Saudi Arabia, the world’s biggest crude exporter, will be able to sustain the current level of shipments for the next two decades even as local demand for fuel rises, the assistant minister of petroleum said.
The kingdom will be able to keep exports at the present level until at least 2030 without adding capacity, Prince Abdulaziz bin Salman said yesterday by phone from Riyadh. The nation’s crude production capacity is 12.5 million barrels a day, he said.
“We will maintain our current oil exports levels for the next twenty years and beyond despite the rise in demand,” the minister said. “Those who are forecasting the kingdom to turn into an oil importer are ignorant bordering idiocy.”
Saudi Arabia is working to improve energy efficiency to ensure availability of crude for export, Abdulaziz said. The kingdom produced 9.57 million barrels of crude a day in December, down from 9.7 million in November, according to Bloomberg estimates.
Global crude markets will remain well supplied in 2013, Abdalla El-Badri, secretary-general of the Organization of Petroleum Exporting Countries, said yesterday in London. OPEC, which produces about 40 percent of the world’s oil, cut output by 465,000 barrels a day last month to 30.4 million, led by a reduction in Saudi Arabia, the group said in a Jan. 16 report.
Saudi Arabia’s total consumption of crude and other types of oil liquids will almost double in 17 years to slightly exceed 8 million barrels a day, Abdulaziz said. That includes 4 million barrels a day of crude and petroleum products and 4.2 million barrels of natural gas liquids, he said.
The kingdom exported 7.15 million barrels a day of crude in November, according to data from the Joint Organizations Data Initiative, which publishes figures for oil-producing and consuming nations. The nation burned 367,000 barrels a day of crude at domestic power plants that month, down 23 percent on a year earlier, according to Riyadh-based JODI.
Demand for electricity is rising at 8 percent a year, according to government figures. Saudi Arabia uses natural gas in half of its installed power turbines, and crude and fuel oil for the rest, according to the electricity generation authority. The country sells crude to the local electricity company at $4.50 a barrel, and heavy fuel oil at $3.50, Prince Abdulaziz said.
Citigroup Inc. said in a Sept. 4 research report that Saudi Arabia risks becoming a net oil importer by about 2030 if it continues to use oil and its derivatives for 50 percent of its power generation and if electricity consumption keeps rising at 8 percent a year. Greater use of renewable or nuclear energy would reduce that risk, the bank said.
Brent crude for March settlement traded 8 cents higher at $113.56 a barrel on the London-based ICE Futures Europe exchange at 7:56 a.m. local time. The European benchmark has risen 6 percent this year.