Petroleum and Mineral Resources Minister Ali Al-Naimi had said in 2008, as oil prices hit a record $147 a barrel, that the Kingdom could boost its capacity by another 2.5 million barrels per day (bpd) to a total 15 million bpd, although in recent years officials have given no sign that such a plan is under serious consideration.
Still, the comments by the Saudi Aramco chief executive, reported by the Wall Street Journal, are the clearest indication yet that the Kingdom saw no medium-term shortage of crude on the horizon.
“There is no reason for Saudi Aramco to pursue 15 million barrels (of output capacity),” the Journal reported AL-Falih as saying in an interview Saturday.
“It is difficult to see (an increase in capacity) because there are too many variables happening,” he said.
“You’ve got too many announcements about massive capacity expansions coming out of countries like Brazil, coming out of countries like Iraq. The market demand is addressed by others.”
The Kingdom last embarked on a major upstream expansion campaign about five years ago, reaching its current capacity in 2009 as oil prices collapsed.
It has yet to test its maximum 12.5 million bpd, pumping nearly 10 million bpd earlier this year — its most in decades — before cutting back.
Al-Naimi said the Kingdom pumped 9.39 million bpd in September, down from 9.8 million bpd in August.
He gave no reason for the decline but oil prices fell by more than 10 percent last month as economic conditions worsened and Libyan supplies resumed.
“Our objective is not to grow our production for the sake of growing our production,” Al-Falih said, “but to be there for the market if the market needs it, and we are waiting to see what happens on the supply side as well as how demand stabilizes.”
He said the Kingdom remains committed to the rest of its $125 billion five-year investment plan. The program involves increasing refining capacity by 50 percent as well as other upstream and downstream developments.
“Our planning horizons are in the decades and most of our investments are investments that will do very well at the end of an economic recession so we will pursue them ... regardless of what happens in Europe or in the US,” he said.
