Prince Turki Al Faisal, a Saudi Arabian Prince and former head of intelligence, gave a speech at an event at Harvard University at the end of April, in which he claimed that the Gulf Kingdom planned to increase its oil production capacity from 12.5 million barrels a day to 15 million barrels a day by 2020.
Saudi Arabia claims about a fifth of the world’s proven oil reserves and just beats Russia to the title of the largest oil producer, and exporter of petroleum liquids, in the world.
One of Saudi Arabia’s main strengths, which has allowed it to invest heavily in infrastructure and develop its economy, is the fact that it boasts a huge spare capacity with which it can stabilise the global oil market, and influence prices, by either increasing or decreasing production volumes. By increasing total production to 15 million barrels a day, Saudi Arabia will be able to increase exports to 10million barrels a day.
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Last year Citigroup announced that at current consumption rates Saudi Arabia will become a net oil importer by 2030, so this increase in production may be necessary in order to keep current exports at a constant level.
In an attempt to reduce domestic consumption Saudi Arabia has been motivated to invest in renewable energies, pledging nearly $110 billion in order to install 41GW of solar energy capacity by 2032.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com