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Saudis not deterred by weaker oil prices

Saudis not deterred by weaker oil prices

Riyadh: Remarks by Saudi Oil Minister Ali al-Naimi (pictured) that his country will continue to develop projects aimed at boosting oil production should provide some relief to tanker owners as they prepare to absorb the largest-ever influx of new tonnage. Despite calls for further production cuts by some OPEC members hoping to shore up flagging prices, including Algeria and Venezuela, the Saudis are taking a more moderate and long-term view. Quoted by Bloomberg, the country's Oil Minister said: "Investments in the oil and gas industry are very long term. They are not decided upon on short-term price movements."  

Oil prices have fallen by more than 15% so far this year, assisted in part by unusually mild weather in the northern hemisphere. However, energy analysts do not see a return to an era of cheap oil. Asian demand, in particular, is fuelling an offshore bonanza in which shipyards in the Middle East and Singapore particularly, are jam-packed-full of drill rig upgrades and refurbishment, FPSO conversions and offshore vessel construction. The quest for new sources of supply, say analysts, will move further offshore into deeper waters and more remote and environmentally hostile regions.  [19/01/07]

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