Saudi Arabian Oil state giant Saudi Aramco will begin production at its 1.2-million-barrel-per-day (bpd) Khurais oilfield in Saudi Arabia at the end of this month.
Khurais will take the country’s total production capacity to 12.5 million bpd by the end of June 2009. The company will also be investing in the development of the Arabiyah and Hasbah gas fields.
"It's mechanically completed. I expect by the end of this month we will have oil production from Khurais," vice-president for new business development at Saudi Aramco, Abdulaziz al-Judaimi, said.
"We will gradually bring on production... depending on what the market needs we will produce, and adjust our production strategy."
The projects will provide about 1.8 billion cubic feet per day (cfd) of gas, Judaimi said.
To meet soaring demand for gas, Saudi Aramco is speeding up the development of fields not linked with oil as it has to stick to its present output of eight million bpd to match the decrease in oil demand.
Saudi Aramco began to develop Karan oilfield when it awarded contracts in February 2009.
The projects were integrated in Saudi Aramco’s expansion plan through 2014. The project is expected take about four years to develop, Judaimi said.
Demand for gas for power and industry in Saudi Arabia is soaring because of an economic boom fuelled by the oil price rally of 2002-08. As most Saudi Arabia gas is produced in alliance with oil production, volumes fluctuate with oil production.
Saudi Arabia oil production is at its lowest in over six years as the kingdom and Opec curb output to match rapidly falling demand. This has left gas supply in the kingdom tight.
The 250,000bpd Shaybah expansion, which would take capacity at the oilfield to 750,000bpd, is expected to be operational by the third quarter of 2009.