Saudi Arabia could turn into oil importer by 2030: Report

A leading international financial conglomerate says Saudi Arabia, the world’s biggest petroleum exporter, risks becoming an oil importer in the next 20 years.

According to New York-based Citigroup Inc., oil and its derivatives are used for about half of the kingdom’s electricity production, which is growing at about 8 percent a year, Bloomberg reported on Tuesday.

Saudi Arabian power providers reportedly pay $5 to $15 a barrel to state-owned Saudi Arabian Oil Co. to get fuel needed for electricity generation.

“If Saudi Arabian oil consumption grows in line with peak power demand, the country could be a net oil importer by 2030,” said Heidy Rehman, an analyst at the Citigroup Inc.

She said Saudi Arabia already consumes all its natural gas production. It plans to develop nuclear power, which poses execution risk amid a lack of available experts, safety issues and cost overruns.

“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 gross domestic product per capita,” Rehman added.

Meanwhile, a quarter of Saudi Arabia’s fuel production is used domestically as the cost is subsidized.

“As a result of its subsidies we calculate ‘lost’ oil and gas revenues to Saudi Arabia in 2011 to be over $80 billion,” Rehman said.

“At the domestic level, we believe the only real way to rationalize energy consumption would be to reduce subsidy levels.”

Saudi Arabia is said to depend on oil for 86 percent of its annual revenue. The country produced 11.2 million barrels of oil and natural-gas-liquids a day in 2011.

The country was reportedly the eighth-largest gas producer, providing 9.6 billion cubic feet a day to the domestic market.