Saudi Arabia has started production from its giant Khurais oilfield, the largest ever single addition to global oil supplies, Saudi Aramco boss Khalid al-Falih said today.

"I am happy to report today that Khurais has entered the stage of operation," Reuters quoted Falih as saying in an interview on Al Arabiya television.

"Oil will reach Aramco terminals in a few days for exports... it did not reach the stage of export (yet)."

"The oil from the plant is now being pumped into tanks that are at the project," he said, adding that the field's capacity can now be seen as part of Saudi Arabia's total output capacity.

The kingdom does not need to use the extra capacity at current demand levels, the head of the state oil company said.

The 1.2 million barrels per day Khurais field contains highly prized Arab Light crude, which is easily converted into transport fuel.

Khurais would also produce 315 million cubic feet per day of sour gas and 70,000 bpd of natural gas liquids to be processed at Shedgum and Yanbu gas plants.

The field can supply over 1.5% of daily global oil demand and pump more than two of Opec's smallest members.

"It's the single largest development that they have ever had," said Raja Kiwan, an analyst with PFC Energy to Reuters.

The project brings to a close the latest expansion in oil output capacity in the top oil exporter and the most influential member of Opec.

Falih also added that Saudi Arabia will not cut investments in the oil and gas sector.

"Oil prices have risen to reasonable levels over around $70 a barrel, this would encourage many companies around the world (to invest)," he told Saudi-owned Al Arabiya television.

"We were worried when prices fell...we at Aramco have no reduction in the level of investments."

He added that production for the world's top oil exporter would hit 12 million bpd in the "coming weeks".