Saudi Arabia, the world's top oil exporter, will start production at its 1.2 million barrels per day (bpd) Khurais oilfield at the end of June, a Saudi Aramco executive said on Tuesday.
Khurais is the largest of three oilfield projects that will take the kingdom's total production capacity to 12.5 million bpd by the end of June.
Although it was not immediately expected to add to the sum of Saudi output, the field represents the biggest ever single increment to global production.
"It's mechanically completed, and it's commissioning...and I expect by the end of this month we will have oil production from Khurais," Abdulaziz al-Judaimi, vice president for new business development at Aramco, told reporters on the sidelines of an industry conference.
"We will gradually bring on production...depending on what the market needs we will produce, and adjust our production strategy."
Aramco will also be investing in the development of the Arabiyah and Hasbah gas fields and are expected to make an investment decision on the project in 2010.
The projects would supply around 1.8 billion cubic feet per day (cfd) of gas Judaimi said. The projects were included in Aramco's expansion plan through 2014.
The project is expected take about 4 years to develop, he said.
To meet soaring demand for gas, Aramco is accelerating the development of fields non-associated with oil as it has to stick to its current output of 8 million bpd to match the decline in oil demand.
Aramco started to develop Karan, its first non-associated offshore gas field project when it awarded contracts in February.
Demand for gas in the kingdom for power and industry is soaring due to an economic boom fuelled by the oil price rally of 2002-2008. As most Saudi gas is produced in association with oil output, volumes fluctuate with oil production.
Saudi oil output is at its lowest in over six years as the kingdom and OPEC curb output to match rapidly falling demand. This has left gas supply in the kingdom tight.
The 250,000 bpd Shaybah expansion, which would take capacity at the oilfield to 750,000 bpd would be onstream by the third-quarter of this year, Judaimi said. The field had already started producing oil, he added.