May 7, 2004

AT THE SYMPOSIUM ON SAUDI-U.S. RELATIONS AND WORLD ENERGY SECURITY IN WASHINGTON. AL-NAIMI MINISTER OF PETROLEUM AND MINERAL RESOURCES CONFIRMS THAT SAUDI OIL RESERVES ARE CONTINUALLY INCREASING. WITHOUT ANY DIFFICULTY, THE KINGDOM HAS THE CAPACITY TO INCREASE ITS PRODUCTION FROM THE CURRENT 10.5 MILLION BPD TO BETWEEN 12MILLION - 15 MILLION BPD OR MORE. THE SAUDI MINISTER OF FINANCE: SAUDI-AMERICAN CO-OPERATION IN COMBATING TERRORISM REALIZES THE JOINT INTERESTS OF BOTH COUNTRIES. THE CHAIRMAN OF SAUDI ARAMCO: THE KINGDOM'S PROVEN RESERVES ARE MORE THAN 260 BILLION BARRELS OF CRUDE OIL. Eng. Ali Ibn Ibrahim Al-Naimi, the Saudi Minister of Petroleum and Mineral Resources, underscored the importance of the Saudi US relations in the field of world energy security and stability of oil markets, drawing attention that it was wrong to say that those relations are confined to the field of petroleum. In a key speech before the first session of a symposium on the Saudi U.S. relations and world energy security, organized by the Saudi US Business Council in cooperation with the Strategic and International Studies Center in Washington D. C., Al-Naimi said Saudi Arabia is committed to the stability of international oil markets and to the provision of enough oil supplies to those markets at reasonable prices for both producers and consumers which fluctuate, according to the Kingdom's announced policy, between $22 and $28 a barrel. He said the energy industry has faced numerous challenges over the last thirty years, but the only thing surviving all the time is the commitment of the Kingdom to provide energy at reasonable prices for all beneficiaries. He cited Saudi Arabia's position as a swing producer that meets the needs of the market during crises. He denied reports that the Saudi oil was depleting, confirming that huge oil and gas reserves were discovered in the Kingdom. He said Saudi Arabia's oil reserves increased from 88 billion barrels in 1970 to a conservative estimate of 261 billion barrels today despite 35 years of continuous and increasing production. The minister assured his listeners that Saudi Arabia's oil production will continue to keep its levels according to the Kingdom's production policy. Without any difficulty, the Kingdom has the capacity to increase its production from the current 10.5 million bpd to between 12million - 15 million bpd or more, Al-Naimi said, adding that Saudi Arabia expects that its oil fields could continue to pump oil at the announced levels for the next 70 - 100 years. He said security measures to protect the Saudi oil fields are considered the world's highest and most strict and intensive. He drew the attention to the fact that Saudi Arabia has many outlets for the exportation of oil. He attributed the gasoline price hikes in the US to a decrease in the capacity of refining in the States rather than the decisions taken by OPEC . To help solve this problem, Al-Naimi offered Saudi investment in the field of building oil refineries in the States together with their marketing utilities. He said cooperation between the Kingdom and the States in particular and between producers and consumers in general will lead to successfully confronting those challenges and will play a pivotal role in achieving world energy security. Minister of Petroleum and Mineral Resources Ali Al-Naimi and Governor of Saudi Arabian Monetary Agency Hamad Al-Sayari met in with Chairman of the Board of Directors of the US Federal Reserve William Greenspan. During the meeting, they discussed a number of issues relating to international oil and gas market and the importance of its stability. Other economic issues were also discussed. The International Monetary and Financial Committee (IMFC) of the Board of Governors of the International Monetary Fund (IMF) held the 9th meeting. The meeting was convened under the title of "The Global Economy and Financial Markets-Sustaining the Recovery." The delegation of the Kingdom of Saudi Arabia was headed by Minister of Finance Dr Ibrahim Ibn Abdul Aziz Al-Assaf. In an address at the meeting, Dr Al-Assaf highlighted the economic situation in the Kingdom and the Arab region as well as spoke about international economic developments. Speaking about the Saudi economy, Dr Al-Assaf said the sound parameters and suitable economic policies that had been carried out by the Kingdom, led to the enhancement of the Saudi economy and enabled it to continue its strong growth. "Last year, the Saudi economy registered a growth rate of six percent with a low level of inflation and a surplus on the foreign accounts and the general budget." "Moreover, the rules and regulations that have been recently endorsed such as capital market system, insurance system, new taxation system on companies are primarily aimed at enhancing financial markets and strengthening the role of the private sector. On the situation in the Arab region, he said that despite the negative effect of the security situation on the economic performance in the region, most Arab states have maintained appropriate growth levels last year, and stressed that Saudi-American co-operation in combating terrorism realizes the joint interests of both countries. He called for carrying out reforms as regards economic policies with preservation of the proper growth rate. As regards the international economy, Al-Assaf said the recovery in the international economy now seems obvious as recovery indices appeared first in the U.S. economy that spread out