Foreign Minister Prince Saud Al-Faisal address to the Baker Institute
Address by HRH Minister of Foreign Affairs Prince Saud Al-Faisal to the Baker Institute for Public Policy, Rice University in Houston, Texas, September 21, 2005. Topic: Saudi Arabia and the International Oil Market.
Ladies and Gentlemen: Allow me to convey my heartfelt condolences to the people of the United States for the suffering, death and destruction brought about by Hurricane Katrina. At the same time allow me to praise this great city of Houston for the noble generosity of its people in offering a very needed assistance in sheltering those who suffered most. Houston has always been a great city and I am very pleased to be here.
Many years ago, when I started my government career in the Ministry of Petroleum, one of your fellow Houstonians gave me advice about traveling in the oil-producing countries of the world. He was what is known in the oil industry as an “old redneck.”
We were sitting in my office in Riyadh on a very hot summer day when he volunteered this unsolicited advice: “When you get to one of them countries,” he said, “the first thing you do is to go to the nearest shop, buy some durable candy, stock up on candles, go to your hotel room, fill the bathtub with water, and wait for the revolution.” I am sure I don’t need to do that in this oil city, I hope.
Before I proceed further, I must apologize to my friend and colleague His Excellency Mr. Al-Naimi, the Minister of Petroleum and Mineral Resources of Saudi Arabia, for delving into his turf. He has my wholehearted blessing to discuss matters relating to our foreign policy any time he wishes.
My topic today is of vital importance to both my country and yours – namely the structural flow in the oil industry. The severe increase in oil prices which we have experienced over the past several years is only a phase of a cumulative process that has been going on for some time.
The developments in the oil industry are important and warrant our full attention. High energy costs can create long term repercussions to the economies of the world that will affect all of us – consumers as well as producers, both in the industrialized and the emerging economies of the world.
It is important, therefore, that our two countries, the largest consumer and the largest producer, make the time available to assess the situation. We must define the issues and review our options to resolve them before they become too severe to manage. This becomes a matter of urgency and priority for all of us, especially when Saudi-bashing has become fashionable, and allocating blame has become an end in itself.
Crude oil has doubled in price to over $65 per barrel since 2002. Escalating energy prices have already had some indication of a depressing effect on the global economy.
The risks are too great to leave the solution to market forces alone. Because of global interdependence, depressions create social and political instability which cannot be confined to one region of the world. If not dealt with promptly and reasonably, such instability will spread regardless of the political and economic soundness of any individual nation.
What then is going on in the oil industry?
There are three sets of variables that need to be examined: Production, consumption, and political-psychological variables.
On the crude supply side, there is currently no shortage of oil. However, and for the first time in decades, there is no sizable excess production capacity. This has understandably caused some heated debates about the long-term supply of oil.
Some pessimists, mostly geologists, contrary to their customary nature, are predicting dire shortages in the future, while some optimists, mainly economists, also contrary to their nature, are predicting higher prices would eventually reduce the growth rate of consumption while increasing the growth rate of production. However, all these predictions are at best educated guesses based on uncertain assumptions.
What is indisputable is the finite depletable nature of oil. However global proven oil reserves have increased from 550 billion barrels in 1970 to 1.2 trillion today, and there is no reason why this trend should not continue.
In addressing these uncertainties, I must emphasize Saudi Arabia’s proven record of meeting its production commitments irrespective of international crises and political turmoil or even wars. Yes, we have kept our commitment even when wars were being fought in our region, when oil tankers were being set ablaze in the Gulf and when our cities and oil facilities were being attacked by Scud missiles.
Saudi Arabia has made up for shortfalls in oil production levels by maintaining between 1.5 and 2 million barrels per day of excess capacity at great cost to our industry and economy for the last 20 years.
Saudi Arabia’s year-to-date production in 2005 has increased by 700,000 barrels per day from last year. This accounted for more than half of the increase in global demand for that period.
