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July 8, 2005 |
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AL-NAIMI: THE KINGDOM HAS THE LARGEST OIL RESERVE IN THE WORLD AMOUNTING TO 261 BILLION BARRELS, AN EQUIVALENT OF ONE-FOURTH OF THE WORLD RESERVES. THE MINISTRY OF PETROLEUM AND MINERAL RESOURCES WORKS IN THE FIELD OF OIL, GAS AND MINERALS WITH COMPLETE TRANSPARENCY AND THE AIM IS THE PROSPERITY AND GROWTH OF THE COUNTRY. SAUDI ARABIA IS INTERESTED IN WORKING FOR THE STABILITY OF THE INTERNATIONAL OIL MARKET AND BUILDING CLOSE WORKING RELATIONS BASED ON ECONOMIC FUNDAMENTALS BETWEEN IT AND OIL PRODUCING COUNTRIES SPECIFICALLY WITH OPEC MEMBER COUNTRIES AND BETWEEN PRODUCING AND CONSUMING COUNTRIES. Minister of Petroleum and Mineral Resources Ali Al-Naimi, in a speech in Riyadh to the annual meeting of alumni of the Massachusetts Institute for Technology (MIT), confirmed the Kingdom's capacity to increase its oil production and its policy that calls for cooperation between oil producing and oil consuming countries. The vast reserves, he said, will allow Saudi Arabia to continue to be a major oil producer for up to 100 years from now, even with an increase in production capacity to 15 million barrels a day. Minister Al-Naimi went on to speak of the Kingdom's reserves of natural gas, some of which are used as feedstock for petrochemical industries. Reserves of non-associated gas have almost doubled in the past decade, and are now estimated at 97 trillion cubic feet; together with the associated gas, this gives a total of 237 trillion cubic feet, making Saudi Arabia the fourth largest producer of natural gas in the world. These figures will increase, given the recent concessions granted to international companies to explore in the Empty Quarter. Plans are also under way to exploit the Kingdom's mineral resources in the north of the country, such as phosphates for use in fertilizer plants. There is also bauxite, and the feasibility of an advanced aluminum industry. To cater for these projects, a second industrial city is being built in Jubail. The Minister of Petroleum and Mineral Resources Eng. Ali Ibn Ibrahim Al-Naimi delivered the speech in the annual meeting of Association of Graduates of Massachusetts Institute for Technology in which he dealt with the situations in the world oil market and the Kingdom's oil policy. Al-Naimi pointed out that the Kingdom has the largest oil reserve in the world amounting to 261 billion barrels, an equivalent of one-fourth of the world reserves. He added that there is a possibility that the Kingdom increases its volume of needs nearly 200 billion barrels through new discoveries or an increase in oil produced from current fields. This huge reserve entitles the Kingdom to continue as a major oil producer in a period ranging between 70 to 100 years from now on, even with the assumption that the Kingdom raises its producing capacity to 15 million barrels a day which might happen during the next 15 years. In this regard, the minister said this relative characteristic was used to expand the building of power generation utilities for industrial, commercial and consuming purposes as well as in the field of water desalination and oil refining. The Kingdom is now the world's largest producer of desalinated water. The 27 desalination plants provide drinking water to major urban and industrial centers through a network of water pipes running for more than 2,300 miles. Desalination meets 70% of the Kingdom's drinking water requirement. Several new desalination plants are under construction. Once completed, the Kingdom's network of desalination plants will have a capacity of 800 million gallons a day. Desalination plants also generate electricity. In 2000, the Kingdom's desalination plants generated a total of 28 million Megawatt Hours. He drew the attention to the following aspects: the provision of gas as a feeder for petrochemical industries, enabling the Kingdom of Saudi Arabia to occupy a leading place among the world's top petrochemical producers. In this regard, the gas productivity capacity was doubled from three billion cubic feet to seven billion cubic feet per day, he said, adding that the Kingdom's reserves of non-associate gas increased by 54 trillion cubic feet over the last ten years, bringing to 97 trillion cu. ft. the Kingdom's total non-associate gas reserves. This led to a total of associate and non-associate gas reserves of 237 cu. ft, making the Kingdom the world's fourth gas producer. On gas exploration, the minister said four agreements with giant gas exploring companies were recently signed. They were granted concessions