DAVOS, Switzerland - The head of Saudi Aramco said Thursday “peak oil” prices were a fear of the past.

“The whole issue that came to the surface and created a lot of concern, peak oil, is behind us, I hope,” Khalid Al-Falih, the head of Saudi Aramco, said at the World Economic Forum in Davos.

Fears raised in the lead up to the peak price of around US$150 a barrel in mid 2008, “contributed to volatility and rise in prices.”

He saw energy consumption worldwide doubling by 2050, with “fossil fuels, in general, still providing (the) predominate share of that energy in that time frame.”

Peter Voser, the chief executive of Royal Dutch Shell, agreed that as population increased and poorer nations grew economically, consumption would double.

“The key is to keep investing throughout the cycle,” Voser said, but suggested moving into a “lower carbon world” which includes bio fuels.

Al-Falih said a third of his company’s capacity was idle but ready to go “on stream,” if demand-supply required more.

Tony Hayward, with BP, said that while in traditional markets the “demand for oil products is in structural decline” this was “offset in markets of the East, particularly in China.”

He also said that his company was able to maintain a cushion of four million barrels a day of spare capacity even if global demands were to grow.

“We don’t believe in peak oil,” he told reporters later.

However, many remained unconvinced.

“The problem of peak oil remains,” said Chairman of French giant, Total, Thierry Desmarest.

“In our opinion, it will be very difficult to raise oil production worldwide above 95 million barrels a day, which is 10 percent more than today.” The problem is not one of insufficient reserves, but that “a lot of it is difficult to be produced.”

Desmarest said world oil production could peak in “about 10 years. We are not there yet today.”

For BP’s Chief Executive Officer Tony Hayward, Iraq could be a new oil source, with a potential to boost production by 10 million barrels a day in the next decade.

“There is no reason Iraq cannot produce 10 million barrels a day in 10 years,” he told the forum.

Meanwhile, Al-Falih said talk of moving away from fossil fuels — a major cause of gases that cause global warming — did not help producers as they seek funds and political backing to keep churning out oil. “Last year, despite the recession, we maintained our investment,” the Aramco chief said.

“But we don’t see the reciprocal assurance (from) policymakers in particular... in terms of giving us the long-term signals that we need to maintain that kind of investment and commitment to long-term supply,” he said.

“There is too much rhetoric from the public domain about moving away from oil ... that is unachievable, and in many ways misleading to the public.”

Energy security should be discussed in the framework of the “intertwined relationship between suppliers and consumers,” he said, insisting that there would be long-term reliance on fossil fuels.

While refusing to be drawn on giving an acceptable price range for oil, Al-Falih said the world needed to “aim for a price range that will keep us investing, keep consumers able to live their lives... without too much volatility.”

“The price will be determined by the market, but we need to create enough cushions in the market to ensure that the prices don’t escalate like it did,” he said.

Azerbaijan’s President Ilham Aliyev rated the current oil price as “acceptable.” Oil is currently trading at about $73 a barrel, half its peak before the global financial crisis hit demand.

“Today’s level of oil price is I think acceptable for companies, for consumers and for the countries. This level of price allows us to invest more to find more oil and gas,” he told the meeting.

“The balance ... is at right now,” said Aliyev, whose country is a major Central Asian producer of oil and gas.

Total’s Demarest agreed that the current prices of between $70 to $75 a barrel were “absolutely reasonable.” The price “is not too big a charge for economies of consumer countries, and is one that is sufficient to bring new production capacity,” he said.

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