GCC nations will continue to fulfill their role as stable suppliers of energy to world markets, Petroleum and Mineral Resources Minister Ali Al-Naimi said.
“We are working to boost economic growth at home, and we will continue to work with our customers across the world to ensure we meet all demand going forward,” he told a conference in Doha, Qatar.
Reiterating the Kingdom’s position, the minister said he welcomes all new energy sources to the market.
Al-Naimi also said that the demand for crude oil fluctuates, as always, but it remains robust.
“I don’t think anyone should fear new supplies when set against increasing global demand,” he said.
“For decades, GCC energy supplies helped support economic growth in the US and across Europe. Both have witnessed economic growth that, in part, is a result of stable energy supplies from the GCC,” he said.
“We have done the same in Asia, supplying energy to help fuel its increasing growth and prosperity,” the minister was quoted as saying in his speech, a copy of which was received here.
“The global energy market has evolved a great deal since my career in the oil industry first started. I think it is fair to say that, during this period, the GCC region has been transformed. It has become a vital energy supplier to the world,” he said.
“Over the past four decades, the GCC countries have accounted for one fifth of crude supplies, producing more than 207 billion barrels. To put this figure in context, it is more than six times current annual consumption levels for the entire world. This has had a remarkable impact on the nations and people of the GCC,” the minister said.
“Today, Qatar is the world’s largest LNG exporter and has sustained one of the fastest economic growth rates in the world over the past decade. And examples of economic progress exist across the GCC,” he pointed out.
“More companies and nations are competing for their slice of the energy pie, that’s true. But the pie is getting bigger and there is enough to go around. So I will look at some of the new entrants to the energy market, then discuss the GCC angle,” said the minister.
He said new advances in technology had presented the US with an interesting domestic opportunity. “Not long ago, all the talk was of ‘peak oil’. Funny, I don’t hear so much about that today. Today, the harbingers of oil scarcity have been replaced by the apostles of plenty. Indeed, after years of declining domestic oil and gas supplies, production is on the rise with the US potentially becoming a gas exporter. This would have been unthinkable just a few years ago,” he said.
“Closer to home, the broader GCC energy story is one of increased domestic demand for energy, particularly gas, and increasingly renewables. This does not, and should not, come as a surprise. It is worth reminding people that for many centuries, the people of this region faced incredible deprivations and hardships on account of the harsh environment. I know this from personal experience,” said Al-Naimi.
“Energy has transformed our lives and it has, for the most part, had a remarkably positive impact on the national economies of the region. Of course, being so blessed with natural resources has, naturally, corresponded with a boom in their consumption domestically. But I would say the region has recognized the need to tackle this situation, and I know that nations across the GCC are taking vital measures to address this demand, via efficiency efforts and by investing in renewables,” the minister said.
He added: “While increasing domestic energy usage is not favorable in general, usage that creates real economic value is positive.”
The minister said gas usage, in particular, is helping spur economic activity in the petrochemical sector.
“It is adding value, creating jobs and it is helping GCC nations to meet environmental standards. This is a region that needs to create jobs and opportunities for its people. It is our number one priority. So the prospects presented by gas are good news,” he added.
In the case of Saudi Arabia, he said greater gas usage domestically is helping ease demand on liquids, thereby ensuring export capacity.
“One thing is clear: the GCC will remain a reliable energy partner,” he said.
The minister also said: I’d like to say something about Asia. While we’re here today in what’s referred to as the Middle East, of course we don’t see ourselves as east. If anything, we see ourselves as inhabiting the western flank of Asia. It is closer energy ties within this region that help spur development across the GCC and Asia. And it is thanks to Asian demand and GCC energy supplies that our region’s combined GDP is at an historic high — and that economic growth remains strong. I would argue that it is shrewd management of resources and the right investment in infrastructure and capability that has helped make this difference. I expect this pattern to continue, even set against turbulence in other Arab nations.”
He added: “Producing nations are competing for new and old markets. This is healthy; it will help drive efficiency and increase the quality of service. I believe the oil outlook remains strong. I would say that, wouldn’t I? Well, yes, but my point is that even in tough global economic conditions, the prospects for energy demand and growth appear positive.”
The minister said demand for crude oil fluctuates, as always, but it remains robust, particularly considering the circumstances. And demand for LNG, which has doubled over the past decade, could double again by 2020.
“If we look at the different regions of the world, demand from Asia remains strong. I was in Hong Kong recently and there seemed to be a tangible sense of optimism about the region’s prospects going forward. New players such as Australia will certainly have a greater role on the global energy scene, not least as an LNG supplier to Asia. Canada, too, has experienced something of a boom in its natural resource capacity, and its rising quantities of shale oil and gas for export will have some impact on global markets. Investment opportunities remain in the Arctic region, the Caspian region, in Latin America and of course Africa. And, as discussed, the US will undoubtedly have a greater role to play,” he added.
“The combined impact of this growing supply and increasing demand will be, I believe, greater economic benefit to the global economy. More supplies add greater depth to the market. And this depth should bring enhanced stability. At least I hope it does,” said the minister.
“This business requires long-term investment and long-term planning. Wildly fluctuating energy prices are not in any of our interests — and by that I mean producers and consumers,” he said.
“While no one can predict what the future will bring, I can be certain in one key respect. GCC nations will continue to fulfill their role as stable suppliers of energy to world markets,” said the minister.
Al-Naimi said he visited Australia last year and heard about the tremendous developments taking place there, with large investments and a committed approach by its government.
“Russia, too, has and is making large investments in its Arctic reserves, only recently considered inaccessible. Canada is developing its reserves, as is Brazil, as are others across the Caspian region. Africa, also, is presenting more opportunities and I hope these can be developed for the good of its people. And then there is the US,” the minister said.