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Saudis begin oil output at Khurais
Source: Agencies |
June 12, 2009, Friday
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SAUDI Arabia has begun production at its massive Khurais oil field, a milestone venture raising output to its highest levels ever in the country that is home to the world's largest proven oil reserves.
The Khurais field in the eastern part of Saudi Arabia can produce 1.2 million barrels per day, boosting to 12.5 million bpd the OPEC powerhouse's overall output capacity. The addition comes at a time when world oil prices are on the rebound, pushing past US$70, after months of being hammered by the demand erosion fueled by the global economic meltdown.
Khaled al-Faleh, chief executive of state-run oil giant Saudi Aramco, said the Arab light crude from the field is currently being stored in tanks and has yet to be exported, the daily Al-Ektisadiya newspaper reported yesterday.
Al-Faleh said given the current economic climate, Saudi Arabia does not yet need the current spare capacity.
But Saudi officials have for months cautioned that a recession-prompted curtailment of investments in the global energy sector could cause another price spike in oil as available supply outpaces demand.
Spare capacity
The start of production from Khurais - that also includes output from two other fields - gives Saudi Arabia a spare capacity of roughly 4 million bpd from its current production levels.
The kingdom has already sharply cut output in line with the Organization of the Petroleum Exporting Countries' earlier decision to rein in output by 4.2 million bpd from September 2008 levels as a way to halt a slide in prices.
Officials in the kingdom have said the project is the single largest rise of light oil output capacity in history.
The Khurais field will also produce 315 million cubic feet per day of sour gas and 70,000 barrels per day of natural gas liquids.
The Khurais field in the eastern part of Saudi Arabia can produce 1.2 million barrels per day, boosting to 12.5 million bpd the OPEC powerhouse's overall output capacity. The addition comes at a time when world oil prices are on the rebound, pushing past US$70, after months of being hammered by the demand erosion fueled by the global economic meltdown.
Khaled al-Faleh, chief executive of state-run oil giant Saudi Aramco, said the Arab light crude from the field is currently being stored in tanks and has yet to be exported, the daily Al-Ektisadiya newspaper reported yesterday.
Al-Faleh said given the current economic climate, Saudi Arabia does not yet need the current spare capacity.
But Saudi officials have for months cautioned that a recession-prompted curtailment of investments in the global energy sector could cause another price spike in oil as available supply outpaces demand.
Spare capacity
The start of production from Khurais - that also includes output from two other fields - gives Saudi Arabia a spare capacity of roughly 4 million bpd from its current production levels.
The kingdom has already sharply cut output in line with the Organization of the Petroleum Exporting Countries' earlier decision to rein in output by 4.2 million bpd from September 2008 levels as a way to halt a slide in prices.
Officials in the kingdom have said the project is the single largest rise of light oil output capacity in history.
The Khurais field will also produce 315 million cubic feet per day of sour gas and 70,000 barrels per day of natural gas liquids.
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