Saudis working 'very hard' hard to bring down oil price: envoy

Dubai (Platts)--15Feb2006

Saudi Arabia is working "very hard" to bring the price of oil below
$60/bbl, which is why it is investing $50-bil to increase production capacity
as part of an energy policy agreed with the US last year, Riyadh's ambassador
to Washington, Prince Turki al-Faisal, has been quoted as saying.
     Prince Turki, speaking on the US' PBS television in an interview in New
York Feb 13, also reiterated that he had been surprised by US President George
W. Bush's call for cutting reliance on Middle Eastern crude oil by 75% by 2025
and had immediately requested a meeting with Stephen Hadley, the national
security adviser, to seek clarification.
     "...when the King (Abdullah) met with the president last April, they
agreed on a joint energy policy, whereby Saudi Arabia would increase oil
production and with investment amounting to nearly $50-bil over the next few
years, to increase that production, and also increase the refining capacity
for oil products, plus joint energy research into making fossil fuels and oil
more ecologically friendly and thereby less dangerous to use than it might be
now," said prince Turki, according to a transcript posted on the embassy's web
site.
     "So the president's statement, of course, was a surprise to -- not just
me, but to all of us in the area, and hence my seeking to get an explanation
from the White House," he added.
     Prince Turki said that while he would continue discussions with Hadley
and other US officials "to get as much as possible clarification of where the
United States is planning to go on this issue," the Saudi diplomat said.
     Asked to comment on current high oil prices and their possible impact on
the world economy, Prince Turki noted that of all the world's commodities, oil
was in real terms still below its actual price in 1970 terms, but that Saudi
Arabia was working to bring prices down below current levels of close to
$60/bbl for WTI crude oil futures.
     "...that is why, we're working very hard to bring the price of oil down.
As I told you, the king agreed with the president on Saudi Arabia increasing
its oil production. Now we produce about 11 million barrels at maximum
production rate from the kingdom. We're raising that to 12.5-mil in the next
three years. And putting in nearly $50 billion in the ground in order to bring
that extra oil up."
          -- Kate Dourian, kate_dourian@platts.com

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