Saudi Arabia will commission two new oil developments on schedule this summer to boost the country's production capacity, even as it delays new refinery projects, a Saudi oil official said yesterday. The two projects, together with a field that is just starting production, have a combined capacity of 1.55 million barrels per day (bpd).
They give the world's largest oil producer a much bigger margin of new supply to call on as demand recovers after the recession. Saudi Arabia currently produces about 8 million bpd under its OPEC quota, and will have the capacity to pump 12.5 million after the two projects are complete. The mechanical system has been completed at the upgrade of the Khurais oilfield and production will start as scheduled later this month, said Abdulaziz al Judaimi, the vice president of new business development at Saudi Aramco.
An expansion to the Shaybah field, close to the Abu Dhabi border, will come online by the end of summer while the smaller Nuayyim field is already being commissioned, Mr al Judaimi said yesterday, on the sidelines of an Abu Dhabi oil conference. "Shaybah, I believe it will be in the third quarter," he said. "We're at 12.5 million bpd, that's our maximum sustained capacity." Mr al Judaimi said the company was committed to a delayed timetable for the Manifa heavy oilfield, which was scheduled to come on line in 2011 but will now begin production by mid-2013.
Even as it went ahead on new drilling, Aramco delayed two refinery projects to wait for a recovery in financial markets and to take advantage of falling prices for contractors. The Jubail refinery, which will process 400,000 bpd and is being built in partnership with Total, the French oil major, will now cost less than US$10 billion (Dh36.72bn), Mr al Judaimi said. This represented a reduction of more than 20 per cent from original cost estimates.
The refinery is now scheduled for start-up in 2013. A refinery at Yanbu of the same size as Jubail, to be built in partnership with ConocoPhillips, will not come on line until 2014, after the two companies decided to restart the bidding process on the project. Kuwaiti officials also pledged yesterday to proceed with oil capacity expansions without delay. Kuwait is committed to a project to increase oil production capacity to 4 million bpd by 2020, Sami al Rushaid, the chairman of Kuwait Oil Company, said on the conference sidelines. "We are not postponing," he said. "The upstream projects are continuing without slowdown. The necessary capital for executing them is available."
Kuwait had already achieved capacity of 3 million bpd, he said, but was producing far below that because it was limited by its OPEC quota. email@example.com