The Kingdom of Saudi Arabia has declared its plan to increase its production capacity by 2.4 million barrels per day by 2009. This represents a net capacity increment of 1.5 million barrels per day while the rest will augment existing capacity. Barring any outside impediments that are beyond our control, we see no problem in achieving this ambitious target.
We have signed drilling contracts, selected project management teams, allocated funds and put the initial engineering plans on the drawing boards. And unless the international companies use up the equipment we have on order and divert contractors from our oil fields to other projects, we see no problem in achieving our objectives.
It is estimated that the total investment needed to increase OPEC production to meet demand by 2025 ranges between U.S. $258 and 382 billion. The difference of U.S. $124 billion is due to different estimates in demand projections based on different economic growth assumptions. This gives you an idea of the difficulty of planning investments by producing countries.
Yet, with an attitude of “damned if you do and damned if you don’t,” we are now – in spite of what we have done and are doing – accused, of all things, of a lack of transparency.
This truly puzzles me. How can we lack transparency when we have published our production capacity, our oil and gas reserves, and our current and future production plans? And we have done so in a manner totally consistent with international norms and standards. In fact, our known practice is to err on the side of underestimating our reserves and potential production.
Let us face it, providing additional data will not stop endless questions and challenges raised by those who get publicity and consulting fees for questioning everything we do. No amount of data and analysis can convince a truly dedicated conspiracy theorist.
The focus on tarnishing proven Saudi performance is largely a distraction from the fact that the key price and supply issues affecting you are not about volumes of production, but rather about gasoline formulations, limited refinery capacities, lack of storage capacity, and the various other restrictions that have paralyzed the energy industry in the Western hemisphere.
Without minimizing the importance of the environmental issues, a balance must be reached between the need for further oil exploration and development and the preservation of the environment. In that respect, Saudi Arabia calls for increased research in this field.
We are ready to join others in developing uniform regulations that are environmentally responsive and sustainable while offering the most effective energy utilization.
In fact, the real energy issues that we need to address today have little to do with Saudi Arabia. Consider the situation with regards to some of the major oil companies.
In recent years, we have witnessed unprecedented mergers and acquisitions on both sides of the Atlantic. Tremendous resources and capabilities have been concentrated within the hands of a few corporations. All of them have the resources and experience to invest in and manage the entire value chain of the oil industry.
The collective expectations were that the oil and gas industry would experience a tremendous revival as a result of such restructuring and integration. But this did not materialize.
It seems that over-regulation made it easy to avoid investing in the needed downstream operations, which are of marginal returns, by tempting investors to seek higher returns and safe investments. The result was a break in the value chain of investments in the industry.
At the risk of angering some of my good friends in the audience, oil companies may have forgotten that calculated risk-taking is the means to higher profit making. They may have opted for the ease of the cautious advice of corporate accountants instead of the spirit of adventure that has characterized the oil industry from its inception.
A critical shortfall in the industry’s refining sector has been created, which is totally beyond the control of oil exporters. This in turn has lead to a gap between the oil production of crude oil and consumption of refined products.
The consumers are clamoring for more fuels which cannot be supplied due to the lack of refining capacity. This gap traditionally has been bridged by the integrated operations of the oil companies.
To be fair to the oil companies, the main reason for the refinery shortages is the environmental and land use restrictions that limit the construction of domestic refineries. Refinery projects which already require years to construct have to wait for additional years for site approvals, if such approvals are forthcoming at all. In fact, not withstanding certain modifications and expansions in existing facilities, not a single refinery was built in the United States during the last three decades.
According to the Energy Information Administration, global refining capacity has only increased by 1.3 million barrels per day over the past five years. Meanwhile, oil demand has increased by over 7 million barrels per day. Today, global refinery capacities stand at 82.7 million barrels per day, over one million barrels short of global demand.
Yet in spite of these refinery bottlenecks, Saudi Arabia is called upon to increase its oil production on a daily basis. Clearly, additional oil production will do little to meet the fuel requirements of the world refined products. We, however, began adding to our refinery capacity in Yanbu and Jubail, our two industrial cities which are the major hubs for our petrochemical and refinery industries, and there is room for more expansion. We therefore invite all investors to join with us to build additional refineries and to expand existing ones, to alleviate the refined products bottlenecks.
