According to the Oil and Gas Journal, Saudi Arabia contains about 260 billion barrels of proven oil reserves (including 2.5 billion barrels in the Saudi-Kuwaiti Divided, or "Neutral" Zone), or around one-fifth of proven, conventional world oil reserves. Around two-thirds of Saudi reserves are considered "light" or "extra light" grades of oil, with the rest either "medium" or "heavy." Although Saudi Arabia has over 100 oil and gas fields (and more than 1,500 wells), over half of its oil reserves are contained in only eight fields, including the giant 1260-sq mile Ghawar (the world's largest oil field, with estimated remaining reserves of 70 billion barrels) and Safaniya, including Khafji and Hout (the world's largest offshore oilfield, with estimated reserves of 25-35 billion barrels). Ghawar's main producing structures are, from north to south: Ain Dar, Shedgum, Uthmaniyah, Hawiya, and Haradh. Ghawar alone accounts for about half of Saudi Arabia's total oil production capacity.

Saudi Arabia maintains the world’s largest crude oil production capacity, estimated to be around 10.5-11.0 million bbl/d. In 2005, Saudi Arabia’s Ministry of Petroleum announced the details of an $18-billion plan to increase capacity to 12 million bbl/d by 2009.

In December 2006, Saudi Aramco announced its 2007 exploration and drilling budget of almost $4 billion - nearly double the draft budget and full quarter of Aramco’s 2007 capital budget. According to Oil Daily reports, Aramco plans to drill 427 onshore and offshore crude oil development wells in 2007. Approximately 134 wells will be in or near Ghawar, while 85 will be drilled in Khurais, and some 50 drilled in Khursaniya.

One challenge for the Saudis in achieving their strategic vision to add production capacity is that their existing fields sustain, on average, 6 to 8 percent annual "decline rates” (as reported by PlattsOilgram) in existing fields, meaning that the country needs around 700,000 bbl/d in additional capacity each year just to compensate for natural decline.

Aramco estimates that the average total depletion for Saudi oil fields is 29 percent, with Abqaiq (the oldest) 74 percent depleted, the giant Ghawar field having produced 48 percent of its proven reserves and the younger Shaybah just 5 percent depleted. Aramco also claims that, if anything, Saudi oil reserves are underestimated, not overestimated. Some analysts have disputed Aramco's optimistic assessments of Saudi oil reserves and future production. Minister Al-Naimi has vigorously refuted these arguments, and stated that Saudi Arabia could add as much as 200 billion barrels of oil to proven reserves after the extended period of investment and exploration. In order to stave off decline, wells are undergoing reservoir management and rehabilitation projects, including the installation of “smart well” technologies.

Saudi Arabia produces a range of crude oils, from heavy to super light. Of Saudi Arabia's total oil production capacity, about 65-70 percent is considered light gravity, with the rest either medium or heavy; the country is moving to reduce the share of the latter two grades. Lighter grades generally are produced onshore, while medium and heavy grades come mainly from offshore fields.

For 2006, the U.S. Energy Information Administration estimates that Saudi Arabia produced around 10.7 million bbl/d of total oil -- comprising crude oil, natural gas liquids, and "other liquids" (includes half of the Saudi-Kuwaiti Divided Zone's 600,000 bbl/d). In addition to crude oil, Saudi Arabia produces around 1.5 million bbl/d of natural gas liquids (NGLs) and "other liquids," not subject to OPEC quotas.

The Ghawar field is the main producer of 5 million bbl/d of 34o API Arabian Light crude. Abqaiq (17 billion barrels of proven reserves) produces approximately 400,000 bbl/d 37o API Arab Extra Light crude. Since 1994, the Najd fields, which includes the Hawtah field and smaller satellites (Nuayyim, Hazmiyah) south of Riyadh, have been producing around 200,000 bbl/d of 45o-50o API, 0.06 percent sulphur, Arab Super Light. Offshore production includes Arab Medium crude from the Zuluf (over 500,000 bbl/d capacity) and Marjan (270,000 bbl/d capacity) fields and Arab Heavy crude from the Safaniya field. Most Saudi oil production, except for "extra light" and "super light," is considered "sour," containing relatively high levels of sulfur.

The $4-billion project, known as the Qatif Producing Facilities Development Program (QPFDP), involved construction of two gas-oil separation plants (GOSPs), as well as gas treatment and oil stabilization facilities, for the Qatif and Abu Saafa oilfields (Abu Saafa is half owned by Bahrain). Additional production from these fields was slated to replace production elsewhere in Saudi Arabia, not to boost overall capacity.

