Ain-Al-Yaqeen - December 9, 2005

		December 9, 2005

KING ABDULLAH IBN ABDUL AZIZ PATRONIZES THE INAUGURAL CEREMONY OF THE BUILDING OF THE INTERNATIONAL ENERGY FORUM SECRETARIAT (IEFS).
THE CUSTODIAN OF THE TWO HOLY MOSQUES: OUR POLICY IS BASED ON TWO MAIN OBJECTIVES, TO REALIZE A FAIR AND REASONABLE PRICE FOR OIL, AND PROVIDE ADEQUATE OIL SUPPLIES TO ALL CONSUMERS.
THE SAUDI MINISTER OF PETROLEUM AND MINERAL RESOURCES: THE IEFS WILL CONTRIBUTE IN THE STABILITY OF THE OIL MARKET.
THE SECRETARY GENERAL OF THE FORUM: THE IEFS REFLECTS THE IMPORTANCE OF SAUDI ARABIA.

The Custodian of the Two Holy Mosques, King Abdullah Ibn Abdul Aziz patronized the inaugural ceremony of the building of the International Energy Forum Secretariat (IEFS).

King Abdullah Ibn Abdul Aziz, who was accompanied by Prince Salman Ibn Abdul Aziz, the Governor of Riyadh region, and other princes, was welcomed by Minister of Petroleum and Mineral Resources Eng. Ali Al-Naimi and a number of senior officials.

The King was briefed on the replica of the building and he listened to a briefing presented by Prince Abdul Aziz Ibn Salman Ibn Abdul Aziz, the Assistant Minister of Petroleum and Mineral resources for petroleum affairs and the head of IEFS's constituent committee on various phases of the project.

Then, the Custodian of the Two Holy Mosques met with Ministers of Energy and Petroleum attending sessions of the Energy Forum and the inaugural ceremony of the building of the forum's secretariat.

During the audience, secretary general of the forum delivered a speech in which he underlined the importance of energy information for the stability of oil markets.

He thanked King Abdullah Ibn Abdul Aziz for the beautiful building of the forum's secretariat.

Then, King Abdullah proceeded to the venue of the speech ceremony prepared for this occasion.

The Custodian of the Two Holy Mosques and those attending watched a documentary on energy in the world and the availability of energy in Saudi Arabia, its care for energy issues including production and distribution and promotion of coordination between producers and consumers.

The documentary explained how the energy forum was launched, its importance and its meetings to discuss issues of energy and economic development and to serve stability, security and sustainability in the field of energy.

Then, Custodian of the Two Holy Mosques, King Abdullah Ibn Abdul Aziz delivered the following speech:

In the Name of Allah, Most Compassionate, Most Merciful Praise be to God, and peace and blessings upon His Messenger Mohammad and all His Kin and Companions.

Dear Friends:

May God's peace and blessings of be upon you.

It is our pleasure to welcome you to the Kingdom of Saudi Arabia, and to celebrate with you the inauguration of the permanent headquarters for the International Energy Forum Secretariat, and the launch of the international project of the Joint Oil Data Initiative. It is our hope that the work of the Secretariat will contribute effectively to enhance the dialogue between producers and consumers, and protect the global economy from turmoil. This is the reason why we proposed the establishment of the Secretariat five years ago.

Dear Friends:

Our oil policy is clear, and is characterized by honesty and transparency. It is based on our firm belief that we are part of the world we live in, and that we share our world's fortunes as well as misfortunes, and that our national interest does not conflict with the interest of the international community. This policy is based on two main objectives: the first is to realize a fair and reasonable price for oil, and the second is to provide adequate oil supplies to all consumers.

In order to realize these two objectives, we have increased our production capacity to a level that does not jeopardize the interests of future generations or do damage to the oil fields. We have adopted moderate positions, within and outside of OPEC, with regard to production and pricing. We have increased production whenever there were shortfalls in supply, and we have adopted a policy of consultation and coordination with both consumers and producers. However, all the efforts exerted by producing countries are fruitful only when they are met with a positive attitude by the major consuming countries, in the form of limiting speculation in the oil market and refuting rumors and misleading information, which cloud the realities of the market. It is also incumbent upon these countries to reduce the burdens on their citizens by reducing taxes on petroleum products when oil prices rise.

Dear Friends:

Our oil policy is part and parcel of our overall policy which seeks dialogue rather than argument, and cooperation rather than confrontation.

We ask God Almighty to grant success to all who labor for the benefit of humanity, for He is the all hearer, the all responsive.

