Kingdom needs oil industry think tank

Updated 23 March 2013

Kingdom needs oil industry think tank

Does anyone remember the words, “we play it by ear?” These were the words of Sheikh Ahmed Zaki Yamani, the most famous and most influential oil minister in the world from 1962 till 1986. These crucial words were not the words that were circulating in the oil industry. He said these words loud and clear at a symposium about oil industry and production capacity.
The symposium was attended by the top brains in world economy, oil businesses and high-profile political figures. We play it by ear is not something you would say about the most important commodity in the world. Wars can be started because of this commodity. If my memory serves me right, I remember reading about the shock in the audience who were not amused and expected a better analysis from the oil minister of the largest oil-producing country. And I remember reading about the presence of Prince Charles of England among the audience who gave a speech after Sheikh Yamani, which provided relief to the audience after what they had just heard from the former Saudi oil minister.
I have tried to gather as much as information about this symposium as possible, using whatever means I have. In the 1980s, even the word Internet had not made it to the dictionary.
And after I read about the news of the symposium, I realized two things that are very badly needed for our oil industry in Saudi Arabia. The first thing was that we needed a think tank that deals with the oil and gas industry. The second thing was that Sheikh Yamani was famous and known because he was the Saudi oil minister, not because he was Sheikh Ahmed Yamani. In other words, when you are the Saudi oil minister, then you are in the news and you are a celebrity, even if you just show up in a conference or a symposium.
I have heard many speeches and analyses from Sheikh Yamani and I remember his analysis in 1986 when he suggested that the oil prices should increase by $ 1 a year. If his suggestion was followed, then the price of oil now would be about $ 45 a barrel. I am not sure why did he ignore the two most important words in economics — supply and demand?
Being a patriot, I gave the former Saudi oil minister the benefit of the doubt. I understand that people holding official posts normally would follow a general and careful outline. But Sheikh Yamani left his post and he became an oil analyst when he opened a consulting firm outside Saudi Arabia. So, at that time he was an independent consultant. But after the American invasion of Iraq in 2003, the former Saudi oil minister declared on international TV networks that the American invasion of Iraq will improve the oil capacity production in Iraq and the price of oil will fall below $ 10 a barrel. Well, later on, the price of oil increased to reach a historic $ 150 a barrel. Again, what happened to the two most important words in oil production and exploration — security and stability?
To this day, Iraq is neither secure nor stable. So, the question now is: Why Saudi Arabia that is the most important oil producing country in the world doesn’t have an oil industry think tank? Or do we have any?
A few years back, in a television interview Prince Abdulaziz bin Salman, the deputy minister of petroleum and mineral resources, said that many Saudis lack the knowledge about the oil industry. Even the educated people don’t have a basic knowledge of the most important commodity in the Kingdom. And there is a great need for a think tank.
The relief came in 2008 when (KAPSARC) was established in the Saudi capital, Riyadh, as an independent non-profit institution that would focus on research, policy and technology of the oil industry in the Kingdom. When the research center was established, I saw it as an oil and gas think tank, but it was known that it was established under the umbrella of Saudi Aramco and staffed by former and present Saudi Aramco employees in addition to names from the Saudi Ministry of Petroleum and Minerals who are members of the board of trustees. So, wouldn’t this be like giving a student a test and asking him to grade himself. And to this day, I still haven’t read an analysis produced by this center or even heard any oil and gas report being attributed to this center.
Saudi Arabia needs a genuine independent research center with no ties to any official organization in the Kingdom. And in later years, this research center could be the information center of the world in the oil and gas sector. All the petroleum intelligence reports should come out from a Saudi think tank. And most importantly, the research center must be staffed by capable people to study the impact of oil industry on Saudis, politically, socially or economically.
Oil and gas industry in Saudi Arabia is the main source of income for the Kingdom, and therefore it is imperative to produce and export them according to the Saudi needs. Saudi oil and gas think tanks should be capable to match the oil revenues which run into billions of dollars with the progress and development of the infrastructure in the Kingdom because at this stage we are seeing millions of barrels a day being used to generate electricity and desalinate sea water for the growing populations and it is important to educate people about its value to the future generations.
Saudis pay the lowest at gas stations. Norway has huge oil reserves, but they have one of the world’s highest prices at the gas stations. To this day, we didn’t see serious studies about the importance of oil and gas technologies’ transfer. Saudi Arabia is one of the biggest electricity producing countries in the world and our think tanks should have been the leading authority in electricity consumption analysis. We have the largest water desalination plants in the world, but I never came across a serious study about the long-term solutions or cheaper way to desalinate the salt water. We need think tanks that think, not think tanks that play it by ear.

Deal signed for new US Embassy in Riyadh

Updated 18 sec ago

Deal signed for new US Embassy in Riyadh

  • The agreement was signed during the consulate’s celebration of the 243rd year of American independence at its new location in Jeddah’s Al-Muhammadiya district
  • Members of the American community, Saudi government officials and business leaders were in attendance

JEDDAH: The US Consulate in Jeddah signed an agreement to purchase land for the US Embassy’s new compound in Riyadh.

The agreement was signed during the consulate’s celebration of the 243rd year of American independence at its new location in Jeddah’s Al-Muhammadiya district.

It was signed by US Ambassador John Abizaid and Dr. Fahad Mushayt, CEO of the Diplomatic Quarter General Authority.

The agreement will allow the US State Department to divert resources toward construction and design of the new embassy.

Hosted by Abizaid and Consul General Ryan Gliha, the celebration’s guest of honor was Jeddah Gov. Prince Mishaal bin Majed bin Abdul Aziz.

Members of the American community, Saudi government officials and business leaders were in attendance.

Since 1945, the US and Saudi Arabia “have stood together in the face of common threats, advanced prosperity and economic growth in both our countries, and forged bonds of friendship through countless exchanges and joint endeavors,” Abizaid said.