Sunday 13 October 2013

SAUDI ARABIA: Gaslands | Emerging Markets

SAUDI ARABIA: Gaslands | Emerging Markets:

"The explosion of shale oil has some in Saudi Arabia worried that the kingdom’s main export is in danger

The billionaire Saudi investor Prince Alwaleed Bin Talal has a talent for making headlines; but only rarely has he put his head over the parapet on politically sensitive strategic issues affecting the kingdom. So when he warned in an open letter to the veteran Saudi oil minister Ali Al-Naimi made public at the end of July, that the kingdom’s oil-dependent economy was looking increasingly vulnerable to rising US energy production, many Saudis were quick to take note.

Alwaleed warned that the boom in shale oil and gas would reduce demand for crude from Opec producers. With consumers limiting their oil imports, Saudi Arabia – the world’s biggest oil exporter – would be forced to produce below its headline production capacity. And this would directly challenge the kingdom’s economy, given its near-complete reliance on oil, accounting for more than 90% of budget revenues."

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