beyondbrics

There are times when deciphering the meaning of a statement or comments by an official in the Gulf can be a tricky business.

And a statement put out on the official Saudi Press Agency quoting King Abdullah was a case in point. It had the kingdom’s ruler saying he had ordered the world’s top oil producer to halt oil exploration operations to protect the country’s hydrocarbons wealth for future generations.

It quoted him as saying the order had been made at a cabinet meeting and, unsurprisingly, the SPA statement was picked up by news wires and internet sites.

But was the kingdom, the world’s key swing producer which recently increased its production capacity to 12.5m barrels per day, really putting a halt on exploration? Or was the king reiterating his view that the kingdom needs to protect and carefully exploit its oil – the nation’s lifeblood – as it prepares for the future.
Unfortunately oil officials in the Saudi Arabia could not be reached to clarify.

The country’s Arab News newspaper appeared to have its own version of the comments with King Abdullah expressing “hope that the Kingdom’s petroleum resources would last long.”

“Once while we were in a meeting of the Council of Ministers, I told them, ‘May God give it long life.’ They were curious and asked me, ‘What is that?’ I told them, ‘petrol’,” the king said while receiving a group of Saudi students pursuing higher studies in US universities, the paper reported.

“When exploration for underground resources first started, I ordered ending all kinds of exploration because of the existence of oil,” he said. “As long as oil is there, other underground resources should be left for future generations. Your country is rich with natural resources.”

Analysts in the kingdom, themselves seeking to interpret the meaning of the king’s flowery words, believe his comments have been taken out of context.

“There is one message which is that Saudi Arabia should be mindful of the usage of its oil going forward and he has said that before,” says John Sfakianakis, chief economist at Banque Saudi Fransi.

Yet the one thing that would resolve the issue has been missing – an official clarification from the conservative kingdom.