 Good afternoon. I know it's been a really excellent program so far, and thank you for making it back from lunch in a timely fashion. We'll now have an opportunity to talk about one of the most important regions, obviously, for the subject of this forum, Global Energy. When one thinks about energy, one has to think about Saudi Arabia. And one has to think about the changes that are going on in the structure of markets, the changes that are going on in Saudi Arabia itself to try to adjust to that. And so we'll spend a few minutes talking about that. I understand we will have some questions that have been submitted by the audience. And so Mr. Ambassador, you and I will go on for 10, 15 minutes and then try to involve the audience. Well, these are obviously complicated times. And I think that we would be remiss if we didn't start by asking a question about the US-Saudi relationship in general. You have been at the UN for seven years. You've been a guardian of the relationships of Saudi Arabia around the world. It's obviously a complicated time after the tragic, indeed, ghastly death of Mr. Koshige. So I would just like you to talk a little bit about how you think we handle the relationship this time. How do we keep it on track? What needs to be done on all sides? Thank you very much, Madam Secretary. It's an honor and a pleasure to be with you on this panel. It's a special pleasure for me to come back to my alma mater, Stanford. I was here a long time ago. I'm not going to tell you when. But a lot of things have changed. But the thing that hasn't changed at all is the spirit that you see in Stanford. And I was delighted to see all the lively young men and women on campus. The only thing is that they look at me as an alien coming from a different age. But thank you, Madam Secretary, for starting with this subject. Saudi-American relations are, of course, very crucial and very strategic. And I think they are built on solid foundations of common interests and common values. This relationship has been for a long time. It's not new. Since the 1930s, ever since the historic meeting between the late President Roosevelt and the late King Abdulaziz, that cemented the relationship between two emerging powers in the United States in the world and Saudi Arabia in the region. We've gone through more than 10 administrations. We've gone through more than six kings during this period of time. And the relationship continues to be resilient, continues to be strong. And in fact, during the current administration of President Trump and the current reign of King Salman, I believe that the relationship has grown and has strengthened to probably unprecedented times. I believe one of the main reasons, the essential reasons, is that both countries are important for each other. Saudi Arabia is not only the leading energy and oil producer, but is also the moral central ground for more than one and a half billion Muslims throughout the world. And that is a major component of the strength and the position of Saudi Arabia. Obviously, you referred to the recent incident with Mr. Kashogji. Let me just be very clear. This is a heinous crime that should be condemned by all people whatsoever. The Kingdom of Saudi Arabia does not hesitate in declaring it as such and in putting all efforts behind the investigation and the search for the exact truth in this particular situation. So I hope that we will have clarity and we will have closure. And I hope that this incident will be seen and will be treated as it is, which is an individual crime that has been committed by people who had no authority to commit such a crime. No one can have the authority to commit such a crime. I think in the light of the things that have happened, I can see that even with this situation happening, the relationship is proving its resilience. There are those on both sides who may want to use this opportunity to weaken it. But I think that wiser minds and souls are recognizing that wherever happens Saudi Arabia and the United States need each other for the stability of the world and for the progress and for the common interests that both countries have. Well, thank you very much. And you mentioned the word clarity, and one could say also transparency. And it's an especially important time for this because the nature of Saudi Arabia itself and its relationship to the world and to international markets is changing because Saudi Arabia has made a decision to try to open up to international investment, to international markets, driven in part by the importance of the diversification of the economy given changes in global oil markets. I was Secretary of State when oil went to $145 a barrel. And well, it wasn't so great if you were the American Secretary of State. I just want to tell you that. After the crisis, oil fell to 1 fourth of that value. And even though we're accustomed to volatility in oil markets, I think there's a general sense that the structural change in oil markets we'll talk about the North American platform in the next panel, that the structural changes are such that people are going to have to adjust not to volatility but to not just to volatility but also to structural. So my understanding is that this was the inspiration for the efforts of diversification, the Saudi 2030. And so can you talk a little bit about the rationale and how you think it's going? Thank you. There are two or three key points that I would like to highlight. Number one, Saudi Arabia is committed to diversification of its economy and of its sources of revenue. Now we've been saying that for a long time and little to show for it over the past decade or more. But the difference now is that we have a specific plan, Vision 2030, that identifies ways and means by which we are going to do that. And in fact, we are starting to achieve results over the first two or three years of the plan. So we now not only say that we want to diversify, but we are telling the world and telling our own people how are we going to do it and what are the steps in the process. Number two, I would say Saudi Arabia is committed to stability of the oil markets. We have been instrumental in maintaining balance between supply and demand. We have been instrumental in trying to moderate prices and keep them at a reasonable level or within a reasonable range. We