Saudi oil export potential likely to surge by 2020

Saudi Arabia will remain the major supplier of energy to the world for many more decades, said Prince Turki Al-Faisal, Chairman of King Faisal Center for Research and Islamic Studies.
“Saudi Arabia has so much production capacity — nearly 2.5 million barrels per day — that we could almost instantly replace all of Iraq’s oil exports,” he said in a recent speech at Harvard University’s Belfer Center for Science and International Affairs.
“This massive spare capacity is the outcome of a capacity expansion program from 10 million barrels per day to 12.5 million barrels per day and beyond, which the Kingdom is undertaking at a cost of over $ 100 billion in petroleum infrastructure,” Prince Turki said in the speech posted on the Belfer Center website.
Saudi Arabia’s national production management scheme is set to increase total capacity to 15 million barrels per day and have an export potential of 10 million barrels per day by 2020, he said.
“The overall Saudi spare production program is the result of several decades of precise planning, hard work and political courage that proves the undeniable evidence of Saudi Arabia’s long term interest in a stable, secure and prosperous oil market,” he added.
“For many years, Saudi Arabia has been and will remain for many more decades the major supplier of energy to the world. Heretofore, that energy has been in the form of oil. But what people want and desire is changing in this new century and that is why Saudi Arabia is constantly re-conceptualizing its energy production policy,” the prince said.
“Now, as the demand for oil continues to rise, especially from China and India, the Kingdom has every intention of meeting that demand. Indeed, Saudi Aramco currently has two stated main strategic objectives,” he said.
“First, and most important, is to support the Kingdom’s geopolitical importance by holding sufficient surplus oil-output capacity to offset potential, global supply disruptions. This is done using the OPEC quota system to ensure Saudi exports sufficient volumes of oil to meet its revenue needs. This spare capacity offers the breathing room the country needs to look to its own economic growth and specifically its domestic energy demands. And one of the most important policies the Kingdom has adopted to meet these demands is to develop alternative energy sources,” the prince said.
He said: “Saudi Arabia is now solidly on the path of meeting most of its internal energy needs via non-oil energy sources, not only so that it can export more oil, but also so that it can export the excess alternative energy.
Already, Saudi Arabia meets around 40 percent of its internal energy needs via domestically produced natural gas.
The Kingdom is also striving to realize other energy sources, such as solar, wind, and nuclear.
These steps are being taken because the Kingdom realizes well what was expressed by Petroleum and Mineral Resources Minister Ali Al-Naimi: “In the same way we are an oil exporter, we can also be an exporter of energy.”
The prince added: “The King Abdullah City for Atomic and Renewable Energy has just issued the Saudi government’s white paper on renewable energy detailing the objective requirements for new solar PV and solar thermal plants, wind farms, geothermal facilities and waste to energy plants. The first installment of this colossal program in renewable energy is to create more than 7GW of new capacity by 2020, the majority of which will come from solar power.
The second installment of this renewable energy program is to hike up capacity to 54GW by 2032, at an estimated cost of over $ 80 billion, making Saudi Arabia one of the world’s largest green energy generators.
Under this new national strategy, the vast majority of the new green capacity will be from concentrated solar thermal sources.
He said Saudi Arabia fully realizes that a multiplicity of energy sources, both for domestic use and foreign export, is now both its national ideal and the global standard.
“No country can or should power itself from one form of energy,” said the prince.
“It is strategically, economically, politically, socially and environmentally irresponsible. Yet Saudi Arabia, as a nation that has such a central role in the planet’s transportation and consumption of energy, has also realized it has a special role to play in helping other nations facilitate energy diversity. And as a nation with so much oil, it fully understands that its petroleum output must play a part in other nations’ progress toward achieving an ideal energy mix,” he added.
He said Saudi Arabia, as it always has, will commit itself in the coming decade to full energy market stability.

“A stable, coordinated price brought about by stable, coordinated 9 production and pricing policies is the only way to assure this stability, and, as we have seen again and again, a situation that is ideal for both producer and consumer alike. Such stability and coordination are at the heart of Saudi Arabia, and global, energy security now and for the future. And on the topic of coordination, it is the Saudi position that those who call for energy independence are misleading and disingenuous,” said Prince Turki.
“The optimum formula for energy security for all nations is cooperation among nations to achieve a mix of all energy sources. Let us call it interdependence. For this reason, the Kingdom is working on adding solar, wind and nuclear energies to offset its own use of oil and gas because we know that the more oil we consume, the less there will be for exports, creating a shortage at the very time when worldwide oil consumption is growing,” he added.
“Another consideration is that every barrel of oil we burn can be otherwise refined to produce scores of products that are of added value and thus the less oil we consume, the more money we can get in export revenues.
In order to foster international energy cooperation and coordination, the Kingdom has also established the International Energy Forum and the Joint Oil Data Initiative Archive of current individual country statistics in Riyadh,” said the prince.
“The goal of these initiatives is to overcome the adversarial confrontation, between producers and consumers, which has existed since the OPEC oil boycott in the early seventies,” he said.
“Producers, consumers, and the oil companies make up the forum, and, already, a better sharing of more exact and beneficial information on reserves, production capacities, and consumption projections is available to all through the fully transparent Joint Oil Data Initiative Archives,” the prince said.