Saudi Arabia Bullish On Oil's Future

Kingdom's Oil Minister Tells 60 Minutes U.S. Oil Addiction Is Here To Stay Due To Lack Of Alternatives

(CBS)  Saudi Arabia reportedly needs to sell oil for at least $55 dollars a barrel to cover the cost of running the country. Fossil fuels finance 75 percent of the country's entire domestic spending budget, but oil is selling for below that breakeven price.

Asked if this drop in price worries him, Al-Naimi said, "Oh, I am not a worrier. I get concerned. But I don't worry."

"The concern is this: any price must be good for the producer, for the consumer, for the investor, the oil companies," he told Stahl.

"So, you're saying if the price goes too low then production will fall. And in the end, we'll be squeezed. We won't have enough oil…to run our country," Stahl remarked.

"Price will skyrocket," Al-Naimi predicted.

What he wants is an end to the wild swings in price, which is why - to keep the price from further plummeting - he agreed to a cut of 1.5 million barrels a day in the October meeting of OPEC.

"The point is that Saudi Arabia wanted the 1.5 [cut of million barrels]. This was not something jammed down your throat?" Stahl asked.

"No, no, no. By the way, nothing gets jammed down our throats," Al-Naimi replied.

"But Iran wanted more?" Stahl asked.

"Well, I mean, different countries want different levels, different cuts. But in the final analysis, reason prevails," Al-Naimi said. "This is Saudi Arabia's influence on OPEC."

It's an influence so strong now that he was able to quash Iran's attempt to double the price of oil, which Tehran needs to support its budget, including its nuclear program and the bankrolling of militias like Hezbollah and Hamas. Still, Al-Naimi says oil is no longer used as weapon.

"Iran tries to keep the price way up; and Venezuela's trying to keep the price way up. You don't consider that oil as a weapon?" Stahl asked.

"If you looked at these countries you just named, every one of them would like to sell every barrel they can," Al-Naimi commented.

"At as high a price as they can get away with," Stahl remarked.

"Right," Al-Naimi said.

"The sense out of the OPEC meeting to a lot of people was by cutting production your purpose was to get the price up again. And that would hurt the world which is suffering an economic crisis. And the world means everywhere," Stahl said.

"I can assure you that price was the least on our mind. I say that in all honesty," Al-Naimi replied.

"But the sense is you were oblivious to the concerns of the world facing this economic crisis. You didn’t care about the recession, the credit problems or anything like that," Stahl said.

"That is really a very unfair criticism. What did governments do when the financial crisis happened? They took measures to bring stability back to the financial market. And we see, because of our responsibility, a future crisis in the oil market. Should we not take preemptive measures to prevent it? And I think the answer is yes, we should. It's incumbent on us not to see the oil market destroyed," Al-Naimi said.

The Saudis recently announced the price they would like to see oil selling for, $75 a barrel. That's about 50 percent higher than the current price.

[zeitgeist5000]

After reading some of the comments, we seem to be mired in either denial or racism. Myopia is also rampant, it is better to belive in sylph than some of the ideas and leadership we have thus far depended on to solve our problems of over consumption, waste and meaga-profits. We do and say anything to earn more and more money that we don't need, the fact that this is probably the end. I Believe that we have passed the tipping point and planet earth is now progressing toward the reduction of man's footprint effect.

We deserve nothing else no other fate but this. We have learnt nothing from the past and it is written that ignorance can be taught however, stupidity lasts forever.

Most of like to think that placing a small plaster on a bullet wound will not only allow the wound to heal but prevent future bullets from doing what bullets are designed to do.

Too many people have died, too many have tried to tell us that we needed to change, the truth is Obama is the best choice for medium to longterm change, sadly, he cannot do it alone and alone he will be. His contribution to our global problems is small, we are all to blame and must therefore claim our share. The the thing is we have become too fat to care, too used to the creature comforts and this as a result, is it. The party is nearing its end, in the distance, I can hear a Fat Lady walking up the steps to take the stage for our final performance. Well done.

Bravo.

[john052259]

Is Lesley Stahl really as uneducated about world energy as she appeared in her interviews or is she just trying to provoke the Saudis to say something scandalous?

Many compliments to the Saudi speakers who logically presented their story and calmly answered the ridiculous questions Stahl kept asking.

Does Stahl think the Saudis should just give us their oil for the good of the world? Do we in the US give away everything we produce? Does China or anyone else?

