RIYADH, 17 June 2007 — The Kingdom’s domestic oil consumption went up by 6.2 percent to 2 million barrels per day (bpd) last year from 1.89 million bpd in 2005 in the wake of economic boom, while its oil production for the international market declined by 2.3 percent during the same period, the “BP Statistical Review of World Energy June 2007” released yesterday said.
Economic analysts attributed the growth to the surge in economic development, especially the decision to set up economic cities, industrial estates and IT parks in different parts of the Kingdom.
The report also said that the Kingdom’s natural gas production also rose by 3.5 percent, from 71.2 billion cubic meters in 2005 to 73.7 billion cubic meters last year. However, there was no change in its refining capacity that stood at the same level at 2.1 million bpd.
Referring to oil production in the Middle East, the report pointed out that OPEC producers implemented a new round of production cuts late in 2006, the first in nearly two years. As a result, OPEC output rose by just 130,000 bpd, with gains in the UAE and Iraq offset by reductions in Saudi Arabia, Venezuela and Nigeria.
Iraq’s oil production surged by nine percent from 1.83 million bpd in 2005 to 1.9 million bpd last year. UAE recorded 7.3 percent increase in output from 2.751 million bpd to 2.96 million bpd during the same period.
At a press conference yesterday attended by Mark Finley, BP’s head of Energy Analysis, and Ribhi Ahmed Rayyan, general manager, BP Exploration Operating Co., Amman (Jordan), the report also provided an overview of the global energy market.
Finley told Arab News that OPEC’s decision to reduce oil output came late in October last year, by which time oil production among other producers in the region was moving in full swing. However, independent industry observers noted that a possible explanation could be that many international companies, including some oil majors, have moved their operations to the UAE to capitalize on its liberal economic environment. This enabled them to meet Iraq’s additional oil needs from the UAE, where they set up joint ventures with the national oil firms, he added.
He further said that while the overall consumption grew by 0.7 percent last year, Chinese oil consumption shot up by a record 6.7 percent during the same period as the international community responded to oil price hike. At the same time, there was a marked hike in coal production in the coal-producing countries.
The report noted that energy consumption slowed last year despite stronger economic growth as oil prices remained high by historical standards, although price movements varied last year by fuel type and region. While crude oil prices continued to rise, natural gas and coal prices fell in North America, but increased elsewhere.
The BP report highlighted that “coal continued to be the world’s fastest growing hydrocarbon in 2006. Global consumption rose by 4.5 percent, below last year’s rapid (+5.7 percent) growth, but well above the 10-year average.
China, where coal consumption grew by 8.7 percent, accounted for more than 70 percent of the growth in global coal consumption, the report said, adding that consumption in the US declined for the first time since 2002. Elsewhere, coal consumption rose by 3.5 percent, well above the 10-year average.