[eXpat]

Most gracious of him being concerned...
Saudi uneasy with high oil price, worried about economy
$this->bbcode_second_pass_quote('', ' ')SEOUL, April 26 (Reuters) - Top oil exporter Saudi Arabia is uneasy with high oil prices and concerned about their impact on the global economy, the chief executive of state oil firm Aramco said on Tuesday.

Oil prices fell on Tuesday in part after the remarks from Aramco's Khalid al-Falih. Brent crude fell 57 cents to $123.09 a barrel by 0153 GMT, just four dollars below a 2-1/2 year peak hit earlier in April at $127.02.

"We are not comfortable with oil prices where they are today...I am concerned about the impact it could have on the global economy," Falih told an industry gathering in South Korea.

There was no tightness in global oil markets, Falih said. His comments echoed those of Saudi Oil Minister Ali al-Naimi, who said last week that the kingdom had cut oil output in March as the market was oversupplied. [ID:nLDE73H03G]

Unrest and violence in North Africa and the Middle East and strong demand growth in Asia have pushed prices to their highest levels since 2008, triggering a series of warnings from consumers and producers that costly oil would harm economic growth, in turn eroding fuel demand.

Saudi Arabia and other OPEC producers warned last week of the strain of high energy prices on economies still fragile after the global financial crisis in 2008. [ID:nLDE73H03G]

Saudi Arabia had enough capacity to meet any spike in demand and plug short-term outages in supply, Falih said.

OPEC's largest producer boosted supply in February to above 9 million bpd to plug the gap in global markets left by fellow OPEC member Libya, where civil war cut exports. The kingdom is the only oil producer with significant spare capacity to meet large supply outages such as that experienced in Libya.

Without that spare capacity, oil price volatility would have been a lot worse when Libyan supply was lost, and more recently when violence wracked Nigeria following elections, Falih said.

[Graeme]

Saudi Arabia to Pump 9 Million Barrels of Oil in 2011, NCB Says

$this->bbcode_second_pass_quote('', 'S')audi Arabia’s oil production may reach 9 million barrels per day on average in 2011 as global demand increases, said an official at National Commercial Bank, Saudi Arabia’s largest bank by assets.

Average prices for Saudi’s crude are expected to reach $95 per barrel, Said A. al-Shaikh, the Jeddah-based lender’s senior vice president and its chief economist, said in a telephone interview today.

Saudi Arabia, the world’s biggest oil exporter, reduced its output by 800,000 barrels per day in March after raising it to over 9 million in February, Oil Minister Ali al-Naimi said last month. The kingdom produced 8,292,100 barrels a day in March and it will probably go a “little higher in April,” he said.

Saudi Arabia pumped 9.02 million barrels of crude a day in February, up 5.9 percent from the previous month, according to official data posted April 17 on the Joint Organization Data Initiative’s website.

[diemos]

http://www.indexmundi.com/energy.aspx?country=sa&product=oil&graph=production

Yawn.

[Pretorian]

food vs oil and nothing else

[Graeme]

Saudi unlikely to lift oil output quickly: analysts

$this->bbcode_second_pass_quote('', 'S')audi Arabia is unlikely to boost oil production quickly to ease the rise of crude prices, because it needs high prices for its own increased spending, analysts at an international banking think tank said Tuesday.

After producing 8.6 million barrels a day in 2010, the world's leading oil supplier will only kick up production to about 8.9 million barrels this year, said analysts at the Washington-based Institute of International Finance.

They said Riyadh needs the higher prices to offset its sharp increase in spending, an effort aimed in part at assuaging Saudis amid a surge in public unrest across the Middle East and North Africa.

"So far the production of crude oil in Saudi Arabia for the first quarter was around 8.7, 8.8 (million barrels a day). And recently some unconfirmed reports said that production dropped in March," said Garbis Iradian, the IIF's deputy director for Africa and the Middle East.

"So we don't expect crude oil production in Saudi Arabia will rise over nine million barrels a day," he said.

The Saudi government is overwhelmingly dependent on income from oil exports to fund its budget, and in December economists calculated that expected 2011 spending was based on the country earning $70 to $73 dollars a barrel.

But Iradian said that the figure is much higher after a February spending hike announced by King Abdullah.

"It's in the interest of the Saudi authorities to have now higher oil prices," he said.

"Our calculation shows that the break-even price for this year, given their expenditure profile, is $85 to $86 a barrel... This is the oil price required by the Saudis to balance their budget."

[Ercole]

The french prime minister said 2 months ago before the french house of representatives that the peak oil happened in 2009... No newspapers have talked about it, but I saw and heard it on from the mouth of François Fillon...

