DUBAI (Reuters) - State oil giant Saudi Aramco will bring new crude output capacity of some 550,000 barrels per day (bpd) online in the fourth quarter from two fields - Khurais and Manifa - giving it the ability to boost production if there is demand, a source said.
The expansion of crude output capacity from Khurais field, which produces light sour crude, will add around 250,000-300,000 barrels per day boosting the field potential to 1.5 million bpd, one source familiar with the matter said.
The resumption of production from the giant Manifa field, which pumps heavy sour oil, after resolving some maintenance issues will add another 300,000 bpd to Aramco’s crude output capacity, the source said.
Saudi Aramco declined to comment.
Saudi Arabia, the world’s largest oil exporter, is the only major producer with oil output capacity of about 12 million bpd. The additional output increase will not raise Aramco’s capacity above the current 12 million bpd.
But that would give the company more flexibility to boost supplies and reach higher production levels sooner than before.
Saudi Arabia currently pumps around 10.5 million bpd and will quietly add extra oil to the market over the next couple of months to offset a drop in Iranian production.
Saudi Energy Minister Khalid al-Falih said last week that production from Manifa would return to 900,000 bpd soon after a pipeline issue has been resolved which has caused output decline from the field over the past months.
The Khurais expansion project is crucial to help Saudi Arabia sustain its spare capacity and help reduce pressure on ageing fields, long seen by the market as a crucial cushion that can balance the market during times of oversupply or shortage.
Spare capacity is the kingdom’s tool to allow it to raise output quick enough in case of any sudden supply outage or to keep oil prices in check.
Reporting by Rania El Gamal; Editing by Alexandra Hudson