Al-Naimi delivers speech at Petrotech 2009 Special Ministerial

New Delhi, January 14 , SPA -- Saudi Minister of Petroleum and
Mineral Resources Ali bin Ibrahim Al-Naimi delivered a speech at
Petrotech 2009 Special Ministerial Session held in New Delhi, India.

Al-Naimi stressed that energy is essential for fueling the world’s
economic engines. "The future availability of sufficient quantities
of affordable energy, important to all economies, takes on even
greater acuity as emerging economies like India take steps out of the
economic downturn".

He pointed out that the price of oil, which is the primary source of
energy, has declined in recent months by more than 70 percent since
reaching their highest levels in July – a drop that will play a major
role in aiding economic recovery.

"This price decline is partially due to the cooperation of producers
and consumers, and as such demonstrates the ameliorating effects that
can be achieved when stakeholders work together. When Saudi Arabia
called the Jeddah meeting of producers and consumers last summer,
India was among the most important contributors to the dialogue",
Al-Naimi said.

"This collaboration, combined with the Kingdom’s moderate price
policy, aided price moderation for a short period. However, because
of the current world-wide economic and financial downturn, prices
decelerated to levels not reflective again of market fundamentals",
Al-Naimi added.

"These lower oil prices are an important stimulus for recovery,
translating into a boost of purchasing power in the billions and
possibly trillions of dollars for nations and individuals –
essentially a welcome injection of liquidity into consumers’ pockets.
Clearly these beneficial effects can speed the recovery of emerging
economies", Al-Naimi said.

"Naturally, our Silk-Road metaphor would not be complete without
discussing India’s trading partners. Here, I would like to focus on
the relationship between India and Saudi Arabia", Al-Naimi added.

"When we met at Petrotech 2007, I stated that the Kingdom is
especially committed to the needs of the growing Asian market. I
spoke of Saudi Arabia’s commitment to the availability of energy to
global markets, and especially for developing countries, backed by
concrete plans and actions, and by the commitment of more than $80
billion for capital projects aimed at increasing energy supplies to
world markets and alleviating infrastructure bottlenecks. Not
coincidentally, much of the equipment, construction material and
labor for these unprecedented expansion programs are imported from
Asia", Al-Naimi said.

"Today I reiterate that commitment to Asian markets as part of the
global cooperative effort toward energy security. This cooperative
spirit is well represented by the relationship between Saudi Arabia
and India, to continue our example of these two nations as a
collaborative model", Al-Naimi stated.

"India and the Kingdom share geographic proximity and ties rooted
centuries-deep in trade, as well as in rich historical and cultural
commonalities. These ties have been substantially enhanced by a
strategic partnership nurtured since the visit of King Abdullah to
India in 2006", Al-Naimi added.

"Our biggest export to India is oil, and we look to India for quality
manufactured goods and equipment. In addition, Saudi Aramco’s
material procurement strategy continues to shift toward emerging
markets, notably India. In the Kingdom, more than 1.5 million Indians
contribute to the Saudi economy and society, and also transfer
earnings back home to benefit their families – a cross-investment
that serves both nations well", Al-Naimi said.

"The energy partnership between Saudi Arabia and India is
particularly positioned for greater cooperation. The Kingdom is proud
to provide about one quarter of India’s petroleum needs. India is the
Kingdom’s fourth-largest customer; we supply some 500,000 barrels per
day to this growing market. India has one of the world’s highest
energy consumption rates as a result of its expanding economy and
increasing individual prosperity", Al-Naimi added.

"Based on these factors, according to the International Energy
Agency, India’s demand for imported oil is projected to triple by
2030, which would make the country the world’s third-largest importer
of petroleum", Al-Naimi said.

"India is responding to this growing energy need by developing its
infrastructure; focusing on debottlenecking; fostering strategic
relationships; and building its innovation culture. One of the
nation’s energy success stories is its transformation from a net
importer of crude oil to a major exporter of petroleum products by
expanding its refining capacity", Al-Naimi added.

"For example, India is pursuing energy security in part through
considerable investment in the downstream sector, with great
implications for its future as a world-class refining export center.
India’s petroleum sector has expanded refining capacity at Panipat
refinery with the capability to process heavy and high-sulfur grades
of crude oil. It also is adding value with an integrated
petrochemical complex, and is developing plans for a
refinery-cum-petrochemical complex at Paradeep", Al-Naimi said.

