Saudi ‘welcomes’ U.S. shale oil boom, says minister

Oil production in the U.S. surpassed oil imports for the first time in nearly two decades last October

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Saudi Arabia, an Organization of Petroleum Exporting Countries kingpin, is unconcerned by the U.S. shale oil boom, Oil Minister Ali al-Naimi said Sunday as he met the U.S. energy secretary in Riyadh.

“We discussed the increased production of shale oil in the United States and elsewhere. The kingdom welcomes this new source of energy that helps fulfill the growing world demand for energy, and helps stabilize oil markets,” state news agency SPA quoted Naimi as saying.

In October, oil production in the United States surpassed oil imports for the first time in nearly two decades, helped mainly by production from newly-tapped shale-based reserves.

Domestic output hit 7.7 million barrels per day (mbpd) in October, a 24-year high, the Energy Information Agency said in November.

Oil imports, long seen as a strategic and economic vulnerability for the U.S., sank well below that figure to a 17-year low, it said.

The onset of hydraulic fracturing, or fracking, has allowed drillers to unlock reserves in hard-to-exploit shale strata and brought on a rise in the production of oil and natural gas.

The shift has taken U.S. reliance on imported oil to less than 40 percent of domestic consumption, compared with more than 60 percent at the peak of import dependence in 2005.

The EIA forecasts imports will make up only 28 percent of consumption in 2014, the lowest level since 1985.

During their meeting on Sunday, Naimi and U.S. Energy Secretary Ernest Moniz discussed the decades-long cooperation between their countries, as well as oil markets, SPA said.

Oil contributes the bulk of Saudi Arabia’s revenues, which pumps 9.7 mbpd, and has a capacity to produce more than 12 mbpd.