Saudi Arabia will invest $20 billion in the next few years to maintain and possibly expand its oil production capacity, Saudi Energy Minister Khalid al-Falih has said, according to Reuters.
Key points (Source: Reuters)
The Kingdom had not decided yet whether it wants to take its capacity up to 13 million barrels per day (bpd) or keep it at current levels.
This spare capacity is not just a natural reservoir that we have. This is very expensive investments for the kingdom, and some of our partners within OPEC and OPEC+ have elected to invest to maintain (oil capacity) to have the readiness on a short notice.
The next 1 million bpd of Saudi capacity is going to cost us over $20 billion. It costs us $2 billion a year of operating expenses to staff and maintain these facilities.
1.3 (million bpd of spare capacity) will be waiting for the demand to materialize.
Some in Asia have requested more barrels than in the contracts. As a result … the exports will exceed the loading schedule at 7.7 million bpd, which is a very high number.
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