Britain To Build A ‘National Flagship’ To Promote Maritime Trade
by Alistair Smout (Reuters) – Britain is to build a new flagship to promote its business and trade interests around the world, the government said on Saturday, in a move it...
July 29 (Bloomberg) — Prince Alwaleed bin Talal, the billionaire owner of stakes in Citigroup Inc. and Time Warner Inc., has written publicly to Saudi Arabian Oil Minister Ali Al- Naimi, questioning the kingdom’s energy policies.
In an letter published in Arabic yesterday on Twitter, he said his country, the biggest crude producer, won’t be able to fulfill its plan to increase capacity to 15 million barrels a day, adding there’s a “clear and increasing decline” in demand for oil pumped by the Organization of Petroleum Exporting Countries, particularly Saudi Arabia. He also challenged Naimi over the impact of U.S. shale gas output.
“We disagree with your excellency on what you said and we see that raising North American shale gas production is an inevitable threat,” Alwaleed, the founder of Kingdom Holding Co., wrote. Saudi Arabia is now pumping at less than its capacity as consumers limit oil imports, he said.
Al-Naimi said in Vienna on May 31 that he isn’t concerned about increased U.S. output from shale formations, adding that it isn’t the first time OPEC has faced a surge in production from outside the group. Saudi Arabia pumped 9.47 million barrels a day of crude in June compared with 9.83 million a year earlier, according to data compiled by Bloomberg.
“Saudi Arabia is almost entirely dependent on oil and this reality is becoming a source of concern for all,” Alwaleed wrote in the letter.
The impact of North American shale production on the kingdom’s state revenues isn’t apparent yet, with more Saudi exports going to Asia, John Sfakianakis, chief investment strategist at MASIC, a Riyadh-based investment company, and former government economist, said by phone today. The country is reducing its dependence on oil, which accounted for less than 30 percent of gross domestic product last year, he said.
OPEC forecast the world will need 300,000 barrels a day less of its crude next year, even as global oil demand growth rebounds to its strongest pace since 2010, amid competing supply sources, it said on July 10. Demand for OPEC’s crude will slip next year to 29.6 million a day, or about 2.6 percent less than the 12-member group is pumping now, it said in its monthly oil report.
“The world’s and the West’s dependence on oil is in continuous decline and this reality is known by everyone,” Alwaleed wrote. He urged the monarch, King Abdullah, and the government to reduce Saudi dependence on oil and increase the use of renewable energy sources to support local consumption.
Saudi Arabia plans to maintain capacity at 12.5 million barrels a day and sees no need to build capacity beyond that, al-Naimi said in a speech on April 30 in Washington. Prince Turki Al Faisal, a former head of intelligence, said in an April 25 speech at Harvard University the nation plans to boost capacity to 15 million barrels a day by 2020, enabling it to export as much as 10 million barrels.
“There are more than 20 million loyal citizens in the kingdom and they all have absolute right to ensure a good life for themselves and their offspring in the future,” the prince said in the letter.
Alwaleed, the world’s 20th richest person, has built a fortune of $26.2 billion, according to the Bloomberg Billionaires Index. He owns stakes in companies including Apple Inc., News Corp. and Twitter Inc.
– Wael Mahdi, Copyright 2013 Bloomberg.
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