Naimi makes case for big spend
The world has enough oil to fuel future economic growth, but the energy
industry is facing a big challenge to ensure investment is enough to meet
future demand, Saudi Arabia's Oil Minister Ali al-Naimi said today.
In a speech to the International Energy Forum, Naimi added that Saudi AraBIA
is working hard to ensure that the oil market is well supplied.
He added that limited fuel supply capacity, and not a lack of oil reserves,
was the greatest threat to future energy supplies.
"Recently, I have observed an unprecedented level of uncertainty, doubt and
even fear in discussions about the future of energy and its impact on global
economic prospects," Naimi said.
"I can assure you unequivocally that the world is not running out of oil...
Limited capacity along the entire supply chain is the real source of current
global supply tightness and represents the greatest threat to ensuring
adequate energy to fuel future economic growth.
"At its heart, this is not an energy resource issue; it is primarily an
investment issue," Reuters quoted him as saying.
Shortages of labour, equipment and materials were raising costs and delaying
new projects that would boost capacity, he added.
Saudi Arabia has committed over $90 billion to increasing its energy capacity,
Naimi said.
Naimi reiterated that the kingdom maintained spare output capacity of around 2
million barrels per day and that the kingdom would boost capacity to 12.5
million bpd by the end of next year.
Current output stands at around 9 million bpd, a Saudi source said earlier
this month.
Alternative fuels would make a limited contribution to energy supplies in the
foreseeable future despite the billions of dollars that have been spent on
developing them, Naimi said.
"Frankly, these efforts are sustained not by economic forces but because of
high government subsidies," he said.
22 April 2008 13:46 GMT
| last updated:
22 April 2008 13:46 GMT
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