Pumping starts on major new Saudi oil field

NEW RESOURCE: Saudi Aramco have started pumping from a new oilfield. (Getty Images)

The world's top oil exporter Saudi Arabia has started pumping crude from the 500,000 barrels per day (bpd) Khursaniyah field, a source at state oil giant Saudi Aramco said on Wednesday.

The oilfield is the largest single increment to global oil production capacity for several years. First output was delayed from the scheduled start date in December 2007.

Khursaniyah will take Saudi Arabia's total production capacity to around 11.8 million bpd from around 11.3 million bpd, although total capacity may be slightly below that due to fields declining elsewhere.

"The facility is operational and producing crude," the source said. He was unable to give more details on actual output or when all of Khursaniyah's capacity would be ready to produce.

"Its production rates are dependent on our (company's) monthly production targets for each facility," the source said.

The field produces light crude, favoured by global refiners because it is easier than heavy crude to process for transport fuels.

The kingdom pledged to boost output to 9.7 million barrels per day (bpd) in July, the fastest rate for 27 years, to help meet rising demand from its customers and tame runaway oil prices. Oil prices have since fallen around $40 from their July peak of over $147 a barrel.

Saudi Arabia aims to boost its total oil production capacity to 12.5 million bpd by the end of next year. The kingdom has a long-held policy of keeping 1.5 million bpd to 2.0 million bpd of spare capacity to meet any unexpected outages in global supply.

Delays in the construction of a gas processing facility at Khursaniyah had prevented start up of oil output there. Aramco has said it could have started pumping earlier but wanted to avoid burning off gas produced.

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