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Saudi certain new oil mega project will be on time |
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administrator |
DATE |
2009-04-27 09:08:01 |
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Saudi certain new oil mega project will be on time
Jun 23, 2008, By Simon Webb and Barbara Lewis
KHURAIS OILFIELD, Saudi Arabia (Reuters) - State oil giant Saudi Aramco is adamant the biggest new field in its plan to raise oil capacity will arrive bang on schedule in June next year.
A chorus of senior executives lined up on Monday to tell reporters visiting the Khurais project south of Riyadh the 1.2 million barrels per day (bpd) expansion would avoid the delays that have plagued the global energy sector.
They were speaking a day after Saudi Oil Minister Ali al-Naimi assured an emergency meeting of consumers and producers the kingdom would pump enough oil to meet demand and pledged to add to existing plans to increase output potential.
"We are 100 percent confident that Khurais will come on stream as planned in June 2009," said Amin al-Nasser, one of Aramco's top executives.
He had been asked how he could be so certain the $10 billion project would be on time given that another major boost to capacity from the Khursaniyah oil field has yet to start up after missing a December deadline.
Aramco officials had shown similar confidence about that plan last year. Nasser said on Monday that Khursaniyah would be ready to start in August.
"Even with a slight delay, it took 41 months from start to finish compared to the world average of 53 months, still Khursaniyah is doing very well," he said.
To prove the point rapid progress was being made at Khurais, Aramco took the visiting journalists on a tour of the miles of steel girders, storage tanks and pipelines, where some of the project's 28,000 workers toiled in the desert heat above 40 degrees Celsius (104 degrees Fahrenheit).
The giant processing plant will handle oil from the Abu Jifan and Mazalij fields, as well as Khurais. Together the fields will produce more oil than each of the three smallest members of the Organization of the Petroleum Exporting Countries: Indonesia, Qatar and Ecuador.
HIGH-QUALITY ARAB LIGHT
The oil the Saudi fields contain is highly prized Arab Light oil, which is easily converted into transport fuel.
"It is a very welcome addition at a time when there are precious few supplies able to add this kind of increment to the market," said David Fyfe of the International Energy Agency.
The new fields are near the world's largest oil field at Ghawar, which has produced for around half a century.
Ghawar pumps around 5 million bpd, and would be able to do so for "many, many years to come," Nasser said.
Proponents of the theory that global oil output is at or near its peak have said Saudi reserves may be less than stated and that fields like Ghawar may be under strain.
Nasser said Aramco had managed to reduce the amount of water that wells at Ghawar produce with the oil, and that the reserve was healthy.
Aramco takes its role as custodian of more than a fifth of the world's oil reserves very seriously and would never increase output at the expense of damaging fields, he said.
Saudi Arabia has long held a policy of keeping spare capacity of between 1.5 million and 2 million bpd to meet any emergencies.
Naimi on Sunday outlined plans for a 2.5 million bpd hike in Saudi capacity beyond current plans, which include Khurais, to lift capacity to 12.5 million bpd by the end of next year.
He gave no details on the time frame, but said the kingdom would need to see demand for its oil before it embarked on a new round of massive investments.
Just as oil has hit record levels, so has the expense of adding capacity as labor and raw material costs have soared.
Nasser said that it cost $9000 for each barrel of capacity being added at Khurais and the $10 billion price tag for the development was rising.
Saudi Arabia could sustain output at 15 million bpd for at least 30 years, and would only bring on any increment in capacity provided it could last for that long.
"We have a minimum of a 30-year plateau, that is always our plan," he said.
(Editing by Matthew Lewis)
Resource from www.reuters.com |
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