Come on 60 minutes, use someone with some knowledge of the realities of the global energy situation next time you do a story on oil. Even Obama stated during his campaign offshore drilling in the US would not begin to cover our needs.

You should republish this story and edit out all the footage of Lesley Stahl. Then you have a pretty interesting story.

I''m certainly more optimistic now about our ability to have enough time to foster alternative fuels before fossil fuels become too expensive.

[grandma_king]

I haven''t watched 60 minutes for many, many years but wanted to watch this Saudi interview. Now I remember why I haven''t watched it for years. Leslie was arrogant and insulting to the hosts and deserves to be blocked from visiting that country and all others because that''s just who she is. You reporters are so one-sided and closed minded, and can''t see anything but your own agenda.

[sflaks]

That was a terrible interview Leslie Stahl did. She seemed to be gaga over saudi technology never once mentioning their civil rights abuses, Madras that teach hate and the fact that almost all the 911 bombers were Saudis. In an interview that talked a lot about Saudi oil and the US she never talked about the fact that a lot of Americans would like to get away from Saudi oil because we dont like the way they treat women and seem to be breeding terrorists. Its times like this that we could use a Mike Wallace style interview and not a Larry king style interview.

[rstcbsnews]

Hmmm...we are releasing "vast amounts of carbon"?. I heard recently that only 4% is because of man, and most released right out of the ground (and we can''t reliably model that yet).

I think they are right about one thing. The politicians are making this oil thing, the next "War on drugs (or crime or whatever grabs the headlinesl like global warming). Where are the alternatives really?

Economics will change our behavior, let them get the price to $75. That is still low enough to keep Iran and Russia from rebuilding their military. But high enough to make us want to use the alternatives.,

[closethippy1]

I have to say that I''m amazed at how no matter Arab professionals try to reason with Americans there''s always people trying to point out all the negatives of Arab society in the same way Bin Laden and his ilk will tell you how sick American society is because of the high rate of sexually transmitted disease, or whatever.
There''s good and bad everywhere, isn''t there? OK, then, let''s for once get serious, learn to listen to each other so we can help each other out without getting defensive about it and give the hillbillies on both sides more reason to screw things up.

[mesned-2009]

Aramco will be better off if we kicks all the infidels out of the Kingdom and jack the oil price to $500!

[jsherman2000]

Did you guys forget who is behind the 911 attacks and whose financially supported those terrorists?

[jsherman2000]

Who the hek are these guys that trying to suck our $$$ from our land & polluted our air?
Saudi loves to brag but in reality all they have is the oil (which will run out in 30 yrs). Stupid terrorist supporters!!! Their next generation will eat sand for breakfast. Let use our alternative fuels & stop depend on their oil!

[zlevay]

I was amazed how sympathetic 60 Minutes was to the Saudi development of their oil resources. Ms Stahl seemed duly awed by Aramco''s vast, high-tech development and the larger-than-life Oil Minister. But she made only a brief, offhand reference to any opposition to their seemingly divine right to their extracting and our burning of every drop of petroleum, no matter the cost of extraction. There are in fact many serious, varied, global consequences to this activity to which the Saudis seem to be burying their heads in their plentiful sand. Perhaps they are considering these things, but we wouldn''t know that from the way the interview was conducted and edited. Aramco surely will reap great profit from their venture, no matter the expense, because nobody has come up with a cheaper alternative to oil. But we are ignoring, as always, the hidden, unquantifiable costs of unleashing vast stores of carbon. The only reference to that was a dismissive, practically sneering mention of Al Gore.

I applaud the Saudis for starting to develop renewable resources such as wind and solar power generation. I eagerly look forward to a future 60 Minutes piece on their development of awe-inspiring factories costing many billions of dollars turning out square miles of solar cells to provide clean, renewable power. I hope such a piece will include investigation of all the costs and benefits in such an endeavor, political, economic, social, etc.

[zlevay]

I was amazed how sympathetic 60 Minutes was to the Saudi development of their oil resources. Ms Stahl seemed duly awed by Aramco''s vast, high-tech development and the larger-than-life Oil Minister. But she made only a brief, offhand reference to any opposition to their seemingly divine right to their extracting and our burning of every drop of petroleum, no matter the cost of extraction. There are in fact many serious, varied, global consequences to this activity to which the Saudis seem to be burying their heads in their plentiful sand. Perhaps they are considering these things, but we wouldn''t know that from the way the interview was conducted and edited. Aramco surely will reap great profit from their venture, no matter the expense, because nobody has come up with a cheaper alternative to oil. But we are ignoring, as always, the hidden, unquantifiable costs of unleashing vast stores of carbon. The only reference to that was a dismissive, practically sneering mention of Al Gore.

