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 Aramco was originally an American company. It goes way back to the 1930s when two American geologists from Standard Oil of California discovered oil in the Saudi desert.

Standard Oil formed a consortium with Texaco, Exxon and Mobil, which became Aramco. It wasn't until the 1980s that Saudi Arabia bought them out and nationalized the company. Today, Saudi Aramco is the custodian of the country's sole source of wealth and power.

Over 16,000 people work at the company's massive compound, which is like a little country with its own security force, schools, hospitals, and even its own airline.

According to Abdallah Jum’ah, Saudi Aramco's president and CEO, Aramco is the world’s largest oil producing company.

And it's the richest company in the world, worth, according to the latest estimate, $781 billion.

Jum'ah gave 60 Minutes a tour of the company's command center, where engineers scrutinize and analyze every aspect of the company's operations on a 220-foot digital screen.

"Every facility in the kingdom, every drop of oil that comes from the ground is monitored in real time in this room," Jum'ah explained. "And we have control of each and every facility, each and every pipeline, each and every valve on the pipeline. And therefore, we know exactly what is happening in the system from A to Z."

A large map shows all the oil fields in Saudi Arabia, including Ghawar, the largest on-shore oil field in the world, and Safaniya, the largest off-shore oil field in the world; green squares on the map monitor supertankers on the high seas in real time.

"What you see today is a company that is as professionally sound as any international oil company," Al-Naimi told Stahl.

Before he became oil minister, Al-Naimi ran Saudi Aramco for 11 years. He was the first Saudi president and CEO.

"You have, as you just said, one of the most efficient, cutting-edge 21st century companies in the world…within one of the most religious conservative countries in the world. It’s almost a paradox. We were surprised by this?" Stahl asked.

"I don't think there's any real surprise," Al-Naimi replied. "Many people have images of Saudi Arabia, but they really change their views and images when they come and visit Saudi Arabia."

But to western eyes, it is a paradox. Skyscrapers, traffic jams and shopping malls co-exist with ancient tribal customs. The king - and the Koran - reign supreme, and women everywhere are required to cover themselves in black from head to toe; even Stahl had to wear an abaya, a women's garment worn in parts of the Islamic world.

The rules apply everywhere it seems, except for the women at Saudi Aramco. When the U.S. oil companies came to Saudi Arabia in the 1940s and 50s, the Americans moved into the area with their families and developed neighborhoods to suit their tastes and their way of life. They created a replica of American suburbia; you could be in the outskirts of Houston or Los Angeles.

"It's almost like it's an enclave within Saudi Arabia. It's different from the rest of the country," Stahl remarked. "Very different. It kept a lot of the American ways, right?"

"Yes, of course. They are good ways. There is nothing wrong with…these are excellent ways," he replied.

"But, I was so surprised to see the culture there. Because for instance, I saw men and women working side by side. I saw women driving cars there, which you don't see," Stahl pointed out.

Al-Naimi says it's not strange to him: he's a product of that culture, having risen through the ranks. He started out as a 12-year-old office boy in 1947, when it was said that to get oil all you needed to do was ladle it out of the sand.

[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.