For the Record | “The Market Sets the Prices” – Oil Minister

Published: March 23, 2015

Editor’s Note:

Saudi Arabia’s Minister of Petroleum and Mineral Resources Ali Al-Naimi commented on the country’s position on energy market conditions, pricing and oil production at the 2nd Gulf Cooperation Council (GCC) for Arab States Petroleum Media Forum in Riyadh. The forum was attended by GCC ministers of petroleum and energy according to the official Saudi Press Agency (SPA). Here is SPA’s report on his remarks. [See also: Economic and Politics of Oil – SUSRIS Special Section]

SUSRIS-logo-100

Minister of Petroleum and Mineral Resources delivers statement

Riyadh, Jumada II 03, 1436, March 23, 2015, SPA — The Minister of Petroleum and Mineral Resources Ali bin Ibrahim Al-Naimi expressed always optimism along with the Ministers of Energy and Petroleum of Gulf Cooperation Council (GCC) for Arab States about oil prices due to the goodwill of the GCC States.

In a press statement here yesterday evening after the opening of 2nd Petroleum Media Forum of Gulf Cooperation Council (GCC) for Arab States, he said, ‘The GCC countries in the past and present have maintained very hard and seriously for balancing oil prices and their stability, and the prices are set by the market.’

alnaimi

Minister Al-Naimi added, ‘The forum is a blessed gesture aiming at professionalism as much as possible, and to defend the positions of the GCC countries in this economic important sector, and to correct what is said about our intention, and we are not against any one; we are with everyone in supporting the stability of the market and in support of maintaining the balance between supply and demand; but as for the prices, they are set by the market. And what we saw today will be supportive for the Gulf petroleum media personnel to practice this profession.’

The Minister of Petroleum and Mineral Resources said, ‘High prices without justification and because of a statement from this or that are harmful; but if prices rose to cover, for example, the marginal cost of producing a barrel, this is reasonable, and every investor wants to cover the long-term production costs, and wants a reasonable profit, and this is what we hope for.’

In reply to a question about the intention of negotiating with countries outside OPEC to improve or achieve prices, the He said, ‘You remember in 1998 when there was the depression of prices at that time, we toured countries outside OPEC, and we managed to gather them, and we agreed on combined cuts which moderated markets. Today, the situation is difficult, we have tried and met, but we have not succeeded due to the insistence of countries that OPEC alone shall bear this burden; and we reject this matter that OPEC bears the responsibility as its production constitutes 30% of the market, and 70% from outside OPEC. As it is a public interest, everyone must take part if we want to improve prices, and it is unallowable that one person earns at the expense of the other. In the eighties we lost a lot and we are not ready to repeat that’.

The Minister stressed that the idea of creating a specialized institute in the field of petroleum media is nice, adding, ‘Every Ministry of Energy and Petroleum holds annually or biennially a workshop for a certain period to explain the petroleum industry, and this is what was experienced before two years for the media personnel. They were given lessons for two weeks, and I think that was useful, and this will be repeated in order to strengthen knowledge and understanding, not only for us, but for the whole world.’

Minister Al-Naimi said, ‘The production of the Kingdom of Saudi Arabia is in the range of 10 million barrels, and we are ready to meet a demand of a new customer at any time, explaining that there is no objection to the accession of new countries to the organization, despite the invitation of many countries, but they have not joined the organization’.

–SPA

SUSRIS-logo-100

Read more on this topic:

Logo SUSRIS 300