This invitation does not require any delays in implementation that would create added cost to the consumers. All it needs is the will to contribute to relieve the pressure that is building. At the same time, we are ready to join any efforts in building facilities in the U.S.
Over-regulation does much to limit supply and raise prices. Gasoline specifications often vary on a state by state basis. Applying standardization would increase the efficiency in managing refineries and allow better utilization of fuel products storage capacities.
The imposition of boutique fuel specifications on a state by state and country by country basis only confounds efforts to formulate global solutions for overall fuel shortages.
The reality is that as oil supplies from the North Sea, Alaska and continental U.S. lag behind demand, heavier crudes with higher sulfur contents will be increasingly needed to meet increased demand. Therefore fuel specifications must be standardized in order to modify refinery processes on a timely basis. This is something which we must resolve urgently if we are to ensure fuel specifications and optimum refinery efficiencies over the next decade.
The question of stability in the Middle East is a major concern in this regard. Conflicts in the region that contains over 65% of the world’s oil reserves and 45 % of its gas reserves have been allowed to spiral out of control.
Regional turmoil and military confrontations have created a volatile atmosphere that undermines investment in the region’s oil industry.
This volatility has in turn become a fertile ground for oil price speculation. Every tragic incident in the Middle East has become a green light for oil traders to set higher premiums on oil supplies.
The need to putting a just and equitable end to the Arab-Israeli conflict is a matter of extreme urgency. This would not only end decades of human suffering, but in the process rid us from the unhealthy speculations that have been so damaging to the oil markets.
I have taken a lot of time to cover these matters because they are of vital importance and yet have no simple resolution. Identifying the problems is always easier than seeking their effective solutions.
What is certain, however, is that we need to move away from the blame game, and to recognize the simple truth that the desired solutions can only be arrived at through collective cooperation.
Facing these challenges require a joint effort by oil producers, oil consumers and the oil companies. To institutionalize a fruitful dialogue among all concerned, King Abdullah bin Abdulaziz, the Custodian of The Two Holy Mosques, took the initiative in setting up a Secretariat for the International Energy Forum in Riyadh.
One of its primary functions has been to facilitate data exchange and transparency through the administration of the Joint Data Initiative, which involves monthly submissions from producing and consuming countries. A few months ago, while in Dallas, he called for the convening of a conference under the auspices of this International Forum.
We look forward to increased cooperative effort and stand ready to work with the United States to do our part in addressing these challenges.
Let me conclude by quoting an old Chinese proverb: “It's better to light a candle than curse the darkness.”
KUWAIT-- Jazeera Airways, the first privately owned airline in the Middle East, announced yesterday that it will start operations in October 2005, as initially scheduled.
The new national airline of Kuwait had previously opened booking for flights November 16, 2005 and beyond, and has now announced that it will take-off on October 30th with flights to Dubai, Beirut, Damascus, Amman and Bahrain, adding Egypt, India and South East Asia to its destinations in the near future.
Though a new airline, Jazeera Airways is breaking-away from aviation models known in the region, offering a brand new travel experience that gives passengers full control over their travel plans.
Marwan Boodai, Chairman and CEO of the new airline said "We do not consider ourselves in the airline business; we are in the business of empowering travelers. We have worked with the best partners in the industry and brought leading international suppliers to the Middle East - some for the first time - to achieve highest level of safety and efficiency. The higher efficiency has enabled us to focus on putting more control into the hands of people travelling to and from Kuwait."
Saudi Arabia: NCB Launches Shariah-Compliant GCC Trading Equity Fund
JEDDAH, 3 October 2005 -- The National Commercial Bank's (NCB) investment services division (ISD) yesterday announced the launch of its AlAhli GCC Trading Equity Fund (GCCTEF), an open-end Saudi riyal-denominated fund, with a minimum subscription of SR5,000 and especially designed for investors seeking a Shariah-compliant long-term investment.
