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(Bloomberg) – Saudi Aramco, the world's largest crude oil exporter, has signed $ 18 billion worth of contracts to boost the production capacity of two offshore oilfields, even as the kingdom and its OPEC partners limit their production.
The Saudi oil company will add 550,000 barrels a day of crude oil production capacity to its Marjan and Berri fields, a statement said in a statement. It will increase the natural gas production capacity of the deposits by 2.5 billion standard cubic feet per day. Aramco awarded 34 contracts, half of which to Saudi companies, the statement said.
McDermott International Inc., Saipem SpA (Italy), Subsea 7 SA (Norway), Tecnicas Reunidas SA (Spain) and China Petroleum & Chemical Corp. were among the companies awarded a contract, according to a photo provided by Aramco at the signing ceremony. Indian companies Larsen & Toubro Ltd. and Hyundai Engineering & Construction Co. of South Korea have also signed contracts.
The statement itself did not indicate the 16 companies to which contracts had been awarded, nor the date on which the Marjan or Berri projects would be completed.
Reserve capacity
Aramco, officially known as the Saudi Arabian Oil Co., plans to put in operation about 1 million barrels of oil per day by 2023 to offset reductions in some other fields. Aramco plans to maintain a production capacity of 12 million barrels a day, even though it regularly pumps around 10 million barrels a day.
Saudi Arabia, which has the largest reserves of conventional crude oil in the world, has long benefited from its prolific deposits to help balance global oil markets. Riyadh is looking to keep some of its capacity available for quick use so that it can react quickly to any shortage. The Organization of the Petroleum Exporting Countries and its allies, including Russia, have decided this month to expand their production cuts by 2020 in an attempt to drive up prices as US stocks rise.
"These two programs will significantly improve Saudi Aramco's oil production and gas processing capabilities," Amin Nasser, chief executive, said in a statement. Expansions on the ground will help meet "the growing demand for oil in the long run," he said.
Marjan's development will add a capacity of 300,000 barrels a day to Aramco's mix, the average gross crude, the statement said. The Berri project will bring an additional capacity of 250,000 barrels a day for Arabian Light crude oil. Aramco produces more Arab light than any other category.
(Updates with the names of the winners of the contract in the third paragraph.)
To contact the reporter on this story: Anthony DiPaola in Dubai at [email protected]
To contact the editors in charge of this story: Nayla Razzouk at [email protected], Bruce Stanley, Mohammed Aly Sergie
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