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Saudi energy minister says market instability is ‘temporary’

Over $45 bln investment in projects being opened in Ras al-Khair, Waad al-Shamal

Published: Updated:

In an interview with Al Arabiya News Channel, Saudi Minister of Energy, Industrial and Mineral Resources Khalid al-Falih said the instability of the oil market is temporary and also discussed the kingdom’s developmental plans in the energy and oil sectors.

Al-Falih noted that the world is suffering from economic slowdown, instability in the oil market and excess of production, adding, however that this was a temporary phase that would be overcome.

According to the minister, the kingdom’s oil production capacity stands at 12.5 million barrels.

Al-Falih said Saudi Arabia’s products comprising petrochemicals, refined petroleum, gas, fertilizers, and minerals are globally economical, and therefore, the profit from these industries in Saudi Arabia is the highest.

He added that these products can compete in global markets, and more importantly, they can attract investors in complementary sectors.

On the projects which Saudi King Salman bin Abdulaziz Al Saud will inaugurate in the eastern province, al-Falih said many of them are linked to the petroleum, gas, petrochemicals, minerals and energy sectors.

Most important project

The most important project on the global level is the Khurais oil field that produces 1.2 million barrels of Arabian light crude a day, Falih said, adding that development plans aim to increase production to 1.5 million.

The underwater Manifa oil field will begin producing 900,000 barrels of Arabian heavy crude and will feed several refineries in Saudi Arabia, such as the Yaserf refinery in Yanbu and Satorp refinery in Jubail. Some of it will also be exported.

There is also a project to expand the Shaybah oil field and increase its production to 1 million barrels.

Major gas project

As for the gas sector, the Wasit gas project is the biggest oil project to be developed as the field and unit’s production capacity reaches 2.5 billion standard cubic feet. This is a record for the Aramco plants.

As for the minerals sector, al-Falih said the investments in the projects being inaugurated is $35.42 billion (133 billion Saudi riyals) in Ras al-Khair and $9.85 billion (37 billion riyals) in Waad al-Shamal.

Regarding the power sector, he said the Hajr project is the biggest in producing electricity through a very high-efficiency combined cycle as it is expected to produce 400 megawatts.

Inaugurating developmental and minerals-related infrastructure projects in the industrial city of Ras al-Khair is considered a massive new achievement that has added to the kingdom’s record of development and confirms that through its wise leadership and the integration of the private and public sectors, it is capable of fulfilling great and successful accomplishments.

State institutions and ministries have cooperated with private-owned companies to achieve these plans and thus contributed to founding the modern mineral sector and turning it into an important pillar for Saudi industry.

It is also important for the aluminum and phosphate industries.

Global standards

Infrastructure projects have allowed the setting up of this modernized mineral sector according to global standards and executed according to plans developed by the state.

The city of Ras al-Khair has a strategic position on the eastern coast of the kingdom, and it is 80 kilometers north of the city of Jubail and this allows exporting its products to global markets.

Ras al-Khair is considered a promising economic and developmental center and a model of success in terms of developing giant industrial cities which can absorb massive investments.

Investments in Ras al-Khair add around $9.32 billion (35 billion riyals) to the GDP. It has also helped provide 12,000 direct job opportunities and tens of thousands of indirect job opportunities for citizens whether in factories or in projects related to infrastructure.

Projects in Ras al-Khair will pave the way towards achieving the promising goals within the Saudi Vision 2030.

*This article also appears on AlArabiya.net.