JEDDAH – Saudi Arabia continued its role as the world's leading producer, maintaining historically high production of near 10mn b/d in support of the global oil market. However, decreased global demand forecast and rising supply should ease the tightness in oil supply, allowing Saudi Arabia's production to hold steady at 11.6mn b/d in 2013, and rise to 12.6mn b/d by 2021, BMI's “Saudi Arabia Oil and Gas Report Q1 2013" report said Friday. The report said the Kingdom's crude oil production would rise to an average for the year of 10.1mn b/d, with natural gas liquids (NGL) and processing gains bringing total liquids production to 11.7 million b/d for the year. Total liquids supply by the end of the forecast period is set to rise to 12.5 million b/d by 2021. Total liquids supply by the end of the forecast period is set to rise to 12.5 million b/d by 2021. Domestic consumption will increase to 4.1 million b/d by the end of our 10-year forecast period, from an estimate of 3.1 million b/d in 2012. Rising consumption of oil as power feedstock, driven by low lifting costs and subsidies will drive much of the gains. It further forecast that Saudi Arabia would remain self-sufficient in natural gas, with production rising from an estimated 98.1bn cubic meters (bcm) in 2011 to 152.8bcm by 2021. Moreover, it also forecast that the average OPEC basket oil price would fall to S$99.10 in 2013, but by 2016, we expect the price to average $93.25, edging lower to $91.50/bbl by 2021. Saudi Arabian Oil Co (Aramco) plans to drill seven gas exploration wells in deep and shallow water in the Red Sea, off the coast of the north-western city of Tabuk, the firm's chief executive Khalid Al-Falih has said recently. The province has given indications that it is full of hydrocarbon wealth, Al-Falih said, according to Saudi Press Agency. Saudi Arabia will develop its Midyan natural gas field in the Red Sea in 2013, Oil Minister Ali Naimi said in comments reported yesterday in local media. “The Midyan field will be developed in 2013 and it would start production within a short period. It would boost electric power plants run by gas instead of diesel, and both electricity and gas would reach industrial zones," he said in Tabuk. In a separate report earlier, Citi Research Equities said Saudi Arabia produces 9.6bn ft3/day of natural gas. This is entirely consumed domestically. It is looking to raise gas production to 15.5bn ft3/day by 2015, implying a 2011-15 CAGR of 12.7 percent. However, peak power demand is growing at almost 8 percent per annum. Citi believes Saudi Arabia will need to find new sources to meet residential & industrial demand. Gas demand in the Arab region has grown faster than oil demand in the past 10 years to peak at 3.34 million barrels of oil equivalent per day in 2005, according to a study by the Organization of Arab Petroleum Exporting Countries (OAPEC). The demand is projected to rise to 4.08 million barrels of oil equivalent per day (BOED) in 2010 and to 5.1 million in 2015 before it climbs to a record 6.4 million, an annual growth of 4.4 percent between 2005 and 2020. The growth is expected to expand the share of gas in the Arab energy market from 41.5 percent in 2005 to 46.2 percent in 2020. — SG
