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Saudi Oil Output Rises to 8.5m Barrels Per Day

Saudi Arabia is pumping 8 million to 8.5 million barrels a day, Khaled Al Buraik, executive director of state oil company Saudi Aramco, said today. Output was about 8.19 million a day last month, after falling as low as 7.86 million a day in February, according to data compiled by Bloomberg.

“Most demand for oil is coming from the Far East,” Al Buraik told reporters in Kuwait, adding that “demand is increasing much slower than anticipated.”

The Organisation of Petroleum Exporting Countries, of which Saudi Arabia is the largest producer, agreed on record output cuts last year as the global recession curbed demand, dragging down prices. Oil futures have since risen 64 per cent in New York, recovering from a low of $32.40 a barrel last December.

“Our production in 2010 will definitely be increasing but we will still have millions of barrels in spare capacity,” Al Buraik said. “We have 4 million in spare idle capacity” now.

Saudi Aramco has delayed its Manifa heavy-oil field development because of lower demand, al-Buraik said. “If the market needed it, we can always advance” the project, he said.

Manifa Delay

The Dhahran-based company expects to start production at Manifa in 2013 and complete the project in 2015, Chief Executive Officer Khalid Al Falih said on December 7. Saudi Arabia originally planned to complete the development by mid-2011.

Manifa, which involves building a causeway to 27 shallow- water drilling islands, will eventually produce 900,000 barrels a day of heavy crude, 900 million cubic feet a day of associated gas and 65,000 barrels a day of condensate, a light oil.

In May, Oil Minister Ali Al Naimi said Manifa would only start production if the market needed more oil. The project is one of several Saudi ventures to boost output capacity, which reached 12.5 million barrels a day in June, Al Naimi said last month. —