Gulf spending $300b to boost oil output by 2015

Dubai: A massive $300 billion investment to boost oil production capacity is underway which could see the Arabian Gulf add 10 million barrels of capacity by 2015 - more than half in Saudi Arabia alone - according to project research firm Proleads.

"Recent analysis of total global oil production and development indicates that world crude production capacity from all sources has the potential to rise from 87 million barrels per day (bpd) to as much as 108 million bpd by 2015," said Emil Rademeyer, director of Proleads.

The Proleads analysis also reveals that in the Gulf Cooperation Council countries of Bahrain, Oman, Kuwait, Qatar, Saudi Arabia and the UAE, approved upstream projects designed to either maintain or increase production capacity have soared in value from below $1.5 billion in 2006 to $30 billion now.

Across the GCC, Proleads is also tracking a record of nearly 300 active upstream oil projects with a combined value of almost $300 billion.

"Our analysis shows that if all current projects across the region meet their projected targets in barrels of oil a day, it would mean that by 2015 the hydrocarbon rich countries of the Gulf Cooperation Council (GCC) will be supplying more than half that future added oil capacity," said Rademeyer.

Saudi leads

"Saudi Arabia is leading the way and would contribute more than half the 10 million bpd in added capacity if all projects deliver on target by 2015," Rademeyer added.

This year and next, Saudi Arabia is putting in place projects intended to raise production capacity by more than 1.6 million bpd. By 2015, projects in Saudi Arabia are expected to add 5.2 million bpd to capacity.

By 2010, Qatar - richer in gas than oil - is targeting an increase of 1.4 million bpd in production capacity.

Projects approved in the UAE will raise oil production capacity by almost 1.9 million bpd by 2013.

Current approved projects in Kuwait aim for an increase in capacity of about one million bpd by 2011 but this does not take into account expected developments in its northern fields which have yet to be approved.

Oman, where fields have been depleting, hopes to raise capacity by about 460,000 bpd by 2012. Bahrain, where oil production has peaked, expects to increase capacity by a mere 35,000 bpd by 2015.

One of the major revelations of this analysis of active projects is the continued failure of Iraq to significantly add to its oil production capacity with only an extra 300,000 bpd projected by 2013.

"Iraq has the world's third largest proven petroleum reserves but only a fraction of its known fields are in development," said Rademeyer.

"Iraq's oil infrastructure is in clear need of massive modernisation and investment and has so far been unable to meet production and export targets.

Saudi Arabia currently maintains the world's largest crude oil production capacity, an estimated 10.5-11 million bpd, and raised output in July to the highest in more than 25 years.

Meanwhile Abu Dhabi, owner of the world's fifth-biggest oil reserves, recently announced that it intends to raise crude production by 30 per cent to 3.5 million bpd by 2010.