LONDON, Oct 13 (Reuters) - Saudi Aramco can

sustain crude oil production at 12 million barrels per day (bpd)

for a year without incurring additional costs, Chief Executive

Amin Nasser said on Monday.

Saudi Arabia holds a substantial share of the world's spare

oil capacity - idle supply that can quickly be brought to

market.

Speaking at the Energy Intelligence Forum in London, Nasser

projected global oil demand would rise by 1.1 million to 1.3

million bpd this year, and by 1.2 million to 1.4 million bpd in

2026.

Nasser said Aramco's extraction costs stood at $2 per barrel

of oil equivalent (boe) for oil and $1 per boe for gas.

"We are determined to remain dominant in oil thanks to a

massive resource base, low costs, and one of the lowest upstream

carbon intensities across the industry," Nasser said.

"We also see resilient demand, and the pressing need for

long-term investments in supply is now widely accepted."

ARAMCO SCALES BACK CAPACITY TARGET

The Saudi energy ministry ordered Aramco in January 2024 to

u-turn on a maximum sustainable capacity target of 13 million

bpd, reinstating the earlier 12 million bpd target that had been

in place before March 2020.

The International Energy Agency estimated Saudi Arabia's spare

capacity at 2.43 million bpd in August, out of the 4.05 million

bpd held by OPEC+. Saudi Arabia produced more than 9.7 million

bpd of crude that month.

The International Energy Agency estimated that Saudi

Arabia's spare capacity was 2.43 million bpd in August out of

the total 4.05 million bpd spare capacity held by OPEC+. Saudi

Arabia produced more than 9.7 million bpd of crude in August.

Aramco, the world's top oil exporter, still views chemicals

as a strategic growth area, even as rivals such as Shell

and Exxon Mobil ( XOM ) scale back operations.

"Despite the current downturn, chemicals remain a key

long-term growth area, with our proven strengths in both

feedstocks and conversion," CEO Amin Nasser said.

The company has been expanding its downstream and

petrochemical portfolio to diversify revenue.

On October 9 it gained majority control of Petro Rabigh by

acquiring a 22.5% stake from Sumitomo Chemical. In July, it

bought a 10% stake in China's Rongsheng Petrochemical for $3.4

billion, securing access to a 400,000 bpd refinery.

It is also building an $11 billion petrochemical complex

with TotalEnergies at their existing Satorp refinery

in Saudi Arabia expected to produce 1.65 million metric tons

annually of ethylene from 2027.

TotalEnergies said last month it is expanding in Saudi

Arabia due to competitive feedstock and energy costs, even as it

closes some European operations.