God's peace and blessings be upon you.

During the speech ceremony, Minister of Petroleum and Mineral Resources Eng. Ali Ibrahim Al-Naimi delivered the following address:

In the name of Allah, the most merciful, most beneficent Praise be to Allah and blessing and peace be upon his last prophet.

Your Majesty, the Custodian of the Two Holy Mosques, King Abdullah Ibn Abdul Aziz your royal highnesses, Eminences, Excellencies and honorable guests may peace and blessing be upon you.

It pleases and honors me, your majesty, to thank you personally, and on behalf of my colleagues at the ministry of petroleum and mineral resources and the International Energy Forum Secretariat (IEFS) for your inauguration of the IEFS headquarters building and the launching of the IEFS's Joint Oil Data Initiative system. It is no wonder, your majesty, since you were first to announce this initiative to establish the IEFS five years ago. You have supported this international initiative morally and financially until the IEFS became a concrete reality that is responsible for a clear and growing international role.

Your Majesty, Ladies and Gentlemen,

One hundred years ago, petroleum started to take its position as an international product of an increasingly growing economic and political importance. During these years many important and significant characteristics have dominated the oil industry and trade, the most important of which is the developing contrasting and transforming relations between oil producers and consumers.

We realize that energy, of all varieties and sources, is the bases of life around the world. It is one of the main props of growth and development for all nations.

Oil alone, makes more than a third of the energy that the world consumes today. Additionally, when the majority of the world's reserves of petroleum exist in developing countries today, while most of the produced petroleum is consumed in the advanced industrial countries, we realize the extraordinary political, economic and developmental dimensions that this precious natural resource has earned, and the influence these dimensions could make on the relations between the oil producing and consuming countries.

It is no wonder that the observer of the oil industry and its international market developments and the reflections of these developments on the international relations can notice the nature of the relationship oil consuming countries and oil producing and exporting countries, especially during the sixties and seventies of the last century, which were characterized with tension, conflict and confrontation. But the eighties witnessed the beginnings of the transformation in these relations. In the nineties, mutual interests between the producers and consumers of oil determined that the relationship must be transformed from the language of antagonism to the language of harmony and cooperation. Cooperation developed gradually until this positive trend was concluded by the 7th ministerial conference for oil producers and consumers in Riyadh in the year 2000.

The most distinctive aspect of the Riyadh meeting is its transformation from just a mere meeting that could be held every year or two, into an assembly that seeks to be deep rooted through the establishment of a permanent forum of clear goals and programs.

Riyadh witnessed the development of the ministerial meeting from speeches and oratory into the dialogue based on scientific inquiry and clearly-started points and goals. The most significant aspect in the 7th ministerial meeting in Riyadh was your majesty's initiative to establish a general secretariat on an international energy forum based in our lovely capital city creating a general frame to host, support, and enhance dialogue between oil producing and consuming countries. Beside framing the international dialogue on energy, among the goals of establishing the IEFS is to preserve, intensify and activate dialogue. Doubtlessly, the importance and the role of the IEFS will increase gradually, each year after another, with the development of the dialogue between oil producers and consumers as long as it is based on scientific foundations that observe the interests of all parties.

Here, I would like to point at the newest IEFS project, which will undertake the joint oil data initiative, which your majesty has demanded cooperation to achieve five years ago. Today, it is honored by your patronage to launch it. This initiative enjoys a particular importance since it helps countries to better plan for future. It also contributes to stabilizing international market, because the absence of accurate and clear data is one of the most important problems that face the international market and industry, especially in significant issues such as supply and demand, production, reserves, etc. I do not exaggerate when I say shortage in accurate oil information is one of the reasons for the crises that international market witnesses nowadays.

Your Majesty, Respectable guests,

The success of the IEFS to fulfil its duties will depend on the enthusiasm and attention of the countries and their participation in its activities. It will also depend on their adherence to meet their responsibilities in supporting the IEFS. Despite the continuously increasing international support the IEFS is receiving, the financial support is still below expectations.

More than 40 countries have supported the IEFS's budget, and they hereby have our thanks and appreciation for that support. However, the IEFS looks forward, and in fact, needs more financial support.

We also hope that the oil industry, represented by oil companies, will take the initiative to support the IEFS financially and morally, through the establishment of an independent financial fund that should enable the IEFS to expand its activities to play a more positive and effective role in the international energy issues.

