Kingdom’s oil output of 13 million bpd by 2027, minister says

Saudi Arabia, Opec’s largest producer, is on track to increase oil production to more than 13 million barrels per day by the start of 2027, its energy minister has said.

The current production capacity of Saudi Arabia, the Arab world’s largest economy, is 12 million bpd.

“We are going to go to 13.2 to 13.3 [million bpd] subject to what we will do in the divided zone but most likely it will be 13.3 and 13.4 and that will be attended to the end of 2026 or beginning of 2027,” Prince Abdulaziz bin Salman said.

“Can we or should we continue maintaining it? Yes, when we get there, if the market allows for maintaining it, we will maintain it.”

Prince Abdulaziz was addressing an energy conference in Bahrain yesterday.

Saudi Arabia and Kuwait resumed oil production from shared oilfields along their Neutral Zone in 2020 after operations in the territory were halted in 2015.

About 300,000 bpd of crude was pumped from the zone by the two countries before production was stopped.

“We are ... improving [capacity] with our friends Kuwait. We are trying to first go back to old capacities,” Prince Abdulaziz said. He also repeated earlier calls for increased investments in the oil and gas sector globally and said the world was “running out of capacities at all levels”. Supply chain issues are further exacerbating the effects, he said. “At a time like this, we need more excess capacity to give people the comfort that they have the ability to say that we have contingency,” Prince Abdulaziz said.

The investment in the upstream part of the oil and gas sector fell 23 per cent below pre-coronavirus levels to $341 billion last year, the International Energy Forum and IHS Markit said.

Referring to market volatility, Prince Abdulaziz said: “Who is doing a better job, Opec+ or unregulated markets?”

Prices of other commodities have surged by more than 200 per cent over the past year, while oil has increased more than 60 per cent. Opec+, which achieved a historic cut of 9.7 million barrels per day between May 2020 and July last year, is unwinding cuts due to improving demand. It was adding about 400,000 bpd to the market every month and increased that to 432,000 bpd for May and June.

On the Durra natural gasfield, located in an energy-rich area shared with Kuwait, Prince Abdulaziz said both countries were proceeding with its development.

Last month, Saudi Arabia and Kuwait invited Iran to hold negotiations to determine the eastern limit of the joint offshore area and reaffirmed their right to develop the gasfield located within it. “We are proceeding with that field, we made a public statement encouraging Iran to come to the negotiating table,” Prince Abdulaziz said.