It's a big play for the world's biggest oil producing countr Collin Eaton June 22, 2016 9:56am
Two years and day after U.S. oil price peaked at $107 barrel, he sketched out the end of the world's oil surplus and the beginning of a new chapter in the cyclical energy business in an exclusive interview with the Houston Chronicle.
Falih, Texas A&M University graduate and former Saudi Aramco chief executive, replaced the long-time Saudi oil policymaker Ali al-Naimi in May. He was in Houston this week to visit Saudi Aramco operations here and later joined in an evening meal to break the Ramadan fast at Houston's Museum of Fine Arts.
But Al-Falih said Saudi Aramco is still investing heavily in maintaining the Kingdom's capacity of 12.5 million barrels a day because Saudi officials believe global economic growth will continue to support rising energy demand of about 1.5 million barrels a day annually.
Even as it pumps 10 million barrels of crude a day, he said, the world's largest oil company is working to offset natural declines in its spare oil production capacity so it's ready to meet demand if supplies drop somewhere else in the world.
That's because Saudi Arabia, he said, isn't too worried about big changes in the world's energy mix. Unlike quickly evolving information technology, global energy systems take decades to build, and while the Kingdom plans to invest in renewable energy resources, it also recognizes "any transition is going to take decades."
"We're going to invest in making it happen. We're not afraid of it, but we're also realists and we know that oil will be a significant part of the energy mix for decades to come," Falih said. "Even if the share of oil goes down from, say, 30 to 25 percent, 25 percent of a much bigger global demand means a much higher absolute number of barrels that will be in demand by 2030 or 2040."
So while electric vehicles could one day make serious inroads in transportation, because of sheer demographic and economic growth in coming years, "we believe overall demand for petroleum in transportation and petrochemicals is going to rise for a long time before it starts falling in absolute numbers. Yes, we know it will fall in percentage terms – but very gradually."