Saudi Aramco says the decision to delay its Manifa oil field project in the Eastern Province by two years was due to construction costs not declining in line with lower oil prices in early 2009.
On 3 December, the state-run oil giant said it will complete its 900,000 barrel a day (b/d) Manifa development by 2015 compared with an earlier date of mid-2013.
In a speech on 4 December, Khalid Al-Falih, chief executive officer of Aramco, said the oil price was above $70 a barrel when the firm made its investment decision but had dropped to below $35 a barrel in early 2009 after construction contracts were awarded.
“[Oil] demand projections fell but [construction] costs did not proportionally decrease, clouding the robustness of the investment,” said Al-Falih. “We reviewed the [Manifa] programme and with some execution plan modifications, including deferring completion by two years, decided to continue.”
The state-run firm expects to deliver 900,000 b/d of oil, 90 million cubic feet a day of associated gas and 65,000 b/d of condensate.
Aramco says a causeway system linking to the offshore oil field will be 60 per cent complete by the end of 2009. The facility connects 27 man-made islands in the shallow waters which will serve as platforms for wells.
Saudi Arabia has oil capacity of 12.5 million b/d, but in November only pumped about 8.2 million b/d of current capacity.