By Reem Shamseddine
Development to compensate for declining capacity says Saudi Aramco CEO.
State oil giant Saudi Aramco sees the cost of developing its Moneefa heavy crude field at nearly $16 billion, its chief executive indicated in remarks posted on its website on Monday, up around $7 billion from the initial estimate.The industry-wide trend toward higher costs would affect the project, Khalid al Falih said. Costs rose rapidly during the oil price rise to record levels in 2008, although they have since fallen due to the global recession and declining energy demand.
Moneefa is the last of a series of large oilfield development projects scheduled in the world's top oil exporter. Aramco completed projects earlier this year that took Saudi total capacity to 12.5 million barrels per day (bpd).
Moneefa will eventually have capacity to pump 900,000 bpd. Output would begin in 2013 and the project would be completed in 2015, Falih said.
Moneefa will begin production in 2013 and will be completed in 2015, said Falih iin a speech delivered on Dec 4 in India and posted on Aramco's website on Monday.
The cost for Moneefa would be seven times as much as another recent development at the Haradh crude field, which cost $2,500 per barrel of daily oil production capacity added, he added.
That would indicate Moneefa would cost around $15.8 billion, or about $17,500 per daily barrel of oil capacity, according to Reuters calculations.
Aramco slowed work on the project as it looked to cut costs on oil service contracts at the field and across its energy industry.
A slump in global energy demand has made further oilfield development less urgent for the world's top oil exporter.
Aramco had decided to push on with the project despite the slump in oil prices last year, Falih said.
"We reviewed the programme, and with some execution plan modifications, including deferring completion by two years, decided to continue," he added.
Aramco is developing Moneefa to compensate for declining capacity at other fields rather than to add to total capacity.
Aramco plans to explore for oil and gas in the deep waters of the Red Sea off its eastern coast, Falih said in the speech.
Technology has made non-conventional oil and gas reserves economically viable, he said.
Last month, he told Reuters Aramco planned to drill in deeper offshore frontiers in 2012.
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