[Daniel_Plainview]

$this->bbcode_second_pass_quote('Ercole', 'T')he french prime minister said 2 months ago before the french house of representatives that the peak oil happened in 2009... No newspapers have talked about it, but I saw and heard it on from the mouth of François Fillon...

[Ercole]

You're an angel and I'm a damn' lazy french...

[SpockLives]

Faith Birol of the IEA recently claimed it was in 2006. I think there was a thread around here talking about it. Which one has more reason to lie about it, and why are they?

[TheDude]

Aramco ‘Keen’ to Develop Shale, Tight Gas to Meet Local Demand - Bloomberg

$this->bbcode_second_pass_quote('', 'S')audi Aramco, the world’s largest oil exporter, wants to develop unconventional gas resources such as shale rock to reduce the burning of crude for power generation, a company official said.

“We are in the early stages of assessing the kingdom’s resources of unconventional gas but the company is very keen on developing it,” Brian Gratto, manager for exploration resource assessment at the company, said today in Khobar, in the east of the country.

Saudi Arabia and other Persian Gulf oil producers are boosting power supplies to meet the demands of growing economies and populations. They are also looking for ways to use less of their valuable crude as fuel for power stations.

“Aramco wants to add 5 billion standard cubic feet per day of gas,” Gratto said. “This is not something that Aramco want to do over 10 years time or more because by then we would have burned more crude oil at power stations that we can sell abroad for higher gains.”

[eXpat]

Sorry if it has been posted before
Saudi Aramco joins the switch to natural gas as oil wanes
$this->bbcode_second_pass_quote('', '
')Summary
Saudi Aramco will attain a production rate of 15.5 billion standard cubic feet of raw natural gas by 2015. Focus has shifted from crude oil to natural gas following the addition of 2 million bbl/day of capacity in the 2004-2009 period. While the focus of exploration and development will be directed toward conventional resources, the company is studying the potential of unconventional resources. Saudi Arabia's gas consumption has risen by 7%/year. Most goes to electric power and petrochemical.

Analysis
The above is an extract from an article by Steven Poruban, Oil & Gas Journal Senior editor. The article was published on line on May 3. At this time, Saudi Aramco is engaged in the redevelopment of the huge but second class Manifa oil field with an expected start up in 2013. Production will come from six heavy crude oil reservoirs including the Upper and Lower Ratawi, the Manifa Zone and the Arab A, B, and C. None of these are famous. The Arab D is wet and there are no Bahrain zones. Capital and operating costs will be high, perhaps the highest in the kingdom. The project requires 27 artificial islands connected by 47 kilometers of causeway.The field will (hopefully) produce up to 900,000 bbl/day. Manifa was discovered in 1957 and produced about 400 million barrels during its long primary recovery life. Today it is being redeveloped with horizontal maximum reservoir contact wells. Recently the company completed the longest well in the country in Manifa. It was 32,136 foot long water injection well into the lower Ratawi reservoir. Redevelopment began in 2005. Top of the Ratawi formation is found at about -7300 feet vertically. Once Manifa is completed, no other major oil fields exist in Saudi Arabia that have not been redeveloped. Thus the shift to natural gas. A number of reservoirs have been discovered with the Khuff zone being one of the most productive. But natural gas is widely distributed in Saudi Arabia in the eastern regions and offshore with much of it in deep paleozoic formations. Without question the country needs the gas. But as a practical matter, that is really all that is left to develop.

[Outcast_Searcher]

Maybe T. Boone Pickens should change strategies. He could help them develop their NG and use it to power their vehicles. Then they could sell us all their extra oil supply for cheap.

That would seem more likely than his current efforts to get the ball rolling on a NG semi truck fleet in the US.

And of course, he could make a boatload of money, which is his true motivation, anyway.

[rockdoc123]

I was working for a company involved in the evaluation of the Rub Al Khali gas bid round. The presentation made to several hundred people in London talked about the increasing consumption of fuel oil in Saudi for various reasons including increasing population and the large desalination projects they were undertaking. The view at the time was there should be a considerable amount of gas in the south and that by tapping that gas Saudi Arabia could effectively stop burning fuel oil entirely. This is a pretty sensible approach to their economy, save oil for export by using a product that has little export potential. Unfortunately the gas round though fully subscribed has resulted in no major gas discoveries. As a consequence the shale gas approach is a fall back position. I actually question how much area is attractive for shale gas, if memory serves correctly the shape of the basin means it is a fairly narrow rim where the Jurassic source rock is in the appropriate depth/temperature conditions for shale gas to be present.
So, no this isn't some nefarious scheme to cover up a lack of liquid hydrocarbons.

