WPC: Saudi oil office says oil resources plentiful

Oct. 6, 2005
Availability of crude oil is not a problem, but deliverability is, Saudi Arabian Minister of Petroleum and Mineral Resources Ali I. Al-Naimi told the World Petroleum Congress (WPC), held at the end of September in Johannesburg.

By OGJ editors
HOUSTON, Oct. 6 -- Availability of crude oil is not a problem, but deliverability is, Saudi Arabian Minister of Petroleum and Mineral Resources Ali I. Al-Naimi told the World Petroleum Congress (WPC), held at the end of September in Johannesburg.

Al-Naimi said inadequate infrastructure puts pressure on prices and poses stiff constraints along the supply chain—in development, production, transportation, refining, and delivery.

He said upstream prospects are promising, especially in Saudi Arabia, where the government expects to increase production capacity to 12.5 million b/d by 2009 and continue maintaining a spare-capacity buffer of 1.5-2 million b/d. Saudi Arabia could boost production to 15 million b/d if demand warranted, Al-Naimi said.

"There are vast areas of the kingdom that have yet to be explored," Al-Naimi said, adding he is confident that Saudi Arabia's reserves "will expand significantly in the years and decades ahead."

Al-Naimi primarily blamed downstream difficulties for deliverability problems. He said refinery capacity upgrades worldwide have not "kept pace with the growth in demand for high-quality, environmentally friendly transportation fuels."

He expects that spare crude oil production capacity will grow sufficiently in 3-4 years "to restore some margin of safety to world crude markets."

Saudi Arabia plans an aggressive exploration program, heavy investment in technology and infrastructure, and construction of export refineries to process heavy and sour crudes, he said.

"There is every reason to believe that oil will remain the fuel of choice for transportation," he said.

Other speakers
In a separate speech, ExxonMobil Corp. Pres. Rex Tillerson agreed with Al-Naimi that there is plenty of oil worldwide left to produce and that supply has yet to peak.

South African Pres. Thabo Mbeki said high fuel prices require a vigorous debate because the poor suffer twice as much from high energy prices as wealthier groups. He called for international cooperation in addressing energy issues.

WPC Pres. Eivald Roren said new energy sources are needed, but he also believes that oil and gas will remain the principal sources of energy for some time to come.