Paulson to push for oil investment in Mideast
U.S. Treasury Secretary Henry Paulson will emphasize during a trip to the Middle East the need to allow private sector investment in the oil industry, a senior Treasury official said on Wednesday.
David McCormick, the Treasury’s undersecretary for international affairs, told a news briefing that Paulson would emphasize on a trip to Saudi Arabia, Qatar and the United Arab Emirates this week the need to allow private sector investment to ease oil supply constraints.
“I think there’d be a broad-based recognition that there’s not enough supply in the global markets,” McCormick said. “We want to encourage additional investment in that global capacity.”
Government policies that ensure that capital can flow to markets that can develop additional oil production capacity are “a worthwhile pursuit,” McCormick said.
He added that Paulson would emphasize the need for energy around the world to be driven by market forces, and that fuel subsidies and price controls should be avoided.
McCormick said Paulson would tread lightly on the sensitive issue of foreign exchange policy, including the dollar pegs that govern many Gulf state currencies.
Some Gulf oil producers have studied Kuwait’s lead in shifting currency pegs away from the dollar to a basket of currencies to help fight double-digit inflation.
Asked how the Treasury would view such a move, McCormick said, “Currency decisions are sovereign decisions free credit reports. We’ve consistently said that.”
Filed under: legal by Specialist