The CEO of Saudi Arabian Oil Co. (Saudi Aramco) said Friday that oil prices will stay at a “healthy” level. Any increased oil output from Iraq probably won't affect prices much since demand is driven by global economic development, said Khalid Al-Falih. “Demand will grow due to demographic growth and economics in Asia,” he told reporters on the sidelines of a conference in Moscow. Speaking to reporters on the sidelines of an energy forum in Moscow, Al-Falih said he did not see a drop in crude oil demand as it would be supported by “driven by demographics which is rising and by economic growth in Asia.” “I expect (oil) prices will remain healthy in the long term,” he said. He said in 2012 Saudi Aramco is to keep capital expendituare “at the very high level to maintain our production and meet our strategic plans.” While speaking about a joint project with Russia's Lukoil, he said “cooperation with Lukoil is progressing very well in terms of the relationship.” Lukoil and Saudi Arabia signed a 40-year exploration and production agreement in March 2004. The joint venture, Lukoil Saudi Arabia or Luksar, has made two discoveries in block A, the first of which was in the Tukhman structure as announced early in 2007. The 30,000 sq km block A is in the northern part of Rub Al-Khali, south of the massive Ghawar oil field. “We'll appraising two discoveries jointly,” he said. It was too early to speak about the drilling results but Saudi Aramco hoped “it will be a gas and condensate discovery,” Al-Falih said. Al-Falih also said Aramco's 2012 spending will stay at a “high level.” He said seismic studies in the Red Sea are “going well,” and Aramco may drill two appraisal wells there in 2012. A possible global economic slowdown driven by Europe's sovereign debt crisis will not dent demand for oil, he further said. “Demand will grow due to demographic growth and economics in Asia,” Al-Falih said. Meanwhile, oil prices slipped below $97 per barrel Friday at the end of a volatile week that mixed jitters about Europe's debt with the prospect of tighter oil supplies and improving economic conditions in the US. Benchmark crude Friday fell $2 to $96.93 per barrel in New York in light trading ahead of the Thanksgiving holiday week. Brent crude rose 3 cents to $108.12 per barrel in London. The benchmark price started the week at about $98 a barrel. It topped $100 for the first time since July Wednesday after Canadian pipeline companies announced plans to bring oil from a key delivery point in Cushing, Okla., to the Gulf Coast. That pushed up prices because it will reduce a glut of crude in the Midwest. Then prices plunged nearly 4 percent, to just under $99, Thursday as investors worried about higher borrowing rates in Europe and slowing economies that would reduce demand for oil. Analysts say the dust is still settling from the rapid ups and downs in oil prices.