to the rest of the world. He urged for exerting more efforts to support the positive trend of the economic growth in the world by dealing with the challenges that hinder the required growth notably the regional differences and the trade pressures. Saudi Minister of Finance Dr Ibrahim Ibn Abdul-Aziz Al-Assaf has hailed the existing Saudi-American economic relations, and said these ties constitute a strong partnership which is liable for further growth. Addressing the seminar on Saudi-American relations, organized by the Saudi-American Business Council in cooperation with the League of the Foreign Policy, Dr Al-Assaf praised the ongoing efforts for the transference of technology through the existing cooperation between the two sides, and said a large number of Saudis had been graduating from the American universities and institutes. Dr Al-Assaf pointed out to the flexibility of the Saudi economy and to the big strides made in the non-petroleum and banking spheres. "Thanks to Almighty Allah, and thanks to the program of economic reforms in Saudi Arabia in addition to the systems of insurance and investment, the economic future in the Kingdom is promising," he said noting the significant growth attained in the fields of saline water conversion, electricity, petrochemical industries, tourism and services. Meanwhile, Minister of Petroleum and Mineral Resources Eng. Ali Al-Naimi reiterated the adherence of the Kingdom of Saudi Arabia to adopting a moderate petroleum policy, ensuring petroleum supplies and working for the stability of the petroleum price in a manner that the price does not exceed $25 for a barrel. "I would like to make it clear that the petroleum market does not face the problems of increase in prices due to shortage of supplies," he said. Eng. Al-Naimi said the Kingdom of Saudi Arabia had earlier increased its oil production to 10.5 million barrel per day to meet demand during the crises of Venezuela and Nigeria and also during the Iraqi war last year. Al-Naimi noted that the oil reserves of the Kingdom of Saudi Arabia amount to 261 billion barrels and there is a possibility to explore more petroleum fields in the country. On the other hand, Al-Naimi drew attention to the available investment opportunities in the Kingdom in the fields of gas, mining, phosphates and bauxites. The American businessmen who participated in the seminar praised the growth of the Saudi economy and the available investment opportunities in the country. They also lauded the Kingdom's efforts to join the World Trade Organization (WTO). Saudi Minister of Finance Ibrahim Ibn Abdul-Aziz Al-Assaf has affirmed the importance of Saudi-American relations, pointing out that these symposiums pave the way for the two sides to enhance the distinguished bilateral relations. This came in a speech Al-Assaf delivered at the third and last session of the "Saudi-American Relations and International Energy Security" Symposium. "The Kingdom of Saudi Arabia is still committed to hard works with its customers in the U.S. and the rest of the world in order to provide enough oil supplies to help stabilize the international oil markets. The Kingdom is also committed to cover the deficit in these markets when needed at the times of crises," he added. Dr. Al-Assaf called on the oil consuming countries including the U.S. to implement internal mechanisms that help them in controlling the local fuel prices instead of depending on OPEC due to the fact that sometimes the rise in fuel prices has no relation to the deficit of crude oil supply in the international markets. Earlier in the day in the second session of the symposium, Chairman of Saudi Aramco Abdullah Jumaa affirmed the company's commitment to provide necessary supplies of oil in the international markets, stressing that the oil reserves in the Kingdom are "sufficient and substantial." "The Kingdom's proven reserves are more than 260 billion barrels of crude oil in 85 oil fields while there are 320 extra fields which are not yet developed. Currently, only 23 fields are used that contain almost half of the Saudi oil reserves," he added. He pointed out that the Kingdom can currently raise its production of oil to 10 million barrel a day when there is a need for it. On the other hand Saudi Minister of Finance Dr Ibrahim Ibn Abdul Aziz Al-Assaf met with the U.S. Secretary of Treasury John Snow on fringes of the 9th meeting of the International Monetary and Financial Committee (IMFC) of the Board of Governors of the International Monetary Fund (IMF). During the meeting, they discussed issues of mutual concern between the Kingdom of Saudi Arabia and the U.S. Dr. Al-Assaf also met Pakistani Minister of Finance Shaukat Aziz. They discussed aspects enhancing bilateral relations in the field of economy and finance between the two countries. The world is poised for strong economic growth this year and next, the world's major industrial nations concluded at a weekend meeting. Finance ministers and central bankers were wrapping up three days of talks Sunday with a meeting of the World Bank's policy-setting committee on how to help developing countries improve living standards for poor people. World Bank President James Wolfensohn said there is a reasonable chance the international community will achieve the first of a series of ambitious objectives, halving global poverty by 2015, "but that's because of the remarkable progress in India and China," whose economies have been soaring. On the other hand Minister of Petroleum and Mineral