Saudi Minister calls for investment in oil sector

Saudi Arabia’s Minister of Petroleum and Mineral Resources Eng. Ali bin Ibrahim Al Naimi has said more investment is required to increase production from the current level.

He was speaking at the APICORP Energy Forum here yesterday.

Even though global growth is slowing, the demand for oil is on the rise and the supply coming down.

“Global oil demand is expected to grow by an average of more than one million barrels a day annually and the oil industry needs around five million barrels a day of additional crude output capacity to keep up with demand,” he added.

“There is a big drop in the production capacity of oil wells across the world, estimated around four million barrels a day, which means the petroleum industry needs new additional production capacity of around five million barrels a day every year…to meet the global demand,” Naimi said.

In a snap poll conducted during the forum, 54 per cent respondents said that OPEC strategy of not cutting oil production would work and 21 pc expected it not to work.

Egypt’s Minister of Petroleum Eng Tarek El-Molla also downplayed the current decline in prices and said it expected to become the hub of the East Mediterranean region.

“Whatever quantity of gas is produced, there will be a market for it”.

Egypt has recently made two large oil field discoveries and the minister said that the discovery happened after many years of effort. He expects the new finds to produce gas from the mid-2017.

UAE Undersecretary at the Ministry of Energy Dr Matar Hamed Al Neyadi said that all investment plans in the UAE were on track and there had been no change in scheduled projects. He expects 2016 to see better oil prices

Both Mirza and Neyadi cautioned about reading too much into the current supply scenario and added that oil fields maturing could put brakes on the current scenario unless continuous investments are made. Egypt’s Minister said that oil staying below US$50 is not sustainable and he considers US65-70 as the price where the balance of demand supply will be sustainable.