JEDDAH: Research at the King Abdullah University of Science and Technology (KAUST) may help Saudi Arabia develop solar energy to provide for a significant portion of the Kingdom’s power needs, Saudi Minister for Petroleum and Mineral Resources Ali Al-Naimi said on Tuesday.
It aims to make solar a major contributor to energy supply in the next 5-10 years, he added.
“Saudi Arabia aspires to export as much solar energy in the future as it exports oil now,” Al-Naimi said.
Apart from cleaning up domestic fuels to reduce emissions, the Kingdom is also looking at carbon capture and sequestration, Al-Naimi said. KAUST would also eventually carry out research into algae for storing CO2 emissions, he added.
Al-Naimi said the Organization of the Petroleum Exporting Countries (OPEC) does not need to cut output next year, according to the latest oil supply and demand estimates. Demand for Saudi crude is increasing, and this is evidence the world economy is recovering from recession, Al-Naimi said in an interview to Reuters.
“No, based on the current (demand and supply estimates), there is no need of course, right now,” Al-Naimi said.
“But you never know, this is a moving target, it is a very active market. The world economy seems to be recovering. I hope it will recover fast and therefore it will impact demand. If demand rises of course supply has to match it... Demand for our oil is rising, and so we are — at least I am — convinced that economic growth has started and will continue.”
Global oil inventories are above the five-year average in defiance of OPEC output curbs that have aimed to match supply with a fall in demand following the economic downturn.
Some oil market observers have said the producer group, which pumps more than a third of the world’s oil, would have to cut output again next year to balance the market.
OPEC pledged to cut output by 4.2 million barrels per day (bpd) last year, and the curbs have helped the oil price recover to around $70 from a low of $32.40 in December.
At its most recent meeting earlier this month, the OPEC agreed to leave output unchanged and Al-Naimi brushed off concerns about high inventories, saying economic growth was driving the oil price. Oil at between $70-$80 a barrel would bring investment in new energy supplies and prevent a future supply crunch, Al-Naimi said. The Kingdom has targeted around $75 as a fair price for both consumers and producers.
“As long as the prices are where they are, like $70 to $80, I think investments will continue... and with so much spare capacity available in the world now we foresee no shortages in the future,” he said. Al-Naimi reiterated that Saudi Arabia was pumping around 8 million bpd of oil and its output capacity was 12.5 million bpd.
Saudi Arabia has no plans for now to develop more capacity after completing the boost to 12.5 million bpd this year, Al-Naimi said.
“Let us see what happens to worldwide demand and if we see significant growth, we have a policy of maintaining between 1.5 to 2 million bpd spare capacity all the time... So we are not thinking today about future expansion but you know, you have to spend a lot of money to stay where you are.”
