Sadad al-Husseini and Nansen Saleri raced up the ranks at Saudi Aramco, the world’s most powerful oil company, working together for years to squeeze more crude from Saudi Arabia’s massive fields. Today, the two men have staked out opposite sides of a momentous industry debate.
Mr. Husseini, Aramco’s second-in-command until 2004, says the world faces a brute reality of depleting resources and ever rising prices. Mr. Saleri, until recently the company’s oil-reservoir manager, insists that with enough ingenuity and investment, plenty more oil can be found.
I’m with Mr. Saleri. Central to the oil business is the link between price expectations and investment. If price expectations rise sufficiently, then the investment follows to make the high expectations false. Little understood in Congress or the Manhattan press elite is how long it takes from the go decision to sustained higher production levels: 10 to 20 years for major fields.
Of course, with big enough “windfall profits” taxes and other brilliant Congressional fixes, these multidecade billion dollar investments will require as little as six months for completion — to produce the desired drop in gasoline prices.
More of the interesting history of the Saleri - al-Husseini debate.
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