Saudi Arabia, Opec’s largest producer, is on track to increase oil production to more than 13 million barrels per day by the end of 2026 or the start of 2027, its energy minister has said.
The current production capacity of Saudi Arabia, the Arab world's largest economy, is 12 million bpd.
“We are going to go to 13.2 to 13.3 [million bpd] subject to what we will do in the divided zone but most likely it will be 13.3 and 13.4 and that will be attended to the end of 2026 or beginning of 2027,” Prince Abdulaziz bin Salman told an energy conference in Bahrain on Monday.
“Can we or should we continue maintaining it? Yes, when we get there, if the market allows for maintaining it, we will maintain it.”
Saudi Arabia and Kuwait resumed oil production from shared oil fields along their Neutral Zone in 2020 after operations in the territory were halted in 2015.
About 300,000 bpd of crude was pumped from the zone by the two countries before production was stopped.
"We are ... improving [capacity] with our friends Kuwait. We are trying to first go back to old capacities."
Prince Abdulaziz also reiterated earlier calls for increased investments in the oil and gas sector globally and said the world was “running out of capacities at all levels”. Supply chain issues are further exacerbating the effects, he said, and “the energy sector is a global issue for the world to attend to”.
“At a time like this, we need more excess capacity to give people the comfort that they have the ability to say that we have contingency,” Prince Abdulaziz said.
The total investment in the upstream part of the oil and gas sector fell 23 per cent below pre-coronavirus levels to $341 billion in 2021, the International Energy Forum and IHS Markit said.
Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, and managing director and group chief executive of Adnoc, has also highlighted the importance of increasing investment in oil and gas to overcome supply shortages.
The sector needs $600bn of investment until 2030 to keep pace with rising demand, Dr Al Jaber said last year.
“Who is doing a better job, Opec+ or unregulated markets?” Prince Abdulaziz said at the energy conference in reference to market volatility.
Prices of other commodities have surged by more than 200 per cent or more over the past year, while oil has increased more than 60 per cent.
Opec+, which achieved a historic reduction of 9.7 million barrels per day between May 2020 and July last year, is unwinding cuts due to improving demand. It was adding about 400,000 bpd to the market every month and increased that to 432,000 bpd for May and June.
Brent, the global benchmark for two thirds of the world's oil, was trading 1.6 per cent lower at $109.76 a barrel at 12.53pm UAE time on Monday, while West Texas Intermediate, the gauge that tracks US crude, was down 1.34 per cent to $109.01 a barrel.
On the Durra natural gasfield, located in an energy-rich area shared with Kuwait, Prince Abdulaziz said both countries were proceeding with its development.
In April, Saudi Arabia and Kuwait invited Iran to hold negotiations to determine the eastern limit of the joint offshore area and reaffirmed their right to develop the gasfield located within it.
“We are proceeding with that field, we made a public statement encouraging Iran to come to the negotiating table," Prince Abdulaziz said.
"We want to discuss with them … Saudi Arabia and Kuwait as one team because the resources there are of common interest to both countries, this is what we’ve agreed to over the last two to three years and we and Kuwait, as one group, we are proceeding," he said.
Prince Abdulaziz said the country's power-generation switch to gas and renewables will free 1 million bpd of oil for export. The kingdom aims to become carbon neutral by 2060 and is increasing investment in the renewable energy sector.
Meanwhile, Iraq, Opec’s second largest producer, aims to increase oil production to 6 million bpd by the end of 2027, its oil minister Ihsan Abdul-Jabbar said at the same event.
The country’s oil production touched 4.4 million bpd in April, according to Opec’s monthly report.
Iraq is “accelerating all the investment programme in oil and gas and also adding a new environment for solar energy”, Mr Abdul-Jabbar said.