Saudi King says he wants to Boost Production

The Associated Press
Apr. 14th, 2007

RIYADH : Saudi Arabia wants to increase its oil production so it can meet domestic and international demand while ensuring "fair" world prices, King Abdullah said. xXX Now pumping just over 11 million barrels a day, the kingdom is the world's largest oil producer and the biggest supplier of petroleum to the United States.

The king did not say Saturday how much Saudi Arabia might increase production, but it has repeatedly said it was prepared to do so. Last May, Oil Minister Ali al-Naimi spoke of raising output to 12.5 million barrels a day by 2009.

Abdullah said the kingdom was "seeking to increase its oil production capacity so that it can meet its commitments for national growth and the demands of the international economies."

He added that Saudi Arabia "is aware of its international responsibilities and is working to create fair prices to this resource that take into consideration the interests of the producer and the consumer."

OPEC has cut production twice in the past five months, contributing to relative stability that has kept benchmark crude between US$50 and US$60 a barrel — down from the record highs of above US$78 a barrel last summer, but still around 40 percent above 2004 levels.

Abdullah made his remarks in his annual address to the unelected Consultative Council, the closest thing Saudi Arabia has to a parliament. The king delivered only a summary of his speech Saturday, and the full text was distributed to journalists.

In the speech, Abdullah also warned that Iran's nuclear program had added another crisis to the region that needs to be contained, along with the sectarian conflicts in Iraq and Lebanon.

Saudi Arabia has recently embarked on an aggressive push to resolve the Middle East's most troubling issues, sending envoys to Iran, talking to Shiite and Sunni Iraqis and urging Lebanon's feuding leaders to negotiate.

Without naming Iran directly, Abdullah said Saudi diplomacy had been careful to deal with the "nuclear issue in a peaceful, rational and objective manner that seeks to avoid tense rhetoric" while seeking to keep the Middle East free of weapons of mass destruction.

"The issue of the nuclear crisis in the region has created a new burden in the region, adding to its consecutive crises," the king said.

The rising profile of Shiite-majority Iran worries Saudi Arabia, a predominantly Sunni kingdom ringed by neighbors with Shiite majorities — Kuwait, Iraq, Bahrain and Yemen.

Some Saudis also fear that if the international confrontation over Iran's nuclear program escalated into war, Tehran would retaliate against U.S. allies in the region — and Saudi Arabia's oil installations across the Persian Gulf are the biggest and most important target.

Any disruption in the kingdom's oil exports would seriously affect world supplies and cause prices to soar.