The Ministry of Energy of Saudi Arabia has announced that the national oil company Saudi Aramco will produce 12.3 mb/d over the coming months. Saudi Aramco previously received instructions from the government to boost its production capacity from 12 mb/d to 13 mb/d. Saudi Arabia also intends to increase its crude oil exports to more than 10 mb/d from May 2020. To reach this objective, the country plans to reduce the consumption of domestic oil in power generation by 250,000 bbl/d and to rather use gas produced by the Fadhili gas plant.
Saudi Aramco is building a SAR50bn (US$13.3bn) gas processing plant in Fadhili, expected in 2020. The Fadhili facility will be able to process gas from onshore and offshore fields. It should process a total of 71 mcm/d (26 bcm/year) of non-associated gas (80% from the Hasbah offshore gas field and 20% from the Khursaniyah onshore gas field). Along with Saudi Aramco’s Wasit and Midya major gas projects, Fadhili should add more than 141 mcm/d (51.5 bcm/year), raising domestic gas production to more than 17 bcf/d (480 mcm/d or 175 bcm/year) by 2021.
Earlier in March 2020, the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producers led by Russia failed to agree on a further cut in crude oil production in order to straighten prices. The current agreement on production cuts of 2.1 mb/d will expire on 31 March 2020 and will not be extended. These decisions immediately led to oil prices collapsing in international markets.