Resources Ali Al-Naimi, in an address in Texas to the World Affairs Council of Greater Dallas, declared that the energy industry faces four major challenges: an unprecedented increase in global demand for energy; depletion of traditional fossil energy sources in certain major consumption areas; increased strictness in administrative systems; and the need for investment in new resources. He nevertheless expressed optimism in the future of the oil industry. Citing figures, he showed that there is no alternative to oil, which will remain the main source of energy for the coming twenty-five years. Saudi Arabia and the Gulf countries, he said, possess huge oil reserves that will help meet the expected demand, adding that the Kingdom has the capability of increasing its production to as much as 15 million bpd and maintain this for fifty years or more. Speaking to the World Affairs Council of Greater Dallas, Saudi Arabia's Minister of Petroleum and Mineral Resources Ali bin Ibrahim Al-Naimi affirmed Saudi Arabia is committed to meeting the requirements of oil consuming countries, stating: "We in Saudi Arabia firmly believe that consumers, producers, and the world economy all benefit from stable and predictable oil markets." Addressing high gasoline prices in the United States, Minister Al-Naimi pointed out that low refining capacity was part of the problem, saying: "Even if OPEC were to raise output it would not necessarily translate into more gasoline for U.S. consumers. This is because the supply 'bottleneck' is created by the lack of U.S. refining capacity, not by the amount of available crude oil in the world markets." He added: "Saudi Arabia is willing and ready to invest in two new refineries and their associated marketing facilities in the U.S. to alleviate the bottlenecks in product availability." The Minister also said that Saudi Arabia's output could be raised to 12 or 15 million barrels per day and run at similar levels for 50 years, declaring: "We are very confident there is a lot more oil to be found in Saudi Arabia." Following is the text of the Minister's speech: 'Energy Challenges Ahead': oil minister at World Affairs Council of Greater Dallas, Texas Esteemed members of the World Affairs Council of Greater Dallas, ladies and gentlemen Once again it is a privilege to be in Dallas and to be honored as your speaker today. I would especially like to thank John Bryant, chairman, and Jim Falk, president of the World Affairs Council here in Dallas, as well as recognize Herbert Hunt and Petro-Hunt, and Darab Ganji for their role in today's program. As you well know, Texas has long held a dominant position in U.S. and world energy markets. It was the center of world oil for many years. While Texas oil production may have dropped from its peak, the influence of Texas is still felt throughout the world of energy. Texas remains the center of the U.S. oil industry and it is home to many of the world's best oil companies. Furthermore, your home-grown product -- West Texas Intermediate or WTI -- plays a key role in facilitating oil trading worldwide by providing price transparency for markets. WTI is one of the three benchmark crudes that are used to price most of the world's crude oil including crude oil from Saudi Arabia that is sold to its U.S. customers. The Texas oil industry has also been at the forefront of developing new technologies to meet the ever increasing demands of finding and producing oil in some of the world's harshest environments. A prime example is the successful development of deepwater offshore oil and gas resources in the Gulf of Mexico. Your homegrown oil industry has had a glorious past and I am sure it will continue to play an important role in the future. Recently, we have heard some talk that the "Age of Oil" might be coming to a close. Pessimists are saying that the world is running out of oil and some have even questioned the ability of Saudi Arabia to continue producing at current levels. A few even maintain that we are foolish to think that technology can help increase production in the future. In fact, they say some of the new technologies will make matters worse. I'm here today to share with you a different view: One that is both realistic and optimistic one that sees a bright future for the oil industry. And, it is one that believes technology will provide us new tools to meet the growing energy requirements of an expanding world economy. While I see a bright future, make no mistake, there are many challenges to be met along the way. Whether it is natural gas, oil, coal, nuclear or alternative energies, we in the energy industry are faced with the daunting task of providing the means for fulfilling the world's rapidly growing aspirations for a better way of life. A look at history shows us that the economic development and increasing standards of living achieved over the past century were fueled by plentiful supplies of reasonably priced energy. We have achieved this despite wars, depressions, regulation, market restructuring, political instability, extreme price fluctuations, shortages and gluts. It has not been easy, nor has the path always been smooth, but the industry has repeatedly risen to the challenge and met the twin goals of plentiful and reasonably priced energy. Looking forward to the next twenty to twenty-five years, I can say with confidence that we in the energy business face four major challenges unrivaled in our past experiences: First, we are expected to face an unprecedented