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According to the Wall Street Journal, repairs on the Khurais field and on the Abqaiq processing plant could take several months, instead of the already estimated ten weeks, citing foreign companies working for the Saudi giant.
Aramco, said contractors at the WSJ, are in urgent talks with equipment manufacturers and service providers and are willing to pay higher rates for faster delivery and installation. Nevertheless, the repair work could take months, as the equipment still needs to be manufactured, delivered and installed, and it could take up to a year, said Summer Said of the WSJ, citing Saudi officials.
The report suggests that Aramco's initial expectations were perhaps too optimistic. As a result, we could soon see a further rise in prices: the attacks on Khurais and Abqaiq took off 5.7 million bpd in all on the world oil markets.
Last week, the energy minister, Abdulaziz bin Salman, had tried to reassure the traders, telling the media that more than half of the lost production had been restored. According to Ben Salman, by the end of September, Saudi Arabia 's production capacity would be 11 million bpd and 12 million bpd by the end of November.
However, according to Wall Street Journal sources, this is unlikely to be the case, as the equipment that will replace the one destroyed by the attacks will have to be made to measure, which takes time.
Bloomberg said earlier this month that Saudi Arabia stores about 50 million barrels of oil in its country and another 80 million barrels stored abroad. This will be enough to keep exports at normal rates, but some expect a supply deficit to widen towards the end of next month.
Uncertainty grows as a result of conflicting reports: early media reported that Saudi Arabia had asked Iraq to use light crude to protect itself from a deficit of supply, then Riyadh said he never did it. Now, the official position remains that the repairs will take a few weeks, the WSJ report suggesting that this might not be the case.
Prices remained relatively indifferent to the latest updates, although Brent and WTI both increased by more than a percentage point compared to Friday at the time of writing.
By Irina Slav for Oilprice.com
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