Saudi Arabia is pushing ahead with a major oil capacity expansion programme despite slackening global demand and its target of 12 million barrels per day will be achieved within weeks, according to the Gulf country's oil operator.

The state-owned Saudi Aramco, the world's largest oil exporter, said that production level would be reached once the world's largest single upstream development project at Khurais oilfield is completed.

Addressing a conference in Washington this week, Saudi Aramco President and Chief Executive Officer Khalid Al Falih said more investments in the hydrocarbon industry are needed urgently by Saudi Arabia and other producers to meet an expected increase in global demand in the future. "In terms of production, Saudi Aramco is on the verge of attaining its goal of a 12 million-barrel-per-day crude oil production capacity, once we complete our Khurais oil field programme a few weeks from today," he said.

"This project is the largest single crude oil increment ever commissioned, and will be capable of producing as much oil as the entire State of Texas. But Khurais is only one aspect of our overall crude oil development program, and Saudi Aramco alone will ultimately account for more than half of the grassroots crude oil production capacity brought on-stream worldwide this decade."

Al Falih said major investments in capacity expansions, including the maintenance of significant spare production capacity to respond to unforeseen circumstances elsewhere in the global petroleum industry, allow Saudi Arabia to play its part in meeting the world's demand for energy "responsibly and reliably".

"But some people question the wisdom of pressing ahead with these mammoth projects even in a challenging business environment and at a time when oil consumption has fallen for the first time in 25 years," he said.

"Certainly we read the same economic forecasts as you do, and we have been negatively impacted by the crisis along with the rest of the petroleum industry… but we continue to invest across the cycle, in good times and bad, because we are maintaining our long-term focus rather than being swayed by the volatility of short-term conditions."

In its 2007 annual report, Saudi Aramco said it has plans to pump in excess of $50bn in upstream oil and gas projects in the next 10 years. It said the investments would cover both expansion the production capacity and maintenance of the present capability, which could dwindle in the course of time without regular upgrading and development.

The report listed several projects which are either under way or have been completed, including the Khurais field, which will add around 1.2 million bpd of light Arabian crude to the Kingdom's production capacity, which was estimated at nearly 11.3 million bpd at the end of 2008.

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