Saudi Arabia, the world’s biggest oil producer, has started to expand and upgrade its oil and gas production and refining business at a cost of $100 billion to tap rising demand in Asia, Oil Minister Ali al-Naimi said.

“China’s and Asia’s demand are projected to be met mainly from supplies
from Saudi Arabia and other Gulf states,” al- Naimi said in a speech at
Beijing University today.

Saudi Arabia is doubling its domestic and international oil refining
capacity by 2015, he said. The kingdom’s current share of refining
capacity in China, Japan and South Korea totals 1.32 million barrels a
day, Al-Naimi said.

Demand for energy in Asia, which accounts for more than half of Saudi
Arabia’s crude, oil products and natural gas exports, is poised to
increase because of surging demand in China and India. The
International Energy Agency increased its forecast for 2010 global oil
demand as the pace of economic recovery in Asia and the Middle East
picks up.

The kingdom increased its crude oil output capacity to 12.5 million
barrels a day in June, al-Naimi said. Saudi Arabia’s natural gas
production and processing capacity will rise 4.5 billion cubic feet a
day by 2014, equivalent to a 40 percent increase from current levels.

Refinery Stake

Saudi Arabia pumped 8.15 million barrels of oil a day in October, down
from 8.2 million barrels a day in September, according to a Bloomberg
estimate.

Saudi Aramco, the state oil company, owns 25 percent of a 240,000
barrel-a-day oil refinery in the southeastern Fujian province, together
with Exxon Mobil Corp., China Petroleum & Chemical Corp. and the
provincial government. It is also in talks to take a stake in China
Petroleum’s 200,000 barrel-a-day Qingdao refinery in the eastern
Shandong province, Aramco Chief Executive Officer Khalid al-Falih said.

Global oil consumption is likely to average 86.2 million barrels a day
next year, 140,000 barrels more than previously estimated, the IEA, an
adviser to 28 nations, said in its monthly report yesterday. The IEA
also raised its estimate for consumption this year to 84.9 million
barrels a day, up 220,000 barrels from last month’s estimate.

Source: Bloomberg

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