Riyadh: Saudi Arabian Oil Company will complete the expansion of its Shaybah oilfield by the end of May, allowing the biggest crude exporter in the world to maintain its total production capacity, according to two people with knowledge of the plan.
Shaybah’s output capacity will rise to 1 million barrels a day from 750,000 barrels, said the people, who asked not to be identified because the information isn’t public. The field, in the Empty Quarter desert near the border with the United Arab Emirates, produces extra light grade crude with an API gravity of 42 degrees, they said.
Shaybah’s expansion will help Saudi Aramco, as the state producer is known, keep the company’s capacity at 12 million barrels a day, they said. Brent crude futures fell 0.5 per cent on Monday amid signs a global glut will persist as Middle Eastern producers boost supplies.
Saudi Arabia is maintaining investments in oil production as the kingdom pursues a strategy of defending market share amid a global glut. Saudi Aramco will keep investing in its crude production capacity, chief executive officer Amin Nasser said last month. The company also plans to complete the expansion of the Khurais oil field to 1.5 million barrels a day in 2018, he said.
Saudi Arabia set a crude production record of 10.564 million barrels a day in June, exceeding a previous high in 1980, according to data the kingdom submitted to the Organisation of Petroleum Exporting Countries (Opec). The country increased output after it led the group to refocus in November 2014 and fight for sales instead of supporting prices by cutting production.
Saudi Arabia could raise crude output by more than a million barrels a day immediately if there was demand for it, Saudi Deputy Crown Prince Mohammed bin Salman said in an interview earlier this month. Aramco could produce 11.5 million barrels a day immediately and go to 12.5 million in six to nine months “if we wanted to,” said the prince, who is also chairman of Aramco’s Supreme Council.
The country pumped 10.2 million barrels a day last month, according to data. If the kingdom chose to increase investment in its oil industry, total production capacity could be increased to 20 million barrels a day but not beyond that level, the prince said. The International Monetary Fund said on Monday that Saudi Arabia’s oil production will increase to an average of 10.34 million barrels a day next year from 10.22 million barrels a day in 2016.