Re: SC66

http://carolynbaker.net/site/content/view/458/

SAUDI KING ABDULLAH DROPS QUIET BOMBSHELL, U.S. MEDIA SNOOZES

Saudi Arabia's King Abdullah said he had ordered some new oil discoveries left untapped to preserve oil wealth in the world's top exporter for future generations…

"When there were some new finds, I told them, 'no, leave it in the ground, with grace from god, our children need it'," King Abdullah said…

Saudi production capacity stands at around 11.3 million bpd, and is scheduled to rise to 12.5 million bpd next year.

The King’s remarks seem to confirm a statement made last year by Saudi oil minister Ali al-Naimi who, when asked “How high can your production go?” replied, “We’ll get to 12.5 million barrels a day and then we’ll see.”

If the Saudi announcement was a bombshell, American newspapers ignored it. We decided to canvass experts we respect to see what they thought. Excerpts follow:

Tom Petrie, vice president, Merrill Lynch:

“King Abdullah’s quote speaks to the fast-emerging reality of what I call ‘practical peak oil.’ The Saudis and other exporters are placing a new emphasis on elongating the petroleum exploitation and depletion cycle. This stems from a growing awareness of the challenges of conventional resource maturity, as well as rising resource nationalism. This is likely to result in an earlier occurrence of global peak oil output than many consumers yet recognize.”

Charles T. Maxwell, senior energy analyst, Weeden & Co:

“If Saudi Arabia’s oil reserves are not going to be made available to the world in future years, beyond the expansion they have already signaled (to 12.5 million barrels/day), then the geologic oil supply constraints that we are feeling in many other parts of the world are going to close in on us earlier and more severely than we previously thought. It’s a major change in policy. It’s a powerful message. It makes the geologic message that much more decisive.”..............

With oil prices skyrocketing higher, the oil exporting countries will more and more find that their Black Treasure is a commodity that they will be holding on to, rather than putting into the markets just to quench the oily thirst of the rich Norhern Hemisphere developed countries. Its completely understandably that its all good for them with oil prices going through the roof, with no reasonable incentive for them to want to drive oil prices down by putting more oil into the system. The facts are also starting to show that they don't have the excess capacity anyway to do this, even if they wanted to.