in the empty quarter area, he said. In the south of the Kingdom is the famous Rub al-Khali (the Empty Quarter), a massive, trackless expanse of shifting sand dunes - one of the largest sand deserts in the world - which covers an area of more than 250,000 square miles (650,000 square kilometers) and extends to 1,200 by 500 kilometers. The Rub al-Khali is one of the driest places on earth, receiving almost no rain at all. Nevertheless, many parts of this dry desert support some hardy plants (in particular, the scarlet-fruited abal and the hadth saltbush). The Minister disclosed that work is currently underway to exploit phosphate ore, natural gas and sulphur in the northern parts of the country, a giant step expected to boost the Saudi economy. The above mentioned minerals will enable the Kingdom to establish more and more developed fertilizers factories, the minister said and predicted that the Kingdom will take a place among the world's leading fertilizers producers and exporters before the end of the current decade. Moreover, the bauxite mine in the north central region of the Kingdom will pave the way for the establishment of an advanced aluminium industry, Al-Naimi said, adding that a new industrial city will be constructed north of Jubail in Ras Alzoar area. Jubail and Yanbu constitute a unique experiment in development which has proved outstandingly successful. These are two cities which were conceived on the drawing board and were planned to provide a purpose-built and highly efficient environment for modern industrial production. These industrial complexes, built at Jubail on the Arabian Gulf and Yanbu on the Red Sea by the Royal Commission for Jubail and Yanbu, are the key to the Kingdom's national industrialization plans. These two industrial cities provide the basis for the Kingdom's program to develop hydrocarbon-based and energy intensive industries. The massive investment in these industrial cities has as its major objective a reduction in the Kingdom's dependence on oil revenues by gaining access to the world's petrochemical markets. This route to industrialization exploits the Kingdom's natural advantages, in terms of cheap energy and cheap raw materials for petrochemical manufacture. The Minister said the Saudi oil policy, which is reflected in the Kingdom's positions within OPEC, receives the world community's great attention and interest. He said OPEC has now become a pivotal player in the stability of oil market and maintenance of the interests of oil producing countries. The decisions by OPEC are taken based on market data and according to introduced economic reports topped by the report of OPEC's secretary general, he said. He highlighted Saudi efforts to bolster cooperating between oil producing and consuming nations and said Saudi Arabia effectively contributed to boosting dialogue, understanding and cooperation between the two sides. The Minister said Saudi Arabia is interested in working for the stability of the international oil market and building close working relations based on economic fundamentals between it and oil producing countries specifically with OPEC member countries and between producing and consuming countries to eliminate any misunderstanding and work together for the stability and transparency of the market. He explained that the Ministry of Petroleum and Mineral Resources works in the field of oil, gas and minerals with complete transparency adding that the aim is the prosperity and growth of the country. About Saudi investment in the oil industry, Al-Naimi disclosed that the Kingdom tends to increase its investments in the industry. "The Kingdom had offered to build two large oil refineries in the US. Yet until today our American friends have not responded to our offer," Al-Naimi said. "The Kingdom is considering investment in building refineries in India, China and other countries," Al-Naimi added. The seventh annual meeting of the MIT alumni was attended by over 110 Saudi MIT graduates, academics, technocrats, economists and government officials. It was sponsored by Al-Eqtisadiah. The MIT Club of Saudi Arabia was established in 1998. From a modest start, its membership has steadily grown to over 80 members. Those members have MIT degrees in diverse disciplines and work in a variety of professions within Saudi Arabia. The objective of the club is to foster social and intellectual interaction between members, promote leadership programs in business and technology in Saudi Arabia, and support programs at MIT that promote cultural tolerance and understanding. The MIT Club has become known for setting a new tradition for civil societies