Saudi Oil Income Expected to Top $160bn
By Philip White
(EUNN) London - While it may come as no surprise, Saudi Arabia's
estimated oil income this year is forecast at $160 billion.
Even though Saudi Arabia is expected to have surplus cash in
its government accounts for the third year in a row, thanks
to higher oil prices, for two decades before that Saudi
Arabia was in the red. But this year promises to set a
record, none the less.
The Kingdom made an estimated $154 billion from oil sales
in 2005 and is expected to reach around $160 billion in
2006 in oil export revenues.
The 2006 revenue figure was based on an average price of
just over $60 for London Brent crude with Saudi oil
output of around 9.6 million barrels per day.
Saudi Arabia plans to use the surplus cash to boost
production levels. The Kingdom has launched a $50
billion plan to boost its production capacity to 12.5
million barrels per day by 2009 and maintain spare capacity
of at least 1.5 million bpd.
Saudi Arabia is OPEC's largest producer and currently has
the largest spare capacity as well.
State oil firm Saudi Aramco has a separate budget for its
operations than the state budget set by the finance ministry
and has already made several upstream and downstream
multi-million dollar investments and that is expected
to continue.
Explosive demand growth in Asia and the United States
sparked a four-year price rally and pushed oil above $60,
prompting consumer governments to pile pressure on major
oil producers to inflate the global supply cushion.
Yet buyers feel that OPEC members have held back when
supplies were seasonally more plentiful to keep prices
artificially higher. At the last OPEC meeting the
ministers said they would not cut back production at
that time. However, oil prices still managed to stay
above $60 per barrel due to "political concerns in the
market place.
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