Oil output deal is here to stay, new Saudi minister vows

Saudi Arabia’s newly appointed energy minister Prince Abdulaziz bin Salman said the kingdom is proceeding cautiously with its planned nuclear power program. (AFP)
Updated 10 September 2019

Oil output deal is here to stay, new Saudi minister vows

  • Prince Abdul Aziz bin Salman is center of attention at World Energy Congress in Abu Dhabi
  • Saudi Arabia has said it wants to tap nuclear technology for peaceful uses

ABU DHABI: A deal agreed a year ago by major oil producers to limit output was “until death do us part,” Saudi Arabia’s new energy minister pledged on Monday.

Prince Abdul Aziz bin Salman wants the Organization of Petroleum Exporting Countries (OPEC) to strengthen and extend its agreement with non-OPEC producers, including Russia, he said in his first public appearance since being appointed on Sunday.

Previous attempts to limit output had been “successful but temporary in nature…Now it is different in quality, size and perpetuity,” Prince Abdul Aziz told a packed house at the World Energy Congress in Abu Dhabi.

The output deal was sealed at an OPEC meeting in Vienna in December 2018. “Soon we will celebrate the anniversary of the charter that will continue to bring us together, and it is until death do us part,” Prince Abdul Aziz said.

The minister also hinted that it would desirable to widen OPEC to give non-members a more permanent role. “This industry has to have the institutions that can give the notion of support toward sustainable energy supplies commensurate with what the world economy requires,” he said.

But he said non-OPEC producers — including the biggest, Russia — should be subject to a process he summed up in the motto of President Ronald Regan: “Trust, but verify.” He will meet other producers, including Russian energy minister Alexander Novak, in the UAE later this week.

Many industry analysts see a greater threat to the oil price from falling global demand, mainly because of the economic fallout from trade disagreements between the US and China.

Prince Abdul Aziz appeared sanguine on this subject, though he said the “jury was out” on future demand projections. “I am fundamentally an optimist, and if I’m not optimistic, I’d make every effort to create a situation where I could regain my optimism. They are not yet trade wars,” he said.

The minister’s appeal for a stronger and deeper OPEC came in an eagerly awaited interview on the first day of the concgess. A career energy professional over more than three decades, the prince underlined his respect for his predecessor, Khalid Al-Falih, and his dedication to the Saudi energy industry.

“I haven’t lost a friend because he will always remain a friend. He was a schoolmate at university, and we spent 30 years working together,” he said in a voice tinged with emotion.

“You’ve seen Upstairs, Downstairs,” he said, the popular British TV drama. “Well, I am downstairs. I like to work in the kitchen serving my country and my king.”

Most of the audience thought his message went beyond a continuation of existing Saudi energy policy, and amounted to to a “doubling down” of the overall strategic direction in the run-up to the initial public offering of Saudi Aramco, expected imminently.

“It’s the same as before, but reinforced and reinvigorated,” said one oil expert.

On the recent change of management at the top of Saudi Aramco, Prince Abdul Aziz said it was correct to separate the oil company from his ministry. “There is nothing I would not do to protect the interests of this state-owned company,” he said.

“I think the best thing we could do was to ensure the commerciality of the company and the ‘arm’s length’ relationship — to keep it owned by the state and to work as any other international oil company. The IPO made us all focus on exerting every possible effort to highlight this and magnify this.

“That model saved us in terms of our economic well-being. The separation of the corporate from the ministry is a must,” he said, suggesting there would be further safeguards in Aramco IPO documents

Opinion

This section contains relevant reference points, placed in (Opinion field)

Prince Abdul Aziz said that when Saudi Aramco this year attracted interest of more than $100 billionn for its historic corporate bond, “it was one of the best days of my life.”

There were some surprising elements in his responses to questions from Helima Croft, energy expert from Canadian financial institution RBS Capital. On nuclear power, he made it clear that the Kingdom was keeping all its options open.

