Saudi Arabia wants its own gas fracking revolution.
The country’s colossal state-run oil firm, Saudi Aramco, is investing another $US7 billion (£4.64 billion) in unconventional gas (shale) drilling in the country. That’s more than double what the company had previously planned, according to the FT.
That’s at the same time that the plunging price of oil, widely accredited to Saudi Arabia’s policies, is helping to stymie growth in US shale.
Apparently while Saudi Arabia’s got the shale reserves it needs, what it doesn’t have is the water that’s blasted into the earth to free up oil and gas. According to Bloomberg and Baker Hughes, Saudi may have the world’s fifth-largest shale reserves, adding to its already tremendous mineral wealth.
However, Aramco CEO Khalid al-Falih played Saudi policy’s part in the tumbling oil price while talking at a conference Tuesday morning, according to Reuters. Here’s What he said:
“The maths will tell you that our exports…are gradually declining so the reason for the imbalance in the market absolutely has nothing to do with Saudi Arabia,” chief executive Khalid al-Falih said at a conference in Riyadh.
“I would not venture to guess where the (fair oil) price will be but it will be the price that ultimately balances supply and demand, and I don’t think that anybody, no single person can dictate what that price is. I will be foolish if I did that.”
He added that the oil price may have been too high before, but that it’s now “too low for everyone”. Western drivers may disagree.
Fracking kicked off with controversy in the US, especially after the documentary Gasland, which purported to show severe water contamination from the process. However, that’s calmed down somewhat because of the economic lift the method has given US energy production.
In the UK, shale is still extremely controversial, and there are currently political attempts to slap a moratorium on all extraction efforts.