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Wednesday 18 September 2019

Saudi Arabia Partially Restores Production from the Attacked Oil Facility


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NEW YORK (Bloomberg) — Saudi Arabia attempted to move beyond the worst oil disruption in its history, assuring the world that crude exports won’t suffer, its damaged facility has partially restarted and that production capacity will be back to normal within months.

The long-awaited update on Tuesday from the kingdom — which before the strike pumped almost 10% of the world’s oil — gives the market much-needed clarity after days of speculation over how severe the damage was at Saudi Aramco’s Abqaiq plant.

Progress has been slower than was initially expected and crude prices remain elevated as traders factor in higher risks for Saudi supply. Abqaiq is now processing about 2 mln barrels a day, Aramco Chief Executive Officer Amin Nasser said. The facility should return to pre-attack levels of about 4.9 mln barrels by the end of September, he said.

Soon after the weekend attack, officials indicated that the majority of output would be restored within days, with weeks required to get back to full capacity. The outlook became more pessimistic in subsequent days as photos were released showing the scale of the damage at the crucial facility.

The minister and CEO assured customers Aramco’s crude exports won’t be reduced this month because it will draw down strategic reserves. The kingdom also temporarily reduced the rate at which domestic refineries process oil by about 1 mln barrels a day, making more crude available for shipment overseas.

Still, figures provided by the energy minister suggested the kingdom will take months to fully recover from the incident. Full output capacity of 12 mln barrels a day will only be available at the end of November, with about 11 mln restored by the end of this month, said Prince Abdulaziz. Saudi Arabia aims to pump 9.8 mln barrels a day in October, he said, in line with recent months.

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