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Khursaniyah on track,
says Aramco

Saudi Arabian state-owned giant Saudi Aramco, will bring its 500,000 bpd Khursaniyah field onstream by August, according to Amin Nasser, senior vice-president of exploration and production. The Khursaniyah project, formally known as the AFK project, comprises the development of three Arab light and medium crude-producing fields: Abu Hadriya, Fadhili, and Khursaniyah.

The project was originally scheduled to come onstream in December 2007, but delays-mainly on the associated gas-processing facility-have delayed progress for more than six months. Crude from the project has been produced at very low levels for some time, however; because of regulations against flaring, production has been curtailed until the treatment plant has been completed.

Meanwhile Nasser also said that Saudi Aramco ‘is 100 per cent confident that Khurais will come onstream as planned in June 2009’, according to Reuters. The US$10 billion Khurais project will add 1.2mn bpd of production capacity to the Kingdom. He did, however, tell Reuters that costs were rising and that each added barrel of capacity at Khurais cost around US$9,000 to bring onstream.

Significance: The Khursaniyah project has been portrayed as the exception that proves the rule, given that other large-scale projects executed by Aramco have been on time and largely within budget. The AFK development has suffered from the global shortages of both construction material and skilled personnel.

Given that the last update on Khursaniyah's progress said that Saudi Aramco was set for a start-up in June or July, it has been widely believed that the additional 200,000 bpd crude output pledged by Saudi Arabia for July recently would be taken from Khursaniyah's increment. This now seem not to be the case. Khurais will greatly enhance Saudi production capacity, but will do little to actually raise exports, as it comes onstream mainly to offset production declines elsewhere.

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