[:en]Podcast script:   Shale oil is another name for the more technical term: light tight oil (LTO). It is characterized by being sweet due to its low sulfur content of 0.2%, and light for being less viscous with average API gravity between 35o and 55o API. It exists in many geological formations around the world, but the vast reserves of LTO in the United States are located in the Permian, Eagle Ford, and Bakken basins. In these regions, LTO became more economically viable to produce during the last couple of decades, thanks to technological innovation, easy access to low-cost financing, high crude oil price environments, and efficient, repeatable upstream development workflows by small independent producers.     In addition to the aforementioned factors, the United States congress repealed a 40-year-old, self-imposed ban on oil exports back in 2015, which allowed the American oil producers to compete in the international markets. These conditions drove the production of LTO to its peak, which exceeded 8 million barrels per day in early 2020, thereby transforming the United States of America from a net importer to a net exporter of petroleum. The LTO crude production boom transformed the landscape of the whole U.S. oil and gas sector across the entire oil value chain, which posed several unique challenges, such as oil refineries reconfiguration and optimization, midstream bottlenecks and investments, and shifting trade flows.     As for the first challenge, the introduction of large quantities of LTO to the current installations of oil refineries faced some serious obstacles. There are several types of refineries; each is a uniquely designed processing plant that is tailored to accommodate a certain type of input crudes, and works to reform crude to produce different outputs of oil derivatives. The problem is that the U.S.’s LTO contains a high content of naphtha and very low heavy residue yields, which is very different from some of the imported light oils that the U.S. refineries are used to processing historically.     The U.S.’s oil industry has foreseen this issue since the early 2000s, and has gradually increased its processing capacity of LTO crudes. In July 2020, about 37% of the U.S. refineries’ diet consisted of LTO crude, while 23% of it was based on conventional oil, and the remaining 40% was imported heavy oil. Likewise, many U.S. refineries in the past two decades have intensified their investments in crude oil resilience projects to process broader slates of crude oil, such as the much cheaper heavy sour and Canadian heavy oil.     Additionally, the refineries’ processing capacity was optimized by blending the LTO with heavier crude oils, based on quality, yield, and cost differentials. Blending tight oils with heavy waxy crude makes sense, as the blend can result in a desirable processing profile for many refiners. However, this can also lead to compatibility issues if blending was not optimized. This lack of compatibility required large-scale reconfiguration and optimization initiatives of the existing oil refineries.     Hence, the American refineries were able to mitigate several processing challenges of the new LTO, such as equipment fouling, high system pressure issues, and underutilized units. This move significantly improved the profit margins due to the utilization of cheaper crude feedstock. However, although most of the refineries on the U.S. Gulf Coast were gradually increasing the LTO in their refineries’ crude diet, it was impossible for all refineries to keep pace due to several reasons, the most important of which is the second challenge: midstream bottlenecks.     One of the main constraints that prevent the full utilization of LTO is the lack of a pipeline system linking producing fields and refineries. To make up for the shortage, railways and trucks are currently used to transport oil, which in

[:en]Podcast script:   The world is witnessing a growing demand for electricity. This has fueled a move toward renewable and cleaner energy sources, as many experts anticipate that over 70% of the needed global system capacity will come from solar and wind energy by 2050. The rapid growth of renewables is driven by the increasing numbers of micro-grids, continued renewable energy penetration in the global power sector, and progress in electromobility.   However, renewable energy projects are confronted with a very significant obstacle that hinders their large-scale deployment. By their innate characteristics, wind and solar power are intermittent. Solar generation operations cease at night, and wind turbines stop rotating when air currents are not strong enough to generate momentum. This cyclical trait conflicts with the electrical grid operators’ duty of maintaining a continuous balance between supplied electricity and its demand. If that fine balance is disturbed, the grid will collapse causing power outages and blackouts. One of the possible solutions to overcome this issue is to utilize large-scale energy storage technologies.   The current technological advancements and downward cost trajectories of the energy storage sector could help to mitigate large fluctuations in grid supply. However, several technological and regulatory challenges facing energy storage remain, making this issue relevant for a number of key energy stakeholders, including the market’s participants, regulators, and consumers.   