[bratticus]

$this->bbcode_second_pass_quote('', '[')b]Aramco Sets Shale And Tight Gas Production Targets As Energy Needs Grow
Business Monitor International Ltd / May 19, 2011

BMI View: As Saudi Arabia's domestic energy needs rise relentlessly, the country is hastening plans to develop its unconventional gas resources in order to cut down on oil combustion for power generation. We believe that oilfield services companies are best placed to take advantage of this opportunity, given Saudi Arabia's low gas sales price and the tough contractual terms that Aramco secured in its Empty Quarter gas joint ventures (JVs) with foreign firms.

More details are starting to emerge of Saudi Arabia's plans to appraise and develop its unconventional gas resources. Amin Nasser, senior vice-president for upstream at state-run oil and gas producer Saudi Aramco , said on May 15 2011 that the company is looking to start producing about 3.1bn cubic metres annually (bcm) of shale gas and tight gas, rising to a targeted 51bcm, although a time frame was not specified. Aramco has said that is working to increase total gas production from 103bcm currently to 160bcm by 2014.

Aramco's interest in unconventional gas is not new, but has taken on greater importance in recent years, given Saudi Arabia's rising energy demand. The executive director of Aramco Power Systems said on May 15 that Saudi Arabia may need ...

[bratticus]

But why beat around the bush when the real issues about Saudi Arabia's inabilities are in the news already?

$this->bbcode_second_pass_quote('', '[')b]Aramco finds little interest for its new oil blend
Bloomberg via Steel Guru / May 9, 2011

Bloomberg reported that Saudi Aramco is finding little interest among buyers for the new, light crude blend that it developed to replace Libyan supplies curtailed by an armed rebellion.

Five people with knowledge of the matter said that European refiners that have been offered the crude declined to take additional cargoes because of its quality. Bids from buyers didn’t meet the price expectations of Aramco, the world’s largest crude exporter.

Mr Ali al Naimi oil minister of Saudi Arabia said recently that Aramco had developed two light, low sulfur blends with specifications that match crude normally supplied by fellow OPEC member Libya.

According to the International Energy Agency, exports from Libya slumped to 450,000 barrels per day in March compared with 1.6 million barrels in January before the conflict began. Aramco sold two cargoes of the grade in March.

The people said that Aramco already shipped 1 million barrels of the blend, a mix of the company’s Super Light and Light grades to the Mediterranean Sea for potential sale to Europe and it has been stored on board the tanker Al Dawha off Egypt for the past month.

The company has been trying to sell the new blend for at least USD 1 per barrel above the official selling price for its Arab Extra Light crude. Refiners that made counter offers didn’t match that price.

They said that crudes that are lighter and contain less sulfur are easier to refine, making them more valuable. Some European refiners found the grade too light while others judged the sulfur content too high. Several were reluctant to process a new blend.

[bratticus]

"Arab Heavy" the crude of the future.

$this->bbcode_second_pass_quote('', '[')b]Saudi Aramco highlights spending plans
Steel Guru / May 2, 2011

Argus reported that Saudi state owned oil firm Saudi Aramco is expected to accelerate development of its Manifa heavy oil field as part of its USD 125 billion capital spending plan for the next 5 years.

A Saudi oil analyst said that a planned rise in the number of drilling rigs at the offshore Manifa development suggests that Aramco is bringing forward the completion date of a second 400,000 barrels per day phase to 2014 from 2024.

[TheDude]

$this->bbcode_second_pass_quote('pstarr', '')$this->bbcode_second_pass_quote('rockdoc123', '[')b]a)by tapping that gas Saudi Arabia could effectively stop burning fuel oil entirely.
b)So, no this isn't some nefarious scheme to cover up a lack of liquid hydrocarbons.

[rockdoc123]

$this->bbcode_second_pass_quote('', 'I')sn't fuel oil a necessary fraction of the distillation process? So if SA makes gasoline then by default will have fuel oil left over. They use it because they have it. So what is Roc's point? The stuff won't t magically turn into high octane gasoline.

[misterno]

Just curious about something;

What if SA's expenditure keeps rising due to ever rising population, price and volume of imported food and other factors but the rise in oil price does not keep up.

What would happen then?

Would they decrease the production/export to push the price of oil up? This would force the gasoline prices to rise over $4/gallon in the USA which we don't want. Especially not when we are in recession.

EU does not want, since they are in recession or so like.

So what is the solution here? I smell big time conflict.

Or maybe SA will start to dig into its savings. Any thoughts?

What would you do if you were the King of SA?

[Pops]

$this->bbcode_second_pass_quote('misterno', 'O')r maybe SA will start to dig into its savings. Any thoughts?

What would you do if you were the King of SA?