The fund aims to generate long-term capital growth by investing in Shariah-compliant GCC equities, Murabahas and Murabaha funds, which are approved by the NCB's Shariah board and managed according to the mutual fund regulations issued by the Saudi Arabian Monetary Agency (SAMA).
The GCCTEF targets people keen on investing in Shariah-compliant equities and having an optimistic long-term view of the markets in the GCC, according to Ahmed Farid, head of the asset management division at the NCB. It is also designed for those who do not have the time or the experience to venture into the stock markets in the region.
On the other hand, Haithem Al-Mubarak, head of portfolio management at the NCB, recommended that investors assess the performance of the GCCTEF within a testing period that is no less than five years. "The GCCTEF will leverage the strong economic growth in the region for a longer term based on NCB's positive and pragmatic overview of the macroeconomic performance of the GCC markets," Mubarak told a press conference at the Jeddah InterContinental Hotel yesterday. "However, investors should be aware of the high risks of investing in stocks in general and stocks in the 'emerging markets' in particular. Therefore, we note the importance of diversification in the selection of the assets in this fund across the six GCC countries," said Mubarak, who was accompanied by NCB's Farouq Fouad A. Ghulam, head of product development structuring and operational risk, ISD, Abdullah Hassan Al-Khatib, head of business development, ISD, and Amr Banaja, head of marketing, asset management.
Recent research has shown that the Kingdom leads across the Arab countries in terms of attracting Arab and foreign investments.
The NCB was the first Saudi bank to introduce mutual funds in the Kingdom in 1979 and remains the leader of the industry because of its extensive experience and expertise in the field. The bank is acknowledged internationally as the pioneer and the innovator in Shariah-compliant mutual funds. This achievement was recognized when NCB was awarded the Euromoney International Award for the "Best Islamic asset management house" for two consecutive years from 2003.
Mubarak said that the NCB remained optimistic about the future of the GCC markets and therefore it had now launched the GCC fund. "However, we would like to caution potential investors to the importance of investing wisely in the equity funds in general and particularly those in emerging markets."
There are currently four funds investing in the Gulf stocks in the Kingdom. However three of them are dollar-denominated, traditional (non-Shariah compliant), and the minimum subscription is for average $10,000. Moreover, one of these funds invests in industrial companies only.
The GCCTEF, an index fund, will be actively managed to diversify the selection of stocks across the various sectors and countries in accordance with the Shariah and ensure that the fund outperforms the index when needed.
About the expected rate of returns on the new fund, Mubarak said over the last few years the GCC economies that were directly linked to oil prices had performed well between three percent to over 100 percent. "However, the past returns do not indicate future market returns on investment nor do they guarantee similar or proximate returns in the future since various political and other factors affect market movement in any country. So it is not possible to make return forecast to any fund accurately."
The fund will invest in a selection of stocks that include the Shariah-compliant GCC companies as determined by country and investment guidelines of the fund. The basket of companies will be revised periodically. "Therefore, we'll not be able to name any particular company. Moreover, the fund manager will deal with highly reliable financial institutions in various countries."
The subscription fee was put basically to reduce market timing by clients who may use this fund as a trading tool instead of a long-term investment, also to cover the cost of managing the fund in the various GCC markets, Mubarak said when asked why the bank had set a subscription fee of two percent.
Explaining the factors that the NCB considered to launch the GCC fund now, Mubarak said investors were pleasantly surprised by the sharp rise in the share prices in the past year across the six GCC markets where the benchmark stock indices had grown on average up to over 145 percent. "At the NCB, we observed the need among our customers for a Shariah-compliant fund investing in the stocks of the companies performing well in the neighboring Gulf countries," he said.
Saudi girls denounced general image of Arab woman in US media
Karen Hughes surprised and impressed by female students' outspokenness and intelligence.
By Isabel Malsang - JEDDAH, Saudi Arabia
Copy and pasted by me :coolsis:
US media are being disingenuous in portraying Arab women as unhappy and wronged, a close aide to President George W. Bush on a PR visit to Saudi Arabia was told this week.
