Aramco on track to hit capacity target

State-owned Saudi Aramco, the world's top oil exporter, is on track to boost capacity to 12 million barrels per day (bpd) by mid-2009, the company's new CEO Khalid Al-Falih told Al-Arabiya television on Sunday.

"In the second half of 2009 Saudi Aramco will reach 12 million bpd of crude oil," Al-Falih said. "If you add the capacity from the neutral zone shared with Kuwait the capacity will be 12.5 million bpd."

Aramco and France's Total have delayed a bid round for a new $12-billion 400,000 bpd refinery at Jubail to February from November, Al-Falih said.

"We did not decide to re-issue the tender but rather to extend the date of bids from contractors from the eleventh month, this month, to February... so that contractors can make more suitable bids," said Al-Falih, who was named chief executive a week ago and will take up his new post on Jan. 1.

Aramco and Total said in June they would award all the tenders for the construction of the refinery in the first quarter of 2009.

On Friday, ConocoPhillips and Aramco said they halted bidding on the construction of the 400,000 bpd joint-venture Yanbu refinery in Saudi Arabia, citing uncertainties in financial markets.

Yanbu, which had a price tag of $6 billion when it was announced in 2006, was one of four plants planned by the world's top oil exporter to boost its refining capacity.

Al-Hayat newspaper, a Saudi owned daily, said on Saturday the launch of many oil-related projects in the world's largest oil exporter could be delayed to 2009.

Saudi Arabia has set a March 7 deadline for prequalified firms to present detailed proposals to build the Jizan refinery which will have a capacity of 250,000-400,000 bpd.

The tender for Jizan has been delayed several times from initial plans to open bidding in the second quarter of 2007.

Turmoil in credit markets and tumbling oil prices have prompted energy firms around the world to reconsider expensive projects or cut back on spending to preserve liquidity.

Global refining margins have been falling on weaker demand due to a slowing economy and increased supply from new export refinery capacity. (Reuters)

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