SYED RASHID HUSAIN OFTEN dubbed as the Energy Olympics, the World Energy Congress (WEC) - every three years - remains virtually one of the biggest events of the energy world – attracting energy fraternity from all around. And with Saudi Arabia positioning to play a very significant role in meeting global energy demand for years and decades to come - attention on Kingdom and its next moves on the global energy chess board - is but natural. Covering the previous WEC in Montreal, Canada, in 2010, this scribe bears witness to how eagerly awaited are the Saudi pronouncements on what it was planning and executing on energy drawing boards. Daegu, Korea - that hosted the WEC 2013 a couple of weeks ago - was no exception. And Khalid A. Al-Falih, the Aramco CEO, often termed as the current czar of the Saudi energy assets, disappointed none – detailing how he saw the energy world emerging and the steps the Kingdom was taking to overcome the obstacles on the way and maintain its lead role on the global energy map. Despite some gloomy predictions about the possible energy scenario in near to mid-term, Al-Falih continues to be optimist. And indeed he has reasons – cold, solid and calculated – for this controlled exuberance. Aramco has eyes focused on the growing global population. Being an energy man for decades, Al-Falih knows too well. The energy needs of a growing population can only go up and up. Nothing could stop that. Therefore he remains confident enough to stand up and says: “All sources of energy - with oil and gas at the core - will be needed to meet the rapid increase in world energy demand by 2050.” With the world population projected to increase by 2 billion to 9 billion people by 2050, and the global economy expected to be three or even four times larger than today, global energy consumption is bound to rise significantly, despite the growing emphasis on efficiency. Even with advanced energy management and efficiency programs that could lower consumption (and indeed the intensity), the overall global demand is expected to be substantially higher by 2050, driven by the rising global population empowered by prosperity, he asserted. Highlighting there was no dearth of resources, he said a total of 1.3 trillion barrels of oil has been produced over the last 120 years and another 1.6 trillion barrels worth of deposits can be pumped out at present. "What is important is that the amount of these deposits is growing every year." Global oil production volume stands at around 91 million barrels a day. "In 20 years it will be 110 million barrels," he added, with Aramco boosting its daily output by more than 1.5 million barrels a day. And Al-Falih's spirit doesn't seem to be dampened by the ongoing revolution(s) in the energy world. He hence went on to emphasize that the world needs all – conventionals, non-conventionals, renewables and the non-renewables – underlining there is room for everyone in the energy industry to prosper “under one roof.” “Providing adequate, affordable, and acceptable energy to 9 billion people will be the challenge of our lives, and of those who will follow in our footsteps. But it also presents us all with the most inspirational opportunity,” he was clear on the issue. And then asserting that that Saudi Arabia would continue to play a lead role in the global energy industry in the decades to come, Al-Falih underlined: "As part of our drive to become the world's most integrated Energy Company, we have increased our annual capital budget tenfold - from $4 to $40 billion - over the last 10 years.” Identifying this as the prime reason for Aramco's ability to stabilize the markets, if and when required, he quipped: "In the past two years alone, we have swung our production by more than 1.5 million bpd in order to address market supply imbalances." Saudi Arabia is currently also endeavoring to expand its asset base – so as to continue to be the energy king pin in the years and decades to come too. “We are on track to increase the average of our conventional oil recoveries to 70 percent, which is more than double the current world average,” Al-Falih said at the World Energy Congress in Daegu, South Korea. “Resources are, in fact, abundant.” The Aramco CEO also announced that despite talk of a coming glut, Saudi Arabia would maintain its output capacity at 12.5 million barrels through new fields including the offshore Manifa deposit. The company also plans to add 550,000 barrels a day of capacity from the Shaybah and Khurais fields by 2017. Manifa, which produces Arabian Heavy grade crude, and Shaybah and Khurais, which will supply lighter varieties, will help Aramco replace the oil that's no longer being pumped from aging fields, Al-Falih told the audience in Daegu. “These are to basically allow us to relax production from the more mature fields and reservoirs and extend them, and also to rebalance our crude slates because with Manifa we're tilting toward more heavy,” he added, conceding in a forthright manner that some fields are entering mature phase. All fields do, and indeed Saudi fields are no exception. And with the US shale boom spreading "far and wide", Al-Falih went on to spice up the audience by saying – Saudi Arabia was going ahead with its shale revolution, to be among the first countries outside North America to use shale gas for power generation and thereby save more of its crude oil for lucrative exports. "We are ready to start producing our own shale gas and unconventional resources in various types in the next few years and deliver them to consumers," Al-Falih said. "Only two years after launching our own unconventional gas program, in the northern region of Saudi Arabia, we are ready to commit gas for the development of a 1,000 megawatt power plant which will feed a massive phosphate mining and manufacturing sector," he said. By unlocking its gas reserves, the world's top oil exporter could use the fuel to power its domestic economy and allow more room for oil sales to world markets. However, despite considerable asset base, low domestic gas prices and water scarcity, continue to daunt shale gas prospects in the Kingdom. Saudi Oil Minister Ali Al-Naimi has earlier given an estimate of over 600 trillion cubic feet of unconventional gas reserves, more than double its proven conventional reserves. That would put Saudi Arabia fifth in a 32-country shale gas reserves ranking compiled for the US Energy Information Administration. China tops the list and has already signed production-sharing deals and awarded exploration blocks as it targets output of 6.5 billion cubic meters a year by 2015. Doomsday projections aside, Al-Falih is staring at the world – confidently!