Respectable guests,

This forum is part of a journey of cooperation between producers and consumers of oil. We all look forward to the 10th forum, which will be held in Doha, Qatar, to move forward in the international cooperation journey in the field of oil and energy. Your Majesty,

Respectable guests,

Before I conclude my address, I would like to highlight the constructive role that the High Commission for the Development of Riyadh has undertaken under the auspices of his royal highness Prince Salman Ibn Abdul Aziz, the Governor of Riyadh Region, to build the IEFS permanent headquarters building. So, we would like to extend our thanks and appreciation to his highness and to the commission.

In conclusion, I would like to express my thanks and appreciation to your majesty for launching this brilliant international initiative and for the support and thoughtful attention you have given it, until it became an evident reality, and for your majesty's inauguration of this ceremony.

I also would like to extend my thanks and appreciation to their excellencies the ministers of oil, energy, economy and finance and to the officials from international organizations and oil companies and all respectable guests for honoring us with participation in this valued event asking the lord almighty success for all.

May peace and blessing be upon you.

The Custodian of the Two Holy Mosques King Abdullah Ibn Abdul Aziz then pressed a button marking the launching of Joint Oil Data Initiative (JODI) supervised by the Secretariat General of the International Energy Forum saying, God willing, it will be a blessing for the whole world.

The King received a shield on this occasion from the Minister of Petroleum and Mineral Resources and a gift from the Forum's Secretariat delivered by its Secretary General.

Afterwards, the Custodian of the Two Holy Mosques graced a luncheon held in his honor.

The Speech ceremony and the banquet were attended by Prince Mishaal Ibn Abdul Aziz; Prince Miteb Ibn Abdul Aziz, Minister of Municipal and Rural Affairs; Prince Badr Ibn Abdul Aziz, Deputy Commander of the National Guard; Prince Miqren Ibn Abdul Aziz, Chief of General Intelligence; princes; ministers and senior officials.

Then King Abdullah Ibn Abdul Aziz received U.S. Energy Secretary Samuel Bodman and the accompanying delegation.

The U.S. Secretary conveyed to the King the greetings of U.S. President George W. Bush. In turn, the Monarch sent his greetings to the President.

The audience was attended by Prince Mishaal Ibn Abdul Aziz; Prince Miteb Ibn Abdul Aziz, Minister of Municipal and Rural Affairs; Prince Salman Ibn Abdul Aziz, the Governor of Riyadh Region; Prince Miqren Ibn Abdul Aziz, Chief of General Intelligence; Minister of Petroleum and Mineral Resources Eng. Ali Al-Naimi; Minister of Finance Dr. Ibrahim Al-Assaf and U.S. Ambassador to the Kingdom James Oberwetter.

King Abdullah Ibn Abdul Aziz received British Chancellor of the Exchequer Gordon Brown and the accompanying delegation.

The Chancellor conveyed to the King the greetings of Britain's Queen Elizabeth II; Crown Prince Charles and Premier Tony Blair. In turn, the Monarch sent his greetings to the British leadership.

The audience was attended by Prince Mishaal Ibn Abdul Aziz; Prince Miteb Ibn Abdul Aziz, Minister of Municipal and Rural Affairs; Prince Miqren Ibn Abdul Aziz, Chief of General Intelligence; Minister of Petroleum and Mineral Resources Eng. Ali Al-Naimi; Minister of Finance Dr. Ibrahim Al-Assaf and British Ambassador to the Kingdom Sherard Cowper Coles.

King Abdullah Ibn Abdul Aziz also received the French Minister of Economy, Finance and Industry Thierry Breton and the accompanying delegation.

The Minister conveyed to the King the greetings of France's President Jacques Chirac. In turn, the Monarch sent his greetings to the President.

The audience was attended by Prince Mishaal Ibn Abdul Aziz; Prince Miteb Ibn Abdul Aziz, Minister of Municipal and Rural Affairs; Prince Miqren Ibn Abdul Aziz, Chief of General Intelligence; Minister of Petroleum and Mineral Resources Eng. Ali Al-Naimi; Minister of Finance Dr. Ibrahim Al-Assaf and French Ambassador to the Kingdom Charles Henri d'Aragon.

King Abdullah Ibn Abdul Aziz received a message from Japan's Premier Junichiro Koizumi.

The message was delivered to the King during his audience with Japanese Special Representative of the Premier Hiroki Hosoda and the accompanying delegation.

The Representative conveyed to King Abdullah the greetings of Japan's Emperor Akihito and the Premier. In turn, the Monarch sent his greetings to the Japanese leadership.

