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An interview with: Abdallah S. Jum’ah, President and CEO Saudi Aramco
Washington Times: Since 1970, Saudi Arabia has introduced several five-year development plans to enhance its oil and gas industry. The sixth development plan has just concluded. How is Aramco contributing to the next development plan (2000-2004)?
Abdallah S. Jum’ah: Overall, it has been truly a banner period for Saudi Aramco. We have inaugurated several major installations domestically, and continue to discover and develop oil and gas resources that will be needed by consumers in the decades ahead. We also worked closely with Government agencies and private sector partners to ensure that the fuel and feedstock needed by the Kingdom’s expanding economy will be met well into the new century.
As global oil prices recovered from a difficult period, we not only preserved our market share in key areas, but attracted new global customers with our reliability of supply, high level of performance, and commitment to providing top-flight service. The company strengthened its position as the world’s leading supplier of crude oil and natural gas liquids and also enhanced its role as a major player in the refined products market.
We have also completed the restructuring process begun during the Fifth Plan period by consolidating the steps already taken to further improve efficiency and productivity and to enhance flexibility in dealing with developments in local and international oil markets.
It should be noted also that these five-year phases of development do not represent sudden shifts or changes in policy or direction, but are better seen as a continuing process guided by a comprehensive planning philosophy. Moreover, throughout the operational goals and targets are woven the issues of training and utilizing Saudi manpower in an ever-increasing way and meeting other concerns for safe and environmentally friendly operations.
WT: What are the prospects for gas development?
AJ: As is well known, Saudi Aramco is the world’s largest oil producer and this has been the focus of much of our efforts in the past and will continue to be so in the future. As we look at the worldwide consumption of energy on a long-term basis, we see oil maintaining it’s 39-percent share of the energy mix, with natural gas coming on strong with a 24 percent share by 2010 and likely replacing coal as the number two energy source by that date. Together, oil and natural gas will account for some 63 percent of the world’s energy usage by the decade’s end.
The Kingdom’s gas business has grown steadily over the years to the point where it now ranks among the world’s top ten, and new discoveries have added significantly to Saudi Arabia’s gas reserves. I would say that gas is now big business in Saudi Arabia, and Saudi Aramco is pursuing a major incremental development of these gas reserves.
Today Saudi Arabia utilizes more gas per capita than some of the highest income OECD countries such as the U.K., Germany and Japan-and the demand for gas continues to grow as the country’s domestic and industrial bases expand.
Saudi Aramco is committed to expanding this critical energy resource. To meet the demand, huge new processing facilities are being added to the giant Master Gas System, and exploration for nonassociated gas is proceeding at a rapid pace.
The company’s Master Gas System is expanding its sales gas capacity by more than 40 percent in about a year’s time, and capacity will more than double by the end of 2003 to about 7 billion standard cubic feet per day. The Kingdom’s gas reserves stood at some 213 trillion cubic feet at the end of 1999, number four worldwide.
WT: While embracing modernization into the 21st century, what would you say has been the main link for Saudis holding onto their religious and cultural roots at the same pace that it evolves forward?
AJ: Well, I can only speak from my personal perspective in response to this question. If I may be forgiven a bit of pride, I would say that my fellow countrymen have a reasonably refined ability to judge value. After all, even in the days of camel caravans and pearl diving, as traders carried their goods to the far ends of the earth, they had to bring something of value to market.
As we pursue modernization in many aspects of our life and our economy, we don’t overlook the value of our religious and cultural roots. In fact, they’re the gold in our lives and not to be traded for every trinket in the social and cultural marketplace.
To be sure, from time to time, as the new marvels of our age materialize and go through this evaluation process, public perception sometimes sees us as more resistant to change than we really are. Certainly life would be poorer without ATMs, cell phones and the Internet. But I hope and believe we’ll go on trying to live within the tenets of our religious faith and doing our best to protect the sanctity of family life.
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