Saudi Oil Minister Ali al-Naimi said the country plans to boost oil reserves by 200 billion barrels on top of the 264 billion barrels it currently holds. The kingdom intends to lift gas reserves by 100 trillion cubic feet, or TCF. Saudi Arabia’s current gas reserves stand at 250TCF, al-Naimi told a conference in Beirut on 4 May.

“The Kingdom will continue to be the largest and the most important oil producer and exporter during the 21st century, just as it has been over the past half century,” al-Naimi said.

Oil consumers will rely on Saudi Arabia and other members of the Organization of Petroleum Exporting Countries to supply the greater part of the expected increase in demand this decade and next. World crude oil demand is expanding at an annual rate in excess of 2%, driven by economic growth in China and India, according to the US Department of Energy.

Crude oil for June delivery rose to $63.36 a barrel, up 17 cents, on the New York Mercantile Exchange at 1:12 p.m. in London. It dropped 49 cents in New York to $63.19 on 3 May, the lowest close for the front-month oil contract since April 19.

New discoveries

“Our petroleum reserves amount to about 264 billion barrels, or one quarter of the world’s proven reserves,” al- Naimi said in a speech. “All indications highlight the possibility of increasing these reserves by almost 200 billion barrels.” He originally gave this forecast in September 2005.

New discoveries in the Rub’ al-Khali, or Empty Quarter desert, in the southeast of the kingdom, will boost gas reserves.

“Over the next 10 years we will be attempting to bring in a minimum of 100 trillion standard cubic feet of non-associated gas,” al Naimi said.

Gas production will be for domestic use, as Saudi Arabia seeks to lift its output of petrochemicals by two thirds to 100 million metric tons a year in 2015, making the kingdom the world’s third-largest producer, al-Naimi said.

Petrochemical plants use gas a feedstock to produce materials for the manufacture of plastics. The expansion of this industry will require investments of $70 billion from 2005 to 2012, he said.

OPEC supply

The 12 countries making up the Organization of Petroleum Exporting Countries account for more than 40% of the world’s supply. They pumped 30 million barrels a day last month, with Saudi Arabia contributing 8.45 million barrels a day to the total, according to Bloomberg estimates.

Saudi Arabia and other OPEC members are investing in building spare production capacity to compensate for any supply disruption, said Naimi.

“We have been successful in doing that over the past seven years,” he said, referring to the conflict in Iraq, the war-torn nation that holds the world’s third-largest oil reserves, behind Saudi Arabia and Iran. “In terms of supply and demand and price levels, the international oil market will remain stable for many years to come.”

Concern about supplies from Iran have kept oil prices above $60 a barrel, double what they were four years ago. The U.S. suspects Iran of developing nuclear technology for military purposes. Iran, which produced at a rate of 3.9 million barrels of crude a day in April, denies this claim.

PIN/BLOOMBERG