Sept. 27 (Bloomberg) -- Saudi Arabia's oil minister and the president of Exxon Mobil Corp. said world petroleum reserves will last for decades, seeking to ease concern about supplies and near- record prices.

Saudi Arabia, the world's largest oil producer, will ``soon'' almost double its proven reserve base, said Oil Minister Ali al- Naimi. That will add 200 billion barrels to the current estimate of 264 billion, he said. Exxon Mobil President Rex Tillerson said the world may still have more than 3 trillion barrels from conventional oil fields, oil sands deposits and other sources.

``There will be plenty of oil available to meet future demand,'' al-Naimi said today in Johannesburg. Prices are high now because ``the petroleum industry faces infrastructure constraints and bottlenecks that are causing market volatility and restricting its ability to bring oil from the ground to the consumer.''

Crude oil prices have soared during the past two years and reached a record of $70.85 a barrel last month in New York after Hurricane Katrina shut off U.S. Gulf of Mexico supplies and flooded refineries. Gasoline pump prices in the U.S. rose to a record above $3 a gallon, levels similar to those of 1981, after adjusting for inflation.

The Saudi oil minister called for a global effort among producers and consumers to find a way to increase investment to make gasoline and meet world demand, equal to more than 29 billion barrels a year.

``There is a limit to what we can do'' to lower prices, al- Naimi said. Crude oil prices may stay high ``until the whole supply chain is even, when downstream and upstream is in balance. Today they are out of balance.''

OPEC, Consumers React

No new refineries, called the ``downstream'' part of the business, have been built in the U.S. in about three decades, and the last new plant constructed in Europe was in 1989. More investment is needed in refineries, pipelines and other infrastructure to meet rising demand, al-Naimi said.

Crude oil prices in New York have retreated more than 7 percent since reaching their record and were at $65.14 a barrel as of 1 p.m. London time. They have doubled in two years.

Executives and ministers from the world's biggest oil companies and producing countries are among 3,500 delegates attending the World Petroleum Congress in Johannesburg to discuss topics ranging from exploration technology, refinery investments, oil prices, access to reserves and the environment.

Tillerson said Irving, Texas-based Exxon Mobil, the largest publicly traded oil company, doesn't change its investment timetable because of the ``inevitable peaks and troughs'' in oil prices. Oil prices will not stay high forever, he said, without giving a more specific outlook.

Exxon Mobil shares this year have jumped 26 percent as oil and gas prices rose, while the benchmark Standard & Poor's 500-stock index is little changed.

`Legacy' of Low Investment

The meeting comes during a month when consuming countries released emergency oil and fuel stockpiles under an International Energy Agency accord for only the second time in 30 years. The Organization of Petroleum Exporting Countries offered all its remaining spare production capacity to buyers, if needed.

``What we are seeing is not a function of the world running out of oil,'' said Kevin Norrish, an analyst at Barclays Capital in London. ``What we are seeing is the legacy of a very long period where investment has been far too low. The problem is getting the oil out of the ground and delivering it to consumers.''

Saudi Arabia is the only OPEC member able to compensate for supply cuts and is targeting to raise production capacity by 14 percent to 12.5 million barrels a day in five years. Saudi Arabia has a plan to raise capacity to 15 million barrels a day whenever that much is needed, al-Naimi said.

For now, the Saudi oil minister said there are ``no takers'' of additional oil supply.

Some critics doubt Saudi Arabia's ability to deliver. The kingdom may have hit its peak oil production and output may start to decline, according to Matthew Simmons, chairman of energy investment bank Simmons & Co.

Assuring Markets

Simmons wrote in ``Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy'' that about 90 percent of Saudi Arabia's oil output comes from seven fields, including three that have pumped for more than 50 years. An unsustainable pace of water injection may lead some ``war-horse'' fields to rapidly decline with few replacement sources in sight, he said.

``The `twilight' of Saudi Arabian oil envisioned in this book is not a remote fantasy,'' Simmons wrote. Saudi Arabia's oil ministry and its state-owned energy company, Saudi Aramco, in May declined to comment on Simmons's book and its assertions.

Al-Naimi, by contrast, has been trying to assure markets that Saudi Arabia can meet increased demand.

Simmons based his findings on more than 200 technological papers written by the Society of Petroleum Engineers and transcripts from closed U.S. Senate subcommittee hearings in 1973 and 1979. He supplemented the findings with a six-day trip to Saudi Arabia in February 2003.

Decades of Oil

Simmons said he tried and failed to get information from current and former members of Saudi Aramco. An energy adviser to U.S. President George W. Bush, Simmons has called on Saudi Arabia to release more data and hire an independent auditor to verify its figures.

Saudi Arabia estimates that it has more than 264 billion barrels of proven oil reserves. That figure hasn't changed much in 17 years even though it has pumped more than 46 billion barrels from that base. Al-Naimi in April had estimated additional probable and possible reserves at about another 100 billion barrels. Probable and possible are reserves that are known, but not proven to be viable given current prices and technology.

Almost all of Saudi Arabia's production comes from a narrow band on the eastern border of the Persian Gulf made up of 17,140 square miles where six of the kingdom's largest eight producing fields are located.

``We will soon be able to boost our proved oil reserves by 200 billion barrels using the latest technology,'' al-Naimi said today. ``We are further encouraged that there are vast areas of the kingdom that have yet to be explored. This leads us to say with confidence that Saudi Arabia's proved reserves will expand significantly in the years and decades ahead.''

To contact the reporter on this story: James Cordahi in Johannesburg on cherifcord@bloomberg.net

Last Updated: September 27, 2005 08:11 EDT