In their workshop brief, titled: “Utility-Scale Storage: Sleeping Giant or Mirage?” KAPSARC’s researchers discussed key opportunities and challenges related to energy storage technologies’ deployment, and sought to formulate a better understanding of how energy storage might evolve. The researchers noted that energy storage technologies are an enabler of increased integration of renewable generation in the power sector, as they can be deployed at the generation, transmission, and distribution segments of the energy supply chain, making storage technologies especially attractive for vertically integrated utilities. They can also compete in energy, capacity, and ancillary markets. In short, storage can act both as an energy provider and as a load.   From a technological standpoint, there are four types of energy storage technologies that are available in the market at this moment, which are electrochemical, electrical storage, mechanical storage, and thermal. Out of these four types, electrochemical storage is expected to become the most prevalent, with a market cap that is expected to reach $4 billion by 2025. The cost of battery technology is expected to decrease substantially due to increased efficiency gains within the battery supply chain and upscaling of manufacturing.   At the same time, the multiple functions of energy storage make it difficult to regulate, and stand in the way of wider and speedier storage deployment. Currently, there is no market sophisticated enough to accommodate storage technologies and all of their capabilities, which is mainly due to the insufficient clarity on long-term revenues that would result from deploying energy storage. Moreover, there are currently no markets for possible offered services, like avoiding thermal generation starts, increasing system efficiency, ramping/following, and black starts.   In terms of finance, most storage projects have been financed through equity and government grants; however, they have inherited regulations that don’t cover all of the services they offer as mentioned earlier, which limits their revenue streams that reward performance. Hence, investors are very reluctant to enter this nascent field. Yet, several countries and utilities have taken progressive steps to enable further energy storage deployments, such as is the case in the United States, Australia, Germany, and Italy.   Among the

[:en]Podcast script:   Saudi Arabia is committed to transitioning to a cleaner and more sustainable energy system, which is an essential input into most industrial sectors' production processes, and is required for export diversification and import substitution strategies. Saudi Arabia has already made significant strides under Vision 2030 in terms of diversifying energy sources and increasing local content, by developing new industrial sectors and taking advantage of existing supply chains. At the moment, blue and green hydrogen are increasingly gaining international prominence as some of the most promising clean energy sources and exports.   Green hydrogen can be produced by utilizing renewable energy to break down water into hydrogen and oxygen molecules through electrolysis. Saudi Arabia is specially equipped to adopt green hydrogen because of its land abundance and its optimal location with a high capacity factor for renewable energy. Moreover, the Saudi industrial sector is showing a great appetite for developing blue hydrogen production capacity and technologies, which are based on creating blue hydrogen from natural gas through steam methane reformation, while simultaneously capturing any resultant carbon for later usage or storage. Later, green and blue hydrogen can be used for domestic energy usage or exported in the form of ammonia for global buyers as a source of income.   Hydrogen is a clean energy carrier; it could deliver or store enormous amounts of energy and then be used in the industry, transport, and electricity sectors. However, the adoption of hydrogen remains constrained by its costs. Recently, the last and noticeable decline in the costs of renewable energy sources has highlighted the potential of hydrogen and makes green hydrogen production more feasible than before. Moreover, the escalation of global environmental protection policies and climate change mitigation measures are leading to increasing the costs of conventional energy sources, hence, improving the outlook for hydrogen. For all these reasons taken together, Saudi Arabia can rely less on domestic oil thanks to green hydrogen production, especially with the ongoing trend of decreasing costs of solar photovoltaic generation globally. Bloomberg New Energy Finance data indicates that the levelized cost of green hydrogen will drop to an average of $1.2 per kilogram by 2050, while the average cost was equivalent to $3.5 per kilogram in 2019. Saudi policymakers are currently assessing the current and possible progress for the future deployment of hydrogen production projects, and are aiming to achieve positive returns on investments in hydrogen technologies, as well as helping Saudi Arabia to gain the first-mover advantage in its transition from a petrostate to an electrostate.   In August of 2020, NEOM announced a $5 billion Saudi green hydrogen plant powered by 4 gigawatts of renewable energy. It aims to produce 650 tonnes of hydrogen by 2025 and export it to the global market to be the world's biggest hydrogen project announced so far. In addition, Saudi Aramco announced its first shipment of hydrogen from Saudi Arabia to Japan in September 2020. The 40 tonnes of high-grade blue ammonia in the shipment, which is meant for use in zero-carbon power generation, marks the first of its kind worldwide. In this regard, Saudi Arabia is going through a paradigm shift by adopting hydrogen and activating the Circular Carbon Economy. During its G20 presidency, Saudi Arabia promoted clean energy transition through the Circular Carbon Economy, comprising 4(Rs) strategies. First, Reduce the amount of carbon entering the atmosphere through energy efficacy and using zero-carbon energy supplies. Second, Reuse carbon by capturing and converting it to another useful feedstock. Third, Recycle carbon by transforming it into fertilizer, cement, or synthetic fuels. Fourth, Remove carbon from the system and store it geologically or che

