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State oil giant Aramco has been without a permanent chief executive since April, when Khalid al-Falih was made health minister, and the old Supreme Petroleum Council, where energy policy was historically made, was abolished in January. While the world's top crude exporter has always prized stability and consistency in crafting oil policy, the changes, alongside a shift in market strategy that contributed to the world price slump, have left analysts and traders guessing as to King Salman's long-term vision. The main tenets of Saudi oil policy — maintaining the ability to stabilize markets via an expensive spare-capacity cushion and a reluctance to interfere in the market for political reasons — are still set in stone, say market insiders.
Saudi Aramco Chief Executive Officer Khalid al-Falih, right, at the company's booth during Petrotech 2014, Bahrain International Exhibition Center, Manama
But the uncertainty has led to speculation over the fate of both veteran Oil Minister Ali al-Naimi and the wider composition of the kingdom's energy and minerals sectors, with rumors abounding that a sweeping restructure could be imminent. "There will be changes [at the oil ministry], but no one knows when or what will happen next. It could be tomorrow, next week or a month from now," said a Saudi insider. "The decisions are being taken by a small circle of people and a few advisers."
The key person in that small circle is Prince Mohammed bin Salman, the young deputy crown prince who without having any previous oil experience has emerged since his father's accession to power as the most powerful figure in Saudi economic and energy policy. The prince heads both an economic development supercommittee and a new council overseeing Aramco, making him the first royal ever to directly supervise the state oil giant, the world's biggest energy company. The sense of unpredictability has only been sharpened by the wider geopolitical and market climate. "It's anybody's guess what will happen next," said a Western diplomat in Riyadh.
Market Changes
The southeast Asian country would be the fourth-smallest producer in the Organization of the Petroleum Exporting Countries ahead of Libya, Ecuador and Qatar, and bring the number of participants to 13 countries. Indonesia was the only Asian OPEC member for nearly 50 years before leaving the group at the start of 2009 as oil prices hit a record high, and rising domestic demand and falling production turned it into a net oil importer.
In a statement, OPEC said Indonesia's request to reactivate its full membership was circulated to OPEC members and following their feedback, OPEC's next meeting on Dec. 4 will include the formalities of reactivating its membership. "Indonesia has contributed much to OPEC's history," the statement from the group's Vienna headquarters said. "We welcome its return to the Organization." Indonesia's Energy Minister, who OPEC said will be invited to December's meeting, told Reuters earlier on Tuesday the country would return as a full member.
The Organization of the Petroleum Exporting Countries (OPEC) logo is pictured at its headquarters in Vienna
The development is no great surprise as in OPEC terms Indonesia never really left. OPEC termed its departure a "suspension." Ecuador, which rejoined in 2007, set a precedent for a return from suspension. OPEC sources made clear the door was always open. Indonesia's status as a net importer had raised the question of whether it would return as a full member given that OPEC's Statute says any country with a "substantial net export of crude petroleum" may become a full member. OPEC pumps more than a third of the world's oil and is engaged in a defense of market share, having dropped its long-standing policy of cutting output to support prices in November 2014.
The addition of Indonesia's output will boost OPEC's production by about 2.6 percent based on July output figures towards 33 million barrels per day (bpd) - far in excess of OPEC's 30 million bpd official target. OPEC output has not been above 32 million bpd since 2008, before Indonesia's exit. Indonesia produced 840,000 bpd in July, according to the International Energy Agency, and OPEC pumped 31.88 million bpd in July according to a Reuters survey - the highest monthly rate on record from the current 12 members.
OPEC: Indonesia to Rejoin Oil Group After 7-year Break
In days of yore I thought dreamers like old rocks sere silly. Now I am on the bandwagon with them. Not because I have any great faith in electric cars yet, but because I want the sheikdoms to go broke.
But electric cars are getting to be more and more mainstream. I want to see the day now, and it may happen during my lifetime
Germany is producing tons of electricity by solar, as does Israel. As for nukes... we have tons of thorium, and producing electricity by thorium is a lot better than oil or coal anyway.In days of yore I thought dreamers like old rocks sere silly. Now I am on the bandwagon with them. Not because I have any great faith in electric cars yet, but because I want the sheikdoms to go broke.
But electric cars are getting to be more and more mainstream. I want to see the day now, and it may happen during my lifetime
Then you need a REALISTIC plan. Not a fairytale.. Oil has virtually nothing to do with the electrical grid. And wind and solar are NOT alternatives to Oil.. Big disconnect there with the rhetoric that you HEAR riding Old Rock's band wagon..
YOU DID correctly identify one way to make a DENT in OIL by transferring SOME of the transportation energy to the GRID --- but that's the fairy tale part.
Wind and solar are AT BEST peaker technologies. They cannot be used to RAISE the actual backbone capacity of the electrical grid.. So if you want that 30 or 40% increase in electricity to sock it to the Saudis -- you gonna need about 250 new nuclear plants.
Germany is producing tons of electricity by solar, as does Israel. As for nukes... we have tons of thorium, and producing electricity by thorium is a lot better than oil or coal anyway.In days of yore I thought dreamers like old rocks sere silly. Now I am on the bandwagon with them. Not because I have any great faith in electric cars yet, but because I want the sheikdoms to go broke.
But electric cars are getting to be more and more mainstream. I want to see the day now, and it may happen during my lifetime
Then you need a REALISTIC plan. Not a fairytale.. Oil has virtually nothing to do with the electrical grid. And wind and solar are NOT alternatives to Oil.. Big disconnect there with the rhetoric that you HEAR riding Old Rock's band wagon..
YOU DID correctly identify one way to make a DENT in OIL by transferring SOME of the transportation energy to the GRID --- but that's the fairy tale part.
Wind and solar are AT BEST peaker technologies. They cannot be used to RAISE the actual backbone capacity of the electrical grid.. So if you want that 30 or 40% increase in electricity to sock it to the Saudis -- you gonna need about 250 new nuclear plants.
I would gladly pay $6 taxes for gas if it weaned us off of it and went into a national research plan like NASA to get us efficient electric cars.
Still some major problems to iron out with hydrogen powered vehicles. Range and storage. Plus, we are right back to having to depend on someone else, where with solar and batteries, we, as homeowners, have the possibility of creating our own fuel. The market will decide the issue. Right now it is going with battery powered EV's.
I agree.I want the sheikdoms to go broke.