Mumbai: Top OPEC oil producer Saudi Arabia will invest $80 billion to increase its oil output from the current 9.45 million barrels per day to 12.5 million bpd and expand its refining capacity by 43 per cent to six million bpd, over the next few years.

Saudi Arabia is planning to increase oil production by 200,000 bpd to 9.7 million bpd over the short run to help stabilise prices.

The Saudi move to act unilaterally is expected to face objection from other producing nations at the consumer-producer meeting planned at Jeddah.

Analysts, meanwhile, said the heavy, sour, high-sulphur crude from Saudi Arabia will not have an impact on the market unlike the light, sweet, crude oil that is much in demand by refiners the world over.

The Saudi proposal, however, failed to avert a one-day spike in oil prices following a major oil rig fire in the North Sea. Crude futures rose to as much as $140 a barrel on Monday, gaining over $5 in one day.

Prices fell on Tuesday amidst reports of the planned Saudi output hike.

US light sweet crude for July delivery dropped 14 cents to $134.47 per barrel. London`s Brent North Sea crude for August delivery also slipped 11 cents to $134.60 per barrel from overnight levels.

While Saudi Arabia has the capacity to increase production to meet demand, market watchers feel the move is only a public relations gesture amidst increasing concern over rising oil prices.

The oil spike has helped oil exporting countries in the Gulf Co-operation Council to grow 27.9 per cent this year with a $1 trillion gain, according to a report of the federation of GCC chambers of commerce and industry.

The GCC economies can use the extra money to invest in infrastructure, tourism and real estate development projects.