SAUDI ARABIA: Oil giant Saudi Arabia asks consuming nations for a "road map" of future oil demand at the opening of the International Energy Forum in Riyadh

Record ID: 189409

  • Title: SAUDI ARABIA: Oil giant Saudi Arabia asks consuming nations for a "road map" of future oil demand at the opening of the International Energy Forum in Riyadh
  • Date: 20th November 2005
  • Summary: KING ABDULLAH SITTING IN TENT LISTENING TO SPEECH
  • Embargoed: 5th December 2005 12:00
  • Keywords:
  • Location: Saudi Arabia
  • Country: Saudi Arabia
  • Topics: International Relations,Energy
  • Reuters ID: LVAELFTVI2N01KAKRRAFTIPN6BYM
  • Story Text: Oil giant Saudi Arabia asked consuming nations for a "road map" of future oil demand on Saturday (November 19) in response to repeated calls for Riyadh to ramp up its production capacity and curb record prices. Saudi Arabia's oil minister Ali Naimi, speaking after a day of talks between global consumer and producer nations following the opening of the headquarters of the International Energy Forum (IEF) in Riyadh, said that neither side has given a deadline for the information it was seeking.
    Such an exchange of information is part of a dialogue between producers and consumers - a process that the kingdom hopes will be enhanced through forums like the IEF. "This is part of the dialogue. You know, when we were asked for a road map for upstream facilities (Saudi investment in new oil production capacity), nobody said 'Deliver it today', and neither will we," Naimi said at a news conference. "All we are saying is we will exchange views, so we know that eventually supply and demand as best as the planners can determine will be in balance. Our objective is to have less volatility in international oil markets," he added. Producers do not want to build new facilities that will boost capacity if the demand for extra output does not exist, Naimi said. His comments turn the tables on Western nations who have called for greater transparency from oil producers and higher output to rein in prices, which hit a record $70 a barrel in August. They have since fallen to about $56. Finance ministers from France and Britain attended Saturday's talks to drive home the call from the G7 group of industrialised nations to get more oil onto the markets.
    The Saudi oil minister said that irrespective of any demand indicators that consumers would provide, the kingdom will spend some $50 billion over the next five years to boost its output capacity from 11 million barrels per day to 12.5 million barrels per day. His request for indicators on demand from consumers therefore applies to investments in expanding Saudi crude output capacity beyond 12.5 million barrels per day. "I have said on many occasions, our investment portfolio (in the Saudi oil industry over the next five years) is probably over 50 billion (US dollars). And the exact numbers will be defined as we advance our preliminary engineering and final feasibilities," said Naimi. The Saudi oil minister confirmed that his country is producing 9.5 million barrels per day (some 1.5 million barrels per day below its full capacity), and said that current demand for Saudi crude stands at that level. He refused to say whether the kingdom would cut output in response of falling prices.
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