“We are proceeding with it cautiously. We are experimenting with two nuclear reactors. We are fortunate enough to have lots of uranium resource and if we scale up we want to go for the full cycle — from producing, enriching and using uranium, even acquiring new technologies….We want to make sure the energy mix is comprehensive,” Prince Abdulaziz said.

On domestic energy reform, he was adamant: “I’m not wasting my time discussing a la la land scenario whether Saudi Arabia will be a net importer of energy by 2030. We have made big improvements in consumption at home, with the energy mix, with efficiency and with price reform. Consumption will be conservatively reduced by 1.5m barrels per day,” he said.

Before his appearance on stage, the prince had reviewed displays at the congress, and lingered to chat casually with journalists at the big Saudi pavilion. “I’m not a horse that can be tamed. I’m known to be excessively spontaneous, a bit of an elephant in the room,” he quipped.

Prince Abdul Aziz also confessed to feeling emotional at the welcome he had received from Suhail Al-Mazroui, the UAE energy minister. “This is a city and a country that gives you a sense of belonging, a sensation of being part of the UAE fabric,” he said.

“I never bet my career on the notion of wanting to be minister of energy. I know energy, I like energy, and I want to be part of that energy, because I get to be energized by it.”

 


Saudi rural tourism recovers after months of forced isolation

Updated 11 July 2020

Saudi rural tourism recovers after months of forced isolation

  • Saudis turn to domestic traveling and flock to their nation’s cooler cities and rural areas

TAIF: As Saudi citizens turn to domestic tourism in the country’s summer resorts, adapting to the coronavirus disease (COVID-19) pandemic, rural areas have become targeted by local tourists wishing to get away from the soaring temperatures in most of the Kingdom’s cities.

Visitors are now choosing cold Saudi cities instead of Europe, which they are accustomed to visiting, such as Taif, Al-Baha, and Abha.

COVID-19 has postponed all plans to travel abroad, and attention has now focused on domestic tourism amid strict health protocols in parks, gardens and recreational areas.

Walid Al-Hamidi, vice president of the Tourism Development Council, confirmed to Arab News that Asir, with its facilities and attractions, was ready to receive summer visitors from across the country.

He said that under the directives of Asir's governor, who supervises all activities and events directly and constantly, many committees had been formed to prepare a successful summer tourism season, to optimize the opportunity and allow people to enjoy the exceptional ambiance of Asir.

“A comprehensive tourism plan was set up two years ago, which resulted in a successful Al-Soudah Season with the support of Asir’s Investment Authority,” Al-Hamidi added.

He noted that Asir’s directives aimed this year to build an exceptional tourism model that meets optimal health standards in dealing with COVID-19.

The model is supported by the “Nashama Asir” team — consisting of 4,000 volunteers — who have been trained for months and have all the necessary skills to make the season successful. Their work will continue until the end of the pandemic and throughout the summer.

“Everyone is ready at public facilities, gardens and parks, to serve tourists,” he said, adding “tourists coming from all the over the Kingdom will be welcomed with smiles, enhanced services, and warm welcomes.”

Dr. Sami Al-Obaidi, chairman of the Chamber of Commerce and Industry in Taif, told Arab News that the tourism sector was the economic backbone of any country or city.

He said that Taif was considered one of the most important tourist cities, given its many attractions  that made it top of any list of places to visit in the Kingdom.

“Suspending travel abroad, and limiting tourism … due to the coronavirus pandemic, makes us, as officials and citizens in Taif, well placed for a beautiful and safe tourism season for Taif’s citizens and visitors,” said Al-Obaidi.

“Meetings are held around the clock, headed by Saad Al-Maimouni, the governor of Taif, with the participation of the relevant authorities.”

He expected all sectors, especially tourism, hospitality and a few other businesses in Taif, to recover to some extent during this season, especially now tourists have already started flocking to the region, with numbers set to increase over the coming weeks.