Saudi Arabia's oil minister on Thursday slammed biofuels, saying they did not protect the environment or help supply security, but added solar power had to be considered one of the best clean energy sources.

'Let's be realistic, ethanol and biofuels will not contribute to the protection of the global environment by reducing (carbon dioxide) emissions, they will not increase energy security, nor will they reduce dependency on fossil fuels to any appreciable degree,' Ali Al-Naimi told an oil conference.

'Biofuels are not the solution,' he added.

The rise in biofuel use was largely due to government subsidies, high import taxes and financial favouristism vis-a vis others, he added.

'That's why we have to look beyond biofuels... and concentrate instead on truly renewable sources of energy,' he said, adding that solar power was perhaps the best clean energy source available in all parts of the world.

'It is abundant, clean and available to all,' he said.

'There is a great chance to expand its usage to all parts of the world especially in developing countries and to all economic sectors and activities including power generation, manufacturing and so on,' Al-Naimi said.

What was needed, he said, was to expand the use of solar energy and to make solar cells more effective to make the transmission of solar power more cost effective.

'For our part we are giving that sort of energy special attention,' he added.

On oil prices, Al-Naimi said oil markets were well-supplied and the world would continue to have enough fuel for its needs.

US crude hit a new record of $112.21 on Wednesday, but Naimi said high prices were unrelated to supply and the kingdom would continue to produce at a steady rate.

"I am not going to pull back. I'm not going dump crude on the market," he said.

The kingdom, the world's biggest oil exporter, was pumping at 9.2 million barrels per day (bpd), he said.

"In my perspective, the oil market is well-supplied. The price is not at that level because of any shortage in supply," Al-Naimi said.

Many say oil prices have been supported by decades of underinvestment in the oil industry.

Total chief executive Christophe de Margerie is among those who predict demand will exceed supply. "Based on a very conservative scenario, we will need an extra 15 billion barrels of oil per day," de Margerie told Thursday's conference.

"This implies that from 85 million we would reach 100 million barrels per day. I don't think this is feasible, certainly not in such a short period of time."    

But Al-Naimi was more upbeat about the prospects of converting the world's oil reserves into production.

"If we're successful in enhancing the ultimate recovery (of oil) we're going to produce 100 million barrels, and we'll probably produce 130 million if demand is there," he said.

"So I have all the confidence in the knowledge that technology will help the industry meet this challenge." - Reuters