The Barrel of Crude Oil Will Not Fall Under USD 60-70
The Saudi Minister of Petroleum and leader of OPEC, Ali al-Nouaïmi, suggested that the price of a barrel of crude oil would fall more under a limit of 60 to 70 dollars, in an interview to the magazine Pétrostratégies.
“There is now a line in which prices (oil prices) will not fall,” argues Mr. Nouaïmi, whose country is the largest oil producer in the world.
“If you look at the marginal cost of production of alternative fuels, whether biofuels or oil sands, I think it ranges between 60 and 70 dollars,” he argued.
“If you take into account all the subsidies involved in the production of a barrel of biofuel, I doubt that anyone can make money in this activity with a price lower than 60 or 70 dollars,” he added.
“A line demarcates now the price level below which it can fall,” he concluded.
Mr. Nouaïmi refused to comment on the outcome of the meeting of the Organization of Petroleum Exporting Countries (OPEC) in Vienna Wednesday: some members of OPEC “declare that we will maintain production, others that we are going reduce it. These are only opinions. “
“We are looking at the information as they stand, we are looking at the data and we decide accordingly. (…) As long as this is not done, it is unwise to say something else,” he judged.
The Saudi minister had said that his country was seeking to become “a hub of research in solar energy” perhaps the alternative energy “ideal”, especially for a country like hers.
Biofuels cause “the prices of foodstuffs” causing “an increase in emissions of carbon dioxide when converting” of forests in agricultural areas, “he pointed out.
Saudi Arabia is also working on research programs for the capture and storage of CO2 that “many countries are ready to cooperate,” says Nouaïmi.
He said that the Saudi kingdom would have a total production capacity of 12.5 million barrels per day (MBD) at the end of 2009, compared with about 11 MBD at present.
“When we are at 12.5 MBD, we will have about 2 to 1.5 MBD of unused capacity,” he noted.
“There was no real justification for adding capacity in the future,” he says, even though the Saudi reserves, the largest in the world, “can absolutely assure additional capacity.”
He figures to forecast world oil demand for 2030 continue to be revised downwards.
“Initially we had 130 MBD, then the figures fell to 119 MBD to finally reach 106 or 108 MBD (…). So these projections will continue to move with the improvements in conservation, vehicles, the introduction alternative fuels, “he says.
“We therefore believe that 12.5 MBD are ample at the moment,” he insisted.
He also noted that the basement of Saudi Arabia is “not fully explored” that the country is intensifying the search for additional reserves: “I think we can add 200 billion barrels of reserves.”
These additional reserves, even if they are not put into operation, would include “reassure the world and make it clear that we are not going to deplete the reserves over the next 5 to 10 years, as theorists predict + peak oil “, he concluded.
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