Aramco Chief: Plentiful Supply Trumps 'Peak Oil'

DAVOS, Switzerland (Zawya Dow Jones), Jan. 28, 2010

The chief of Saudi Arabian Oil Co. told delegates at the World Economic Forum Thursday that global dependence on oil will continue and that fears over future supplies are overstated.

"There is too much rhetoric in the public domain about moving away from oil," said Khalid Al Falih, who heads the world's largest oil company in terms of production.

Al Falih said that Aramco is "comfortable" maintaining a cushion of 4 million barrels a day of spare capacity for the foreseeable future even if global demand cranks up.

"This issue of peak oil has been pushed behind," he said. "There are plenty of resources out there."

Saudi Arabia, the Middle East's biggest economy, holds the world's largest proven oil reserves at about 264 billion barrels. The kingdom presently pumps about 8 million barrels a day of crude.

Aramco has invested heavily in recent years in upgrading the country's crude production capacity to about 12 million barrels a day. In June, Aramco started pumping from the 1.2 million-barrel-a-day Khurais field, the largest-ever single addition to global oil supplies.

The company is presently pushing ahead with plans to develop the offshore Manifa field, which will add another 900,000 barrels a day of heavy crude from 2013.

Saudi Arabia last year delayed the completion of Manifa by two years as it looked to cut costs amid a steep fall in oil prices--from about $147 a barrel in July 2008 to below $40 a barrel in early 2009--and slowing global crude demand due to the worldwide recession.

The kingdom has announced plans to raise output to 15 million barrels a day of oil, but is waiting for global demand to pick up before going ahead with more increments.

Light, sweet crude futures for March delivery were trading $0.47 higher at $74.14 a barrel on the New York Mercantile Exchange at 1330 GMT.

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