have done so at difficult times. We have done so at times when we did not have as much power to achieve these results. And we have done so at times when we did have that power. And we do it because we believe in the long-term vision of the oil markets. It's not in our interest to go to 140 or 150 for a short period of time and then be faced with sharp reductions in consumption or in demand or in prices as a result. We are there for the long run. Number three, the third point to add is that we are in Saudi Arabia going through nothing less than some people may hate the word, but I'll use it, revolution. It is a social and soft revolution that is taking place in Saudi Arabia. It is changing attitudes. It is changing the society. In many ways, of course, women empowerment is a big part of it, opening up the society and instilling in the system a much higher degree of transparency and accountability. And I think with those elements, we are able to attract and encourage international participants. So this is, I believe, these are the three major factors in the new era that Saudi Arabia is going through at the moment. Well, thank you. In fact, one of the hard things in governing, because you were right, I was in Saudi Arabia in Riyadh last December. I had an opportunity to meet with the Crown Prince for an extended period of time and to listen to his views about reform. It's quite obvious when you're in Saudi Arabia that young people are energized by the reform in ways that I think we've not seen in a long time, but every governing body, every governing structure has to balance short-term interests, short-term economic growth with a longer-term horizon. That transition can be very, very difficult. And it's especially difficult if you're going from a state-run economy, essentially since oil was such a big part of the Saudi economy, to one that is going to be more dependent on markets and on the efforts to bring in foreign investments. So will Saudi Arabia be patient enough to make the transition this time? Because I think that one of the reasons that those efforts that you talked about before didn't really come to fruition was that when the price of oil was up, it was easy to forget about the reforms. When the price of oil was down, people talked about diversification, and then price of oil was up again, and the efforts of diversification were laid aside. And so how do you think about the short-term, long-term balance here? You are exactly right in your description. And the reason that that has happened is because we did not have a long-term plan. The difference today is that, A, we have a long-term plan. B, we have the determination of the leadership to stick to the plan, even though it might be painful. And indeed, it has been painful over the past one or two years with the increase in price of energy, of electricity, of gas, and everything for the people in Saudi Arabia. But we have seen the results. The result is that our own consumption of oil has declined by almost a third as a result of introducing market factors and proper pricing. And that process is proceeding. So we have leadership that is now looking over the long horizon, over the long term, as opposed to facing the immediate pressures that may arise from here or there. And I think we've demonstrated that over the past two or three years. We've gone through some of the most difficult adjustments and we still have some more adjustments to go through. But I think we will show the way for a process of transformation that is genuinely taking place. How do we think about Saudi Aramco in that context? Because there was a lot of energy behind the possibility of an IPO. A lot of markets, a lot of exchanges were out there bidding to be the one that got Saudi Aramco. And then it clearly slowed. And there is a little bit of a danger in sometimes getting out ahead of with an announcement like that and then realizing that the transition is going to be somewhat slower. So how should we think about Saudi Aramco in this context? The IPO of Saudi Aramco or part of Saudi Aramco would have been a very important step and a very major step. And it is not unusual for such steps to be fraught with caution, with even risks at times, and to be exercised with a third degree of care and attention. And I think that's what's happening. I think there was also a need for more public debate inside Saudi Arabia about the IPO of Aramco. There are philosophical issues as to whether you should sell part of the future resources of the coming generations or whether you're actually securing those generations with alternative investments and possibilities. That's a lively debate that is taking place in Saudi Arabia and that probably needed time alongside the time that was needed for the technical preparations and so forth. I think the Crown Prince is still committed to the concept of privatizing Aramco. He believes that having the private sector involved in the ownership and leadership of Aramco is going to make it more transparent, is going to make it more efficient and so forth. And I think that these objectives are still valid. The question of the timing is something where a certain degree of flexibility may have to be exercised. Well, if indeed the idea was to jumpstart greater innovation, greater openness to technologies that would come from the outside, are there things that can be done in the meantime to attract investment because the investment brings with it a certain innovation and technological progress? And how do you think about technology in this environment? Aramco is already a leading power in many of the technology areas that need to be done. We spoke this morning, the speakers talked about CO2 storage and capture and storage and so forth. And I think that Aramco is one of the leading powers in research and development and investment behind that process. You may have noticed that in the past couple of years or three years, the Ministry of Petroleum and Mineral Resources have been transformed to become the Ministry of Energy. And therefore it expanded the role of energy and the role of the ministry from looking after oil alone to looking at the whole sector. And that involves nuclear, it involves solar, it involves wind energy and so forth. And the investments that are lined up behind those alternative