Saudi Arabia plans to raise production capacity to 15 million barrels a day by 2020 from 12.5 million barrels a day now, a Saudi prince said, reviving talk of a higher internal target.
The new capacity will allow the kingdom to be able to export as much as 10 million barrels of crude a day, Prince Turki Al Faisal, 68, a former head of intelligence, said in an April 25 speech at Harvard University that was posted on the university’s website yesterday.
Saudi Arabia’s oil minister Ali al-Naimi told reporters in March last year that the kingdom doesn’t plan to boost capacity beyond 12.5 million barrels a day, though it has the ability to do so if needed. The country first announced its plans to raise daily capacity to 15 million barrels in a speech delivered by al-Naimi in 2008, weeks before Brent crude reached a record $147 a barrel as OPEC’s spare capacity shrank.
The desert kingdom maintains the largest portion of spare capacity within the Organization of Petroleum Exporting Countries, producing about 9 million barrels a day last month, and keeping 3.5 million barrels a day unused.
Khalid Al-Falih, chief executive officer of Saudi Arabian Oil Co., or Saudi Aramco, said in November 2011 that the state- run company had no plans to increase daily capacity beyond 12.5 million barrels and was focused on developing the Manifa oil field to compensate for declines at other deposits.
Aramco started pumping crude from Manifa this month and plans to produce 500,000 barrels a day of Arabian Heavy crude from the field by July and 900,000 barrels by the end of 2014. Al-Naimi said in June 22 that year that oil from five “mega” fields could be used to boost capacity. The country raised its capacity to about 12.5 million barrels a day in 2009, from 10 million barrels, and has kept it at that level since then.
The country’s strategic goal is to maintain sufficient spare oil production capacity to offset global crude-supply interruptions, Prince Turki said in his speech this month. It has an unused 2.5 million barrels a day of capacity, which is enough to “almost instantly replace all of Iraq’s oil exports,” he said. Iraq overtook Iran last year to become the second-largest producer in OPEC, trailing only Saudi Arabia. The prince made his remarks in a speech entitled “Saudi Arabia’s New Foreign Policy Doctrine in the Aftermath of the Arab Awakening.”
Saudi Arabia’s policy is also to meet rising domestic energy needs through renewable energy and natural gas, where possible, to free up oil for export, Prince Turki said. The country currently meets 40 percent of its energy needs through gas, said Prince Turki, who also served as an ambassador to U.S. until 2007.
Separately, al-Naimi is speaking today at an event in Washington.
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