Costs Rising For Saudi Oil Expansion Plans

Tougher-than-expected technical hurdles and an accelerated schedule are quickly raising costs for Saudi Arabia’s ambitious plans to increase its oil production capacity, a Saudi analysts said Wednesday.

The government is now budgeting $15 billion-$18 billion to ramp up its capacity to about 12.6 billion barrels a day by early 2009, according to Nawaf Obaid, managing director of the Saudi Strategic National Security Assessment Project.

The earlier estimates had been for a more modest $12 billion-$15 billion budget.

Obaid said getting oil out of the Khoreis and Khursaniyah oil fields has proven more challenging and required costlier drilling technology then expected.

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