Gulf oil production to increase by 10 million barrels a day by 2015

A view of the Aramco (Saudi national oil company) offshore oil rig "Marjan 2.” (GulfReza/Getty Images)

A view of the Aramco (Saudi national oil company) offshore oil rig "Marjan 2.” (GulfReza/Getty Images)

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A new market report indicates that the $300 billion [USD] that has been invested in boosting oil production in the Persian Gulf could deliver a staggering 10 million barrels of crude a day in added capacity by 2015. More than half of this additional production capacity could come from Saudi Arabia alone, according to the report issued on Sept. 7 by Proleads, a market research firm based in the United Arab Emirates.

The report reveals that within the Gulf Cooperation Council (GCC) countries, approved upstream oil projects designed to either maintain or increase production capacity have soared in value from below $1.5 billion in 2006 to a 2008 peak of $30 billion.

Proleads is also tracking a record of nearly 300 active upstream oil projects with a combined value of almost $300 billion across the six-country GCC, which includes Bahrain, Oman, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates.

“Recent analysis of total global oil production and development projects shows that world crude production capacity from all sources has the potential to rise from 87 million barrels per day to as much as 108 million by 2015,” Proleads Director Emil Rademeyer noted in a company press release.

“Our analysis shows that if all current projects across the region meet their projected targets in barrels of oil a day, it would mean that by 2015 the hydrocarbon-rich countries of the GCC will be supplying more than half that future added oil capacity,” he added.

Rademeyer noted that not all of the added oil capacity will be exported as crude.

“Much will be destined for the booming regional domestic markets where new refinery and petrochemical projects are also at a record level,” he said. Rademeyer credited advanced oil recovery technology with boosting the increase in oil production.

“Most of the current projects will use enhanced oil recovery techniques that can suck up 70 percent of the oil,” he said, “compared with conventional extraction of only around 35 percent.”

The Proleads report added that between 2008 and 2009 alone, Saudi Arabia has initiated projects that will increase production capacity by more than 1.6 million barrels a day. More projects in Saudi Arabia are targeting 5.2 million barrels a day in added capacity by 2015.

“Saudi Arabia is leading the way and would contribute more than half the 10 million barrels a day in added capacity if all projects deliver on target by 2015,” Rademeyer said. “Saudi Arabia, with one-fifth of the world’s proven oil reserves and some of the lowest production costs has an aggressive energy sector investment initiative.”

The report noted that Saudi Arabia currently maintains the world’s largest crude oil production capacity, estimated to be around 10.5–11 million barrels per day. In July 2008, the kingdom raised output to the highest rate in more than 25 years.

By 2010, Qatar, which is richer in gas than oil, is targeting an increase of 1.4 million barrels a day in added production capacity.

Projects approved in the United Arab Emirates indicate an added oil production capacity of almost 1.9 million barrels a day by 2013. Abu Dhabi, which has the world’s fifth-largest oil reserves, recently announced it intends to raise crude production by 30 percent in the next two years, to 3.5 million barrels a day by 2010.

In Kuwait, current approved projects indicate an increase in capacity of around one million barrels a day by 2011. The Proleads report, however, noted that this does not take account of expected developments in the country’s northern fields, which have yet to be approved.

Oman, where fields have been depleting, hopes to achieve added capacity of around 460,000 barrels a day by 2012, while in Bahrain — where oil production has peaked — output capacity is only expected to increase by 35,000 barrels a day by 2015.

Rademeyer warned that growing economic gloom worldwide could put a halt to increasing energy use.

“These concerns are shared by some within OPEC [Organisation of Petroleum Exporting Countries] who think that the future demand for oil may not be strong enough to justify the huge investment in boosting production,” he added.

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