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Giant oil field to raise Saudi output Giant oilfield to raise Saudi output
(1 day later)
By Andrew Walker Business correspondent, BBC World Service, Khurais, Saudi ArabiaBy Andrew Walker Business correspondent, BBC World Service, Khurais, Saudi Arabia
Workers brave the heat to get the project finished in timeWorkers 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. 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 investmentHuge 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 yetKhurais is described as the largest oilfield development yet
A sea water treatment plant on the Gulf coast is also being expanded. 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 extractedIt 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 meters of concrete. 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). All this comes with a hefty price tag - $10bn (£5bn).
Raised outputRaised 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 delayWithout 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 projectSome 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 estimateSceptics 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.