[:en]Podcast script:   The dominant views of energy security usually revolve around the security of physical supply and its price affordability, which is an importer-centric view and ignores the perspective of the energy exporters in the energy security domain. Energy exporters face some specific challenges, such as global and regional macroeconomic concerns, global market instability, increasing competition from emerging producers and substitutes, protectionist policies, and sanctions among others. While the market participants, international organizations and academia should adopt a more holistic approach to energy security to correct this imbalance, energy-exporting countries must address these risks by developing and articulating comprehensive energy security policies and strategies, which would help identify challenges and threats, in addition to the need for applicable political tools.   To better assess and manage energy security from an exporter’s perspective, KAPSARC researchers utilized one of the most widely used and respected economic tools in the financial industry, the Modern Portfolio Theory. This theory allows for the creation of models that can find the balance between maximizing returns on investments and minimizing the associated risks depending on the investor's priorities. In a discussion paper titled, “Energy Security and Portfolio Diversification: The Exporter’s Perspective,” the researchers used the historical oil export “mirror” data from 2018 of five GCC countries to construct two portfolios for each. Using these two portfolios allowed the researchers to assess the balance between risks and the two core priorities of exporters’ energy security separately; these priorities are increasing export volumes and prices optimization.   Of these, the first portfolio examined Oil Export Volume Growth, which represents the trade-off between focusing on a lower number of buyers who can provide higher export growth on one hand, and having lower risks through a more diverse base of buyers on the other. The second portfolio investigated the Oil Export Price, which represents the trade-off between a riskier portfolio that is concentrated on fewer buyers offering the best price terms, and a safer, more diversified one with a lower expected return.   Among the countries in focus, the analysis demonstrated that Saudi Arabia has composed the most efficient oil export portfolio with an emphasis on securing export volume growth, closely followed by Kuwait and the UAE. Qatar and Oman have less optimal portfolio structures and risk profiles.   Later, to better understand how global events might impact GCC countries’ energy security, KAPSARC researchers developed three scenarios to test the resilience of the GCC countries’ portfolios in the face of external demand and logistical shocks, which are the increase of Chinese oil demand, exports redistribution, and Malacca Strait blockade. In the first scenario, increasing oil demand from China by 20% over Baseline 2018 levels may improve the performance of Saudi Arabia and the United Arab Emirates, but it will increase volatility of export portfolios of Kuwait and Oman in particular. In the second scenario, the reduction in oil exports to the USA by 20% compared with Baseline 2018 levels, while also proportionally distributing these exports to other buyers, will mildly increase Kuwait and Saudi Arabia’s export portfolio risk levels only. However, it will also improve export prices slightly for both countries. In the third scenario, the closure of the Malacca strait leads to a 20% reduction in export volumes to East Asia, which will have an impact on all oil exporters in the GCC, both in terms of reducing export volumes and the portfolios’ risks. Kuwait and Oman would be the worst affected by the disruption.   This analysis shows that portfolio theory can be used to assess and manage energy security from the exporter’s perspective. Unde

[:en]Podcast script:   Reforming the structure of the power industry proved to be the most challenging aspect of the roadmap to reach a competitive electricity market. The industry comprises three distinct power sectors that work together to get electricity to the end-user, which are: power generation, transmission, and distribution. All of these sectors were monopolized by the Saudi Electricity Company, which was a vertically integrated company that suffered from efficiency and systematic challenges. The Saudi restructuring plan envisioned separating competitive and non-competitive activities of the company, by unbundling generation and distribution activities, while maintaining a monopoly of the transmission.   The generation sector’s reforms included energy source diversification initiatives by integrating renewables in the Saudi energy mix, allowing other privately-owned power plants to enter the market, and allowing direct electricity trading by big generators and consumers. Currently, 35% of the Saudi power generation’s capacity is owned by non-Saudi Electricity Company generators.   