RIYADH (Reuters) – Saudi Arabia will decide soon whether to proceed with plans to raise capacity at its oilfields beyond the 2009 target of 12.5 million barrels per day (bpd), a Saudi oil adviser said.
The kingdom is on track to add 2.3 million bpd by August 2009, around 800,000 of which will be used to offset natural declines, said Nawaf Obaid, managing director of Saudi National Security Assessment Project (SNSAP).
‘All of the fields are expected to come on stream around six months earlier than initial projections,’ Obaid said, commenting on his latest SNSAP report.
Saudi Arabia, which has a current production capacity of 11 million bpd, has fast-tracked oilfield expansion plans to raise its output capacity to 12.5 million bpd by 2009 to maintain spare capacity and meet growing world demand.
The first increment will come from Haradh field, adding 300,000 bpd of Arab Light crude by the second quarter of 2006.
Saudi Aramco said earlier this month it has started pumping ahead of schedule from Haradh and Oil Minister Ali Al Naimi has said the extra crude would lift the kingdom’s output capacity to 11.3 million bpd by April.
Beyond 2009, Riyadh plans an increase of 1.35 million bpd — 800,000 bpd to offset declines — to bring sustainable capacity to 13.05 million bpd by 2013, said the SNSAP report.
Obaid said the figures in the report were conservative for both expansion phases and that the post-2009 plan was expected to raise output capacity to 13.05-13.15 million bpd.
According to SNSAP, the first of the post-2009 projects would be a $1 billion expansion at Shaybah. A $500 million expansion at the Neutral Zone, which is shared with Kuwait, would add 150,000 bpd of Arab Medium crude by 2010.
‘A decision to proceed with development is expected soon,’ the report said of the two projects.
An expansion of Moneefa field, expected to cost $5-$7 billion, would add 1 million bpd of Arab Heavy crude by 2013.
‘The project is currently under consideration,’ the SNSAP report said, adding that the project depends on market fundamentals and progress in planned increases in Aramco’s domestic and international refining operations.
Saudi Arabia has been pumping around 9.4-9.5 million bpd.
Saudi Arabia holds the lion’s share of the spare output capacity of Opec, which has faced calls from importing states to raise its output to prevent high prices from slowing economic growth.
Riyadh also has plans to overhaul and expand its refining operations at home and abroad. It will build two domestic export-oriented refineries with total capacity of 800,000 bpd.
According to SNSAP, the downstream projects would increase domestic capacity by 1.29 million bpd to 3.385 million bpd and capacity abroad by 1.075 million bpd to 3.1 million bpd — for a total refining capacity of over 6.480 million bpd by 2011.