UPDATE 1-Saudi oil capacity at 12.5 mln bpd by June 30 -exec

(Adds byline, field-by-field view, other comments, paragraphs 3-15; includes SAUDI-OIL/OUTPUT)

By Bruce Nichols

HOUSTON, May 5 (Reuters) - Saudi Arabia will meet an end-of-June target for raising its oil output capacity to 12.5 million barrels per day (bpd), a Saudi Aramco [SDABO.UL] executive said Tuesday.

Amin Nasser, Saudi Aramco's senior vice president for exploration and production, made the prediction to Reuters on the sidelines of the Offshore Technology Conference.

The kingdom currently produces about 8 million bpd, and there are no current expectations of a change, a spokesman for Nasser added later.

Nasser said all oilfield development projects scheduled for completion in June are on target, including Khurais, Nuayyim and Shaybah, which will add a total of 1.45 million bpd of capacity. Khurais alone is set to add 1.2 million bpd.

With capacity now at 12 million bpd, the expected increase exceeds the target of 12.5 million bpd of kingdom capacity by the end of June, but Nasser said some additions will merely offset declines elsewhere.

"We don't use all of it for expanding our capacity. Some of it's being utilized for maintaining potential. It's a combination," he said.

Nasser said marginal world oil production, such as output from deep offshore waters or tar sands, needs a price in the range of $70 a barrel to continue expanding.