18/09/2014
During his speech at the Conference of the Arabian Gulf and regional challenges
«American rock» will shrink the role of Saudi Arabia Saying is misleading
Prince Abdulaziz bin Salman bin Abdulaziz the Assistant Minister of petroleum and mineral resources of oil confirmed that Gulf States will continue to play a central role in the world oil market, and the views that oil shale in the United States will review the important role played by Saudi Arabia and other Gulf producers in world energy markets over the past century, is only misleading opinions. The oil Minister said in a speech yesterday to the Conference and regional challenges, organized by the Institute of diplomatic studies in cooperation with the Gulf Research Center: in addition to the size of reserves and production, there is a critical distinction and is the only State that has a surplus production capacity of usable. In the event of supply disruptions due to geopolitical and technical factors, as has happened in recent years, with the use of surplus productive capacity, shortage of supply, leading to stabilization of oil prices.
Between 2011 and 2013, estimated that the market lost more than 1.6 billion barrels of oil production as a result of supply disruptions, the producers in the Gulf Cooperation Council States to use surplus productive capacity, shortage of supply and to prevent the rapid rise to oil prices. The joint production of Saudi Arabia, Kuwait, Qatar and the U.A.E. from around 14 million barrels a day, before the beginning of spring, to the more than 16 million barrels a day during most of the past three years. Another view is also widely reported that the adoption of the United States on imports of oil from the region, will undo US interest in the Middle East and its relations with the GCC. He said, the adoption of the United States on imports from Saudi Arabia was modest, and in 1977 the United States imports of crude oil from Saudi Arabia 1.3 million barrels per day, then rose to 1.7 million barrels a day in 1991, during the first Gulf war, back to 1.3 million barrels per day in 2013.
As the rate of US imports of crude oil from Kuwait in 2013, some 300,000 barrels per day, this is the largest amount the United States imports from Kuwait during the past two decades. For GCC producers such as the United Arab Emirates, Oman and Qatar petroleum exports were to the United States, equivalent to nearly zero over the past three decades. These trends indicate that changes in GCC producers ' exports to the United States, dictated by market conditions and commercial considerations. Whether the United States imported crude oil from the Gulf Cooperation Council States or imported, it is a matter of little importance to the dynamics of the global oil markets because crude oil interchangeable with other similar materials, it can sell oil to the United States will find a way to market more need it. Prince Abdulaziz bin Salman said that during these transformations on the world scene, there are many questions about the future role of the GCC, the location of the global system in the fields of politics, economy, and energy.
Some observers expect the future deep mystery to this region; these observers argue that the impact of current developments for the energy sector in the United States would be an obvious impact leads to important changes not only in the United States, but their effects to the rest of the world. Effect of dip dominant role by Saudi Arabia and other energy producers in the Gulf in world energy markets. They warn that the fallout from the political, economic, social and security resulting from these changes may be significant, these expectations are not surprising for Saudi Arabia, in times of great uncertainty and rapid change, the emergence of such a pessimistic Outlook, it is to be expected. But, as in the past, would rebut these future expectations. Globalization, industrialization, urbanization, and rapid development-energy-hundreds of millions of people out of poverty and created a large middle class in emerging market countries. In Asia alone, 525 million can be considered as the middle class, a figure exceeding the total population of the European Union.
It can be said that one of the key factors that have contributed to shaping energy markets over the last three decades, the growth in energy demand from outside the Organization for economic cooperation and development (OECD). Between 1990 and 2013, rising oil consumption in countries outside the Organization for economic cooperation and development (OECD) from 25 million bpd to 45.7 million barrels, an increase of more than 20 million barrels per day. In the same period, only increased demand in countries of the Organization for economic cooperation and development (OECD) 3.8 million barrels per day. He said he expected the growth of the middle class in the world over the next two decades from the current level of 1.8 billion to 3.2 billion in 2020, to 4.9 billion people in 2030, it is expected that most of this growth in Asia. Unlike in Western countries, the majority of the emerging middle class in Asia, young people are looking to increase their consumption.
