OPEC will meet on Sept. 9 in Vienna to review oil output policy amid falling crude prices in the international markets and against a backdrop of perceived higher supply as Saudi Arabia's Khursaniyah oilfield starts pumping 500,000 barrels per day (bpd). Some members of the Organization of the Petroleum Exporting Countries have expressed concerns over the falling prices, sparking speculation that the organization could cut output if the price falls below $100. Production from the Khursaniyah field was delayed from the scheduled start date of December 2007. The output from the oilfield is the largest single increment in global oil production for several years. “The facility is operational and producing crude,” a Saudi Aramco source said without providing more details. “Its production rates are dependent on our company's monthly production targets for each facility,” the source said. The giant oifield produces light crude, favored by global refiners because it is easier than heavy crude to process for transport fuels. Development of the Khursaniyah field is part of a larger initiative by the government to boost oil and gas production. The Kingdom is investing nearly $90 billion of its oil revenue to further develop the oil industry. By 2009, Saudi Arabia hopes to increase oil production capacity to 12.5 million bpd and double its refining capacity to 6 million bpd. The government recently announced that planned projects to increase production to 15 million bpd will be put on hold, as a result of concerns that recent market turbulence could erode the industry's long-term profitability. Of late, oil prices have dropped by more than 25 percent since notching an all-time high of $147.27 on July 11. On Thursday, oil prices fell after the government reported a smaller-than-expected drop in US gasoline stockpiles. Light, sweet crude for October delivery was down $2.70 at $105.65 a barrel in morning trading on the New York Mercantile Exchange. Earlier in the week, prices dropped below $105 as the US tapped into its oil reserves. “I'm keeping an open mind,” Nigerian Junior Minister for Petroleum Odein Ajumogobia was quoted as saying ahead of next Tuesday's OPEC meeting. “We haven't seen the end of the volatility and I think we should wait and see how things settle down ... before we take a step to intervene,” he said. Ajumogobia said he preferred to be cautious and adopt a wait-and-see attitude. “When the price was going very high, there was a lot of advocacy that countries should produce more, (but) I have always maintained that the price was driven by factors other than the supply and demand and I still think so,” he said. __