On the other hand, the transmission sector’s reforms are more complex in nature, as they will determine the dynamics of the future Saudi electricity market. As a part of the reforms, the Saudi Electricity Company established a separate independent company called the National Electricity Transmission Company in 2012. It is currently the system operator and the owner of the Kingdom's transmission network, which has increased by over 50% since 2000, interconnecting more than 99% of the grid with 83,682 circuit-kilometers of transmission lines (overhead and underground lines) and with 1070 sub-station­­­­­s in 2018. The National Electricity Transmission Company acts as an independent transmission operator that maintains an open and unbiased access policy to eligible participants' transmission capacity.   However, Saudi Arabia's roadmap to a competitive electricity market requires creating an independent system operator, which should generate its own resources and play a critical role in establishing and operating the wholesale competitive spot electricity market, by ensuring the independence of operations and investment decisions of the business, and guaranteeing non-discriminatory access to the network. Furthermore, the Saudi Electricity Company established the Saudi Power Procurement Company in 2017 to be the main and single buyer of electricity from all generators in Saudi. Its prominent role is to buy and sell electricity, fuel, and services, and develop year-ahead generation plans, with an exclusive mandate to manage the import and export of electricity across regional interconnections. This company will serve only a transitional role until the market reaches full liberalization.   The distribution sector’s reforms include allowing multiple retailers of electricity to operate in the competitive parts of the country, while maintaining a monopoly in the less attractive areas. This competition will lead to improved services to the end consumer, lower electricity prices, and more innovative business models. Moreover, the authority developed its "Smart Metering and Smart Grids Strategy,” which aims to allow for the integration of PV distributed generation by consumers into the grid, and significantly reduce the grid's power waste. This strategy is expected to deploy 10 million smart meters over the next 15 years, with a cost reaching up to 7.5 billion Saudi Riyals. However, the direct benefits from a massive rollout of smart meters were assessed to be 9.16 billion Saudi riyals. The Smart Metering Project is one of the single most significant digital transformation projects in the Kingdom, and nearly one-third of the components used to build smart meters will be sourced locally.   It is worth mentioning that Saudi Arabia is not the first country to go through this reformation process, and it can learn fr

[:en]Podcast script:   Gas is considered as the ideal fuel in the transition toward clean, sustainable, and affordable energy access. Many countries are increasingly integrating it in their energy mix to generate power as an alternative to the dirty and expensive liquid fuels. Also, a growing number of industries are becoming dependent on natural gas feedstock. Despite all of the given facts, many oil-producing companies dispose of the natural gas associated with the production of crude oil by burning it at the wellhead through a process known as "flaring", or by directly releasing it into the air at the gathering stations and processing facilities in a process known as "venting".     Both of these harmful practices cause accumulation of greenhouse gases in the atmosphere, and waste great amounts of valuable natural gas. They have resulted in flaring of 5.1 trillion cubic feet of natural gas globally in 2018 according to the World Bank, and release of more than 310 million tonnes of carbon equivalent. Such behaviors are a consequence of multiple factors, such as infrastructure restrictions and limited capacities, lack of financial incentives to capture and process gas, weak contractual rights, and poor environmental protection regulations.   Saudi Arabia is one of the most prominent examples of combating these harmful practices and turning gas into a valuable commodity. Back in the early twentieth century, gas did not receive much attention from the Standard Oil of California and the Saudi government, and they disposed of it. In 1948, the discovery of the largest oil field in Saudi Arabia, the Ghawar field, led to the flaring of more associated gas. However, the Saudi government demanded that Aramco stop burning associated gas in the 1950s and instructed Aramco to reinject the gas in the oil reservoirs to provide reservoir pressure support.   Later in the 1970s, Aramco attempted to monetize the associated gas by either selling liquefied petroleum gas to the local and international markets or using it to generate electricity. That coincided with gas being increasingly regarded as an important part of a wider attempt to diversify the Saudi economy, whether to support the petrochemical industry or to generate electricity.   Therefore, the government awarded Aramco a 12 billion US dollar contract to establish the Master Gas System (MGS) to capture, process, and use gas. It became operational by 1982, and it expanded over time in conjunction with the high demand for natural gas and prevented the emission of 80 million tonnes of carbon dioxide into the atmosphere annually. The MGS allowed Saudi Arabia to become the world’s ninth-largest producer of gas, with marketable gas production of 11.5 billion cubic feet per day.   