sources of energy, the more renewable sources of energy are tremendous. And Aramco is a leading power within that direction. Aramco is likely to take over a major share in the national petrochemical industry giant, SABIC. And that will mean that Aramco will also be integrated not only in the energy sector and renewable energies but also in the petrochemical sector and will make it more along the lines of the exons of the world and others who have made such a transformation in the past. So Aramco is heavily involved in that process. It is being supported by research institutions within Saudi Arabia and outside Saudi Arabia. And I think you will see that there will be a great deal of desire on the part of the technology holders to work with Aramco, co-invest in Saudi Arabia, outside Saudi Arabia and help build and develop the necessary technologies. Absolutely. On the technology side, I would completely agree. I was a Chevron director. My first trip to Saudi Arabia was actually as a Chevron director, you know, Standard Oil was really the first of the American companies to have those relationships. And so obviously a leader on the technological side. The question that some in Saudi Arabia itself have asked is about the human potential side. In other words, the training and skills that the Saudi population might need to really take advantage of these new frontiers and whether or not there are actually impacts on the educational system and how people are trained. So, and by the way, not trained just at the highest levels but trained down through the population. Well, I have to concede that education is one of our most important challenges in Saudi Arabia. And this is a subject that is not limited to Aramco. Aramco has excellent training programs and they develop their own human resources, needs very effectively. But at the country at large, education remains a big challenge in terms of the quality of the substance and in terms of the quality of the methods of teaching and in terms of the interaction between the technology, the classroom and the family at home. And I think that that is something that we still need to work a lot more on and there are numerous steps and numerous efforts in that direction but I think a lot more needs to be done. I'll come back to oil. I want to ask you a question about OPEC and what it means in this world. But I want to just continue on education just a moment if I may. You were trained here in the United States as a matter of fact, right here at Stanford. When I talked often to, at the time, King Abdullah, he mentioned the fact that there had actually been a drop off for a period of time in Saudi students being trained abroad. He of course created one of the great universities and put a $10 billion investment into that university and indeed one of the characteristics was that women would also be trained within that university and I remember not really wanting to ask the king whether women and men would go to school together. The answer was in fact yes. One of the real breakthroughs has been actually in the education of women. At least a couple of years ago, Saudi was training more women in their universities than men. So talk a little bit about that and how that might change. You talked earlier about societal reform. I do remember saying to people that Saudi was going to be on a bit of a high wire if you wanted to educate that many women and give them no voice. And so talk a little bit about how that is proceeding. I'll tell you something. Before the recent initiatives were taken, initiatives such as allowing women the right to drive, such as allowing women the right to attend football stadium, the right to attend concerts and theaters and movies and so forth. Before all of that happened, there were those who were howling and shouting and assuming and expecting that all hell will break loose because women will be out there in the public and men, those men cannot be trusted and they will all be on their feet and on their sort of trying to find out what to do in that game. Well, I have news for you and for everybody. This thing went smoothly. The number of women who are being harassed in the streets as they drive is extremely low. The number of women who are being harassed in the stadium and so forth is almost nonexistent and the whole process is going through smoothly. The same can be said about women in education, especially in higher education. King Abdullah University has a co-educational student body including professors, not only students, but also professors. A lot of other universities are gradually following suit and today almost 60% of all college students are female. The other part is you talked about the King Abdullah Scholarship Program. Today in the United States, there are probably around 100,000 Saudi students who are on scholarship programs from the Saudi government, 30% of whom are women. Now the next challenge is going to provide job opportunities for all the women who come from abroad or who graduate from the local universities and I think that that is going to be an important step and it's going to have significant social impact because men will become much more used to working with women, encountering women in the workplace and women will have an opportunity to demonstrate of course their abilities and contributions to society. We'll go back now to a couple of questions about international oil markets and if you do have questions, please submit them and we will take them up with the ambassador but there are four letters that strike fear into the hearts of oil importers. OPEC, I remember when I was a teenager, I think I was a teenager, maybe truthfully I was already 20 or so but the time of the oil shock in the early 1970s when what happened in the Middle East brought very much to the American service station to the American family a sense of what could happen when oil became a political weapon, so to speak. That's the OPEC that still many people remember. How should we think about OPEC today? How should we think about the various members of it? Is it, it's obviously a different organization than at that time but how different? It is a different organization for a variety of reasons. Number one, the political landscape is different and number two, the percentage of oil that comes from OPEC countries