Sheralyn Tay, Today Online 29 Nov 07;
Yes, says Saudi petroleum minister, as the country is 'within five-year average'
As oil industry bigwigs gathered here on the first day of the Middle East and Asia Energy Summit yesterday, one question on everyone's mind was whether the Middle East can slake the raging thirst of Asian economies for oil? The answer from the Middle East was an unequivocal "yes".
According to Mr Ali Al Naimi, Petroleum Minister of Saudi Arabia, the world's largest oil exporter, has upped its production to 9 million barrels a day but still has a spare capacity of 2.3 million barrels. And next month, Saudi Arabia will increase total capacity by another 500,000 barrels a day.
On oil prices, which were more than US$95 a barrel yesterday, Mr Al Naimi stressed that it was not a shortage of supply from the Organisation of Petroleum Exporting Countries (Opec), but a weakening US dollar and speculators which had driven crude oil to almost US$100 a barrel.
He told the conference: "There is no relationship between the fundamentals and the price. There is a mismatch and anyone that tells you otherwise is wrong."
Opec members, which pump 40 per cent of the world's oil, are due to discuss production figures for the first quarter of 2008 at a meeting in Abu Dhabi on Dec 5.
Also in Singapore, Opec president Mohamed Al Hamli, denied rumours of a 750,000-barrel-a-day increase in production, saying the market was "well-supplied".
He said: "For producers, there is a real risk of wasting precious resources on spar production capacity that may not be needed."
He said that in the long run the producer group plans to spend US$150 billion ($217 billion) to boost production capacity by 5 million barrels a day by 2012, and $50 billion to add 3 million barrels a day of refining capacity in that timeframe.
At yesterday's summit speakers noted that energy security would continue to be a challenge for producers and consumers. They also underscored the need for greater collaboration and commitment from both.
Energy issues, speakers noted, had long been and will continue to be the fulcrum of an interdependent relationship between the Middle East and Asia.
With Asia accounting for some 60 per cent of the increase in exports of Middle Eastern oil between 2000 and last year, Senior Minister Goh Chok Tong, who gave the opening address, said that the Middle East has a stake in Asia's stability and prosperity.
"If Asia catches a cold, it will also quickly spread to the Middle East through reductions in oil revenue," he said.
"Asia's drive to enhance its security of oil and gas supply is but the other side of the coin for the Middle East, whose oil revenue is increasingly fuelled by Asian growth."
He suggested four ways in which cooperation could be nurtured. Existing co-investment in energy infrastructure could be expanded; increased R&D collaboration was another possibility.
Energy security too — in the area of transit routes — is another area of partnership, he said. Mr Goh also urged more dialogue, noting that it was timely to discuss energy security issues at the next Asia-Middle East Dialogue in March.