"Another key project that warrants mentioning is the Jamnagar
grassroots refinery, India’s largest petrochemicals hub and a
sophisticated facility that is impressive in both scale and
execution. Further steps by India include developing its energy
portfolio, such as leveraging its status as the third-largest
coal-producing nation so that coal now meets some 69 percent of the
country’s electric power generation and industrial needs. In
addition, India is actively contributing to clean-coal technologies
for the power sector" Al-Naimi added.

"And of course cooperation among partnering nations is another vital
step in attaining energy security. A joint technical committee was
founded by the Kingdom’s Ministry of Petroleum and Mineral Resources
and India’s Ministry of Petroleum and Gas in 2005 to explore ways and
means of energy cooperation between our two countries" Al-Naimi said.

"Saudi Arabia and India continue our strong interest in joint
ventures, and the Kingdom continues to invite Indian engineering and
construction firms to bid on our petroleum, natural gas,
petrochemical and mineral sector projects" Al-Naimi said.


"We continue our talks on cooperation in such areas as cleaner fuels,
refinery process improvements, corrosion control and bioremediation.
We continue to explore commercial opportunities in the downstream
sector", Al-Naimi said.

"Such communication and cooperation are important for shared security
and greater opportunity, but never more so than in challenging times"
Al-Naimi added.

"Events such as Petrotech contribute to a thriving, modern Silk Road
by providing a forum for energy cooperation dialogue – ensuring
adequate supplies; investing in technological and human resources;
and continuing to mitigate the environmental intensity of our
operations and products, especially minimizing the carbon footprint
of petroleum-based transportation fuels and technologies", Al-Naimi
said.

"The industry knows well that the cyclical nature of the oil market
is not completely avoidable, but we can work together to ameliorate
challenges and extremes. Here I think it is important to emphasize
our goal of a stable oil market, the balance of supply and demand
through the existence of reasonable spare production capacity, over
both the short and long term. Stability means oil prices maintained
at a level that encourages investment, helping create a climate
conducive for the development of all viable energy sources. Stability
also is defined as a level providing a reasonable return to producing
nations, and one that does not harm the global economy, and
particularly does not hinder the prospects of developing economies"
Al-Naimi added.

"Of course, hand-in-hand with stability, predictability also is
essential for a successful energy market and energy industry, and it
is best achieved through clear, transparent information and policy by
both producers and consumers" Al-Naimi said.

"I believe that India’s continued progress toward becoming a global
economic engine, and Saudi Arabia’s expansion of crude oil exports to
meet the growing energy requirements of India’s dynamic growth, make
us ideal partners in this quest. Not only our two nations, but all
nations, share a common destination in mutually beneficial energy
partnerships to sustain economic expansion and, in turn, help ensure
better lives for people everywhere. Such cooperation can benefit not
only India’s continued economic growth, but that of Asia as a whole",
Al-Naimi said.

At the beginning of the speech Al-Naimi talked about the New Silk
Road, saying that "the New Silk Road, figurative and literal paths
which economists and business analysts say represent not only the
opening of trade among emerging nations, but also a gravitation of
international trade and investment that suggests a new eastward shift
of economic power and influence".

"Clearly the New Silk Road is a potent metaphor for Asia’s stunning
growth and growth potential, and the far-reaching implications as
developing nations take their places at the global table, and their
people enjoy the greater opportunity and prosperity that accompany
economic growth. Let’s apply this metaphor to India, a major outpost
of both the old and new Silk Roads, for our look at the importance of
global cooperation to energy security. The silk, sandalwood and
spices of its ancient trade have given way to modern India’s
emergence as a knowledge economy and information technology hub. The
nation’s leadership in science and technology has led to India’s
boasting the world’s second-highest standing in number of scientists
and engineers", Al-Naimi added.

"Just as globalization has contributed to Asia’s rising fortunes,
however, the economic recession that began in the West has triggered
an inexorable domino effect worldwide, as the crisis has led to less
money being available for credit and investment, and the precipitous
fall in stock markets. A significant consequence of these
developments has been the drying up of liquidity to fund projects and
other investments which underpin economic growth in emerging
economies", Al-Naimi said.

"Adding to India’s economic challenges this year were the horrific
terror attacks on Mumbai. Here, please allow me to pause and
reiterate the Kingdom’s deepest sympathy and condolences on the
tragic loss of life and devastation wrought by these shocking
attacks", Al-Naimi added.

--SPA