Saudi Aramco Raising Oil Reserves 25%.

Saudi Aramco is quadrupling exploration activities to boost its oil reserves by 25% by 2025, a Saudi Aramco official said on May 15. Saudi Aramco has 260 bn barrels of proven oil reserves. Addressing the Arab Energy Conference in Jordan on May 15, Muhammad al-Qahtani, Saudi Aramco's manager for production and facility development, said: "The 260 billion barrels represent 36% of discovered oil resources; this is the so called oil initially in place. We have 716 billion barrels of discovered resources.

"We produced 106 billion barrels so far, that is 15%, and 36% is our proven reserves. We are estimating that by 2025 we will increase total discovered resources to more than 900 billion barrels. The role of exploration is to increase the size of the pie and the role of development is to take more out of the pie".

Saudi Aramco has fast tracked plans to boost oil production capacity to 12.5m b/d by 2009 to help meet growing global demand for oil. The Saudi output capacity now stands at 11.3m b/d.

Qahtani said: "Over the next five years, we are almost more than quadrupling our exploration activities, keeping the level of exploration for the non-associated gas programme and also heavily increasing our exploration in the crude [oil] programme". He said Saudi Aramco was employing technology to overcome the challenges to exploration in the kingdom which is characterised by a diverse geology, harsh environment and some difficulties in acquiring land seismic data. Saudi Aramco has been using advanced and smart well technology at Abqaiq field, which has been producing since 1948.

Naimi told the same conference: High crude oil prices lead consumers to think twice before they spend. Oil now stands at just above $70/b, having shot past $75 in late April on fears of supply disruptions in major producers Iran and Nigeria. Investors are taking profits after recent reports that dear oil is denting demand for fuel.

On the sidelines of the Amman conference, Naimi told reporters: "In general, when prices are high, people check their pockets. When they are lower, they open them". Record high oil prices led the IEA, adviser to 26 industrialised countries, to cut its global oil demand growth forecast on May 12 (see OMT).

Naimi said the IEA forecast could change, adding: "The IEA revises their numbers regularly. Today it {world demand growth) is denting, tomorrow it is accelerating". He said there was no lack of oil producing capacity in the world and that supplies of crude oil were running ahead of demand. Dealers were cashing in profits across commodity futures markets, prompting some to speculate that the commodity's bubble may be about to burst.

Naimi said: "Bubble. This is an economic term. I am not an economist. But bubbles have happened in the past, they will happen in the future. The question is definition".

On May 14, participants in the Arab Energy Conference asserted the importance of co-ordination to confront international challenges facing the energy sector in the Arab world. Naimi called on Arab oil producing countries to evaluate their oil industries to estimate their ability to develop, compete, and confront challenges.