As the world's largest producer and provider of oil, with its vast installations, refineries, pipelines, shipping terminals and housing facilities reserved for foreigners, the kingdom offered al-Qaida a choice of prime targets.

Saudi Arabia holds the largest oil reserves in the world: the kingdom claims 25 percent of the world's proven reserves -- estimated at 260 billion barrels -- with another 200 billion barrels more as a "possibility."

Saudi Arabia produces 12.5 percent of global total production. Forecasts put Saudi sustainable production capacity at 12.5 mb/d by 2009.

Following a series of terrorist attacks aimed at its security personnel, its oil industry or people working in the oil industry, Saudi authorities had to scramble to enforce new security measures to protect the lives of those working on oil installations, as well as to secure the energy sector itself -- vital to its survival, and that of Western economies.

Nawaf Obaid, managing director of the Saudi National Security Assessment Project, a government consultancy based in Riyadh, who is also the private security and energy adviser to Prince Turki Al Faisal, the Saudi Ambassador to the United States, outlined steps taken by Saudi authorities at a recent conference in London.

In combating terrorism, Obaid pointed out that economic and social reforms are at least as important as political reforms. "Aramco (the Saudi state-run oil company) and others, project (that) future oil revenues cannot sustain high per capita income or the Saudi economy," said Obaid.

The Saudi security expert warns that if terrorism is to be defeated, "despite many of the good things the kingdom has done in the last three years, there is a lot to be done."

Demographics in the desert kingdom are changing. Obaid alluded to the "youth explosion" that is changing the face of Saudi Arabia, creating the need to diversify and create jobs for the ever-increasing number of college graduates.

"The privatization campaign has been slow and ineffective to build a private sector robust enough to meet the employment needs of the country and diversify the Saudi economy," said Obaid. He calls for a "realistic and concerted effort" to be channeled into dealing with demographic problems and unemployment to limit the pool of recruitment by extremists. That is a point cannot be stressed strongly enough.

As for lessons learned in combating terrorism, Obaid points out, "there is no such thing as too much security." He stresses the importance of continually assessing, improving and adjusting security protocols in order to stay abreast of ever-changing terrorist threats.

In combating terrorism in the desert kingdom, close coordination between the ministries responsible for security played a key role in Saudi Arabia's success, as did close surveillance of energy facilities and redundancy in all aspects of security and energy installations.

However, stepped-up security measures, increased police presence, impeccable intelligence and greater vigilance alone will not work.

"Security plans," says the Saudi expert on terrorism, "must be part of a larger social, economic, and political program." In other words, increasing security measures and clamping down on terrorists will fail to produce positive results unless they are accompanied by sweeping social, economic and political reforms. Those reforms are long overdue in Saudi Arabia.

Obaid pointed to the successes in Saudi's war on terror. Of al-Qaida's original five major cells, each comprised of 26 members, that made it onto the country's first "most wanted" list, all but one have been killed or captured.

Of the 36 second-tier operatives on the second "most wanted" list, 20 have already fled the kingdom, while of the residual 16 only 4 remain at large. Obaid believes it was this group that carried out the failed attack on Abqaiq last February.

Saudi counter-terror authorities, according to Obaid, have successfully thwarted 17 major terrorist attacks since May 2003. More than 767 suspected terrorists were arrested in counter-terrorism operations since May 2003.

Fighting terrorism does not come cheap, however. Saudi Arabia has spent $8.5 billion in 2004 -- of which $1.2 billion was allocated to petroleum security, including the National Guard. That figure rose to $10 billion in 2005, and jumped to $12 billion for 2006, (projected) -- including more than $2 billion allocated to petroleum security.

But failure to invest in security would be far more costly.

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