Saudis to save hydrocarbon wealth for the future
July 5th, 2010This report from Zawya Dow Jones in Riyadh, Saudi Arabia, should give pause:
Saudi Arabia’s King Abdullah has ordered a halt to oil exploration operations to save the hydrocarbon wealth in the world’s top crude exporting nation for future generations, the official Saudi Press Agency, or SPA, reported late Saturday.
“I was heading a cabinet meeting and told them to pray to God the Almighty to give it a long life,” King Abdullah told Saudi scholars studying in Washington, according to SPA.
“I told them that I have ordered a halt to all oil explorations so part of this wealth is left for our sons and successors God willing,” he said.
A senior oil ministry official, who declined to be named, told Zawya Dow Jones the king’s order wasn’t an outright ban but rather meant future exploration activities should be carried out wisely.
Saudi officials have begun to worry about expanding domestic energy use. If current trends continue, Saudi Arabia’s demand will rise to 8.3 million barrels a day of oil equivalent in 2028 from 3.4 million barrels in 2009. Saudi officials are hoping that unspecified “efficiency measures” can cut the projected increase in demand in half.
Saudi Arabia’s cutting back on exploration, coupled with increased domestic demand, is surely bad news for oil exports – and for oil importing countries, including the U.S.