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SUPPLY
As a member of OPEC Saudi Arabia has restricted output
since the mid-1980s but began producing near to full developed potential
in 2002, apart from some heavier oil reservoirs which were not in demand
by refineries. Oil output had increased up to 2005 but began to slide in
2006 when several new projects were announced to maintain capacity.
However in 2008, considerable amounts of, mainly onshore, oil were
shut-in to meet its OPEC obligations.
By 2012 Saudi Aramco is expected to begin returning the country to full
capacity but there remain question marks as to its maximum capacity once
old giant fields, especially Ghawar onshore and Safaniya offshore, begin
to decline. Assuming no output restrictions after 2012 it is forecast
that growth will continue up to a maximum around 2022.
Gas production has barely begun into a Master Gas System inaugurated in
1982. The country has huge potential to increase output of gas from both
associated and non-associated fields. However restrictions in oil
capacity have hit associated gas production such that output is now flat
but development of the Karan gas field is designed to fill this gap.
DEMAND
Oil consumption in Saudi Arabia is one of the highest in
the world per capita due to the ready availability of cheap oil. It is
rising and will continue to do so for a decade in an environment of
subsidised gasoline prices.
Exports have declined since 2005 and are only forecast to begin
increasing again slowly in 2009 until they jump in 2013 when global
supplies have tightened. Gas consumption will begin increasing more
rapidly as new gas resources are developed in the country. It is
forecast that exports of gas to neighbouring countires may begin around
2013.
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