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Saudi sets date for production return
PERFORMANCE
SAUDI Arabia has pledged to restore the 5.7mn barrels per day (bpd) of oil production that was taken out during this weekend’s attacks by the end of September.
The kingdom has already restored half of the capacity that was knocked out from the attacks on the on Abqaiq and Khurais facilities, Saudi Energy Minister Prince Abdulaziz bin Salman told a press conference on September 17. He added that capacity would climb to 11mn bpd by the end of the month and 12mn bpd by the end of November.
The oil market has welcomed the announce- ment, which removes mounting uncertainty over the long-term supply outlook. On Septem- ber 16, CNBC quoted a Saudi source as saying that Aramco had 35-40 days of supply to meet contractual obligations, while members of the International Energy Agency (IEA) have reserves to cover 90 days’ worth of imports.
US President Donald Trump had said the Strategic Petroleum Reserve (SPR) could be tapped to ensure there is no supply shortfall.
“We are in the process to bring back oil refin- ing to full capacity,” CNBC quoted bin Salman as saying. “The company will honor all of its commitments to its customers this month by drawing from its reserves of crude oil and fur- ther modified some of its oil until the production capacity of the country is up to 11 million barrels
a day by the end of September and up to 12 mil- lion barrels in November.”
The targeting of Abqaiq was as symbolic as it was devastating. Crude processing facilities there deal with crude from Ghawar, the world’s largest oilfield, which produces 3.7mn bpd. Last year, Abqaiq facilities processed around 5mn bpd, more than half of Saudi output.
Its location is also important, just 66km south of Aramco’s Dhahran HQ, and the attack shows that the prized export facilities on Saudi’s East Coast may now be within range of Yemeni Houthis.
Abqaiq is the main strategic hub for Aramco’s exports too. From there, flows can be manipu- lated to go east to Ras Tanura and Jubail or west towards Red Sea export facilities at Yanbu, Jed- dah or Jazan via the East-West pipeline, which has also been the subject of drone attacks.
According to the 469-page bond prospectus published by Aramco in April, the Khurais com- plex, including the Abu Jifan and Mazalij satellite fields as well as Khurais itself, is the fourth largest onshore oilfield in the world, comprising 20.1bn barrels of crude.
It has a maximum sustainable capacity (MSC) of 1.45mn bpd at the end of last year, fol- lowing commissioning of a 250,000-300,000 bpd expansion. Aramco will make a public statement on September 16.™
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w w w . N E W S B A S E . c o m Week 37 18•September•2019