Addressing a symposium in Houston yesterday, Minister of Petroleum and Minerals Ali Bin Ibrahim Al-Naimi declared that Saudi Arabia is producing oil at only about 70 percent of its capacity, with around 3 billion barrels of crude oil available on reserve. Its pipelines are running at half capacity, and the oil export terminals on the Arabian Gulf can load 14 million barrels a day but currently handle far less. He went on to say that oil contributes 80 percent of the value of the Kingdom's exports, while representing about 35 percent of its Gross Domestic Product.
Minister Al-Naimi explained that Saudi Arabia has greatly reduced its dependency on oil, but that there is still a long way to go. He stated: "The major challenge is to use our comparative advantage as a springboard for the creation of wealth by different sectors and sources. ….. This abundant energy resource can be made available to develop domestic enterprise, to attract international investors and to diversify our economic base."
Crediting the strength of the Kingdom's economy to a stable well-established political system, he said that Saudi Arabia has always been "one of the world's most consistently dependable countries". He explained that the Kingdom has a free economy in terms of investment, private enterprise, and transfer of funds, and maintains a first-rate infrastructure, including airports, railways and roads. He also referred to the recent establishment of the Higher Economic Council, as well as the on-going revisions of the foreign investment laws and the privatization of certain domestic activities.
Minister Al-Naimi declared that one of the Kingdom's main goals in its oil policy is to achieve a stable international oil market, saying: "wide and rapid swings in prices are undesirable". He deplored fluctuations of more than 10 percent, and urged cooperation among all oil producers, both OPEC and non-OPEC, to maintain market stability. Nevertheless, he concluded by expressing optimism about the future of the oil market, and about the industrial development of Saudi Arabia.
[full text of speech]