SAUDI OIL RESERVES RISE DESPITE HIGHER OUTPUT Proven oil and gas deposits in Saudi Arabia increased in 1986 despite higher oil output, according to the kingdom's main producing company, Aramco. Recoverable oil reserves in Aramco fields rose to 167 billion barrels by the end the year from 166.5 billion in 1985, while gas reserves jumped by 7.7 pct to 135.8 trillion cu ft from 126.1 trillion, the company's annual report said. Aramco, responsible for all Saudi production except about 200,000 barrels per day (bpd) in the Neutral Zone between Saudi Arabia and Kuwait, increased production to 4.69 mln barrels per day in 1986 from 3.04 mln barrels a year earlier. Most of 1986 was a virtual free-for-all in production, as OPEC members abandoned restraint in an effort to recapture their share of the market. In the process, prices collapsed from about 28 dlrs a barrel to below nine dlrs, until the organisation decided to cut production again from last September onwards. Saudi output in 1985 had been the lowest since the 1960s. Production of natural gas liquids in 1986 declined slightly to 304,178 bpd from 316,310, said the report, carried on the official Saudi Press Agency. The increase in reserves came despite a sharp cut in the number of wells Aramco drilled to 33 in 1986 from 103 in 1985. Aramco's only refinery, at Ras Tannurah, processed 142.44 mln barrels (390,246 bpd) of crude last year. The plant was upgraded to a capacity of 530,000 bpd during the year, enabling it to supply 50 pct of local demand for oil products, the report said. The country's other five, smaller refineries -- owned by another state-owned oil organisation, Petromin -- produced around 750,000 bpd last year. Sulphur production rose to 1.23 mln tonnes in 1986 from 998,707 tonnes in 1985. During the year the company began operating a sulphur granule plant with capacity of 4,000 tonnes per day, the report said. Aramco said it awarded 1,303 contracts last year worth 1.4 billion riyals -- about 370 mln dlrs.