The audience was attended by Prince Mishaal Ibn Abdul Aziz; Prince Miteb Ibn Abdul Aziz, Minister of Municipal and Rural Affairs; Prince Miqren Ibn Abdul Aziz, Chief of General Intelligence; Minister of Petroleum and Mineral Resources Eng. Ali Al-Naimi; Minister of Finance Dr. Ibrahim Al-Assaf and Japanese Ambassador to the Kingdom Yasuo Saito.

King Abdullah Ibn Abdul Aziz also received a message from Indian President Abu Bakr Zein Al-Abedeen Abdulkalam.

The message was delivered to the King during his audience with India's Minister of Petroleum and Natural Gas Mani Shankar Aiyar and the accompanying delegation.

The Minister conveyed to the King the greetings of the Indian leadership. In turn, the Monarch sent his greetings to the Indian leadership.

The audience was attended by Prince Mishaal Ibn Abdul Aziz; Prince Miteb Ibn Abdul Aziz, Minister of Municipal and Rural Affairs; Prince Miqren Ibn Abdul Aziz, Chief of General Intelligence; Minister of Petroleum and Mineral Resources Eng. Ali Al-Naimi; Minister of Finance Dr. Ibrahim Al-Assaf and Indian Ambassador to the Kingdom Momona Othman.

Then the King left the venue after warm welcome and farewell.

Meantime Arne Walther, the Secretary General of the International Energy Forum (IEF) has hailed the great attention given by the Custodian of the Two Holy Mosques, King Abdullah Ibn Abdul Aziz to the forum, and underlined the importance of cooperation between oil producing and consuming countries.

Addressing a press conference, attended by a number of senior officials, Walther expressed happiness over the official inauguration of headquarters of International Energy Forum Secretariat (IEFS) and thanked King Abdullah for providing the forum's general secretariat with this beautiful building as well as for the meeting of the oil ministers and executive directors of the giant oil companies.

Walther said the opening of IEFS testifies to the importance and potential of the producer-consumer dialogue in the International Energy Forum (IEF) at a time when oil prices and energy security are a major global concern. "This is a time for global energy dialogue to promote energy security and address the links between energy, environment and economic development in an increasingly interdependent world.

"The IEF is a unique vehicle for international cooperation across traditional political, economic and energy policy dividing lines. Nowhere else do ministers of energy producing and consuming countries, of industrialized as well as developing countries, of the IEA and OPEC along with the increasingly important countries independent of these, meet in informal dialogue. This political dialogue also recognizes the importance of dialogue and partnerships between governments and industry itself. Ministers and CEOs interact in the International Energy Business Forum in conjunction with the biannual Ministerial. An important add-on is the opportunity that these ministerial provide for a network of bilateral meetings," he said.

"Such is the setting also for our meeting today. Leading experts will make presentations on the global economy and the oil market and industry as well as on technology and information and oil market stability. Panel discussions will also provide guidance to preparations for the 10th IEF Ministerial meeting and 2nd International Energy Business Forum, to be hosted in Doha on April 22-24, next year," Walther said.

"The Custodian of the Two Holy Mosques, King Fahd Ibn Abdul-Aziz, has kindly consented to release the Joint Oil Data Initiative (JODI) world data base to the public this afternoon," he noted.

"More than 90 countries, representing 95 per cent of global supply and demand, are now submitting data on oil production, demand and stocks," Walther said.

"Since we have seven of the G8 countries here today, let me say how encouraged we were by the Gleneagles Summit statement that emphasized the importance of the producer-consumer dialogue in the IEF and the Secretariat's coordination of the Joint Oil Data Initiative as means to reduce market volatility and promote energy security.

That G8 emphasis has later been echoed also by other regional and international organizations.

He also thanked Indian Minister of Petroleum and Natural Gas Mani Shankar Aiyar for the "Asian Energy Vision" he presented when giving the 1st IEF lecture in Riyadh in March this year. It attracted Saudi officials, foreign ambassadors, executives of oil companies and financial institutions as well as the media.

In promoting the global dialogue on energy in the IEF, Walther said " it is the objective of the Secretariat to give Ministers added value input and platforms for dialogue that you would find useful in your national decision-making and participation in other patterns of international energy cooperation. For this, we need not only your political guidance, but also your financial support.

Let me thank those Ministers, whose countries have made their voluntary financial contributions to Secretariat activity for this year. I hope that those, who have not yet done so, will do so. It goes without saying that contributions from industry are certainly also highly appreciated.