I applaud the Saudis for starting to develop renewable resources such as wind and solar power generation. I eagerly look forward to a future 60 Minutes piece on their development of awe-inspiring factories costing many billions of dollars turning out square miles of solar cells to provide clean, renewable power. I hope such a piece will include investigation of all the costs and benefits in such an endeavor, political, economic, social, etc.

[mrbadexampl9]

Ms Stahl:
You did your viewing public a great dis-service by not reporting the context behind the Saudi unveiling of these new oil fields. The two fields you looked at will together produce perhaps as much as the 44 billion barrels claimed. That''s a large number, but the world is currently using over 30 billion barrels a year. Moreover, many in the oil business suspect that this will not be enough oil to replace falling production at Ghawar, the Saudi''s huge field.
Interview Matt Simmons, probably the most knowledgeable expert on Saudi oil in the West. You''ll get a very different view of Saudi''s production capacity.

[ptoemmes]

Ms. Stahl,

I watched your piece on Suadi Aramco with great interest. As a near year-long member of The Oil Drum, but sill very much learning the ins-outs of the oil and energy arenas I invite you to review and participate in the discussion that is taking place on your piece right now at: http://www.theoildrum.com/node/4850#comments_top

I believe 60 Minutes and you owe it to your viewers to offer a counterpoint to this piece and you could do no better than contacting the staff at The Oil Drum at [e-mail] for that counterpoint.

Kindest regards,

Pete

[garyhere]

how come you made a point to tell us that Iran uses it''s oil revenues to fund terror but failed to say that Saudi Arabia uses it''s funds to fund osama, palestinian so called terrorists, abuse of woman, and doesn''t even pretend to have elections? Lesley has to be the worst reporter on your staff!

[xpineapple]

I lived in Saudi Arabia for two years. While it does have some success and urbanization, it''s got many more problems. 96% of women can''t work, and can''t drive, and they can''t even go outside the house without a male family member or sponsor as guardian or escort. Everything fun is illegal. No Alcohol, not because the Koran said so, but because clerics said so centuries ago. Clerics haven''t got the heart to change customs that have become canonized. Temperatures stay at above 110 to 120 degress for the greater part of 9 months of the year. Saudi Arabia is not a popular place with expats.

There is an alternative and it does work as some people already know. The problem is political - bottom line is money. The Saudi''s say they are researching alternatives, not to go green, but to continue our reliance on them so that their pocket books are not hurt. Even the US government knows of other ways to get by without as much gas, they just won''t allow it to go public because of their own loss of revenue.
Honestly, as naive as most people are in both this country and around the world, it isn''t any wonder we are in an economic crisis.

[spinproof]

Saudi Arabia has underestimated America''s anger over being on their short oil leash this go round. America''s dependency on foreign oil is on an irreversible path of coming to an end, it may not be quick but this game is over! Dream on Saudi Arabia, we are out!

[lbarker77]

I haven''t read the other post yet - but I thought that was a terrible interview last night. Leslie looked surprised by the Saudi''s honest answers. She had no follow ups and it he had a true answer for the Obama plan - it won''t happen overnight, but everyone including the Saudi''s need to start working on it

[nothappyatall]

The Arabs indeed OPEC want us to stay dependant on oil as long as they get the profits.
They have been working against any alternative to oil.

Posted by MrNrgmizer''


No, PRICES have, when it''s $4/gal gas everyone screams, when it drops down no one cares any more about alternatives or ethanol.


"This motor emits NO, Co2, and does not burn oil or gasoline. This solves the oil and gasoline crisis, eliminates refueling logistics and eliminates greenhouse gases
caesar113"

WRONG, the batteries will STILL have to have charging from a power plant source, that means the pollution goes up the smoke stack instead of the tailpipe

[superfly48]

It''s sad to say that the Jews have America by the balls, America can''t afford to not support the Jews, that''s why the Palestinians are getting screwed. Be nice to the Arabs in Palestine, the Saudis will help us and let Israel go to hell.