And it came from the horse's mouth.
"We are happy. We want to show that image but the general image of the Arab woman in the American media is that she is not happy," a female student at Jeddah's private Dar al-Hekma university said during an encounter with US Undersecretary for Public Diplomacy Karen Hughes, drawing thunderous applause from colleagues.
"Your media is not really as fair as it used to be," came another voice from among the crowd of women clad in the mandatory black "abaya" who gathered in an amphitheatre on Tuesday to "exchange" views with the American visitor.
Students were given time off from classes for the event and nearly all 700 of them came to see Hughes, who was in Saudi Arabia as part of a tour also taking in Egypt and Turkey and which aimed at polishing America's battered image in the region.
As reporters accompanying Hughes on her tour listened, the girls - mostly Saudis but including some from other Arab countries -- said they had had enough of being portrayed as deprived of any rights.
"I don't want to drive, because I have my own driver," one of them defiantly told American journalists.
Women in ultra-conservative Saudi Arabia are banned from driving or mixing in public with men other than relatives.
But "it is not an absolute wall" between men and women, one of the students insisted, as another grabbed the microphone to wonder why US media tar all Muslims with the terrorism brush.
Hughes was careful to tell her audience that "America should not seek to impose our will on Saudi Arabia."
She also applauded news in that day's local press that women would be allowed to work in Saudi Arabia, where only a limited number of professions are currently open to them.
Hughes overlooked the rest of the report, which referred to a new labor law allowing women to work "in all sectors compatible with their nature."
The sectors have not been specified.
The students of Dar al-Hekma were in no doubt that they would be able to work after graduating, even if they would not be able to drive to work.
"We can change, we are going to change, but not by force from outside," Leen Assassa, a 19-year-old student of interior design who holds dual Syrian and British nationality, later said.
She was covered from head to toe like her Saudi peers.
"America is trying to force its own opinion on us; the change will come from us," Assassa added.
Chamane Rahim, a French-educated social sciences professor, explained that the students don't cover their heads in class "as we're all women."
True, Saudi women still can't drive, "but it will come soon, Inshallah (God willing)," she said.
Hughes confided she had been "surprised" by what she heard but also "impressed by their (the girls') outspokenness and intelligence."
"They clearly feel much a part of the debate in the society even though they don't have the right to vote nor to drive," she said.
salam
its just the kuffars trying to cause unrest among the muslim population, mashallah the sisters in the Arab world are happy shame about the americans who thought they were unhappy
wasalam
salam
its just the kuffars trying to cause unrest among the muslim population, mashallah the sisters in the Arab world are happy shame about the americans who thought they were unhappy
wasalam
I know.....
Ahem....sorry, I need to calm down a little
Copied and pasted by YOUR reporter: Ameeratul Layl :coolsis:
07/10/2005
JEDDAH, 7 October 2005 — For the first time, a young Saudi security system consultant Manal Al-Sharif was awarded an "Ethical Hacking" certificate from the International Council of E-Commerce Consultants in America.
Speaking to Arab News Al-Sharif said her work was acknowledged because of its importance for business concerns. She said that when companies build up a network system and implement it, they ask "ethical hackers" to try to crack the system down. They do that in order to evaluate the system's efficiency so the company can be aware of it and make changes to prevent crackers from penetrating the system.
"That is the difference between an 'ethical hacker' and a 'cracker,' Al-Sharif added. Then, they present preventive plans to the companies.
She started working in the "Ethical Hacking" project at Aramco along with her colleagues in the security system section cooperating with special experts from outside. At the end of their project they were able to form a sample lab. Its purpose was to imitate crackers' actions.
The international certificate that Al-Sharif received did not only require passing the tests but the applicants should also have appropriate experience in the field of security systems. Aramco provided the needed training courses for Al-Sharif and six male participants at the project.
Twenty-six years old Al-Sharif has worked in the field of electronic safety at Aramco for three years after graduating from King Abdul Aziz University with a bachelor's degree in computer science.