by working to give a larger role to university graduates and academics to serve their country, said Muhammad Bakr, president of the club. The club organizes symposiums and forums for academics, businessmen, industrialists and government officials where they discuss various topics and issues of public interest and concerns. A recent function was attended by a number of prominent numbers of the Shoura Council, Supreme Economic Council and business and industrial communities. MIT admitted its first students in 1865. The institute is independent, coeducational, and privately endowed. Its five schools and one college encompass 34 academic departments, divisions, and degree-granting programs, as well as numerous interdisciplinary centers, laboratories, and programs whose work cuts across traditional departmental boundaries. Fifty-nine current or former members of the MIT community have won the Nobel Prize. They include 24 professors, 23 alumni, 14 researchers and one staff physician. Twenty-six of the Nobel Prizes are in physics, eleven in chemistry, twelve in economics, eight in medicine/physiology, and two in peace. Eight Nobel prizes were won by researchers who helped develop radar at the MIT Radiation Laboratory. OPEC Formation The governments of Saudi Arabia and Venezuela, in accordance with the objectives of the Arab Petroleum Congress of 1959 (1378/79 AH), issued a declaration on May 13, 1960, recommending that petroleum exporting countries pursue a common policy in order to protect their rightful interests. The declaration also advanced the idea of establishing an organization to achieve this end. Nonetheless, the countries concerned did not take immediate action. It was the sudden and arbitrary decrease in petroleum prices for the second time in 1960 (1379/80 AH) that made them feel the danger which encouraged them to unite in a common front. Consequently, the major petroleum producing countries declared, after the Baghdad Conference of 10-14th August, 1960 (at which the Kingdom of Saudi Arabia, Republic of Iraq, Iran, Venezuela and Kuwait were represented), their intention to establish the organization which became known as the Organization of Petroleum Exporting Countries (OPEC). One of the major decisions of that meeting declared a cardinal objective of the organization to be the standardization of petroleum prices among its members and agreement on the best methods of protecting its individual and collective interests. As a result, OPEC was founded in September 1960. The member states of Member States of the Organization of Petroleum Exporting Countries are Iran September 1960 Founder Member, Iraq September 1960 Founder Member, Kuwait September 1960 Founder Member, Saudi Arabia September 1960 Founder Member, Venezuela September 1960 Founder Member, Qatar December 1960 Full Member, Libya December 1962 Full Member, Indonesia December 1962 Full Member, United Arab Emirates November 1967 Full Member, Algeria July 1969 Full Member, Nigeria July 1971 Full Member, Ecuador November 1973 Full Member, Gabon December 1973 Associate Member. The Ecuador left OPEC in 1992 (1412/13 AH). Article 2 (sections A/B/C) of OPEC's statute, delineates the aims and objectives of the Organization: A) The principle aim of the Organization shall be the co-ordination and unification of petroleum policies of the Member Countries and the determination of the best means for safeguarding their interests individually and collectively. B) The Organization shall devise ways and means of ensuring the stabilization of prices in international oil markets with a view to eliminating harmful and unnecessary fluctuations. C) Due regard shall be given at all times to the interests of the producing nations and to the necessity of securing a steady income to the producing countries; an efficient, economical and regular supply of petroleum to consuming nations; and a fair return on their capital to those investing in the petroleum industry. On the other hand Saudi Aramco plans to build a multibillion dollar export-oriented refinery with a 400,000 barrel-per-day (bpd) capacity in the Red Sea city of Yanbu. This was disclosed by Khalid Al-Buainain, Vice President of refining at Aramco, to reporters at an energy conference in Dubai, according to a press statement. Investment for the plant will run to $4 billion-$5 billion, he said. Saudi Aramco wanted to form a joint venture with one or more international partners for the facility, he said. "We are talking across the globe to all refiners," he said, adding that the deal should be finalized "within a year or so." |
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