Saudi billionaire businessman Prince Alwaleed Bin Talal said the kingdom’s government does not “get it” that increased shale output in the west poses a real threat to the country’s economic stability and addressing it urgently is “a matter of survival”.
Speaking to Canada’s The Globe and Mail newspaper, the prince said new shale oil discoveries “are threats to any oil-producing country in the world” and the kingdom urgently needed to urgently diversify its economic output in order to guarantee its long-term stability.
“It is a pivot moment for any oil-producing country that has not diversified,” he was quoted as saying. “Ninety two percent of Saudi Arabia’s annual budget comes from oil. Definitely it is a worry and a concern.”
However, his concerns have fallen on deaf ears as the kingdom’s deputy oil minister on Wednesday said the Riyadh government remains unconcerned by surging US shale output, which threatens to eat into OPEC's market share, and sees no need to cut production to support prices.
"I think that the world economic growth will be sufficient to handle growth from all sorts - shale oil, shale gas, tight oil and including renewable," Prince Abdulaziz Bin Salman Bin Abdulaziz told a conference in Dubai.
As a result, Alwaleed said he would use all outlets possible to him to convince the government to take the threat from shale seriously, as he believed many Saudi shared his concerns.
“I will make them get it; there is no doubt about that. I’ll make them get it. It is matter of survival. There is no choice but to get it. I will keep pushing until they do.
“The majority of Saudi Arabians get it. We will mobilise the media; mobilise the people to put maximum pressure on the government to do things to rectify the problem.”
While US shale oil is much more costly to produce than Middle East crude, a surge in global oil prices over the last four years has made it economic to produce and reduced demand for other crudes.
The move by Washington means the US, a top consumer of Saudi Arabian crude, is aiming to be energy self-sufficiency by 2020.
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