The Hindu Business Line : Saudi Arabia assures increased crude supply

Naimispeak
Oil will remain the fuel of choice for the transportation sector.
Investments aimed at increasing sustainable production capacity to 12.5 million barrels per day by 2009.

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New Delhi Jan. 19 Saudi Arabia has sent out a strong message to the oil markets on its commitment to increase crude oil supplies and to the stability of the market.

"I want to assure you that Saudi Arabia is committed to increasing the availability of energy to global markets... we strive to be a source of stability in world markets and it is a responsibility which we take seriously," Mr Ali Ibrahim al-Naimi, Saudi Arabia's Oil Minister, said here. He was delivering a special address at the ongoing Petrotech 2007.

Pointing out that his country had committed more than $80 billion investment to increase the supply of energy and remove infrastructure bottlenecks, Mr al-Naimi said: "These are not hollow words."

The investments are aimed at increasing the sustainable production capacity to 12.5 million barrels per day by 2009.

Mr al-Naimi's words should be seen in the backdrop of calls from some members of the Organisation of Petroleum Exporting Countries (OPEC) for stronger measures to rein in oil prices, which have been on a sustained downtrend over the last three weeks.

`Fuel of choice'

In a statement aimed at those calling for higher investments in developing renewable and alternative energy sources, Mr al-Naimi said: "Oil will remain the fuel of choice for the transportation sector and will be called upon to supply a significant portion of new energy demand in the coming decades."

He said despite the impressive growth rates seen in renewable energy sources, the overall energy mix in 2030 will look much as it does today with fossil fuels continuing to maintain their importance. "While a number of renewable and alternative energy sources have long-term potential, they are not yet economically competitive with fossil fuels," Mr al-Naimi said.

Delivery constraints

According to him, the challenge for the industry now was on the delivery front where supply chain constraints have restricted its ability to deliver energy to consumers. There is no shortage of hydrocarbon resources that would seriously limit oil's contribution to the energy mix in the future, he said adding, "The resource base is vast and recovery rates are steadily increasing thanks to reasonable prices and technological innovation."

Mr al-Naimi also assured India that Saudi Arabia, which supplies about 25 million tonnes of oil to the country, would be a reliable supplier and is committed to increasing the supply in the future, if necessary.