"Let me especially thank the Kingdom of Saudi Arabia and its Petroleum and Mineral Resources Minister Ali Ibrahim Al-Naimi most particularly, for being such a gracious host country to the Secretariat and for providing so much political and financial support to our activity," Walther added.

US Energy Secretary Samuel Bodman has praised the personal follow up of the project of the Riyadh-based International Energy Forum Secretariat (IEFS) by the Custodian of the Two Holy Mosques, King Abdullah Ibn Abdul Aziz.

Addressing a press conference here on Friday evening, Bodman underlined the importance of the role that could be played by the International Energy Forum (IEF) in enhancing cooperation between oil producers and consumers as well as in strengthening pillars of stability at the oil market through making available the necessary knowledge and understanding of facts.

He noted that he had reviewed with Saudi Minister of Petroleum and Mineral Resources Eng. Ali Ibrahim Al-Naimi, means of increasing the productive capacity of the refineries owned by the Kingdom of Saudi Arabia in America.

Bodman pointed out that a number of governments and oil companies have shown interest in investment in the field of refineries in America through attractive investment opportunities in the American market.

He also criticized the taxing policy imposed in his country, and said it has an adverse impact on investment in America.

Bodman reiterated his confidence on the commitment of the member states of the Arab Gulf Cooperation Council (GCC) in making the required oil supplies available at the international oil market, and said such a development would enable them, increase their productive capacity.

"I haven't received any commitments in this respect, and at the same time I have not asked for any commitment from oil producing countries either from inside or outside OPEC to intervene through increasing production for curbing prices.

"However, I have discussed the issue through direct contacts with oil producers from inside and outside OPEC, and these producers have pledged to provide the oil market with the required supplies," he said.

Bodman said there is a problem in the capability of the producers in facing the demand for crude oil , adding that the growth in supplies would increase by about one million barrel this year and a similar volume next year.

"We are keen on reasonable prices for oil producers and consumers," he said, adding 'several quarters are worried about the increase of oil prices, and I am keen on stable prices because fluctuation of prices will make matters difficult for countries and companies to set their plans," Bodman noted.

He said that Catrina and Rita hurricanes have had an adverse impact on the stability of oil prices.

"Three of our refineries with a productive capacity of 800,000 barrel per day are not operating for the time being, but one of these refineries is expected to be operating by the end of this year," he added.

From his part the Minister of Petroleum and Mineral Resources Eng. Ali bin Ibrahim Al-Naimi emphasized the importance of the role of the Kingdom of Saudi Arabia in the stability of the world oil market.

In a press conference held following the patronization of the Custodian of the Two Holy Mosques King Abdullah Ibn Abdul Aziz of the inauguration ceremony of the International Energy Forum Secretariat building and the launching of Joint Oil Data Initiative (JODI), he said that world's countries give a great weight to the Kingdom's role in the supply and stability of the world oil market.

Replying to a question, he said the Kingdom's producing capacity will reach 12.5 million barrels at the end of 2009.

Eng. Al-Naimi noted that the Kingdom does not intend to play the role of a price swing producer, but it builds its facilities on the expected demand level.

The Minister indicated that the supply is bigger than the demand; oil storage has been built and the market is satisfied. Consequently, there is no need for additional steps, he said and added that refineries in the world have been unable to meet consumers' needs.

He pointed out that the Kingdom's accession to the World Trade Organization will integrate the Kingdom greater into the world economy. The Kingdom's role will be more important in the future as a result of its great integration into the world economy, he said.

Al-Naimi stressed that investment in producing and refining operations is necessary due to the economic growth in the world. The Minister pointed out that with regard to a final consumer, a range between 30 to 35 percent of oil barrel price is for the cost of production, marketing and freight of oil and the remaining of nearly 65 percent for taxes on fuels.

Al-Naimi hoped that the Secretary General of the International Energy Forum takes into consideration the recommendation that the Secretariat sets a mechanism to ensure the producers' interests.

Replying to another question on his remarks that the Kingdom intends to spend more than 50 billion on expansion projects of production, he said that investment portfolios exceed 50 billion and the accurate amount will be set later following feasibility studies.

He affirmed that the Kingdom has the least level of depletion in the world since it has the largest reserves.

The Minister of Petroleum and Mineral Resources noted that the Kingdom does not set oil prices in the world, but prices are set in accordance with the world oil market.

He expressed his confidence that the Kingdom will raise its oil reserves to more than 200 billion.