Despite recent OPEC cuts, Saudi Aramco continues aggressive plans to increase capacity; the following is a table of planed production capacity increases through 2011. In addition to these capacity increases, Saudi Aramco has said that it will also conduct additional drilling at existing fields in order to help compensate for the natural declines from the mature fields.

Saudi Arabia's long-term goal is to further develop its lighter crude reserves including the Shaybah field, located in the remote Empty Quarter (Rub al-Khali) area bordering the United Arab Emirates. (In June 2005, the UAE said it wanted to amend a 1974 border pact which gave the Saudis rights to Shaybah, which lies 80 percent in Saudi territory and 20 percent in UAE). Shaybah contains an estimated 14.3 billion barrels of premium grade 41.6o API sweet (nearly sulfur-free) Arab Extra Light crude oil, with production as of November 2006, at around 550,000 bbl/d from 141 wells. It is the largest oil field in the world that has been developed in the past two decades. According to Oil Minister Naimi (October 1999), the development of Shaybah showed that "the cost of adding...capacity - that is, all the infrastructure, producing and transportation facilities - necessary to produce one additional barrel of oil per day in Saudi Arabia is, at most, $5,000 compared to between $10,000 and $20,000 in most areas of the world."

The Saudi-Kuwait Divided Zone, 2230 sq mi between the borders of Saudi Arabia and Kuwait that was left undefined in 1922, contains an estimated 5 billion barrels of proven oil reserves, divided equally between the two countries. Within the Divided Zone, Japan's Arabian Oil Co. (AOC) traditionally operated two offshore fields (Khafji and Hout) with 300,000 bbl/d in production (now approximately 150,000 bbl/d), but in February 2000, it lost the concession (in January 2003, AOC reached an agreement with Kuwait on the right to purchase at least 100,000 bbl/d of crude for the next 20 years from Khafji). Efforts to negotiate an extension of the operating contract with Saudi authorities failed when Japan refused to commit to investment in development projects desired by the Saudis. Saudi Aramco has taken over operation of the former AOC fields. ChevronTexaco, meanwhile, operates three onshore fields (Wafra, South Fawaris, and South Umm Gudair) in the Divided Zone under a 60-year license that expires in 2009. These fields have 2 billion barrels of proven reserves and total production of about 260,000 bbl/d. Finally, Bahrain and Saudi Arabia share the 300,000 bbl/d production of the Abu Saafa offshore field.

According to Oil and Gas Journal, Saudi Arabia has seven functioning refineries, with combined crude throughput capacity of around 2.1 million bbl/d, plus around 1.75 million bbl/d of refining capacity overseas, making it the sixth largest oil refiner in the world. The Saudi Aramco development plan calls for a $20-billion investment, increasing domestic refining capacity to 3 million bbl/d and international holdings by at least 1-2 million bbl/d by 2011, particularly in an effort to meet requirements of the fast-growing Asian market.

Saudi Aramco is also aiming to increase private investment through join ventures in downstream petroleum activities. In March 2006, France’s Total and Saudi Aramco announced plans to build a $6-billion, 400,000-450,000 bbl/d export-oriented refinery in Jubail. Also in 2006, Aramco signed an MOU with Conoco Philips for a 400,000-bbl/d heavy conversion facility at Yanbu. As part of the privatization program, 30 percent of shares will reportedly be offered to the public. Reportedly, Aramco is considering putting out a tender for a privately-owned refinery at the port-city of Jizan

The Saudi petroleum pipeline and export network (and energy sector in general) remains a terrorism target. In February 2006, Saudi security prevented an attempted suicide bomb attack at the Abqaiq petroleum processing facility, after Al-Qaeda leadership called for renewed attacks against the country’s economic backbone.

Nevertheless, energy infrastructure remains well-protected. Following the February incident, the government increased the National Guard and military security force to approximately 20,000, in addition to the 5000 guards employed directly by Aramco. Reportedly, security spending has been ramped up since a series of attacks against energy infrastructure and foreign nationals were carried out in 2004.

In addition to direct security, Saudi Arabia is known to ensure export security by maintaining "redundancy" (i.e., multiple options for transportation and export) in its oil system, in part as a form of indirect security against any one facility being disabled.