Reuters quoted the head of Saudi Arabia's state oil company as saying that world oil demand could rise by 1 million barrels per day to 1.5 million barrels per day from 2010 as the global economy recovers but there was no need for the country to add capacity.

The predicted demand growth exceeds the most recent forecast from the Organization of the Petroleum Exporting Countries for 750,000 barrels per day in 2010 but is in line with the International Energy Agency's 1.42 million barrels per day outlook.

Mr Khalid Al Falih CEO of Aramco said that even so, Saudi Aramco has cut its upstream maintenance budget to USD 4 billion per year to USD 5 billion per year from USD 7 billion because of the global economic crisis.

He said that the cut was to respond to the fact that we are sitting on significant spare capacity and our production declined by more than 1.5 million barrels. With spare capacity of around 4 million barrels, there were no current plans for new capacity development.

The paper said that the Manifa oilfield is expected to add 900,000 barrels per day to Saudi Arabia's oil capacity around 2013, later than an earlier target of 2011 because of the recent fall in oil demand.

Mr Al Falih said that "Once we are getting close to Manifa we will relax spending in other areas to allow Manifa to replace rather than add to capacity."

(Sourced from Reuters)