increase in global energy demand during this period. Second, conventional fossil fuel resources in many major consuming regions have already been extensively exploited. Third, increasingly stringent regulations will add to the complexity and cost of energy production and consumption. Fourth, the development of such sizeable new energy resources will require a substantial and steady flow of new capital into energy projects. I will now discuss each of these challenges in greater detail According to the U.S. Energy Information Administration's recently released International Energy Outlook, annual global demand for energy will grow from about 404 quadrillion Btu's (67 billion barrels of oil equivalent) in 2001 to 623 quadrillion Btu's (104 billion barrels of oil equivalent) in 2025, a 219 quadrillion Btu (36.5 billion barrels of oil equivalent) or 54 percent, increase. To put this in perspective, Saudi Arabia produces about 17 quadrillion BTUs (3 billion barrels) of oil annually or in more familiar terms, about 8 million barrels a day. This forecasted increase in world energy demand is equivalent to adding the annual oil production of 12 (36 billion barrels) new Saudi Arabia's by 2025. To put it mildly, that is a lot of energy. Total world energy consumption is projected by the EIA to increase at an average of 1.8 percent between now and 2025. The fastest growth is expected from Asia, driven principally by robust economic growth in China and India. The EIA estimates that energy consumption in the developing countries of Asia will double by 2025 and will account for 40 percent of the projected increase in world energy demand during this period. By contrast, energy demand among the developed countries is projected to increase only about 1.2 percent per year due to several factors. These include older energy consumers, slower population growth, efficiency gains and the move away from energy-intensive manufacturing to service industries. Where will all this energy come from? Some people place their hopes on alternative fuels like solar, biomass and wind. Yes, the importance of these fuels will grow over time. But it is not realistic to expect them to make a significant contribution over the next 20-30 years. Today alternative fuels supply only 2.5 percent of world demand. What about nuclear? Currently, nuclear provides about 7 percent of total global energy supply. But political opposition, safety concerns and unfavorable economics are likely to preclude a dramatic expansion of nuclear power during this period. Coal will continue to make significant contributions to world electricity generation. China and India have abundant coal reserves and are projected to account for almost 70 percent of the growth in worldwide demand for this fuel. However, the growth in coal consumption is likely to be constrained by environmental concerns. Demand for natural gas is likely to rise substantially, particularly in the electricity generation sector. The EIA projects world natural gas demand to increase from 93 quadrillion BTUs (15.5 billion barrels of oil equivalent) in 2001 to 157 quadrillion BTUs (26 billion barrels of oil equivalent) in 2025, an increase of 69 percent. However, its contribution to meeting transportation demand, while increasing, will remain relatively insignificant. While the contributions of these fuels to satisfying global energy demand will all increase, none is likely to seriously diminish the role of oil in meeting the need for energy in the transportation sector. Research on hydrogen-powered vehicles may hold the promise of eventually producing an exciting new technology for the future of transportation, but, significant hurdles remain. Perhaps the biggest hurdle is the need to invest trillions of dollars to build the vehicles and facilities necessary for a hydrogen economy. What does this all mean? It means that oil will remain the dominant energy source worldwide for the foreseeable future. This is evident in the EIA's latest projections, which indicate that world oil demand will increase 1.9 percent per annum to 2025, raising demand from 77 million b/d in 2001 to 121 million b/d in 2025. Asia will account for about 60 percent of the projected increase. Can we, the oil industry, meet these expectations? My answer is a resounding "Yes!" Many of the major oilfields outside the Middle East are mature and production is down from peak levels. Nevertheless, I have no doubt that sufficient reserves exist to meet projected future world demands. It is not a question of running out in this time period. There is plenty of oil left to be produced. The reserves in Saudi Arabia and the Gulf are massive and can be called upon to meet the world's growing appetite for energy. However, finding and developing new reserves, especially in regions outside the Gulf, will be more difficult and more expensive than in the past. The odds of finding new super giant and giant oil and gas fields are diminishing, with remaining undiscovered reserves likely to be found in smaller fields in isolated locations. This is not the first time we have heard talk of the world running out of oil. In the 1970s, quite a few experts were saying that world resources were being exhausted and oil production would soon decline abruptly. What happened? The numbers tell the story. Worldwide reserves of oil grew from an estimated 550 billion barrels in 1970 to more than 1.2 trillion barrels today. This feat becomes all the more remarkable when we consider that this dramatic