Saudi Arabia May Become Net Oil Importer By 2030: Citigroup
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The kingdom of Saudi Arabia, the world’s largest exporter of crude oil, is at risk of becoming a net importer of oil within the next 20 years, said a study by Citigroup analysts on Tuesday, with the nation’s consumption rate growing much faster than what the nation can produce each year.
The kingdom of Saudi Arabia, the world’s largest exporter of crude oil, is at risk of becoming a net importer of oil within the next 20 years, said a study by Citigroup analysts on Tuesday, with the nation’s consumption rate growing much faster than what the nation can produce each year.
The report, which was cited by Bloomberg News, claimed that the kingdom’s per capita consumption was already higher than that of most industrialised nations, including the U.S., while its 10-year historical consumption compound annual growth rate was also increasing by 6 percent each year, or double its projected population growth.
“If Saudi Arabian oil consumption grows in line with peak power demand, the country could be a net oil importer by 2030,” wrote Citigroup analyst Heidy Rehman in his report.
[quote]“Indeed we would expect consumption to continue to outstrip population growth as Saudi Arabia’s currently young population ages and consumer spending increases supported by rising GDP per capita,” he added.[/quote]Related: Saudi Arabia Economy
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Nearly a quarter of the country’s annual fuel production is now being used domestically, noted the report, which is more per capita than other industrialised nation in the world.
The country is believed to have also already consumed all of its natural gas production, claimed Rehman, while its government to date has refused to import gas from overseas, unlike neighbouring producers such as Kuwait and the United Arab Emirates.
Instead, Saudi Arabia has fast-tracked plans to explore for more gas deposit in the country and are also planning to develop solar and nuclear power facilities in order to preserve more of its crude.
The country produced 11.2 million barrels per day of oil and natural-gas-liquids last year, or 13 percent of the world’s supply, and depends on oil for 86 percent of its annual revenue.
Earlier this year, the Kingdom announced that it would spend $109 billion over the next two decades to build out 41,000 megawatts of solar capacity, and has founded the King Abdullah City for Atomic and Renewable Energy to achieve this aim.
But Rehman also believes that Saudi Arabia should cut its domestic subsidies for oil in order to encourage conservation, and at the same time increase revenues to plan for the future.
“As a result of its subsidies we calculate ‘lost’ oil and gas revenues to Saudi Arabia in 2011 to be over $80 billion,” Rehman wrote.
[quote]“At the domestic level, we believe the only real way to rationalize energy consumption would be to reduce subsidy levels.”[/quote]Related: Are Global Energy Supplies In Jeopardy? – An Interview With Jellyfish
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