Global Energy Review

Saudi Arabia 1

Saudi Arabia's oil minister says that the kingdom has 9 mn bpd of production capacity 'immediately available' and another 1 mn bpd that can be brought on-line within 90 days. The Saudis have the highest production capacity in OPEC and also the largest amount of spare capacity, though the 1 mn bpd referred to above consists of heavy, high-sulphur crude that would probably be unattractive to many refiners.

In addition to its crude production, Saudi Arabia produces more than 0.8 mn bpd of NGL. Volumes are difficult to identify precisely since some are spiked into Saudi crude streams. This has been the case until recently with NGLs produced in the Haradh and Hawiyah fields. From late 2003, however, some 250,000 bpd of gas liquids from these two fields were segregated, leaving just 80,000 bpd to be spiked into Arabian Light crude. NGLs are available as ethane, LPG, and A 180 condensate, which closely resembles paraffinic naphtha and is used as a steam cracker feedstock.

Saudi Arabia also takes 50% of the oil production of the Neutral Zone, which it shares with Kuwait. Output there is likely to peak around 0.7 mn bpd in 2004 or 2005. The kingdom also shares the 150,000-bpd Abu Safah field with Bahrain, but allocates all the sales revenues to Bahrain.

Saudi Arabia will almost certainly surpass its previous record production level of 9.9 mn bpd in 1980. It should nevertheless be borne in mind that many of Saudi Arabia's fields are mature and that its main two fields, Ghawar and Safaniyah, are more than 50 years old (Ghawar is the world';s largest field and Safaniyah is the largest offshore field in the world). There are no reliable data on production by field in Saudi Arabia, making it impossible to say which of the major ones have peaked. Coning is reported in several of them. In 1988 proven oil reserves in Saudi Arabia were revised upwards by 84 bn bbl, but little by way of detailed explanation was given for this move.

In recent years, the Saudis have mothballed facilities in fields producing heavier grades of crude in order to maximize their income from the remaining fields. It is not at all clear where any major new discoveries will come from, though various areas have been identified as containing potentially enormous finds, including Rub al-Khali in the far south of the country. There are some small and medium-sized fields awaiting development in the centre of the kingdom.

Production Outlook

By re-commissioning its mothballed fields and bringing some of its small and medium-sized fields on-stream, Saudi Arabia should be able to raise production for several years. More NGL production is likely as well.

Crude-oil production is forecast as follows:

2003 8.8 mn bpd
2010 10.6 mn bpd

Saudi Arabia, Reserves & Production, 2003

Reserves: 261.8 bn bbl
Reserves remaining: 82.0 years
Production capacity: 9.00 mn bpd
OPEC Quota (Nov ’03): 7.96 mn bpd
Production: 8.75 mn bpd
Consumption: 1.40 mn bpd
Net trade: 7.35 mn bpd
Peak output *
Peak year *

Production 1991-2003

Production 1991-2003

Latest Developments

Condensate Production

OET ARCHIVE LINK: ‘OPEC plans more condensate production’, Focus, Oct 09

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Refining

Saudi Arabia has asked foreign oil companies to submit proposals for a new refinery at Jizan.

Production

Saudi Aramco has announced production figures for 2006 as follows:

 (mn bpd)
Crude8.9
NGL1.1
 (bn cfd)
Gas8.2

The state-owned company also claims proven reserves as follows:

Crude and Condensate259.9 bn bbl
Natural Gas248.5 trillion cf

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Notes:

1 Figures are for Saudi Arabia plus half the Neutral Zone unless otherwise indicated.