Identifier
Created
Classification
Origin
06RIYADH3852
2006-05-20 08:06:00
CONFIDENTIAL
Embassy Riyadh
Cable title:
ARAMCO CEO: THE OIL ERA IS NOT OVER
how-toVZCZCXRO1564 PP RUEHDE DE RUEHRH #3852 1400806 ZNY CCCCC ZZH P 200806Z MAY 06 FM AMEMBASSY RIYADH TO RUEHC/SECSTATE WASHDC PRIORITY 7571 INFO RUEHHH/OPEC COLLECTIVE RUEHBJ/AMEMBASSY BEIJING 0330 RHEBAAA/DEPT OF ENERGY WASHINGTON DC
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).
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
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