Saudi Arabia plans to increase its crude oil production capacity nearly 40 percent by 2009 and double its refining size over the next five years to keep pace with growing global demand, the country's oil minister said Thursday.

The minister, Ali Naimi, said the plans were part of a $80 billion commitment that Saudi Arabia — the world's biggest oil exporter — had made to increase oil supplies in the global market.

"Saudi Arabia is committed to increasing the availability of energy to global markets," he said.

The country's priority is in investments to increase sustainable oil production capacity to 12.5 million barrels daily by 2009, from 9 million barrels now, Naimi said.

"Additional projects have been identified for implementation after 2009, if warranted by market conditions."

Naimi blamed the sharp rise in global crude prices over the past two years mostly on "insufficient investment and rising energy demand," especially from the booming economies of Asia.

"The rise has been a wake-up call for the industry and for producers and consumers alike, who are now beginning to address deliverability problem head on," he told delegates to an international energy conference in New Delhi.

Saudi Arabia, which has a quarter of the world's proven oil reserves, has a significant stake in ensuring stable markets, Naimi said.

Saudi Arabia is also making substantial investments in refineries within and outside the country so to double its refining capacity to 6 million barrels a day over the next five years, he said.

Naimi said an assessment by his government has revealed that "oil will remain the fuel of choice for the transportation sector and as such, will make up a significant portion of new energy demand in the coming decades."

He said he believes there are enough oil resources to meet energy demands for the next 30 years.
ADVERTISER LINKS