Saudi Oil Minister Affirms Oil Reliability

Ali I. Al-Naimi, Minister of Petroleum and Mineral Resources, reassured leading U.S. policymakers of Saudi Arabia's ability to remain a reliable supplier of energy for decades to come.

In remarks made at an April 27 conference on U.S.-Saudi Arabia Relations and Global Energy Security, attended by Federal Reserve Board chairman Alan Greenspan and Kyle McSlarrow, deputy secretary of the U.S. Department of Energy, Al-Naimi discussed Saudi Aramco's reliability as a supplier and its ability to meet current and future demands for energy. The reliability of supplies from Saudi Arabia is not just the product of good fortune. Rather it is the direct result of Saudi Arabia's commitment to ensuring oil market stability," Al-Naimi said. "We are able to state confidently that sufficient quantities remain to make oil an important source of energy for many years to come."

Abdallah S. Jum'ah, president and CEO, also addressed the gathering. "We will continue to leverage our natural, technological, human and financial resources to meet the world's expectations and to maintain our unmatched record of reliability as a supplier of energy," Jum'ah told the conference, sponsored by the Center for Strategic and International Studies (CSIS) and the U.S.-Saudi Business Council.

Speaking at the session on production capacity and oil reserves, Jum'ah spoke about the role Saudi Aramco envisions playing in the future supply of oil, focusing on reserves; future production potential; reservoir management strategies; the key enablers that underpin reliability; and the relationship between Saudi Aramco and a range of U.S. institutions.

Jum'ah, commenting on current and future reserves, pointed out that only 23 fields have been developed, out of a total of 85 spread over 300 different reservoirs.

The company's reserves-replacement program has also been highly successful, Jum'ah said. "For the past several decades, we have been able to fully replace our production … through exploration, delineation and the improved performance of producing fields."

Furthermore, Jum'ah said, with more than half of Saudi Arabia's potential hydrocarbon bearing areas still relatively unexplored, "Our estimate of future oil reserves is in the range of 340 billion barrels." Jum'ah then discussed Saudi Aramco's production capabilities, currently at 10 million barrels per day, including some 2 million barrels of surplus production capability.

"Depending on global market demand," Jum'ah said, "we can produce and sustain the 10 million barrels a day level for more than 50 years, by relying primarily on our already proven reserves.

"This confidence in our ability to sustain our production over the long term stems from the quality and quantity of our data and from our prudent reservoir management practices," Jum'ah said.

He enumerated the key principles governing the management, production and depletion of reservoirs: maximizing recovery, monitoring reservoirs, gradual depletion, advanced diagnostics and reservoir modeling, and use of cutting-edge technologies.

Jum'ah also spoke at length about the mutually beneficial relationship the company has long enjoyed with the United States, referring to training and human resource development opportunities, industry partnerships in engineering and oilfield services, and advanced equipment purchases.

"We know that our ability to provide a reliable supply of energy is vital to the world - to its countries, its companies and its consumers - and we take our responsibility very, very seriously," Jum'ah said.

Other speakers at the daylong conference included HE Dr. Ibrahim Al-Assaf, Minister of Finance, Saudi Arabia; HE Sheikh Abdulaziz Al-Quraishi, co-chairman, U.S.-Saudi Arabian Business Council; Dr. Patrick Cronin, senior vice president and director of studies, CSIS; World Bank president Dr. James Wolfenstein; Rex W. Tillerson, president, ExxonMobil; and Greenspan.