JOHANNESBURG, 28 September 2005 — Saudi Arabia yesterday reaffirmed its readiness to increase its oil production from the current 11 million barrels per day to 12.5 million bpd in 2009 to meet growing demand.
Addressing the World Petroleum Congress, Minister of Petroleum and Mineral Resources Ali Al-Naimi also said the Kingdom was making contingency plans for expanding oil output capacity to 15 million barrels per day if necessary.
“Saudi Arabia is at the forefront of efforts to expand capacity across the supply chain,” the minister said. “These efforts include expanding our production capacity from the current 11 million barrels per day to 12.5 million barrels per day by 2009 to meet future demand and maintain spare capacity of at least 1.5 to 2 million barrels per day,” he told delegates of the congress.
“Other projects have been identified and can be advanced if necessary to meet additional supply requirements. Saudi Arabia has prepared a production capacity scenario of 15 million barrels per day which can be implemented in response to growing market demand,” he said.
But Nawaf Obaid, managing director of Saudi National Security Assessment Project, a government consultancy, emphasized the need for boosting the Kingdom’s output by1.5 million barrels per day to 12.5 bpd by mid-2008, six months earlier than planned.
Obaid made this comment while speaking at an Abu Dhabi conference on “Gulf oil and gas: Ensuring economic security.” He said that due to “higher spending and soaring oil prices, the target will be met by mid-2008.”
The Kingdom’s proven oil reserves are “conservatively” estimated at more than 264 billion barrels despite having produced over 91 billion barrels in the past 35 years, said the oil minister.
Using the latest state-of-the-art technology, Saudi Arabia will “soon be able to boost our proved oil reserves by 200 billion barrels,” he said.
However, the oil minister warned that Saudi Arabia cannot meet the supply challenges on its own and called on the world oil industry to “find ways to remove bottlenecks that constrain our ability to achieve greater market stability.”
Naimi also proposed that the International Energy Forum conduct a study of the global oil supply system to offer recommendations on delivering petroleum products at reasonable prices.
In his speech in Abu Dhabi, Obaid also said that the Kingdom had earmarked about $50 billion for various oil and gas development projects over a period of five years up to 2009. “Up to $23 billion will be spent on upstream projects, while around $15 billion will be spent on downstream projects. The rest is (national oil company) Aramco’s spending,” he said.
The main increase in output capacity will come from eight major oilfields. Khoreis, now producing 150,000 bpd, would contribute up to 1.2 million bpd in an investment worth $6 billion, Obaid said. The fields of Khursaniya and Shayba will boost production by 500,000 bpd and 300,000 bpd, respectively, by 2007, he said.
The Kingdom has some 1,000 wells in 80 oilfields. The largest is Ghawar, in Eastern Province, which contributes 65 percent of total output, or around six million bpd, Obaid said. Ghawar is also the world’s largest oilfield.