NEW DELHI, 19 January 2007 — Committed to increasing availability of oil to global markets, Saudi Arabia was working continuously to expand its ability to increase production and deliver energy to world markets, Minister of Petroleum and Mineral Resources Ali Al-Naimi said yesterday.
“As the world’s largest producer and exporter of petroleum, Saudi Arabia is keenly aware that the continued availablility of reliable and affordable energy is essential to future economic growth and prosperity. I want to assure you that Saudi Arabia is committed to increasing availability of energy to global markets,” he said.
Emphasizing that this commitment should not be viewed as mere indulgence in rhetoric, the minister asserted: “These are not hollow words. They are backed up by concrete plans and actions and the commitment of more than $80 billion for capital projects aimed at increasing the supply of energy to world markets and alleviating infrastructure bottlenecks.”
With specific reference to Saudi Arabia’s link with India, Naimi said: “While two decades ago we exported only a tiny amount of crude to India, today we are supplying about 500,000 barrels per day (bpd) to this growing market. We have also expressed strong interest in various joint ventures either in the Kingdom or in India. We also invite Indian engineering and construction firms to bid for our projects. We appreciate the efforts of over 1.7 million Indians who are working in different sectors of Saudi economy.”
Meanwhile, New York oil prices fell under $50 a barrel for the first time in 19 months yesterday after a government report showed a sharp rise in US crude stocks.
The benchmark New York “light sweet crude” oil futures contract, for February delivery, slumped to $40.90 a barrel in mid-afternoon trading after news that US energy stocks increased.
The oil price tumbled after the Department of Energy, in a weekly snapshot, reported that US crude oil reserves rose 6.8 million barrels to 321.5 million in the week ended Jan. 12.
The rise was much sharper than expected as most oil traders were only expecting crude inventories to grow by 100,000 barrels. London Brent traded $1.23 lower to $51.55 a barrel.
During his address at the Petrotech 2007 conference, Naimi elaborated on Saudi Arabia being strongly conscious of the “market requirements and challenges that lie ahead.” “Saudi Arabia is working continuously to expand its ability to deliver energy to world markets, and especially to the growing Asian market. Our first priority is a massive investment program to increase our sustainable production capacity to 12.5 million bpd by 2009,” Naimi said.
Meanwhile, the International Energy Agency reduced its forecasts for world oil demand yesterday and said that production cuts by OPEC producers had “ironically” contributed to a recent slump in crude prices. “Given milder-than-expected temperatures and minor revisions to our economic growth assumption, we have revised downward our global annual growth forecast for 2006 and 2007,” the IEA said in its monthly oil market report.
The IEA, an influential energy watchdog, said that demand would increase by 1.6 percent this year to 85.8 million bpd, a figure 160,000 barrels per day less than its previous estimate. The agency also cut its estimate of demand in 2006 by 120,000 bpd to 84.4 million bpd, a rise of 0.9 percent from 2005 levels.
