Saudis see need to pump 9m bpd of oil

Saudi Oil Minister Ali al-Naimi Top oil exporter Saudi Arabia needs to pump at least 9 million barrels per day (bpd) of crude for the next few years and is considering boosting capacity to meet

rising demand, Petroleum Intelligence Weekly (PIW) said in a report citing Saudi sources this week. Rising fuel demand led by growth in China, India and the Middle East has outpaced Riyadh's expectations, and Saudi Arabia now sees medium to long-term oil consumption higher than it had previously anticipated, trade publication PIW report
ed.
Saudi sources expect the kingdom will need to keep oil output around 9 million bpd or higher over the next few years," PIW said. Saudi Oil Minister Ali al-Naimi said on Sunday the kingdom's April oil output may rise from March, when it pumped 8.292 million bpd. Output was above 9 million bpd as recently as February, when the kingdom produced 9.125 million bpd to plug the gap left by Libya, where civil war cut exports.
Libyan output disruption, the threat of more supply cuts stemming from political tumult across the Middle East and North Africa, and strong growth in fuel demand helped push oil prices to 2.5-year highs this year. Brent crude rose to $127.02 a barrel earlier this month, the highest since August 2008, while US crude rose to $113.46.
Oil consuming and producing countries have warned that high energy costs could impact economic growth and lead to fuel demand destruction, but OPEC has taken no coordinated decision to boost supply. The group next meets to discuss supply policy in June. OPEC's biggest producer Saudi Arabia is the only member of the group with significant spare capacity to boost output to meet unexpected interruptions in oil flows such as Libya's export cut. It has a long-held policy of maintaining a capacity buffer of 1.5-
2 million bpd.
To maintain that cushion as it pumps more, the kingdom is discussing plans to take capacity beyond 12.5 million bpd. Saudi was considering projects to boost Moneefa, Khurais and Shaybah oilfields, PIW said. Expansion would add another 300,000 bpd at Moneefa, taking that field's capacity to 1.2 million bpd, PIW said. The field is already under development to take it to 900,000 bpd. Another 300,000 bpd could be added at Khurais, and 250,000 bpd at Shaybah, PIW reported. Projects were unlikely to go ahead thi
s year, even if the kingdom decides to take them on, PIW added.

Saudi Arabia plans to bring in more rigs this year as it moves ahead with Moneefa, boosting rigs at its disposal by over a quarter. It had slowed the first stage of development at Moneefa after the global economic slowdown in 2008 cut demand and left it with over 4 million bpd of spare capacity - more than double its target. But that cushion would shrink to less than 3.5 million bpd if output rose about 9 million bpd, leaving the kingdom with less scope to deal with another large unexpected outage in the g
lobal oil supply system.
Some analysts have doubted the kingdom has kept all its spare capacity ready for immediate production and said it would be tested to the limit if it needed to compensate for another large disruption. Saudi Arabia has previously said it could take capacity to 15 million bpd when demand warranted, and detailed potential expansion plans during the run up in oil prices to nearly $150 a barrel in 2008.


From : Kuwait Times