Al Naimi speaks at G-8 Meeting of Energy Ministers 3 Rome

Al-Naimi said "Today, the oil industry is confronted with faltering
demand and significantly lower prices. This contrasts with the market
psychology we witnessed just a year ago, when the widespread
perception of supply shortages and the fear of disruptions fueled
speculation which played a significant role first in pushing oil
prices to record highs and then in accelerating their subsequent
collapse. The extreme volatility we experienced is detrimental to
our goal of establishing secure and stable energy markets.
It
discourages the smooth flow of capital into the energy sector and in
doing so, undermines our collective energy security. That is why
consuming and producing countries need to intensify the efforts to
better understand the workings of oil markets and to improve their
transparency. Together, we must also consider whether an expanded
role for governments in regulating these markets is warranted to
combat practices that undermined transparency and foster the types of
extreme volatility that can destabilize our energy future. We are
pleased that the high-level Steering Group working with the
International Energy Forum is studying this issue and will present
their findings at the upcoming Ministerial Meeting in Mexico.

In order to meet future energy demand, all BTUs, regardless of their
source will be needed. The world does not have the luxury of
discarding any particular energy source, whether oil, nuclear or
coal. The effect of such an approach could be disastrous to global
prosperity and the economic aspirations of the developing world.
Ultimately, technology and the market place should determine the
winners and losers, not governments. We may find that the optimal
solution is not only the type of energy we use, but how we use it.

Fossil fuels will continue to serve as the “base load” for meeting
growing world energy demand for decades to come. Amid the excitement
over the potential of alternative energy technologies, we cannot lose
sight of basic economic realities and the need to maintain a robust
and reliable energy system. There is a finite amount of capital
available for energy investment, and as such we should employ it
where we can reap the most benefit for the least cost.

And last but not least, we must redouble our efforts to deepen
dialogue and improve cooperation between producers and consumers. We
can build on ongoing initiatives being coordinated by the IEF,
including the Joint Oil Data Initiative (JODI) and other efforts to
improve oil market transparency and reduce price volatility,
including the high-level Steering Group initiative now underway."


--SPA