Aramco Khursaniyah Oilfield on Stream in August

KHURAIS OIL FIELD (Dow Jones Newswires), June 23, 2008

Saudi Arabian Oil Co. will bring on stream its Khursaniyah oil field in August, a top company executive said Monday, potentially adding 500,000 barrels a day of crude to the oil market at a time when prices are at record highs and output in Nigeria has slumped to its lowest level in years.

State-run Saudi Arabian Oil Co., better known as Saudi Aramco, will increase its production capacity further by year-end, adding a combined 350,000 barrels a day of crude from its onshore Nuayyim and Shaybah oil fields, Amin Al Nasser, senior vice president for exploration and production said.

Aramco will boost output at Shaybah by 250,000 barrels a day to a daily rate of 750,000 barrels, while output at the newly developed Nuayyim field will reach 100,000 barrels a day, Al Nasser said at a presentation at the site of the company's largest-ever single field development, Khurais.

Production from the 1.2 million barrel a day Khurais field will kick off in June 2009 as planned, Al Nasser said, adding that construction of the field's central processing facilities was 55% complete.

Output will increase by yet another 900,000 barrels a day in the fourth quarter of 2009 when Aramco will bring on stream the large-scale Manifa heavy oil field, Al Nasser added.

The field developments are part of Saudi Arabia's plan to raise its daily production capacity, including output from the partitioned neutral zone shared with Kuwait, to 12.5 million barrels a day of crude oil by the end of 2009, from 11.3 million barrels a day now.

Al Nasser said that production at Ghawar, the world's largest oil field with estimated remaining reserves of 70 billion, according to the U.S. Energy Information Administration, will last "for decades."

The field produces an estimated 5 million barrels a day of light crude from its five main structures Ain Dar, Shedgum, Uthmaniyah, Hawiya, and Haradh, according to the EIA.

"We don't need enhanced oil recovery at Ghawar for another 20-30 years," Al Nasser said. "We still have plenty of resources available and the depletion (at Ghawar) is low."

Al Nasser's comments come a day after a one-day summit of the world's top oil producing and consuming nations in Jeddah discussed ways of reining in runaway crude oil prices of nearly $140 a barrel.

Crude oil futures rose in London Monday despite Saudi Arabia's pledge at the summit to boost crude output to its highest level in 27 years to 9.7 million barrels a day.

At 1141 GMT, the front-month August Brent contract on London's ICE futures exchange was up $1.39 at $136.25 a barrel.

The front-month August contract on the New York Mercantile Exchange was trading $1.44 higher at $136.80 a barrel.

Saudi Oil Minister Ali Naimi said in a speech at the Jeddah meeting that the kingdom had plans to invest $129 billion in oil exploration and production projects over the next five years and to expand pumping capacity to as high as 15 million barrels a day in the longer run if necessary.

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