Saudi Arabia’s state-owned oil giant Aramco said it is ready to ramp up output to its maximum capacity of 12 MMbbl/d by 2025 to meet world’s energy needs, the company’s CEO Amin Nasser, told reporters during an earnings call on August 14.
“We are confident of our ability to ramp up to 12 million b/d any time there is a need or a call from the government or from the ministry of energy to increase our production,” Nasser said.
“It is going come gradually in 2024. I mean limited increase but in 2025, we should go to 12.3 million b/d and in 2026, we should go to 12.7 million b/d before reaching 13 million b/d by 2027,” he said.
Aramco chief added that the company’s spending will be focused on “growth not only in oil and gas [but] hydrogen [and] crude-to-chemicals. So there’s a lot of programs that we are working on so that would require a growth in our capital program year-on-year, until 2025 and then maybe hopefully it will stabilize later on,” Nasser said.
Saudi Arabia, alongside fellow OPEC producer UAE, holds virtually all of the world’s remaining spare capacity.
The kingdom plans to bring on additional capacity in increments, with its Dammam field set to provide a further 75,000 bbl/d by 2024, and the offshore Marjan and Berri fields expected to add 300,000 bbl/d and 250,000 bbl/d, respectively, by 2025. The expansion of the Zuluf field is projected to add another 600,000 b/d by 2026, with the Safaniyah development also set to add 700,000 b/d by late 2027.
Saudi Aramco’s spare capacity
Despite Nasser’s confidence in bringing production on-stream quickly and sustaining it, several analysts doubt the capacity.
S&P Global vice chairman Daniel Yergin recently said in a note that Saudi Arabia does not appear to have a large amount of extra oil that can be produced at short notice.
Yergin’s statement reflects industry-wide doubts about Saudi Arabia’s ability to reach and sustain peak output levels without damaging its reservoirs.
If Saudi Arabia maximizes output and exhausts its spare capacity, there will be no room to cover a production shortfall in other countries due to war, accidents or weather-related outages. Additionally, Saudi Arabia will also lose its strategic advantage — especially if it tries and fails to produce at full tilt, according to commentary by Ben Cahill, senior fellow of Energy Security and Climate Change Program at the Center for Strategic and International Studies.