LONDON, U.K. (December 01, 2004) – Saudi Arabia has enjoyed a remarkable resurgence of investor confidence in the past five years, due to government economic reforms, increased crude oil production and rising oil prices, Minister of Petroleum and Mineral Resources Ali I. Al-Naimi said here Monday. Speaking at the Royal Institute of International Affairs, also known as Chatham House, Al-Naimi said domestic and international investments have been rapidly increasing in all sectors of the Saudi economy, especially in industry and services.
Photograph Contributed by Saudi Aramco
Economic reforms have "created an atmosphere of improved efficiency, greater transparency, reduced government regulation, more opportunities for foreign investment, and a significant emphasis on the highest ethical and business standards," he said.
State oil company Saudi Aramco's success in bringing new production increments on-stream at regular intervals has allowed Saudi Arabia to recently increase its maximum sustained production capacity from 10.5 million barrels per day (bpd) to 11 million bpd, Al-Naimi said. He said the Kingdom has plans to gradually increase sustainable production to 12.5 million bpd. The increases will allow the Kingdom to continuously maintain a reasonable spare capacity of no less than 1.5 million bpd, he said.
In addition, Al-Naimi said, Saudi Aramco opened its upstream natural-gas sector to international investors last year and placed a greater emphasis on creating higher value-added products and helping accelerate industrial growth in the country and creating new jobs.
The company is also deep into refining joint ventures worldwide and is planning more, he said.
Saudi Arabia remains first in oil reserves and fourth in natural-gas reserves globally, Al-Naimi said, and its economy is among the world's top 25, accounting for one-fifth of the total gross domestic product of the Middle East, including Turkey.
By the end of October, the Saudi stock market ranked 11th in the world for total traded value, he added.
Nadhmi A. Al-Nasr, executive director of Community, Buildings and Office Services for Saudi Aramco, also spoke Monday at the two-day Chatham House event, which was titled, "Oil, Economic Change and the Business Sector in the Middle East."
Photograph Contributed by Saudi Aramco
Al-Nasr told those attending that although Saudi Aramco is the Kingdom's largest non-government employer (it employs more than 45,000 Saudis, 86 percent of its workforce), it is constantly striving to improve the country's economic growth and to stimulate jobs.
He said the goods and services purchased by the company are important drivers for the economy. "Last year, Saudi Aramco executed contracts valued at $3.5 billion," he said, "of which a significant share was awarded to Saudi-owned or Saudi joint-venture companies."
And to ensure that contractors can meet stepped-up requirements for qualified Saudi workers, the company developed a specialized center to train and equip Saudi contractor employees with the necessary job skills.
"This is a major signature initiative and has been received with enthusiasm by Saudi contractors," Al-Nasr said.
Among other new initiatives, Saudi Aramco also created a New Business Development organization to help stimulate new businesses to expand and diversify the national economy, Al-Nasr said.
"The company is now looking to work more vigorously with both local and international companies, not only as suppliers and contractors but also as customers for feedstocks as well as investors and partners in a wide range of products," Al-Nasr said.
According to its website, Chatham House is one of the world's leading organizations for the analysis of international issues, and it "aims to help individuals and organizations be at the forefront of developments in an ever-changing and increasingly complex world."