increase occurred over a period of time when the world consumed more than 800 billion barrels of oil. In the case of Saudi Arabia, our proved reserves were estimated to be about 88 billion barrels in 1970. Today, we conservatively estimate them at 261 billion barrels, despite the intervening 35 years of production. Our careful analysis gives us reason to be optimistic about the future. Current world proven reserves are estimated at 1.2 trillion barrels. The United States Geological Survey estimates that another 1.3 trillion barrels of oil and natural gas liquids will become available in the future. This will come from undiscovered resources and more accurate assessments of reserves located in existing fields. The additional oil raises the conventional liquid reserves and resources to over 2.5 trillion barrels. But that's not all. There are vast amounts of unconventional heavy oil and bitumen. The in-place volume of these two resources is estimated at about 3.7 trillion barrels; 570 billion barrels of these resources are expected to be recoverable. Based on the current global oil consumption rate, these conventional and unconventional oil resources would last for more than 100 years. As I mentioned earlier, some pessimists are even suggesting that output from Saudi Arabia's own fields is set to decline sharply in the next few years. Let me reassure you; this is not the case. The reserves we report are in the ground. In fact, the estimates we use are quite conservative and there is considerable upside potential to book additional reserves in the near future. We are very confident there is a lot more oil to be found in Saudi Arabia. There are vast areas of Saudi Arabia yet to be explored. They present great opportunities for new discoveries. We expect the cumulative impact of these new finds to be quite significant. On this point I want to be clear, ladies and gentlemen. We have more than sufficient reserves to increase production capacity and are committed to do so in line with growing demand. We also possess the human, financial and technical resources to do the job. Saudi Arabia could without much difficulty raise output from 10.5 million b/d to 12-15 million b/d and maintain that level of output for 50 years or more. We produce our fields very carefully, with the aim of maximizing overall recovery. Where other companies may look at a 20 year production profile, we are looking to produce our fields for 70-100 years. This is our guiding principle, a principle we will not compromise for short-term expediencies. I would just add that the EIA shares our optimism. In the International Energy Outlook which I mentioned earlier, EIA forecasts that Saudi oil production capacity could rise to 22 million b/d by 2025. Clearly, and contrary to some people's concerns about Saudi oil reserves, no such concern is obvious to the experts at the U.S. Department of Energy. The third major challenge I would like to address today is the proliferation of increasingly stringent governmental regulations. In certain countries like the U.S., refiners are straining to meet growing consumer demand for petroleum products. Their task is made more difficult and expensive by the need to adhere to multiple product standards and specifications. For example, we see nearly fifty different grades of gasoline sold in the U.S. gasoline market, each with its own unique formulation. The lack of uniformity in regulations and standards from region to region increases complexity and costs, and it reduces the flexibility of the system to respond to disruptions in supply in any one region, because gasoline from other regions may not conform to local mandates. Such a regulatory environment also limits the ability of imports to fill any gap that may arise between demand and supply. The final challenge I mentioned, is to ensure that sufficient capital will be available to finance future projects. The International Energy Agency's World Energy Investment Outlook, published in late 2003, estimates that the industry will need to invest at least $16 trillion over the period from 2001 to 2030 in order to expand the energy supply infrastructure necessary to meet projected global energy demand. It is my belief that financial markets will respond to these needs and that sufficient capital will be available to develop the required energy resources. However, there are no guarantees this will happen. Investors crave stability and predictability particularly when it comes to financing multi-million and billion dollar projects. A steady flow of investment capital to the energy industry depends in large part on the degree to which these conditions prevail. If prices do not offer a sufficient return to producers, then investments will not be made and the potential for shortages and price spikes will increase. With a steady stream of investment, the road to the future can be a smooth one. Without the proper incentives, the road ahead is likely to be rough, with energy markets lurching forward in boom and bust cycles. I am sure many of you here in Texas are all too familiar with such cycles. In the U.S., we see what can happen when the industry must operate in a climate of uncertainty. Companies are reluctant to invest capital in projects that do not offer reasonable assurances of an adequate return. Regulatory and legal uncertainty have been major factors in limiting investment in new facilities, as has the growing trend of NIMBY (not in my back yard) sentiment. We do not have to look far to see