RIYADH: Saudi oil minister Khalid Al-Falih has expressed concern that false expectations on peak demand and exploitable oil resources will hinder trillions of investment in the hydrocarbon industry. Speaking from the CERAWeek Energy Conference in Houston this week, Al-Falih said the costs of alternative energy sources like renewables was declining but the transition from hydrocarbons would take “a long time”. During this period he stressed that a recent visit to a number of East Asian countries had assured him of the continued increase in demand for oil. “We are concerned about the investment’s inability all over the world to keep pace with the needs of development, and compounding fears is the slow pace of development projects of long-cycle which we need to provide global supply in the future,” he said according to Saudi Press Agency.
Al-Falih added that the kingdom held a long-term view and had kept capital spending unchanged despite the weakness of oil market conditions over the last two years. “As a result the number of our rigs remained close to their highest levels, with our quest to maintain maximum fixed production capacity of crude oil and double the capacity of gas production, and move forward, at the same time, in the construction of the largest business group in the field of refining, processing and marketing in the world.” The minister of energy, industry and mineral resources went on to call for an increase in targeted investments in the oil industry to reduce the environmental impact and carbon emissions of fossil fuels to give oil broader acceptance following the Paris climate agreement. He indicated demand this year would range between 1.4 to 1.5 million barrels per day and said commitment to an oil production cap deal agreed by OPEC and non OPEC countries last year was acceptable. “Accordingly, I believe that market fundamentals are on track, and that the recent OPEC agreement has been given enhanced push, for the first time, being a new framework for cooperation with non-OPEC major producing countries,” he said.
