Outlining Saudi Arabia's plans to boost crude oil output in coming years, Khalid Al-Falih, senior vice president for gas operations at Saudi Aramco, said the Kingdom will concentrate on producing more light crude varieties while investing little in medium or heavy grades.

Aramco expects to increase production to 12.5 million barrels per day (bpd) by 2009, up from the current production rate of 11 million bpd, in an effort to maintain a cushion of spare capacity above and beyond world demand.
That cushion will 'include a lot more light crude,' Al-Falih said.
In addition, by 2006, Saudi Arabia will have 90 drilling rigs exploring for new fields or working on existing fields. This is almost double the number the Kingdom had operating in 2004, Al-Falih said.
Citing the sources of the new crude, Al-Falih said Saudi Aramco will boost output from the Haradh III field, which produces Arab Light, by 300,000 bpd by 2006.
The AFK field, which produces blended Arab Light crude, will increase by 500,000 bpd by 2007.
The Nuayyim field, which produces Arab Light, will increase its output by 2009 by 100,000 bpd.
The Shaybah field, also producing light crude, will go up by 200,000 barrels. Finally, the Khurais field, which puts out Arab Light crude, will rise by 1.2 million bpd.
While the gross new production exceeds the goal of boosting output by 1.5 million barrels by 2009, Al-Falih said the discrepancy is explained by the fact output from other fields will be declining.
Al-Falih made the comments at the Center for Strategic International Studies in Washington.
Al-Falih said the Kingdom won't have to invest much in midstream infrastructure, because its network of pipelines and oil terminals already has spare capacity.
As for the natural gas industry, Al-Falih said Saudi Arabia has no plans to become an exporter of natural gas and will reserve the fuel for domestic consumption.
Likewise, he said the kingdom will probably curtail exports of natural gas liquids in the future and use the commodity as a feedstock for what Saudi Arabia hopes will be a growing domestic petrochemical industry.
Maintaining that Saudi Arabia will continue to be a 'dependable supplier' of crude oil, Al-Falih said it was hard to predict when Saudi Arabia's output of crude will peak as its fields are depleted. However, he said this issues remains decades in the future even as Saudi Arabia boosts output to 12.5 million barrels per day or even if it follows through with plans to eventually boost output to 15 million bpd.
Saudi Arabia is likely to add another 300,000 bpd of light crude to its output in April 2006, Saudi Oil Minister Ali Naimi said.
Even with plans to expand its crude oil capacity to 12.5 million bpd by 2009 and perhaps to 15 million bpd beyond that if demand warrants, Saudi Arabia is in no danger of hitting peak production in the next few decades, Al-Falih said.
'Even with the 12-to 15 million bpd (capacity expansion) scenarios, we are not going to be peaking anytime soon, not in 20 years, not in 30 years, not in 40 years,' he said.
Some analysts, notably US analyst Matthew Simmons, have said Saudi Arabia, the world's biggest oil producing country, may have overstated its crude oil reserves and might not be able to meet future demand for crude because its oilfields are in decline.
But Falih said Saudi engineers are careful in keeping production rates conservative to ensure adequate reserve lives, and that its reserve reporting is accurate.
Meanwhile, Falih said Saudi Arabia has no plans to begin exporting natural gas, and will instead use any gas discovered through new exploration and production initiatives for its own internal needs and to expand its petrochemical sector.
In fact, Saudi exports of natural gas liquids will likely be reduced in coming years as the company looks to double its petrochemical capacity. Saudi Aramco's $9 billion natural gas investment plan will involve drilling 100 wildcat exploratory wells, and 90 delineation wells on its own by 2009, plus another 27 wildcats with joint venture partners, Falih said.
He noted that Saudi Arabia, although not considered a natural gas powerhouse because it does not export LNG, has the second highest per-capital gas intensity in the world, with natural gas representing over half of Saudi Arabia's energy consumption.
Falih said he does not anticipate the Saudis exploring LNG export opportunities.
Saudi Arabia is currently producing 9.6 million bpd of crude oil, way above its official Opecoutput quota of 9.099 million bpd, the US Energy Information Administration (EIA) said.
The Energy Department's analytical arm included the Saudi oil production estimate in its latest update on the Kingdom's energy sector.
The EIA pointed out that Saudi Arabia maintains crude oil production capacity of around 10.5 million to 11 million bpd, and the Kingdom claims it is 'easily capable' of boosting future output to 15 million bpd and keep it at that level for 50 years.
Saudi Arabia's net oil export revenues are forecast to increase to $150 billion this year, from $116 billion in 2004, mainly due to higher oil prices and increased production, the EIA said.
Oil export revenues make up around 95 per cent of total Saudi export earnings, 70 to 80 per cent of state revenues and around 40 percent of the Kingdom's gross domestic product.
High oil prices will help the Saudi economy grow 5.7 per cent this year and 4.8 per cent in 2006, compared with a 5.2 per cent growth rate last year, the agency said.