1999 News Story

U.S. Energy Secretary In Riyadh For Investment Talks

Custodian of the Two Holy Mosques King Fahd Ibn Abdul Aziz yesterday received U.S. Secretary of Energy Bill Richardson and his accompanying delegation. Secretary Richardson was also received by Crown Prince Abdullah Ibn Abdul Aziz, Deputy Prime Minister and Commander of the National Guard. Earlier, he was received by Foreign Minister Prince Saud Al-Faisal.

Secretary Richardson also met yesterday with Minister of Petroleum and Mineral Resources Ali Al-Naimi to review aspects of cooperation between Saudi Arabia and the United States in the area of petroleum, and its technical and scientific aspects in particular. Following the meeting, a joint statement was issued, which said that the two sides had discussed the current international economic situation and its impact on the international petroleum and gas industries as well as its effect on future investments and supplies. The two sides underlined the importance of constant growth in supply and demand as well as transparency in the market and the impact on the expansion of international trade and economic growth. They also highlighted the strategic importance of the Arabian Gulf region in the light of future needs for oil and the importance of trade exchange in the relations between the two countries, affirming their resolve to boost these relations.

Minister Al-Naimi remarked on the Kingdom's record of commitment to secure supplies of oil for the world, and the importance of Saudi Arabia to the U.S. market. Secretary Richardson noted the strategic importance of the Kingdom of Saudi Arabia as a stable, reliable and dependable source of oil for the United States.

The communiqué said the two sides welcomed investment activity in the energy sector in both countries and expressed their readiness to expand such opportunities. They noted the role of trade relations in energy in strengthening relations between the two countries, and referred to the important role resulting from development of natural gas in the Kingdom and its subsequent provision of opportunities to diversify the Saudi economy. The communiqué said the U.S. Energy Secretary welcomed and encouraged offers by American companies indicating their interest in this field.

The two sides exchanged viewpoints on negotiations concerning global weather changes and the resolutions adopted by the multi-lateral conference held in Buenos Aires in November 1998, and expressed their commitment to continue dialogue to reach mutual understanding on such issues. The two sides recognized the significance of exchanges of scientific, technical and technological knowledge, the outcome of which can lead to the development of major industries in both countries. They decided to start negotiations to reach memoranda of understanding for technical cooperation, each side agreeing to set up a team to begin these negotiations and promote coordination with the concerned governmental bodies. The duties of these teams will be to determine spheres of joint interest and promote participation in the exchange of technology and technical experience. They will also be concerned with basic research into energy, planning, exchange of energy data, gas and mineral technologies, energy efficiency, environmental aspects of technology, and absorption of carbon, among other things. The two sides agreed that dialogue on energy issues continue between the Saudi Ministry of Petroleum and Mineral Resources and the U.S. Department of Energy.

Speaking at a press conference yesterday attended by U.S. Secretary of Energy Bill Richardson, Minister of Petroleum and Mineral Resources Ali Al-Naimi clarified that Saudi Arabia is not in need of foreign investment in the area of oil exploration, attractive and profitable as this area may be. He went on to point out that the Kingdom is looking for proposals pertaining to petrochemicals and integrated projects for natural gas. He added that with recent discoveries of reserves of crude oil estimated at 51 billion barrels, and over 80 oilfields, only ten of which are being utilized, Saudi Arabia is in no need of additional capacity.

Minister Al-Naimi explained that the call to American companies to invest in the Kingdom arose from a meeting in Washington DC, and referred to benefits for both Kingdom and the investors. Saudi Arabia, he said, has gas reserves estimated at more than 207 trillion cubic feet, adding that although exploration for more would be useful, this is not to be given top priority. What is important, he emphasized, is the development of an industrial sector based on gas. He noted that the companies that have made proposals in this respect are well known, and already purchase Saudi crude oil and invest in the Kingdom in other spheres. Asked if it would be possible for non-American companies to invest in the Kingdom, he said a statement on opening investment opportunities has already been issued, and no restrictions will be imposed on any company capable of investment in Saudi Arabia.

Minister Al-Naimi went on to say that the area of exploration for minerals is open, and there are opportunities for foreign as well as local investment in mining. The largest investment project under study at the moment is one on phosphates to be found in the northern part of the country. The required infrastructure for investment in this sphere is not, however, as well developed as that for investment in petroleum and gas.

U.S. Secretary of Energy Bill Richardson underscored the importance of broadening the scope of cooperation, saying that the Kingdom is a strategic partner of the United States in the field of energy, and adding that he hoped his current visit to Saudi Arabia would make a positive contribution to this. He noted that the U.S. administration will support American companies that are interested in investment in the Kingdom of Saudi Arabia, and referred to his talks in Riyadh as covering ways of activating cooperation between the two countries in the field of energy technology. A working group is to be formed to achieve this.