Opec’s Market Strategy Shrinks Spare Capacity

Saudi Arabia, Kuwait and the UAE are operating a record number of drilling rigs, bucking the industry trend at a time of low oil prices. But the reasons behind this latest rush to drill are not uniform nor are they likely to result in an immediate rise in production capacity. If anything, a dispute between Kuwait and Saudi Arabia over the Neutral Zone has taken more than 500,000 b/d of capacity off markets and volumes are not expected to be restored from the 300,000 b/d offshore Khafji oil field until 2017 at the earliest, MEES understands.

KEEP ON DRILLING

“You know we have natural decline of around 6% from our producing fields so we need to keep drilling if we are to maintain our current production,” a senior Saudi industry source tells MEES. Current production is at 10.2mn b/d, give or take a few barrels, the source says, adding that Saudi Aramco is satisfying all customer demand for crude oil. (CONTINUED - 2937 WORDS)

DATA INSIDE THIS ARTICLE

table OPEC Wellhead Production, April 2015 (Mn B/D, Mees Estimates)