Business Monitor International has released a new report, ‘Saudi Arabia Oil & Gas Report Q3 2014’, in which it indicates the view that crude production in the country will remain elevated by historical standards in 2014 and 2014.
This view is based on continued OPEC outages, a mediocre global supply picture, a continued increase of domestic consumption from the power generation and transport sectors, strong demand from the refining sector and a recovering global demand picture.
Risks to the outlook lie mostly to the downside. As Saudi Arabia is a swing producer, stronger supply growth from OPEC and/or non-OPEC producers, would see Saudi Arabia lower outputs in order to protect prices.
The outlook for gas remains tight, according to the report, despite ambitious plans to tap unconventional resources. Business Monitor International holds that rising consumption and faltering supplies may see the Kingdom seriously consider imports.
The report additionally forecast that Saudi oil reserves will rise to as much as 273 billion bbls by 2017, but will fall to 265 billion by the end of 2023. In early 2013, Saudi Aramco officials outlined plans to add 160 billion bbls in additional reserves in the coming years.
The country has maintained high oil production and exports by historical standards in the first half of this year. This is attributable to large unplanned outages and a healthier-than-expected demand. The view of Business Monitor International is that crude oil and lease condensates production will remain at current levels throughout 2014. This will see production of approximately 9.78 billion bpd for 2014, a 1% increase on 2013 production, but lower than the record production year of 2012.
2015 oil production is set for a slight decline, at approximately 9.8 million bd. This is based on the same trends as for 2014.