US shale oil the best thing to have happened – Saudi Aramco

(Montel) The development of unconventional gas and oil resources in the US is not a threat for Saudi Arabia but rather "the best thing" that has happened to the industry in recent years, the CEO of major oil producer Saudi Aramco said on Monday.

“Absolutely not. Without it the world would have been in a tight spot with the interruptions that have taken place to production in other areas,” said Khalid A. Al-Falih, when asked whether he considered US shale oil and gas a threat.

Speaking at the ONS conference in Stavanger, he said the influx of unconventional gas and oil from the US had helped oil prices stabilise within a band that has created crucial predictability for consumers and producers.

Al-Falih also played down Opec’s ability to control price levels.

“It is a market-driven business. Supply and demand will play the key role [in deciding prices],” he said, adding that Opec's releasing of extra supplies at times of shortage had often been of crucial importance.

Brent oil was trading at USD 102.63/bbl on Monday, and although this is very high historically, it also reflects spiralling costs in the sector.

“Not long ago an oil price of USD 100 would have called for champagne. Now it calls for concern,” said Statoil CEO Helge Lund at the conference.