A top executive of Saudi Arabian Oil Company said his country does not plan to increase its oil output to 15 million barrels a day, from its already 12 million capacity.
Khalid Al Falih, Chief Executive of Saudi Arabian Oil Company, ruled out any expansion. “It is difficult to see an increase in capacity because there are too many variables happening. You’ve got too many announcements about massive capacity expansions coming out of countries like Brazil, coming out of countries like Iraq. The market demand is addressed by others,” he?explained in an interview on Saturday.
Saudi Arabia is part of the Organisation of Petroleum Exporting Countries (OPEC) and had to increase its oil production in early 2011 to just over 9 million barrels a day, due to the uprisings in Libya which is also a fellow member of OPEC.
“Our objective is not to grow our production for the sake of growing our production,” Falih said while adding: “but to be there for the market if the market needs it, and we are waiting to see what happens on the supply side as well as how demand stabilises.”
Saudi oil minister, Ali Al-Naimi, also reiterated the same position in an interview with Al-Arabiya television on Satruday. ?The demand for Saudi oil in 2011 would be within the limits of 1 million barrels per day, which is up from 2010 levels. In 2012, demand will increase to 1.1 million barrels, and will rise to 1.3 million barrels in 2013,? al-Naimi responded when asked about the Kingdom’s oil strategy.?He also explained that Saudi Arabia produces oil ?to meet the demands of its customers? and would consider increasing its production at ?customer?s request?.
Over the past year, Brazil has announced the finding of a new offshore field that is set to increase its oil production. Iraq has also made its intentions to boost its oil production?with the opening of a port in southern Iraq.
Despite these announcements, oil prices have been on a 12-month low until the middle of last week pushing it to $82.98 a barrel. Analysts predict oil prices will get a big boost if the eurozone crisis are amicably resolved and US economy posts signs of modest recovery.
Sources: BusinessWeek,?Wall Street Journal,?Al Arabiya News