She said that she was determined to specialize in the security systems profession that only a small percentage of women work in — not only in the Kingdom but also around the world — when she started as a student at KAAU.
"Since the Internet service was available in the Kingdom in 1997 I was very fond of the technical part of it, I did not want it to be merely a hobby I wanted to be professional in that field."
Copied and pasted by YOUR reporter: Ameeratul Layl :coolsis:
RIYADH, 3 October 2005 — Private institutions have been given two years to submit applications to the Labor Ministry to open women's sections in their ...
03/10/2005
RIYADH, 3 October 2005 — Private institutions have been given two years to submit applications to the Labor Ministry to open women's sections in their premises.
Deputy Labor Minister Dr. Ahmad Al-Zamil said at a press conference here yesterday that, according to the new law approved by the Council of Ministers last week, clearance has been given for opening female sections in all private and public institutions.
He said the ministry had given a two-year period so that as many private institutions and businessmen as possible come forward. Two years would allow them to create the necessary areas in their workplaces.
"This does not mean, however, that any private institution that comes forward before the end of the two-year period would not be given a permit if it had fulfilled the regulations," he said.
Dr. Al-Zamil said according to the new law, women are now able to work in all fields, in addition to the selling of lingerie and women's garments, as long as the occupation complied with certain regulations.
The conditions for employing women in new fields are as follows: That the job is not contrary to Islamic beliefs and there is no mixing with men; that the jobs suit the female nature; that the female's guardian approves of her working.
He said institutions that wanted to open separate branches for women with an all-female staff would have to receive permission to do so from the appropriate ministry, but an institution that wants to employ females and open a female section in its own working place would not need any permission to do so.
"If a businessman, for example, wanted to open a separate female car showroom for women he would have to get a permit from the Ministry of Commerce for its operation. But institutions that want to open a female section in the same working place need no permission to do so," he said.
Commenting on why the ministry requested the permission of a female's guardian to work in a certain field, Dr. Al-Zamil said there was a ministerial regulation on this matter and that the ministry was concerned about women's welfare.
"We want to assure all families that their daughters are working in a field which is compatible with our Islamic and cultural values," he said.
He did not find the guardian's approval of great significance since it was part of the religion. "In Islam a woman cannot even leave her house without her husband's approval so I do not find any problem in this."
Dr. Al-Zamil also called on Saudis who registered themselves as "jobless" in the ministry's branches to come forward to seek jobs, saying that if they are not serious they should withdraw their files and leave the room for others. He said of the 150,000 registered jobless at the ministry, only 50,000 had come forward for jobs.
they shud listen to the nasheed by dawud wharnsby ali which explains wat our sistaz are really like.......may allah inshallah punish those who are tryin to corrupt the muslim ummah
Copied and pasted by YOUR reporter: Ameeratul Layl
RIYADH (SPA)
The Custodian of the Two Holy Mosques King Abdullah directed Saudi officials to provide airlift relief assistance to victims of the earthquake that hit north Pakistan on Friday.
A medical team comprising a number of physicians from the Health Ministry and the Saudi Red Crescent Society will be sent to Pakistan to make a survey on the impact of the earthquake, and to determine the areas and regions that are in need of urgent medical services.
Acting president of the Saudi Red Crescent society Dr. Saleh Al-Tuweijiri said in a press meeting here today that the Saudi Red Crescent society will coordinate with the Saudi Embassy in Islamabad, the World Health Organization (WHO), the International Red Cross Organization and the Pakistani Red Crescent Society.Allah ma3akum :coolsis:
Copied and pasted by YOUR reporter: Ameeratul Layl
RIYADH (SPA)
The Custodian of the Two Holy Mosques King Abdullah directed Saudi officials to provide airlift relief assistance to victims of the earthquake that hit north Pakistan on Friday....
Subhanallah... Muslims helping muslims, now this is the kind of stuff I like to read... May Allaah unite the Muslims once more, and may Allah reward all those hurt in the earthquake, and all those who helped out... Ameen...
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