IEA urges Saudis to invest in boosting oil output to meet demand

Paris (Platts)--3Nov2005

The price of oil could rise by 50% by 2030 if Saudi Arabia, holder of a
quarter of the world's oil reserves, does not invest in oil production, the
chief economist at the International Energy Agency warned Thursday.
     Fatih Birol told the Financial Times newspaper that the giant oil
producer would have to almost double its current oil production of 10-mil b/d
to meet expected demand in 2030. 
     But Birol said that Saudi Saudi Arabia might not make the investment
needed to ensure production met the strong demand growth in China and India.
"It is not a problem of availability of reserves or capital. We need to be
sure that the increase in production will be high enough and a sustained
production capacity increase policy is in place. That will need sustained
political will," he said.
      "We may end up with much less oil from the Middle East than we demand.
There is substantial risk of substantially high oil prices if current
investment in the Middle East is not stepped up substantially," Birol told the
newspaper. "Such high oil prices would be an additional trigger for major
consuming nations to introduce policies to save oil and look for alternative
sources. If they don't, the global economy but mainly the economies of the
consuming nations will suffer."
     Saudi oil minister Ali Naimi in September said the kingdom would "soon"
be able to boost its proven reserves by 200-bil bbl but insisted that current
market turbulence was not due to a lack of crude oil supply and there were no
takers for OPEC's offer or extra barrels.
     A Platts survey last month showed Saudi Arabia pumped 9.56-mil b/d in
September.
Jacinta Moran, jacinta_moran@platts.com

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