This will increase the income levels of the younger demographics to a strong increase in demand for oil, even after taking into account the conservation and use of alternatives to fossil fuels in the transport sector. For the consumption of petroleum and liquid fuels, so some of the pessimistic scenarios expect an increase in demand nearly 20 million barrels a day by 2035. He noted that while oil demand is expected to continue on its upward trend, the increased supply has become more challenging and more expensive. A few years ago, dominated the idea of peak oil theory enthusiast, sphincter that global production of oil bypass peak. Today, flipped that idea on its head, and replaced peak forecast forecast abundance. Some expect could draw some oil market oil price shock, describing the current situation as very similar to the period 1981-1986, which peaked with the collapse in oil prices in 1986, has contributed to the development of oil shale in the United States largely on the shift in perspectives.
And the Prince Abdulaziz bin Salman, this vision about the abundance of oil does not comply fully with the data. In 2002, the total production from outside OPEC, with the exception of the States of the former Soviet Union, around 36 million barrels a day. In 2013, the total production of those countries at the same level. In other words, over the past decade, the level of production from outside OPEC, with the exception of the States of the former Soviet Union, reflecting the fact that the new oil discoveries and the development of new resources was barely enough to offset declines in existing fields, which was most acute in some States. For example, Mexico production fell from 3.8 million barrels a day in 2004 to 2.8 million barrels per day currently, as United Kingdom production fell 2.9 million barrels per day at peak production in 1999 to 866 000 barrels per day at present. With the expected low global rates by 5 per cent to 6 per cent, and the global oil industry needs to add a new annual production of between 4.5-5.5 million barrels a day, to offset losses caused by low rates of natural production.
He stated that, although very modest results of prospecting and drilling over the past decade, the rate is disappointing in terms of oil discoveries outside OPEC, still some talks about abundant oil supply and oil prices in the long term, unaware that even under such standard fare for which skip average $ 100 a barrel during the past three years, global oil companies have reduced exploration budgets in order to reduce costs. Worse still, capital expenditure for exploration and production, rose considerably during the past 10 years. The new smaller discoveries and producing fields reduced rates are multiplied by the period of depreciation is complete and need to be developed, and companies increased spending on maintenance.
This has led to the search for new oil deposits with higher cost to compensate for shortfalls in other areas, the resulting rise in the price level of a tie, any expenditures with revenues, international oil companies, which are the free cash flows declined by half since 2005. So it was not surprising because of weak oil prices in recent weeks to warn some of the executives of the major oil companies of billions of petroleum investment at risk falling crude oil prices. The executives openly about adoption rate is $ 100 a barrel as the rate equivalent to expenses for returns, they noted that as the price of $ 100 a barrel, it has become a source of concern over the past few years, when those prices are a source of satisfaction. He added: the oil market needs a high price to balance supply and demand, especially with increased production from new sources and more difficult, such as sandy and Rocky and oils, and oils extracted from under layers of salt in very deep water, as these new sources of oil will help to establish a minimum price of oil in the long term.
He told the CEO of Saudi Aramco, Eng. Khalid Al-Falih was ' to avail of this increasingly expensive petroleum sources, oil prices must be high enough to attract the required investments. The other side of the coin itself, is that prices in the long term will be supported by the high cost of a barrel of new product from these sources '. He said Prince Abdulaziz bin Salman: the oil market has shown signs of future challenges regarding increasing costs, the shortage of manpower and the shrinking areas of cheap and easy oil, and while spot prices drop in recent weeks, the prices of petrol ' Brent ' for the long term, currently trading at prices higher than last year.
He drew attention to the fact that, in addition to sourcing the most costly and difficult, most international organizations expect more dependence on the Middle East, especially the Gulf countries and Iraq. In the recent release of ' world investment report on energy ' World Energy Investment Outlook, the International Energy Agency IEA indicates the need to increase investment in the oil sector in the Middle East, to compensate for the decline in other regions of the world. In case of unsuccessful Middle East countries to increase investment, the International Energy Agency predicts that oil prices rise towards $ 15 above the current price level by 2025 with real prices.
These patterns of supply and demand to the fundamentals of long-term energy markets remain strong. In the oil market, like any other market, could affect the temporary factors, such as concerns over the recovery of the global economy and geopolitical events, the speculation in commodity markets, including oil, in short-term price fluctuations. But for the producer and exporter of oil as Saudi interests in the long term stability of the market, the volatility of daily, weekly or even monthly, not important, only that the source of the noise around a fixed direction.
