* Saudi Arabia calls on oil service cos to boost rig count
* Kingdom looks to rapidly boost rigs by 30 percent
* Move “manifestly positive” for oil service cos-Simmons
* Shares in Halliburton, Baker Hughes, Schlumberger soar
* Saudi push to expand oil capacity is unexpected-Simmons
(Updates with details, company comment, share prices.)
By Joshua Schneyer
NEW YORK, March 28 (Reuters) - Saudi Arabia, the world’s top oil exporter, has unexpectedly called on top oilfield service companies to help quickly boost the country’s oil rig count by 30 percent to expand production capacity, Simmons & Co analyst Bill Herbert said on Monday.
Saudi state-run oil giant Aramco met with leading oil service companies, including Halliburton (HAL.N), over the weekend to announce ambitious plans to increase its rig count, Herbert wrote in a research note.
It was not immediately clear whether Saudi Arabia was seeking more rigs to increase its idle spare production capacity beyond an estimated 3 million barrels per day currently, or simply ensure it can maintain the extra pumping power to meet any disruptions in international oil markets.
“Saudi Arabia has been expected to tread water on its production capacity, so this is unexpected,” Herbert said from Houston in a phone interview with Reuters.
“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 production capacity.”
Aramco has stepped up production over the last several weeks to make up for a loss in Libyan output, but the Kingdom hasn’t released any plans to expand its overall capacity since completing a $100 billion plan to increase capacity by 3 million bpd to a “sustainable” 12 million bpd last year.
Herbert said Aramco wants to see the Saudi oil rig count soar to 118 from a current level around 92, while it’s “dusting off” a slow-going, $16 billion, 900,000-bpd oil project known as Manifa.
The rig count increase is imminent, and expected to “accelerate” in the second half of 2011 and into 2012, Herbert wrote.
Later, Halliburton said in a press release that it plans to accelerate activity at Manifa, a project to tap massive offshore heavy crude reserves, following discussions with Saudi Arabia. In 2008, Halliburton was awarded a major contract to provide drilling and associated work at 93 Manifa wells off northeast Saudi Arabia.
Herbert called the Saudi plans “manifestly positive” for oil service companies. Halliburton shares soared 4 percent to $47.90 on the New York Stock Exchange, after touching a 52-week high. Shares in Schlumberger (SLB.N) also rose more than 4 percent, while Baker Hughes BHI.N rose 3.8 percent.
The country, OPEC’s top producer, controls more than a fifth of world oil reserves.
Saudi Arabia is currently believed to be pumping more than 9 million bpd of crude after lifting output amid a slowdown in Libya’s oil exports which have been crimped by a bloody conflict between rebels and the regime of Muammar Gaddafi.
Herbert said Saudi Arabia may be moving to boost spare capacity as it comes closer to reaching its operational capacity, or as it girds against the risk of further political unrest across the Middle East that could curtail production elsewhere. (Additional reporting by David Sheppard; Editing by Marguerita Choy)