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Giant oilfield to raise Saudi output | |
(1 day later) | |
By Andrew Walker Business correspondent, BBC World Service, Khurais, Saudi Arabia | By Andrew Walker Business correspondent, BBC World Service, Khurais, Saudi Arabia |
Workers brave the heat to get the project finished in time | Workers brave the heat to get the project finished in time |
The desert sun is beating down. The temperature is 44 degrees Celsius. And yet there are men working in the baking heat. | The desert sun is beating down. The temperature is 44 degrees Celsius. And yet there are men working in the baking heat. |
Not all that energetically, perhaps, but they are working nonetheless. For them, there is no escaping on board the visiting air-conditioned bus. Instead, simple shelters provide scant, yet welcome, relief. | |
Welcome to Khurais in the Saudi Arabian desert, 160 kilometres east of the capital Riyadh. | Welcome to Khurais in the Saudi Arabian desert, 160 kilometres east of the capital Riyadh. |
It is described by the national oil company, Saudi Aramco, as the largest oilfield development in the history of the industry, containing 27 billion barrels of oil. | It is described by the national oil company, Saudi Aramco, as the largest oilfield development in the history of the industry, containing 27 billion barrels of oil. |
Huge investment | Huge investment |
The main site is called a central processing facility that will be able to handle 1.2 million barrels a day of crude oil, from three separate oilfields. | The main site is called a central processing facility that will be able to handle 1.2 million barrels a day of crude oil, from three separate oilfields. |
That would be more than 10% of Saudi Arabia's total oil production capacity. | That would be more than 10% of Saudi Arabia's total oil production capacity. |
The project also includes 310 new wells and the improvement of 110 existing ones. | The project also includes 310 new wells and the improvement of 110 existing ones. |
Khurais is described as the largest oilfield development yet | Khurais is described as the largest oilfield development yet |
A sea-water treatment plant on the Gulf coast is also being expanded. | |
It will supply an extra two million barrels a day of water to inject into the ground to maintain the pressure as the oil is extracted | It will supply an extra two million barrels a day of water to inject into the ground to maintain the pressure as the oil is extracted |
The plan for the whole project involves 4,000 kilometres of piping, and nearly half a million cubic metres of concrete. | |
In total, there are 28,000 people working on the project, although they are not all toiling under the desert sun. | In total, there are 28,000 people working on the project, although they are not all toiling under the desert sun. |
All this comes with a hefty price tag - $10bn (£5bn). | |
Raised output | Raised output |
The Khurais project is a key element in Saudi Arabia's $60bn plan to increase its production capacity. | The Khurais project is a key element in Saudi Arabia's $60bn plan to increase its production capacity. |
The Kingdom's aim is to be able to produce 12.5 million barrels a day by the end of next year, though Saudi Arabia generally keeps some spare capacity. | The Kingdom's aim is to be able to produce 12.5 million barrels a day by the end of next year, though Saudi Arabia generally keeps some spare capacity. |
Its current production is about 9.7 million barrels a day. | Its current production is about 9.7 million barrels a day. |
Without delay | Without delay |
Outside Saudi Arabia there is not much spare capacity among oil suppliers. | Outside Saudi Arabia there is not much spare capacity among oil suppliers. |
Many analysts say that is one of the key reasons prices are so high - although that is not the prevailing view in Saudi Arabia, where they blame speculators in financial markets. | Many analysts say that is one of the key reasons prices are so high - although that is not the prevailing view in Saudi Arabia, where they blame speculators in financial markets. |
Some 28,000 workers are involved with the Khurais project | Some 28,000 workers are involved with the Khurais project |
So it does matter to oil importing countries that Khurais should be ready to pump oil on time in June next year. | So it does matter to oil importing countries that Khurais should be ready to pump oil on time in June next year. |
Aramco executives say it will be. | Aramco executives say it will be. |
On this site in the desert, the central processing facility, construction started in February last year. | On this site in the desert, the central processing facility, construction started in February last year. |
Mohammed Rabeh from Aramco's project department says it is now 55% complete and 99% of the materials are on site. | Mohammed Rabeh from Aramco's project department says it is now 55% complete and 99% of the materials are on site. |
But outside Saudi Arabia there are some doubts. | But outside Saudi Arabia there are some doubts. |
Another Aramco project to bring capacity on stream is behind schedule. | Another Aramco project to bring capacity on stream is behind schedule. |
The Khursaniya project was supposed to be ready at the end of last year. | The Khursaniya project was supposed to be ready at the end of last year. |
It still isn't. | It still isn't. |
Amin Nasser, a senior vice-president of the company, says it will be ready in August. And he insists Khurais will be on time. | Amin Nasser, a senior vice-president of the company, says it will be ready in August. And he insists Khurais will be on time. |
'Peak oil' | 'Peak oil' |
If it is on time, it should help Saudi Arabia keep ahead of demand. | If it is on time, it should help Saudi Arabia keep ahead of demand. |
Mr Nasser points out that it costs money to maintain spare capacity. | Mr Nasser points out that it costs money to maintain spare capacity. |
Sceptics say there is less oil beneath the sand then the Saudis estimate | Sceptics say there is less oil beneath the sand then the Saudis estimate |
Saudi Arabia generally does do that, in order, he says, to stabilise the market. | Saudi Arabia generally does do that, in order, he says, to stabilise the market. |
With oil prices so high, you might wonder what on earth he means by stability, but he insists that prices are not high because of any shortfall in supplies. | With oil prices so high, you might wonder what on earth he means by stability, but he insists that prices are not high because of any shortfall in supplies. |
And it is certainly true that unused capacity doesn't come cheap. | And it is certainly true that unused capacity doesn't come cheap. |
There is also a bigger and longer term question about Saudi Arabia's oilfields. | There is also a bigger and longer term question about Saudi Arabia's oilfields. |
It is what's called the "peak oil" hypothesis. That's the idea that the world is at or close to the maximum level of sustainable oil production it can achieve. | It is what's called the "peak oil" hypothesis. That's the idea that the world is at or close to the maximum level of sustainable oil production it can achieve. |
The geologists, economists and analysts who take that view argue that Saudi Arabia's reserves are not as plentiful as they tell us. | The geologists, economists and analysts who take that view argue that Saudi Arabia's reserves are not as plentiful as they tell us. |
Looking round this hot sandy construction site it's impossible to tell. But in Saudi Arabia they insist the oil will last for decades. | Looking round this hot sandy construction site it's impossible to tell. But in Saudi Arabia they insist the oil will last for decades. |
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