RIYADH: Saudi Arabia will continue investing in its oil sector to help stabilize crude prices at a level acceptable to both consuming and producing countries, Finance Minister Ibrahim Al-Assaf said Sunday.
“The Kingdom is continuing with its big efforts to achieve stability in the international oil market,” the minister told a meeting attended by China’s trade minister and business officials.
“This is through big investments to increase production and refining capacity to maintain balanced and acceptable prices by both producers and consumers,” Al-Assaf said.
The Kingdom completed a massive crude capacity expansion project in 2009 to boost output capacity to 12.5 million barrels per day (bpd).
OPEC’s leading producer and exporter has around 4.5 million bpd of spare capacity, with production at around 8 million bpd. That is well above the 1.5 to 2 million bpd the Kingdom sees as a safeguard against any surprise outage in global oil output. The Kingdom is also investing billions of dollars in refineries at home and abroad.
US crude prices settled at $82.75 a barrel on Friday as a prolonged cold snap in key heating hubs in Europe and northeastern United States boosted demand for heating oil. Last month, Custodian of the Two Holy Mosques King Abdullah said $75-$80 a barrel was a fair price for oil. OPEC decided to leave oil supply targets unchanged when it met in December, content with an oil price then at $72-$75 a barrel.
Speaking about Chinese charges of the Kingdom dumping certain petrochemicals, Al-Assaf said talks with visiting Chinese Trade Minister Chen Deming went well, but the two sides could not resolve the issue.
“We continued to discuss this today. We believe we can resolve this problem,” Al-Assaf said while addressing a news conference in Riyadh with Chen.
On Dec. 24, China announced anti-dumping tariffs of up to 13.6 percent on Saudi- and Taiwan-produced butanediol, a chemical used to make plastics, elastic fiber and polyurethanes.
Chen and Al-Assaf, meanwhile, said they have targeted a 50-percent growth in bilateral trade between 2009 and 2015, increasing the total annual value from $40 billion in 2009 to $60 billion. Bilateral trade is heavily weighted in Saudi Arabia’s favor, with China importing mainly crude oil and petrochemical products.
During a Saudi-Chinese Joint Commission meeting earlier in the day, Al-Assaf urged the Chinese side to participate in more joint ventures. “Bilateral trade went up 25 times during the past 10 years. At the same time, we have only 19 joint projects.”
