Saudi Aramco plans to have 550,000 barrels per day (bpd) more in oil production capacity by 2025 when the expansion projects on two major oilfields are complete, Saudi Arabia’s state-owned oil giant said on Sunday.
Aramco, which reported yesterday a jump in Q2 net profit amid rallying oil prices like all international oil majors, also updated the market on its projects to boost production capacity. The Saudis are aiming for 13 million bpd of production capacity, up from 12 million bpd now.
In its earnings report on Sunday, Aramco said that the programs to boost production at the Marjan and Berri oilfields were in the final stages of detailed engineering, and construction activities continued to progress.
The Marjan and Berri projects are expected to add production capacity of 300,000 bpd and 250,000 bpd, respectively, by 2025, the Saudi oil giant noted.
In the second quarter of 2021, Aramco completed and successfully tied in the ‘Ain Dar and Fazran programs to boost capacity, by targeting secondary reservoirs with a combined production capacity of 175,000 bpd.
Under the Saudi plans to raise production capacity at the Marjan and Berri oilfields, the 400,000-bpd Marjan field is set to boost its capacity by 300,000 bpd, and the Berri field, currently with a capacity of 300,000 bpd, will see its production capacity rise by 250,000 bpd.
In July 2019, Saudi Aramco awarded 34 contracts worth a total of US$18 billion to boost the oil production capacity of the two fields.
After the oil price and demand collapse last year, to which Saudi Arabia itself contributed by breaking up the OPEC+ pact for a month, Aramco idled offshore rigs and postponed the start of the expansion of several projects.
In April this year, reports emerged that Aramco had resumed tendering and development work on major offshore oil expansion projects that would give Saudi Arabia another 1.15 million bpd of production capacity by 2024.
By Tsvetana Paraskova for Oilprice.com
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So when Saudi Arabia says it is producing 10 mbd, only 6.0-6.5 mbd come from production and the remaining 3.5-4.0 mbd come from storage. Adding 550,000 barrels a day (b/d) by 2025 will lift Saudi production to 6.55-7.05 mbd.
Saudi Arabia’s crude oil production peaked at 9.65 mbd in 2005 according to Dr Majod Al Moneef the former Saudi Governor at OPEC and has been in decline since to 8.2 mbd by 2010 and to just above 6.0 mbd now.
90% of Saudi crude production comes from five giant oilfields Ghawar, Safaniya, Hanifa, Khurais and Zuluf all of which are more than 70 years old and are being kept producing by a huge injection of water with Ghawar accounting for 50% of the total.
The Saudis have admitted in 2018 for the first time that Ghawar which is the cornerstone of Aramco’s oil production can only produce 3.8 mbd. If this is the case, then it is fair then to suggest that the same depletion would have also affected the other oilfields of the same age.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London