OPEC star Saudi Arabia looks to raise oil export capacity

30 March 2011 30 March 2011

BonTrade

Last weekend OPEC’s star crude oil exporter Saudi Arabia called apon top oilfield service firms to help the country quickly boost its oil rig count by 30 percent to help give Saudi Arabia additional capacity to export oil as the world faces tighter supplies.

Saudi Arabian state run oil giant Aramco met with leading oil service companies and announced plans to quickly expand its oil rig count to ensure it has extra production capacity, and in turn, exports.

“The rig count leap is likely imminent, and expected to accelerate in the second half of 2011 and into 2012. The risk premium in the Middle East has risen. Also, with Libyan production falling, Saudi Arabia may feel it has to be ready for higher oil production capacity.” according to Simmons & Co analyst Bill Herbert.

Herbert wrote that Saudi Arabia is targeting a 30 percent increase in the rig count, to 118 from a current number around 92. He confirmed details of the Saudi meetings with oil service companies from Halliburton and Baker Hughes and called the Saudi plans manifestly positive for large service companies active in Saudi Arabia.

Saudi Arabia is currently believed to be pumping more than 9 million barrels of oil per day after lifting crude oil output amid a slowdown in Libya’s oil exports, while unrest in the Middle could play a part in OPEC’s future oil output targets.

Saudi Arabia – Oil Exports

Saudi Arabia’s stated oil exports are estimated to be 12 million barrels of oil per day, although many analysts believe that Saudi Arabia’s real exporting capacity is much lower than this figure.

During the oil price spike of 2008, Saudi Arabia managed to raise crude oil exports to around 9 million barrels per day, from around 8 million barrels per day earlier on in the year.