Saudi King says he wants to Boost Production

The Associated Press
Apr. 14th, 2007

RIYADH : Saudi Arabia wants to increase its oil production so it can meet domestic and international demand while ensuring "fair" world prices, King Abdullah said. xXX Now pumping just over 11 million barrels a day, the kingdom is the world's largest oil producer and the biggest supplier of petroleum to the United States.

The king did not say Saturday how much Saudi Arabia might increase production, but it has repeatedly said it was prepared to do so. Last May, Oil Minister Ali al-Naimi spoke of raising output to 12.5 million barrels a day by 2009.

Abdullah said the kingdom was "seeking to increase its oil production capacity so that it can meet its commitments for national growth and the demands of the international economies."

He added that Saudi Arabia "is aware of its international responsibilities and is working to create fair prices to this resource that take into consideration the interests of the producer and the consumer."

OPEC has cut production twice in the past five months, contributing to relative stability that has kept benchmark crude between US$50 and US$60 a barrel — down from the record highs of above US$78 a barrel last summer, but still around 40 percent above 2004 levels.

Abdullah made his remarks in his annual address to the unelected Consultative Council, the closest thing Saudi Arabia has to a parliament. The king delivered only a summary of his speech Saturday, and the full text was distributed to journalists.

In the speech, Abdullah also warned that Iran's nuclear program had added another crisis to the region that needs to be contained, along with the sectarian conflicts in Iraq and Lebanon.

Saudi Arabia has recently embarked on an aggressive push to resolve the Middle East's most troubling issues, sending envoys to Iran, talking to Shiite and Sunni Iraqis and urging Lebanon's feuding leaders to negotiate.

Without naming Iran directly, Abdullah said Saudi diplomacy had been careful to deal with the "nuclear issue in a peaceful, rational and objective manner that seeks to avoid tense rhetoric" while seeking to keep the Middle East free of weapons of mass destruction.

"The issue of the nuclear crisis in the region has created a new burden in the region, adding to its consecutive crises," the king said.

The rising profile of Shiite-majority Iran worries Saudi Arabia, a predominantly Sunni kingdom ringed by neighbors with Shiite majorities — Kuwait, Iraq, Bahrain and Yemen.

Some Saudis also fear that if the international confrontation over Iran's nuclear program escalated into war, Tehran would retaliate against U.S. allies in the region — and Saudi Arabia's oil installations across the Persian Gulf are the biggest and most important target.

Any disruption in the kingdom's oil exports would seriously affect world supplies and cause prices to soar.

Aramco Manifa Field Project on Target

Saudi Aramco $10B Manifa Field Project on Target for Mid-2011

Apr 12, 2007 Dow Jones Newswires

DUBAI - Saudi Arabian Oil Co., the world's largest oil company by production, is on schedule with plans to develop the Manifa offshore oil field to produce 900,000 barrels a day of crude by mid-2011, the company has said.

Plans for the field development are "proceeding on schedule" to be completed in June 2011, the Manifa project management team said at a recent progress update meeting in London, according to a report posted on Aramco's Web site Wednesday.

The estimated $10 billion Manifa development program, Aramco's largest-ever offshore project, aims to add 900,000 barrels a day of Arabian Heavy crude and 65,000 barrels a day of condensate production.

The project will also process 90 million cubic feet a day of natural gas.

Persian Gulf oil producers are spending income generated from three years of high oil prices to expand and upgrade their crude oil production capacity to meet rising global demand, in particular from fast-growing Asian economies such as China and India.

Aramco to Cut Oil Supply to Asia

Saudi Aramco to Cut Oil Supply to Asia a 7th Month
By Nesa Subrahmaniyan

April 12 (Bloomberg) -- Saudi Aramco, the world's largest state oil company, will maintain a cut in crude oil supply to Asian refiners for a seventh month in May. xxx

Saudi Aramco will reduce mainly contracted supply of its Arab Heavy crude exports, said three refinery officials who received notices and asked not to be identified because of confidentiality agreements with the Dhahran, Saudi Arabia-based oil producer. The company has lowered shipments below contract levels since November.

The supply cuts are between 9 percent and 10 percent of contracted volumes, the officials said. Saudi Aramco is lowering exports to Asian refiners in April by an average 9 percent, and the cuts this month and in May are more than the 7 percent reduction in March shipments.

Saudi Aramco's export reduction is to comply with 1.7 million-barrel-a-day production cuts agreed last year by the Organization of Petroleum Exporting Countries.

Fredrik Robelius on Saudi Arabia

Fredrik Robelius – Giant Oil Fields

Many publications with forecasts of future oil production has a gap between future production and demand. A common solution to fill the gap is production from Saudi Arabia. There seem to have been a general consensus among forecasters on a more or less unlimited production capacity from Saudi Arabia, with production levels up to 20Mbpd (EIA, 2005, 2006; IEA, 2005).

Peculiar enough, this consensus has developed despite no such information fromneither Saudi Aramco nor Saudi Arabian officials. Permanent increases in production rates together with ever increasing reserves have simply been taken for granted. Indeed, the reserves of Saudi Arabia are large, the largest in the world. However, to refer to the discussion in chapter 5, the official Saudi Arabian proven reserve number is listed at around 260Gb and have been more or less unchanged the latest 16 years. This is despite a total production of 48Gb during the last 16 years. Moreover, new field discoveries during the same time amount to less than 10Gb (OFN,GF). Thus, a simple calculation reveal a proven reserve of around 220Gb. This number includes the debated increase from 170Gb to 258Gb in 1990. A look at the URR for the giant fields of Saudi Arabia reveals a number between 230 and 361Gb (GF). A majority of this difference can be found in the URR estimates of the largest fields: Ghawar, Safaniya, Berri, Shaybah, Abqaiq and Zuluf. Cumulative Saudi Arabian production excluding the neutral zone is some 103Gb. This leaves a volume between 127 and 258Gb left of the original URR. By assuming the URR to the 2P reserves, the higher number is consistent with the official number. The only difference being the official number is proven reserves instead of 2P.Moreover, assuming the top 25 per cent is probable reserves leaves the high end estimate of Saudi Arabia proven reserves at 194Gb and the low end at 95Gb. Still, the lower value is a very large reserve but undeniable much less than the official value of 260Gb. Unfortunately, as Simmons (2005) has argued, neither Saudi Aramco nor the official Saudi Arabian oil ministry has released any detailed field by field data to prove either the reserve estimate of 260Gb or 95Gb right.

As a response to Simmons work, two representatives from Saudi Aramco presented their view on the criticism on the Saudi reserve at a meeting inWashington D.C. The presentation by Baqi and Saleri (2004) showed for the first time since the early 1980s details on production from single fields. Furthermore, the presentation includes a forecast on future production from Saudi Arabia. The forecast shows two views, one of sustained production at a 10Mbpd level and the other at 12 Mbpd. Thus, far away from other forecasts of 20 Mbpd. Moreover, Dr S. I. Al-Husseini, retired executive from Saudi Aramco E & P, called the expectations of 20Mbpd production from Saudi Arabia unrealistic, instead he referred to future plateau levels of 10 and 12Mbpd (Mortished and Duncan, 2004; Al-Husseini, 2004).

pages 106-107 Fredrik Robelius – Giant Oil Fields

http://publications.uu.se/abstract.xsql?dbid=7625