Production Starts At Khurais Oil Field

RIYADH: Saudi Arabia has started production from its giant Khurais oil field. The Saudi Aramco’s mega oil project carried out at a cost of SR37 billion will bring more oil on stream than the production of Qatar or Indonesia and will boost the Kingdom’s production capacity from 11.3 million bpd to 12.5 million bpd this year.

“The crude capacity of the Khurais field is 1.25 million bpd,” said Ali Al-Naimi, minister of petroleum and mineral resources. This is in addition to the 900,000 bpd Moneefa oil field expansion project that will be completed in 2013, two years later than the initial schedule, but only if global demand for crude warrants,” said the minister in a statement yesterday.

“The oil from the Khurais oil field, located some 160 km south of Riyadh, is now being pumped into tanks that are at the site,” said Khalid Al-Falih, president and CEO of Saudi Aramco, in an interview to Al-Arabiya yesterday. “I am happy to report that Khurais has entered the stage of operations.”

Al-Falih said that the oil field covers three fields, Khurais, Abu Jifan and Mazalij. They produce highly prized high-quality Arabian light crude. He said that the Kingdom did not need to use the extra capacity from the field as demand levels did not warrant tapping into its supply.

The Khurais field will also produce 315 million cubic feet per day of sour gas and 70,000 bpd of natural gas liquids to be processed at the Shedgum and Yanbu gas plants. The field can supply over 1.5 percent of daily global oil demand, said a report published yesterday. The Khurais field has a reserve of 27 billion barrels. The Kingdom, which has outlined how it could produce 15 million bpd when demand requires, has no immediate plans to raise its output potential further, it added.

The Khurais oil field is the biggest single addition to global production of light crude. It is the biggest ever in the petroleum upstream industry.

The global economic recession has slowed oil demand and has prompted the Kingdom and other OPEC countries to reduce supplies. It is expected that Khurais will be in production for 20-25 years. The project involved drilling 420 wells and building four processing facilities and two gas facilities, and a 4.5 million bpd expansion of seawater well-injection capacity at Qurayyah treatment plant.

“It’s the single largest development that they have ever had,” said Raja Kiwan, an analyst with PFC Energy.

The project brings to a close the latest expansion in oil output capacity in the top oil exporter and the most influential member of the OPEC.

Meanwhile, oil prices climbed past $71.70 per barrel yesterday, scaling an eight-month pinnacle on the back of the weak US currency and hopes of a recovery in global energy demand.

Traders were on tenterhooks ahead of the weekly report on crude oil reserves in the United States, the world’s biggest energy consuming nation.

New York’s main futures contract, light sweet crude for delivery in July, surged as high as $71.65 per barrel in morning trade, the highest level since last October.

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