the impact that the uncertainty has had on the energy infrastructure of the U.S. and its ability to meet rising energy demands. In 2000, California experienced an electricity crisis. In August of last year, the Northeast experienced the worst blackout in U.S. history. During the last three winters there have been shortages of natural gas which have led to record price spikes. And now we are seeing the effect of the lack of investment in refinery capacity that has plagued the U.S. industry for more than a decade. Refiners are straining to produce sufficient quantities of gasoline to meet both demand and currently mandated formulations. The result is record high gasoline prices. I would like to say one more thing about gasoline prices. Some may try to convince you that high gasoline prices are the result of OPEC production decisions. This is not the case. Even if OPEC were to raise output it would not necessarily translate into more gasoline for U.S. consumers. This is because the supply "bottleneck" is created by the lack of U.S. refining capacity, not by the amount of available crude oil in world markets. Saudi Arabia is willing and ready to invest in two new refineries and their associated marketing facilities in the U.S. to alleviate bottlenecks in product availability. Price volatility also creates uncertainty and can hold back investment. Demand surges and supply disruptions are a fact of life in commodity markets and oil is unfortunately no exception. Left unchecked, these events can lead to price swings and supply shortfalls that destabilize markets. We in Saudi Arabia firmly believe that consumers, producers, and the world economy all benefit from stable and predictable oil markets. That is why we are committed to maintaining spare production capacity at significant cost to ourselves that can be quickly tapped when the market needs additional supplies. Our spare capacity has proven to be instrumental over the years in helping to ensure stability in times of turmoil. In practice, this spare capacity allows us to help smooth out the inevitable "bumps" in the road. Yet Saudi Arabia's spare capacity is not the only tool required to keep markets stable. In order to achieve long-term stability, it is essential that we cooperate closely with other OPEC and non-OPEC producers, not only to ensure that we do not over- or under-supply markets, but to also make additional supplies available in times of shortage. This combination of spare capacity and cooperation among producers has worked well over the years. There is no better example of this, than what transpired in early 2003 a period when we faced six different overlapping crises. The first was when political problems in Venezuela caused oil production to drop from about 3 million b/d to about 1 million. The second was an unexpected spike in oil demand caused by a colder-than-normal winter in the northern hemisphere. The third was a natural gas crisis in the U.S. which created shortages, a large spike in prices and increased demand for oil due to fuel switching. Fourth, problems in Japan's nuclear power industry caused a significant rise in oil imports. Fifth, Nigerian oil output dropped 40% due to political unrest. And finally, the cutoff of 2.5 million b/d of Iraqi production due to the war. As a result of OPEC's rapid supply response -- with a major contribution from Saudi Arabia the oil market remained stable in 2003 despite this multitude of problems. Saudi Arabia prefers to play a quietly constructive role in maintaining stable oil markets, one which is often overlooked by the media and some opinion leaders. It is not our custom to boast when things go right. However, I believe that when you ask our customers, they will attest to the fact that Saudi Arabia, in conjunction with other major oil exporters, played a crucial role in preventing a major supply crisis. Not just in the last year, but over the past 30 years. We in Saudi Arabia also believe stability in oil markets is greatly enhanced by close cooperation between both producing and consuming nations. That is why we have an active policy of maintaining a close dialogue with major consuming countries through bilateral and multilateral arrangements and with relevant international organizations. I would add that a strong dialogue between producers and consumers should not be limited to times of crisis. That is why we are strong supporters of the International Energy Forum and its efforts to promote dialogue; and, as a result of His Royal Highness Crown Prince Abdullah's initiative, Saudi Arabia now hosts the new Secretariat for the Forum in Riyadh. In closing, I would like to reiterate that we face enormous energy challenges in the future. The degree to which we are successful in providing the world's needs for vast new quantities of reasonably priced energy will have a major impact on the ability of the world's people to fulfill their aspirations for a better life. I am confident that working together, producers, consumers and industry can meet these challenges that lie ahead. I am sure that the oil industries in both Saudi Arabia and the great state of Texas will be leaders in the effort to ensure that the world has abundant and affordable energy supplies. Working together we can accomplish great things. Thank you again, ladies and gentlemen, for the opportunity to share some of my observations about the energy scene and the challenges ahead. It has been my privilege to speak before the World Affairs Council of Dallas.