DUBAI, Sept 3, (RTRS): The world’s top oil exporter Saudi Arabia has started pumping crude from the 500,000 barrels per day (bpd) Khursaniyah field, a source at state oil giant Saudi Aramco said on Wednesday.  The oilfield is the largest single increment to global oil production capacity for several years. First output was delayed from the scheduled start date in December 2007.  “The facility is operational and producing crude,” the source said. He was unable to give more details on actual output or when all of Khursaniyah’s capacity would be ready to produce.  “Its production rates are dependent on our (company’s) monthly production targets for each facility,” the source said. Khursaniyah will in theory take Saudi Arabia’s total production capacity to around 11.8 million bpd from around 11.3 million bpd. Actual sustainable capacity may be slightly lower due to field decline elsewhere.

The field produces light crude, favoured by global refiners because it is easier than heavy crude to process for transport fuels.  The kingdom pledged to boost output to 9.7 million barrels per day (bpd) in July, the fastest rate for 27 years, to help meet rising demand from its customers and tame runaway oil prices. Oil prices have since fallen around $40 from their July peak of over $147 a barrel.
Boost
Saudi Arabia aims to boost its total oil production capacity to 12.5 million bpd by the end of next year.
The kingdom has a long-held policy of keeping 1.5 million bpd to 2.0 million bpd of spare capacity to meet any unexpected outages in global supply.
It is the only oil producer with significant spare capacity that could be brought online quickly.
Oil Minister Ali al-Naimi outlined plans for the next stage of expansion in June, which would take total capacity to 15 million bpd.
Delays in the construction of a gas processing facility at Khursaniyah had prevented start up of oil output there. Aramco has said it could have started output earlier but wanted to avoid burning off gas produced.
While final start up was delayed, Aramco had acclerated work on the field early on. Aramco cut preliminary work on the project to 8 months from 20 months.
Meanwhile, the world’s top oil  exporter, Saudi Arabia, cut the price of its Arab Light crude oil in October to customers in Asia and the United States, state oil firm Aramco said on Wednesday.
Aramco cut the price of Arab Light to Asia by 70 cents a barrel to parity with the Oman/Dubai average and reduced the price to the United States by $1.40 to WTI minus $5.05, the company said.

Output
The kingdom has been raising oil output in recent months, and pumped 9.7 million barrels per day in July, in response to demand and to tame high prices which hit a record $147.27 a barrel in July.
Aramco, which sells half its exports to Asia, sets its oil prices based on recommendations from customers and after calculating the change in value of crude over the past month based on yields and product prices. Aramco, as expected, also raised the price of its heavy grades to Asia on the back of stronger fuel oil prices. It raised the price of Arab Medium by 70 cents a barrel to a $2.25 discount to the Oman/Dubai average, and lifted Arab Heavy by $1.50 to a $4.60 discount to Oman/Dubai.
Saudi Arabia’s prices set the trend for Iranian, Kuwaiti and Iraqi prices, altogether affecting the cost of more than 8  million bpd crude to Asia. Prices to Europe were mostly raised. Aramco lowered the price of Extra Light crude and raised that of the other grades.