CERAWeek: Aramco calls upon industry to invest

Saudi Aramco’s chief executive officer and president called upon the oil industry to increase investments to help fulfill the world’s growing oil demand, saying he was concerned about the volatility of investment across cycles.

Paula Dittrick
OGJ Senior Staff Writer

HOUSTON, Mar. 9 -- Saudi Aramco’s chief executive officer and president called upon the oil industry to increase investments to help fulfill the world’s growing oil demand, saying he was concerned about the volatility of investment across cycles.

“Now some of you might wonder why I would ask Saudi Aramco’s competitors to do more,” Khalid Al-Falih told CERAWeek, hosted by IHS Cambridge Energy Research Associates. “But we think there is room for plenty of players in the oil industry, and Saudi Arabia still accounts for only about 10% of global oil production. That leaves 90% of the load for others to shoulder, even as that load increases to some 105 million b/d of demand by 2030.”

Aramco plans to invest $90 billion in 5 years with much of that to be directed to natural gas exploration, production, and processing, Al-Falih said. During the last 5 years, Aramco spent $62 billion to increase its oil production capacity to 12 million b/d.

Gas today accounts for less than 50% of the Saudi Arabia’s energy consumption, he said, adding that the objective is to increase the country’s gas production capacity and also its gas consumption.

“Our objective, in a way, is to make more crude oil available for export around the world,” Al-Falih said.

During questions after his speech, Al-Falih said Aramco could drill deepwater wells for the first time in the Red Sea during 2012, although he did not elaborate.

Al-Falih said Saudi Arabia wants to be a global leader in energy in general, not just petroleum. In particular, Saudi Arabia is interested in developing the potential of solar power within the kingdom.

“But it is vital that we recognize that, while the continued development of alternative energy sources in not in question—and I am very optimistic about the long-term prospects for some of them—the pace of their development and deployment does remain an open question,” he said.

Contact Paula Dittrick at paulad@ogjonline.com.

More in Economics & Markets