Since then, Aramco placed emphasis on two frontiers: aggressively curbing gas flaring, and developing more non-associated gas fields such as the Jafura field. This has been achieved through implementing corporate-wide programs to further mitigate routine gas flaring across its oil and gas value chain, through the use of zero discharge technologies such as ‘smokeless’ flares, and the deployment of flare gas recovery systems.   To understand how much progress Saudi Arabia has made, we can compare it with Iraq as an example, which ranks second in the world in terms of gas flaring after Russia and burns 65% of the gas output associated with oil. The lack of midstream infrastructure and the absence of a large-scale petrochemical industry augmented the issue even further. Moreover,the Iraqi power sector suffers from aging infrastructure, and there are no incentives for international oil companies in Iraq to capture this gas since oil is profitable.     Were it not for the measures taken by Saudi Arabia, it would have had to produce an additional 18 billion cubic feet in 2018 to meet the domestic demand for gas, in addition to burning 65% of t

[:en]Saudi Arabia's electric power industry is the largest in the Gulf region. The country's electricity peak demand in 2007 was 35 GW, and almost doubled in size to reach 61.7 GW in 2017. That means an average growth rate of 5.31% annually. By 2030, it is expected to double again to reach a peak demand of 120 GW. This fast-paced growth in energy consumption is driven by many factors, such as population growth, strong economic and industrial development, improvements in living standards, harsh weather conditions, and low energy prices in the past.   To get electricity to the end-consumers, three distinct power businesses collaborate with each other to provide the nation with its power needs. These businesses are generation, transmission, and distribution. In the 1950s, Saudi Arabia had only two generation companies in Al-Ahsa and Jeddah. However, this number steadily grew to include several privately owned companies around the country that served large cities and towns. In the 1970s, the government combined all of these small players into four regional companies that are collectively known as the Saudi Consolidated Electrical Companies (SCECOs).   As demand and systems complexity grew further, the government took steps to restructure the electricity industry in the late 1990s, and merged all of the four regional companies to create a single, joint-stock monopoly that is vertically integrated, and called it the Saudi Electricity Company (SEC). It was tasked with carrying out all of the Kingdom’s generation, transmission, and distribution operations. At the time, the Saudi electric power industry faced several challenges, including the low operational efficiency caused by the vertical integration of the Saudi Electricity Company, the financial unsustainability of the sector due to the high dependency on government financial support, the lack of competitive players in the market, and the difficulty in securing large capital investment due to the low participation of the private sector.   With these clear shortcomings, there was an urgent need and interest in reforms and restructuring of the Saudi electric power industry. Efforts began with the establishment of the Electricity and Cogeneration Regulatory Authority (ECRA) in 2001 as an independent regulatory authority, with the aim of overseeing the electricity and cogeneration industries in the Kingdom. The newly created authority undertook the tasks of assessing tariffs, issuing licenses, monitoring service providers, investigating complaints, establishing the quality of service standards, regulating price control and managing the reforms. Its main objective is to ensure that consumers have access to affordable electricity supplies while providing sufficient income for service providers, and to improve energy efficiency and network reliability through new technologies and innovations.   Soon after, in 2005, the Electricity Law was adopted by Royal Decree, and later, in 2007, the ECRA released the Electricity Industry Restructuring Plan (EIRP) that proposed a gradual transformation of the electricity industry from a vertically integrated utility structure to a more competitive electricity sector in the future. It was revisited later in 2014 and adopted a ‘building block’ approach to the market reforms, and also suggested implementing a national competitive electricity market through five phases. The notable features included: unbundling of competitive and non-competitive business elements, rationalizing the fuel and electricity prices, and introduction of a spot wholesale electricity market. While overall progress has been slower than expected, it partly fulfilled the objectives by creating National Grid SA in 2012 to oversee and manage the transmission as a separate business unit within the SEC, and established Saudi Power Procurement Company in 2017 in the run-up to the competitive wholesale electricity market.   The government's main rational

