Aramco Confirms Having Brought 500,000-b/d Khursaniyah Field Onstream

[phantom power]

The 500,000-b/d light crude Khursaniyah field has been confirmed by Saudi Aramco to be onstream, without further specification of whether its production supplied the bulk of July's production increase.

Significance
The Khursaniyah field represents the largest single increment in Saudi production capacity coming onstream in years and lifts the Kingdom's overall production capacity to around 11.8 million b/d.

Implications
Having originally been delayed since December 2007 because of global material shortages suffered in the construction of its associated gas-processing plant, early testing of the field began some months ago. The perceived failure of Saudi Arabia to react to rapid crude price increases in the first and second quarters of this year, not increasing production until July, did, however, raise the suspicion that early Khursaniyah production was used when the increases finally came.

Outlook
Having brought the field onstream, Saudi Aramco's light crude production capacity has been significantly boosted and eventual future production cuts are more likely to affect its heavy oil production. If it should be revealed that Khursaniyah was used for the bulk of the recently added export volumes, Saudi Arabia's critics would continue to spread scepticism over whether its swing production capacity is real or not.

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