Middle East Asia Energy Summit debating critical oil market issues

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Ministers from key oil and gas producing countries in the GCC discussed critical oil market issues at the Middle East Asia Energy Summit in Singapore on Wednesday. On behalf of the organizer of the event - the Gulf Research Centre (GRC) - its Chairman Abdulaziz Sager, commented that 'there has never been a better time to forging strategic alliances between the Gulf and Asia given current high oil prices.'

H.E. Ali Al Naimi the Minister of Petroleum & Mineral Resources of the largest oil producer in the world - Saudi Arabia - commented that the 'emergence of Asia as an economic power house is truly breathtaking,' and pointed out that the central gravity in global trade and investment is shifting towards Asia. He mentioned that Saudi Arabia supplies Asia with more than 4.5 million barrels per day of petroleum, which is approximately one half of all the oil the kingdom produces. He thus highlighted the growing interdependences between the two regions and firmly ascribed to the philosophy of a stable oil market. Current high prices he regarded as fundamentally not justified as oil markets are well supplied he said and blamed price increases on the weak dollar, tight refining capacity, geopolitical issues and speculators.

The fact that Asian nations rely between 60% and up to 90% on the Gulf when it comes to oil supplies was stressed by H.E. Goh Chok Tong, Senior Minister and Former Prime Minister of Singapore in his opening speech of the conference, which was supported by the government of Singapore and the S.Rajaratnam School of International Studies. Mr. Goh whose country has spearheaded the Asia Middle East Dialogue (AMED) initiative in 2005 showcased his intimate knowledge of the Middle Eastern region by referring to the various multi billion dollar infrastructure and technology projects in the GCC like the Masdar initiative in Abu Dhabi.

In a profound assessment of current supply scenarios H.E. Mohamed bin Dha'en Al Hamli, UAE Minister of Energy and current President of OPEC, discussed technological challenges of upstream investments and enhanced oil recovery. The minister dealt with the prospects of non-OPEC production and envisaged an additional OPEC capacity of 3 mbpd until 2012. He also stressed the importance of collaboration between Asia and OPEC in an increasingly globalized world.

The growing importance of cross border investments in achieving energy security was highlighted by one of the pioneers in the field, Hiromasa Yonekura, the President of Sumitomo Chemical. He spoke about the seminal $10 billion integrated refining and petrochemical Rabigh plant, which his company has been setting up as a joint venture with Saudi Aramco. Besides the problem of cost overruns for engineering procurement and construction (EPC), the trend from ethane based to naphta based petrochemicals was discussed.

The conference will last until Thursday and experts from around the world will discuss issues of supply and demand security, logistics, choke points and strategic storage. Natural gas and its growing importance as a cleaner burning energy source will be addressed in a special session. The forum thus provides a major meeting platform between oil producers and consumers and strives to enhance cooperation among them. It also hopes to lead to the formulation of possible ventures and partnerships to remedy current supply concerns.

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