[:en]The adoption of solar energy technologies has recently gained considerable global momentum as an alternative option to generate electricity. It can be centrally generated by utilities in large solar power stations, or generated in a decentralized fashion by small, photovoltaic distributed generation systems that are near the end consumer, and can be installed for residential, commercial, and industrial use. Photovoltaic distributed generation possesses some attractive attributes: it can defer investment in utility power generation, reduce energy transmission losses, reduce carbon emissions, and boost the renewable energy industry and the associated employment that comes with it. Meanwhile, and from the consumers’ point of view, a photovoltaic distributed generation system can be considered an economically feasible choice depending on technological, environmental, and regulatory factors, making it either financially viable and attractive, or unreasonable and costly. In the residential sector, the typical system has a capacity below 20 kilowatts, and households are usually motivated to install them to reduce their monthly electricity bills. If a household installs a PV system, there are likely to be several occasions when the electricity generated by the system is higher than the electricity demand. That excess energy is dealt with in three ways: either it is discarded, stored in a battery, or exported to the grid. The commercial appeal of distributed photovoltaic generation increases if the end-user earns financial gains from electricity exported to the grid. To better understand the PV system’s financial viability, the King Abdullah Petroleum Studies and Research Center published a Commentary titled “Demystifying Policy Support Mechanisms for Distributed Solar Photovoltaic Systems.” In the publication, the researcher noted that several factors influence the PV systems’ attractiveness, such as the system’s installation capital cost, the local solar irradiation conditions, the household’s load profile, the prevailing electricity price, and the regulatory policies that govern PV distributed generation deployment. The researcher discussed how different regulatory policies could incentivize PV distributed generation. There are many types of financial incentivizing policies around the world, such as Investment Credits, Feed-in Tariffs, and Net Metering. The Investment Credit mechanism is the easiest to understand and implement, in which the government provides a direct one-time payment to households to cover all or part of the capital cost required to install the PV system. However, Feed-in Tariffs and Net Metering are more complex. The Feed-in Tariff works by measuring how much electricity the household exports to the grid by smart meters, and paying money to them for every exported unit of energy (kilowatt-hour), which can be different from the electricity selling price. On the other hand, Net Metering follows the same process, but buys back any exported electricity at the same price at which it is sold. The Commentary also included hypothetical examples of household consumption using the distributed generation solar PV system, assuming that the household members would travel during July and August, and purchase electricity for $ 0.10 per kilowatt-hour from the utility. If a distributed photovoltaic system is installed, the household will buy less energy from the grid, because the generation system mainly meets part of the load first. Then, the surplus generation - if any - will be exported to the grid. The researcher assumed that the utility compensates the household for the exported electricity by $0.05 per kilowatt-hour. It pays to the household in cash, or by carrying over the balance for use in the next electricity bill. If the baseline of the total annual electricity bill for the household is $1,010, the bill will decrease substantially if a PV distributed generation system is installed and can

[:en]The COVID-19 pandemic has led many countries to implement strict restrictions that have not been seen since the Second World War. This caused an interruption of economic and social activities at an accelerating pace, as many governments imposed a ban on international and domestic flights, partial or full movement restriction, suspended some services, and closed schools, factories, and shops.   In these dire circumstances, the Kingdom of Saudi Arabia was no exception. This prompted the Saudi government to respond with a wide range of policy initiatives to mitigate economic impacts. The government was very active in communicating with the public through media awareness campaigns, increased the readiness of its healthcare system, enacted social distancing measures, and supported its economy with several measures that include financial, social, health, and labor support, which will undoubtedly have wide-ranging benefits for the economy’s future prospects.   Amidst these circumstances and changes, politicians urgently need real-time data about levels of GDP and demand in order to make sound decisions. However, this type of data usually takes extended periods of time to become available. In order to solve this, researchers at the King Abdullah Center for Petroleum Studies and Research (KAPSARC) studied all of the interfering factors in an effort to fill this gap, and published their findings in recent research entitled “Estimating the Impact of the COVID-19 Pandemic on Saudi Gross Domestic Product (GDP).”   The researchers utilized two different approaches to assess the amount of GDP’s deviation from the baseline scenario. The first estimation was carried out using the Saudi Vision 2030 Input-Output table, which is an analytical tool designed by KAPSARC to study the effects of Vision 2030’s transformation policies on 50 sectors of the Saudi economy, including retail, entertainment, road and air transportation, oil and gas, and others. Meanwhile, the second estimation was conducted by analyzing nighttime light satellite images to infer the changes in the overall domestic economic activity, based on the latest available information. To make the first estimation approach more comprehensive and accurate, the researchers designed three alternative scenarios to calculate the economic effects of the pandemic within the input-output framework, which are medium, moderate, and severe impact. This division depends on the severity of the overall initial shock on demand, its distribution among economic sectors, and the time needed for economic activities to recover.   