Khalid A. Al-Falih, Saudi Aramco senior vice president for Industrial Relations, Tuesday emphasized the vital role that energy plays in sustained economic development and continued global prosperity. He made his remarks in a speech entitled "Saudi Aramco: Investing Across the Value Chain to Meet Future Global Demand," delivered at the Royal Institute of International Affairs, also known as Chatham House, in London. During a session on "Saudi Arabia: Internal and External Investment - Challenges and Opportunities," he also outlined ways in which the Kingdom of Saudi Arabia and Saudi Aramco are utilizing a systematic program of strategic investments all along the petroleum value chain to meet future energy demand while growing the Kingdom's economy. The senior vice president drew attention to the fact that tight capacity is particularly apparent in the downstream segment, where there is a sizable mismatch between available crude oil supplies and existing refinery hardware configurations and that this gap is set to widen unless there are appropriate investments in refining systems. He pointed out that according to the International Energy Agency (IEA), global demand will grow by more than half over the next quarter-century, exceeding 325 million barrels of oil equivalent per day. The IEA expects oil and gas alone will account for close to 60 percent of total energy supply, and that will require massive investments all along the value chain. "These investments are related primarily to resource deliverability, not resource availability, a distinction noted by His Excellency Ali Al-Naimi, the Kingdom's Minister of Petroleum & Mineral Resources, at last year's World Petroleum Congress," Al-Falih said. "In other words, the global industry's most immediate challenges are not those connected with below-ground reserves, but 'surface' issues like system capacities and configurations; the reliability of production, refining and transportation networks; local, regional and global political and economic issues; and the need for appropriate and timely infrastructure investments." Addressing the challenges ahead, he said that Saudi Arabia, and by extension its national petroleum enterprise, Saudi Aramco, are uniquely placed to respond to these pressing needs. This is not simply because of the unmatched size of Saudi Arabia's reserves, which are conservatively estimated at over 260 billion barrels with tremendous upside potential, but rather, the extremely low finding and development costs, the technological prowess, the long experience in managing mega projects, and the financial strength which will enable Saudi Aramco to play an important role in meeting future demand challenges. --MORE