has declined substantially with the rise of production in the United States and elsewhere and number three, the relative strength of the players within OPEC has also become very different. You have an OPEC, those who have small inventories of oil, small reservoirs and such and tremendous financial needs and therefore for them the objective is to hike the price as high as possible. You have those like Saudi Arabia who have a much longer term vision of the markets. For the last 40 years or so Saudi Arabia has played a moderating role, a responsible role, a very constructive role in keeping OPEC within certain parameters that need the requirements and the interests of the OPEC members as well as take into consideration the interests of the consumers and the international community. And as long as that is the case, then I think there will be little or no reason for concern. As I said, there are others who may have different interests. Iran in particular has a different approach, not only to OPEC but also to the region as a whole. And that is why Saudi Arabia and the United States are working together to try to contain Iran as much as possible and to reduce the impact of their policies. And Russia? Well, Russia has played a constructive role in the last few years. It has joined Saudi Arabia in trying to maintain a reasonable balance. Russia also has a large production and significant reserves. And therefore, I think it's in their interest to play the market positively and constructively. And so you would say... And Russia is not a member of OPEC. No, no, but the relationship with OPEC is what I'm really asking about. No, but the question then you're telling us that if you look at what states will do in the oil markets in terms of policy, look not at their politics and their international or foreign policy, but look at where they sit in terms of their own oil reserves, their own position in the international system. Is that going too far? Is that the right way to think about it? I think that's a key consideration. Of course, some may be driven by ideology, some may be driven by political desires to achieve certain objectives. I'm talking here particularly about Iran, where the policies may not necessarily reflect economic sense or economic reason. But by and large, I think that economic sense and reason would prevail. And in many cases, the relative influence of Saudi Arabia within OPEC would make it prevail. Let me ask you two final questions that are kind of more broad political questions. One has to do, and you've touched on it, the politics of the region and Iran. We know it's a very complicated time in the politics of the region with the war in Yemen and the divorce, I guess I should call it, from Qatar. How should we think about, when we think about the Middle East at oil markets, people want to know what should we think about the stability of the region? How should we think about the stability of the region at a time when the world is still very dependent on the Middle East for oil? It, we'll talk about North America, which is obviously a huge player, but the world still needs Middle Eastern oil. How should we think about the stability? In Islam, divorce is a three-stage process and we've only gone through one stage with Qatar, so we still have two stages more to bring things together. And I think and I hope that that will be the case at some point of time. But there are two major destabilizing forces in the region. One is the Israeli-Palestinian conflict and as long as that conflict is maintained and as long as it does not find a reasonable solution, a fair and just and comprehensive solution that meets the aspirations of the Palestinian people and that provides Israel with the security it needs. As long as that does not take place, we will continue to have a reason for instability in the region. And to that extent, I hope that the United States will continue to exercise its influence as much as possible to try to bring such a solution to reality. The second is the expansionist, the ideological, hemeagonic policies that Iran is trying to drive through. And if you look at the region, if you look at Saudi Arabia, Iran is trying to actually encircle Saudi Arabia going through Iraq and Syria and Lebanon in the North and now coming through Yemen in the South. This process needs to be defeated and we are working very hard to achieve that, especially in Yemen where we cannot accept the presence of another Hezbollah on our southern border. And I think that the majority of the Yemeni people do not want a return to the dark ages over theological, theocratic government in Yemen along the lines of Iran. Iran have never produced a model of government that is appealing to the masses. They appeal to emotions, they appeal to extremists, they appeal to their own interests sometimes, but they have never been able to provide the Middle East with a model of leadership, of development, of welfare for the people, et cetera. So that is going to be the second challenge to help bring stability in the Middle Eastern. And again, I'm glad that the United States and Saudi Arabia are working together to try to face up to this challenge. So final question you have gathered before you, a quite expansive and eminent group of people who follow energy, who are part of the future of energy. The Stanford Energy Forum is really dedicated to understanding the entire energy landscape. What would you say to this audience in closing about where at the end of 2030, one would think Saudi Arabia should be. What is the aspiration and what is the challenge to getting there? Well, we certainly hope, I certainly hope, as a Saudi citizen that by 2030 or even before that, that we would have Saudi Arabia as a modern country, as an open country, as a country that has a diversified economy, as a country that is a beacon of knowledge and civilization to the region, to the entire world. A country that attracts tourists and investors. A country that exports different types of energy, not only oil and gas, but also solar and ours. And a country that can continue to be and will continue to be a reliable partner in maintaining peace and stability and economic prosperity for all. Thank you very much. Please join me in thanking the ambassador for his. Thank you. Thank you very much. Thank you very much.