Saudi oil minister says crude production needs to increase

Dr Abdul Hussein Bin Ali Mirza said that despite price instability and geopolitical tension in the region, “oil demand is increasing year after year and is expected to continue at 10 million bpd”.

Major oil projects in Bahrain include the 350,000 barrel-a-day (b/d) AB pipeline linking Bahrain and Saudi Arabia, which recently started the engineering, procurement and construction (EPC) phase.

The result has been market oversupply, and sharply falling prices.

“The economies of all Arab countries, including non-oil-producers, are closely linked”.

He called for the need to avail of the huge energy potentials of GCC and member states of the Organisation of Arab Petroleum Exporting Countries (OAPEC) and launch investments that boost those countries’ sustainable development efforts.

Crude oil demand will eventually pick up as Chinese growth recovers in coming years, buoying prices, the chief executive of state energy giant Kuwait Petroleum Corp (KPC), Nizar Al Adsani, said on Thursday. This correlation is expected to continue for several decades, bringing into focus the importance of the development, as well as the vertical and horizontal expansion, of the oil industry, including the continuation of new oil discoveries.

Projected global oil demand will increase by an average of more than one million barrels a day (MMBPD) annually for the foreseeable future – even as the oil industry needs roughly 5 MMBPD of additional crude output capacity to keep up with ongoing and added demand, Saudi Arabia’s oil minister said Thursday. Arab countries hold 57 per cent of the world’s oil reserves, and that will grow on new discoveries, Al Naimi said.

Saudi Arabia remains a highly reliable and major oil exporter, and it invests domestically in all the stages of the oil industry, in the fields of exploration, production, and refining; and internationally in the areas of transportation, storage, and downstream activities such as refining, distribution, and manufacturing.

Last year, for example, in a 500 million dollar acquisition, APICORP acquired a 28.3 percent stake in the National Petroleum Services Company (NAPESCO), one of the largest oil and gas field service companies in the Middle East, North Africa, and Southeast Asia. “We must continue and even increase the pace of investments in the energy sector”.

In the long term, he said: “Oil as a commodity is not in decline” – future oil investments should continue to meet an anticipated global growth in crude demand by more than 1 million barrels per day.

Bahrain’s government was also borrowing on worldwide capital markets to finance strategic energy projects, he said.

However, if Saudi Arabia is forced to untie its currency and it weakens, following the Brazilian and Russian currencies lower, then oil could collapse to $25 per barrel.