ARAMCO CEO: THE OIL ERA IS NOT OVER

C O N F I D E N T I A L RIYADH 003852 SIPDIS SIPDIS DHAHRAN SENDS PARIS FOR ZEYA, LONDON FOR TSOU ENERGY DEPARTMENT FOR GEORGE PERSON AND JAMES HART E.O. 12958: DECL: 05/16/2016 TAGS: ENRG EPET PREL PINR SA SUBJECT: ARAMCO CEO: THE OIL ERA IS NOT OVER Classified by Consul General John Kincannon for reasons 1.4 (b) and (d). ¶1. (C) At a dinner on May 14 hosted by businessman Badr Al-Suwaidan, President and CEO of Al-Bilad, and attended by the CG and FCS Off, Abdullah Jumah, CEO of Saudi Aramco, commented in response to a query that U.S. energy policy is "confusing" and "has no logic." He claimed that the U.S. was sending "mixed signals" about its energy policy, but the only specific issues he cited were the negative impact of U.S. environmental regulations on new refinery development and the proliferation of different grades of gasoline. He said that Aramco wanted to send a clear message to Washington: "The oil era is not over." He noted that unconventional sources of petroleum like tar sands, oil shale, and Orinoco Belt heavy oils may have reserves of 3 trillion barrels: "If technology can give us only 10 percent of that, it will equal all of the oil pumped in the world since the beginning of time." ¶2. (C) Jumah described Saudi Aramco's move into new refining projects as "reluctant" because "the returns on refining are only 6 to 10 percent, but it is the right time for us to enter this sector." He mentioned that Saudi Aramco is about to sign two large refinery deals with Total and Conoco-Phillips. Turning to China, he described its conservation practices as poor even as Chinese demand for energy grows. "If the Chinese ever reach the economic development level of Brazil, they will need more energy than the U.S." Finally, he dismissed Matt Simmons's peak oil thesis: "I know Matt. I think he is a very nice guy. But he's a banker. He came to Aramco for two weeks and suddenly he thinks he's a geologist. The book is just rubbish. I've met him, but I've never discussed the book with him." ¶3. (C) Comment: It is highly unusual that Jumah would attend this sort of dinner, which Al-Suwaidan hosted as part of ongoing discussions between Al-Bilad and the U.S. firm Global SantaFE about a potential deal to supply four offshore rigs to Saudi Aramco. Eastern Province (EP) Governor Prince Mohammed bin Fahd (MbF) is the owner of Al-Bilad, and Jumah's attendance probably represents his deference to MbF's presumed personal and financial interest in this potential business deal. End comment. ¶4. (C) Bio note: Badr al-Suweidan was born in 1958 and took over Al-Bilad in late 1990s. Prior to that, he was a career Saudi MFA employee who served in the Eastern Province during the early to mid-1980s as a protocol officer. In 1985, he used his connections to get posted as Saudi Consul in Bonn. In 1989, he was involved in a serious auto accident that almost crippled him and required extensive hospitalization. End bio note. (APPROVED: KINCANNON) GFOELLER