DUBAI - Saudi Oil Minister Ali al-Naimi on Monday said the rise of unconventional energy sources doesn't threaten his country's dominant role in world oil supply because demand also is increasing.
"I don't think anyone should fear new supplies when set against increasing global demand," Mr. Naimi said in a speech at the Brookings Doha Center. "More companies and nations are competing for their slice of the energy pie, that's true. But the pie is getting bigger and there is enough to go around."
Saudi Arabia, the world's largest crude producer, has seen its lead narrow sharply in the past year as a result of the boom in U.S. shale oil.
U.S. crude production in November and December topped 7 million barrels a day for the first time in 20 years. At the same time, Saudi Arabia reduced its oil production to 9.025 million barrels in December, 5% less than in November. It was the kingdom's deepest cut in almost three years, reflecting weaker demand, chiefly from Asian nations.
The U.S. government recently forecast that U.S. crude output will swell to 7.5 million barrels a day within six months. The International Energy Agency, which represents key oil consumers, has predicted the U.S. will overtake Saudi Arabia by 2020.
Mr. Naimi said he U.S. "will undoubtedly have a greater role to play," in the global energy scene but oil outlook remains strong, particularly from Asian countries.
Last month, Mr. Naimi said that prospects for global production of shale gas and oil--including in China, Ukraine, Poland--were so promising that the kingdom might not need to continue with its decades-long policy of maintaining an output cushion in case of disruptions in global supply.
Saudi Arabia itself intends to remain a world energy powerhouse for the foreseeable future, partly by exploiting new technology that has unlocked vast quantities of oil and natural gas in North America. It will push ahead this year with exploratory drilling of shale and other unconventional gas reserves which Mr. Naimi has said could be twice as large as its conventional gas reserves, which total 286 trillion cubic feet.
Mr. Naimi said Monday he was certain that Gulf members of the Organization of Petroleum Exporting Countries will continue to fulfill their role as stable suppliers of energy to world markets.
"We are working to boost economic growth at home, and we will continue to work with our customers across the world to ensure we meet all demand going forward," he added.
Copyright (c) 2012 Dow Jones & Company, Inc.
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