 Page 87 
 
 
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