Posted by: Chuck | August 2, 2013

Should Saudi Arabia Fear North Dakota? One Man Says Yes


Should Saudi Arabia fear North Dakota? A member of the Saudi royal family says yes.

King Abdullah ibn Abdul Aziz in 2002

King Abdullah ibn Abdul Aziz in 2002 (Photo credit: Wikipedia)

Prince Alwaleed bin Talal, founder of Kingdom Holding and a multi-billionaire investor in News Corp, Time Warner and Citigroup, among other companies, has told Saudi Oil Minister Ali Al-Naimi that the desert kingdom is making a mistake not to worry about burgeoning U.S. oil and gas production.

In a letter published on Twitter, the prince calls rising American shale gas production “an inevitable threat.” Saudi Arabia, he warns, “is almost entirely dependent on oil, and this reality is becoming a source of concern for all.” The Saudi oil minister said in May that he wasn’t worried about increased U.S. production from shale, and that OPEC had survived past increases in production from countries outside OPEC.

According to data compiled by Bloomberg, Saudi Arabia pumped 9.47 million barrels of crude a day in June, down from 9.83 million the year before.

English: Tomb of Muhammad in Madinah, Saudi Arabia

English: Tomb of Muhammad in Madinah, Saudi Arabia (Photo credit: Wikipedia)

Tom Kloza, chief oil analyst at GasBuddy.com, said the Saudis had reason to be worried. The U.S. is currently enjoying the highest level of oil production in a quarter-century, around 7.56 million barrels a day. “The prince is right to recognize not just oil shale production in the U.S.,” says Kloza, “but in similar geologic areas that will put pressure on the kingdom.” He refers to shale deposits in Europe, China and South America. He predicts the oil industry will see “plenty of shale exploration later in this decade” in those regions.

Further helping the U.S., he says, is reduced domestic consumption. “At the same time we’re seeing this shale boom, we’re using less oil. It’s a function of an aging population: After age 55, driving drops off sharply.” (Source: ASC News)

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