The Kingdom's oil policy is long term and stable, observed oil expert Bill Farren Price, during a panel discussion held in Riyadh on Thursday.

The event, organized by the Sidra Capital, was attended by Price, CEO of Petroleum Policy Intelligence, Richard Banks, founder of RMBanks and Co., and Feras Alsaid, head of corporate finance and advisory of Sidra Capital and media men.

“Saudi Arabia's long-term objective is aimed at getting the best value for its natural endowments,” Price said, adding that its policy is focused on stability and tends to be conservative.

“The GCC’s largest oil producers such as Kuwait, Saudi Arabia and the UAE are either working on long-term capacity expansion (Kuwait, the UAE) or managing existing spare capacity (Saudi Arabia).”

Kuwait has targeted 4 million barrels per day (bpd) through heavy oil expansion.

Saudi Arabia is managing its production capacity of 12.5 million bpd, Abu Dhabi targets 3.5 million bpd by 2020 from onshore/offshore.

Discussing the oil price volatility, its meaning and impact, Price said: “After years of relative stability, oil prices have entered a new, more volatile phase where there is a considerable premium on understanding the underlying policy intentions of the major producers and consumer countries.”

“Oil has always been a critical element in understanding the prospects for the global economy and Saudi Arabia's role is as important as ever,” he said, adding that OPEC’s decision to no longer balance the market by cutting oil production, accelerated the decline in oil prices and is testing the economics of some US shale oil production, and non-OPEC oil elsewhere.

Richard Banks of a specialist investment event company and moderator at the panel said: “The level and direction of oil prices is mission critical for the Kingdom. We know Sidra Capital understands this and we are delighted to be its partner on this important event.”

Hani Baothman, CEO of Sidra Capital, said: “OPEC has over the years adjusted its oil production higher to meet shortfalls caused, for example, by the Iraq war, and reduced the supply when there was oversupply and/or weak demand in order to stabilize oil prices. US shale oil has risen from less than one million barrel per day in 2010 to 3.5 million bpd in late 2014. The challenge for MENA producers recently was to play the role of a swing producer by reducing the output when supply grows elsewhere in order to maintain prices. This seems to have shifted in 2014.”