To reach a more distinguished estimation of these factors, the researchers defined six types of initial shocks to economic sectors, reflecting their severity. For example, a zero-type shock does not affect demand negatively at all, which we have seen in the agriculture, food, and health sectors during the pandemic. While a type-five shock decreases the demand by 80%, which happened in the entertainment and air transport sectors during the complete ban period.   Experts suggested that the medium scenario is the most likely under current conditions, which states that the negative economic impact of the pandemic on GDP is estimated to be -7% in 2020. However, the Fiscal countermeasures and economic support packages launched by the Saudi government, around 70 billion Saudi Riyals, will have a positive effect and will reduce the negative impact by an estimated two point five (2.5) percent. Assuming a hypothetical economic expansion of 2% in a world in which COVID-19 did not occur, the estimated annual decline in overall GDP is about to reach minus two point eight percent in 2020. Looking at the remaining scenarios, the interval of annual GDP decline ranges from ‑0.4% to ‑5.4% this year.   The second estimation approach relies on the intensity of the nighttime lights in 18 photos of Saudi Arabia that were taken by satellites on th

[:en]In 2010, Saudi Aramco launched its Accelerated Transformation Plan, which aims to extend the company's E&P and downstream activities into new frontiers, and promote the production of unconventional natural gas resources in tight sands and shale formations. Currently, Saudi Arabia has over 600 trillion cubic feet of unconventional gas resources, half of which are technically recoverable. It holds the world's sixth-largest estimated proven gas reserves, and the world's ninth-largest marketable gas production.   In February 2020, Saudi Aramco announced the development of the Jafurah Basin as a resource of unconventional natural gas. It is Saudi Arabia's largest unconventional natural gas field to date, and is located east of the giant Ghawar oil field, with 200 trillion cubic feet of wet gas resources. It will be developed in stages, and by 2036, production is expected to reach 2.2 billion cubic feet per day of natural gas.   The development of unconventional gas basins has emerged as a strategy to strengthen Saudi Arabia's energy security and offers many opportunities for the country's energy markets. For example, most of the Kingdom's gas production was historically associated with oil, which means that the natural gas was initially dissolved in oil and was later separated after extraction. However, Saudi Aramco managed to increase the share of non-associated gas to nearly 60% of all gas production as of 2019.   Moreover, providing more quantities of natural gas for domestic consumption means that the Kingdom can use it to reduce the heavy reliance on less efficient and more carbon-intensive liquid fuels. These dynamics led Saudi analysts to predict that domestic natural gas demand will continue to grow at a compound annual growth rate of 3.7% for the next 10 years.   Nevertheless, a project of such magnitude will face many challenges, including drilling and completion costs, technical know-how, and water access. For instance, from the drilling and completion perspective and accounting point of view, Saudi Aramco's approach to developing the Jafurah Basin gas field is similar to that of its other megaprojects, with a significant capital investment of $110 billion, as Saudi Aramco plans to deploy an array of advanced technologies in developing Jafurah, including horizontal multi-stage fracturing, and underbalanced coiled tubing drilling. This is due to the fact that unconventional wells usually have lower rates of productivity and rapid decline rates, thus requiring more wells to be drilled and placed into production simultaneously than conventional wells.   On the other hand, water availability will play a significant role here, as the extraction process for Jafurah will require substantial volumes of water, which contradicts the company's priority of reducing groundwater use during fracturing treatments. Therefore, Saudi Aramco is exploring using seawater for fracturing applications, and is piloting the use of local sand in its gas fracking treatments rather than imported sand.   To manage and overcome all of these challenges, Saudi Aramco has established an unconventional gas department, and hired a large number of unconventional development specialists to bridge the knowledge gap, and outsourced fracking to leading oil service companies.   On the national level, the gas produced from Jafurah will be primarily reserved for domestic use and meet future energy demands for power generation, water desalination, and petrochemical production.   In conclusion, there are many significant benefits to developing domestic natural gas. Unconventional gas developments are major industrial projects that can enable the growth of local small and medium enterprises, foster job creation, and increase technical know-how in the Kingdom. This fits very well with the Saudi Vision 2030 goals of developing local industries and increasing local content, which would prov