May 2 (Bloomberg) -- Saudi Arabia, holder of the world's largest oil reserves, may not need to increase its oil-production capacity after 2009, the country's oil minister said, because conservation and alternative energy sources could curb the consumption of oil.

``As we approach 2009, we will look at our plan and see if demand warrants additional increase in capacity,'' the minister, Ali al-Naimi, said at a press conference after a conference with Asian energy officials in the Saudi capital of Riyadh.

``Our feeling now is that with the thrust and push for conservation, for efficiency of use, for use of alternative-sources energy, we probably need not go beyond 12.5'' million barrels a day, the capacity projected for the end of 2009, Naimi said.

``But that is guessing right now,'' he added. ``We don't know what the impact of the measures of conservation, of efficiency and alternative fuels is going to do to demand.''

Oil consumers have relied on Saudi Arabia, the world's largest oil exporter, and other members of the Organization of Petroleum Exporting Countries to provide the bulk of increased oil supply this decade and the next.

Saudi Arabia can pump 10.8 million barrels a day now, according to Bloomberg estimates. It produced 8.5 million barrels a day in March and could have pumped 2.3 million more barrels a day. That spare capacity typically would be used to fill gaps in supply caused by disruptions in oil-producing regions.

Earlier Plans

Before today, Saudi Arabia has said it plans to increase capacity to 12.5 million barrels a day by 2009 and then to 15 million barrels a day by another, unspecified date.

Crude prices have held above $60 a barrel since March 22, double what they were three years ago, causing concern among the Asian nations that are Saudi Arabia's biggest export markets.

It is ``vital'' that energy-production capacity be expanded to meet rising demand, Japanese Minister of Economy, Trade and Industry Akira Amari said at the meeting in Riyadh. ``Energy- producing and energy-consuming countries in Asia need to actively implement further investment, in both the upstream and downstream sectors, and at the same time make efforts to develop a market environment that attracts the necessary investment.''

Asia, with more than half of the world's population, will account for more than 70 percent of the world's incremental demand growth for energy, Naimi said.

To contact the reporters on this story: Maher Chmaytelli in Riyadh at mchmaytelli@bloomberg.net. Ying Lou in Riyadh at ylou1@bloomberg.net Nesa Subrahmaniyan through the newsroom in Singapore on nesas@bloomberg.net

Last Updated: May 2, 2007 10:57 EDT