2004 News Story

Oil minister speaks on Saudi economy at U.K. conference

Minister of Petroleum and Mineral Resources Ali Al-Naimi, addressing a session on oil, economic change, and business in London today at the Middle East conference organized by the Royal Institute for International Affairs, declared that the Saudi economy, the largest in the region and 25th globally, represents one-fifth of the Gross Domestic Product (GDP) of the entire Middle East, including Turkey. Accordingly, the Kingdom has won investors’ confidence over the last five years; and the Saudi stock market now ranks 11th internationally in terms of the value of circulated bonds.

Minister Al-Naimi attributed the current invigoration of the Saudi economy to two important factors: first, higher oil prices and increased production over the past two years; and second, the economic reforms launched five years ago by Deputy Prime Minister and Commander of the National Guard Crown Prince Abdullah bin Abdulaziz. These reforms were implemented in a climate of efficiency and transparency while government restrictions were reduced and opportunities for foreign investment increased.

On foreign investment, Minister Al-Naimi commented on the government’s restructuring of the investment sector to encourage the flow of foreign capital into the Kingdom, and the subsequent concessions for exploration and development of natural gas granted to international companies that would lead, he said, to expansion of the Kingdom’s petrochemicals industry. Saudi Arabia welcomes investment not only in natural gas, but in refining of crude oil, and in mining. Rabigh refinery is to be expanded into a comprehensive complex, and the mining sector is expected to grow as much as 10 percent annually. By the end of this decade, Saudi Arabia will be one of the top producers of fertilizers and aluminum.

As for oil, recent discoveries in Qatif and Abu-Safa have brought the Kingdom's production capacity to 11 million barrels a day: a figure that can be increased gradually to 12.5 million. Demand for Saudi oil is expected to continue over the coming years, and Saudi Arabia’s oil policy is to maintain a surplus production capacity of at least 1.5 million barrels per day to meet crises. In the long term, the Kingdom plans to increase its production capacity to 15 million barrels per day to reflect the demands of global consumption.