Long accustomed to dominating world energy, Saudi Arabia is scrambling for ways to maintain a strong role in energy for decades to come. With U.S. oil production booming and the International Energy Agency predicting the U.S. will actually be the world’s top energy producer by 2020, Saudi Arabia is starting to feel the squeeze.
According to Foreign Policy, this new pressure has put the Saudis in somewhat of a quandary, as “40 percent of [their] 28 million citizens [are] under the age of 15”; the males above this age are mostly employed in the nation’s “bloated public sector.” Add to this the “post-Arab Spring era of elevated per-capita government spending” and it’s easy to see why Saudi Arabia feels pressure.
Yet their plan for dealing with this problem has been unclear.
On April 25, Prince Turki al-Faisal “announced that Saudi Arabia is set to increase its total production capacity from 12.5 million barrels per day (mbd) today to 15 million mbd by 2020.” Such an increase would guarantee that Saudi Arabia remains the world’s top oil producer. However, just five days after this announcement was made, the Saudi Arabian Minister of Petroleum and Mineral Resources, Ali al-Naimi, said 15 million mbd couldn’t be produced by 2040, much less 2020.
There is a theory that Naimi’s rejection of Faisal’s predictions isn’t based on a lack of confidence in Saudi Arabia’s technological or oilfield capabilities, but on the knowledge that the Saudis may already be producing at a level which they will not be able to maintain for long.
Follow AWR Hawkins on Twitter @AWRHawkins
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