King Abdullah of Saudi Arabia, holder of the world’s largest crude-oil reserves, encouraged using the fuel wisely to protect the interests of future generations, rather than a ban on exploration, an analyst said.
The monarch told Saudi scholars studying in Washington that he had ordered all oil exploration to cease “in order to keep the earth’s wealth for our sons and grandsons,” state-owned Saudi News Agency reported yesterday.
“The King’s statement shouldn’t be perceived as a message that Saudi Arabia is stopping its capacity expansion projects but rather that Saudi Arabia has to be mindful of the future needs of the country and be cognizant of its usage wisely and prudently to support future generations,” said John Sfakianakis, chief economist at Riyadh-based Banque Saudi Fransi.
Saudi Arabia, the largest member of the Organization of Petroleum Exporting Countries, boosted oil output capacity to 12.5 million barrels a day last year to meet future global demand. State-owned Saudi Aramco plans to invest more than $120 billion in the next six years on crude oil and petrochemical projects, Chief Executive Officer Khalid al-Falih said Jan. 31.
“Even though Saudi Aramco’s conventional crude oil reserves are the largest in the world, at slightly more than 260 billion barrels, we operate an extensive and aggressive exploration program to ensure we will have the petroleum resources to meet domestic and world demand for many years to come,” Aramco said last month in its 2009 annual review.
Aramco, the world’s largest state-owned oil company, is drilling a record number of wells to find more hydrocarbons resources, Oil Minister Ali al-Naimi said in December.
Aramco plans to drill 45 to 50 oil exploration wells in 2010, Abdulla al-Naim, vice president for exploration, said in December.
Saudi officials have begun to issue notices against expanding domestic energy use. Saudi Arabia’s demand will rise to 8.3 million barrels a day of oil equivalent in 2028 from 3.4 million barrels in 2009 unless the kingdom becomes more efficient, Aramco’s al-Falih said in April. The increase in demand may be cut by 50 percent through improved energy efficiency, he said.