Despite possessing some of the largest crude reserves in the world, retaining the crown as the world’s preeminent oil exporter is not always easy. As the Kingdom’s own domestic consumption constitutes an ever-larger portion of its national crude output, the country’s oil producers are becoming involved in a continuous search for new sources of energy. These new discoveries along with new, more efficient lifting technologies have seen Saudi Arabia’s proven reserves increase over the past two decades in spite of continually rising extraction rates. Starting at 260.9bn barrels of oil in 1991, the country’s proven reserves inched up to 262.7bn barrels by 2001 and were estimated at 265.4bn barrels in 2011, according to data from the “BP Statistical Review of World Energy 2012”. At the same time, proven natural gas reserves increased from 5.2trn standard cu metres (scm) in 1991 to 6.5trn scm in 2001 to 8.2trn scm at the end of 2011.
With the vast majority of current production derived from land-based oilfields, many of the new exploratory efforts are being focused on less developed offshore blocks and in particular those in the Gulf.
Queuing Up
Additional crude oil extraction in the near term revolves around two major projects: the Manifa field located offshore in the Gulf and the Safaniya Phase I upgrade, which is the more developed of the two projects. The initial stage of the Safaniya upgrade project is scheduled for completion in late 2013. While the site is not a virgin field, the Safaniya upgrade will maintain production levels of approximately 1.2m barrels per day (bpd) within one of the world’s largest offshore oilfields, giving it a level of production that few greenfield projects could match. As laid out in the Safaniya field master development plan, the two-stage upgrade is intended to sustain the field’s maximum production capacity of Arabian heavy crude by bolstering crude-gathering infrastructure such as new tie-in platforms and related truck lines, as well as upgrading existing wellheads and installing electric submersible pumps. In December 2012 Saudi Aramco installed its largest tie-in platform (Safaniya TP-20) to date, weighing in at more than 6000 tonnes (which is around three times that of average tie-in platforms) at the site to serve as the North Safaniya field’s primary crude oil gathering and power supply hub.
Ensuring Support Structures
The fifth-largest oilfield in the world, Manifa is expected to produce 900,000 bpd of Arabian heavy crude oil, 2.54m standard cu metres per day (scmd) of sour gas, and 65,000 bpd of hydrocarbon condensate upon reaching full operational status in December 2014 after an initial output of 500,000 bpd starting in mid-2013.
While the site is located in shallow waters that generally allow for relatively cheap and easy drilling and extraction processes, the environmentally sensitive area also requires complex infrastructure to minimise the impact of traditional offshore drilling platforms. These construction works include the creation of 27 man-made islands, each of which will host shallowwater wells that are more cost-effective than offshore rigs. Other support infrastructure includes 41 km of main and lateral causeways connecting the islands, 3 km of bridges, 13 offshore platforms, 15 onshore drill sites, water supply wells, injection facilities, sub-sea power and communication cables, multiple pipelines, a central oil and gas processing facility, and a 420-MW heat and electricity plant.
Staying On Top
In addition to these two headline projects, Saudi Aramco was also involved in various other developments designed to maintain oil and gas production from its other fields. Part of these efforts include the company’s maintain potential programme (MMP), which completed 104 new oil and water wells, adding nearly 413,000 bpd of oil production capacity by the end of 2011, with more offshore rigs planned for the Manifa, Hasbah and Arabiyah fields.
New and upgraded technology employed in the MMP includes the installation and integration of downhole instrumentation, multi-phase flow meters and remote terminal units that are used for the purpose of enabling real-time reservoir-performance monitoring of 60 offshore production platforms.
Gas
With much of the exploration efforts in past years focused on new petroleum discoveries, little has been done in terms of searching for and developing standalone natural gas deposits. Now, with a new emphasis on developing gas supplies to relieve the pressure on petroleum demand, the hunt for non-associated natural gas supplies has become a priority.
So far, these efforts have seen limited success, as a trickle of new gas fields have been discovered over the last decade. These include the discovery of one field in 2001, 2003, 2004, 2007, 2009 and 2010, as well as two new fields in 2005 and 2008, and three fields in 2006, according to statistics from the Saudi Arabian Ministry of Petroleum and Mineral Resources (MPMR). Partially as a result of these discoveries, MPMR data shows an increase in the country’s proven natural gas reserves from 6.45trn scm in 2001 to 8.02trn scm in 2011, with a corresponding increase in production from 60.48m scm to 102.39m scm over the same decade. In 2011 alone, Saudi Aramco completed a total of 103 new exploration and development wells, boosting production to an all-time high of 317m scm per day.
Karan Field
By far the most important natural gas project is the development of Saudi Arabia’s first non-associated gas field: the Karan field. Responsible for boosting the country’s natural gas production by 18%, Karan yielded its first commercial quantities of gas starting in May 2011, with the project reaching its full capacity of 50.97bn scmd ahead of schedule in the summer of 2012. Discovered in 2006, the field is being tapped by a total of 21 increment wells serving five offshore wellhead platforms and the gas is transported to the Khursaniyah Gas Plant via a 110-km sub-sea pipeline. After arriving at the plant, the gas is processed using three 16.9m-scmd-capacity trains for further use as industrial feedstock, water desalination, power generation and commercial sales. The facility also includes units for gas sweetening, acid gas enrichment, gas dehydration and supplementary propane refrigeration.
In addition to the Karan project, Saudi Aramco has also been busy drilling wells in the Hasbah and Arabiyah offshore gas fields located north-east of Dhahran in the Gulf. A total of seven wells will be drilled in the Hasbah field, producing a combined 36.8m scmd of gas, while Arabiyah will produce slightly less at 33.98m scmd from six wells. Both fields will supply the new Wasit Gas Plant, which will become one of Saudi Aramco’s largest natural gas plants upon completion in 2014. The integrated facility will have an initial capacity of 2.5m scmd of non-associated gas and is projected to supply an average of 49.55m scmd of sales gas upon start-up, with a peak production potential of up to 86.37m scmd. Wasit will also produce ethane, propane, butane and natural gas, and will be the first such plant in the country to utilise Sulfinol-M gas treating technology to improve the efficiency of sulphur recovery up to 99.3% Complementing these ongoing explorations for new sources of conventional natural gas is Saudi Aramco’s upstream unconventional gas programme, which was launched in 2011 (see analysis).
Saudi Aramco is also active on the country’s east coast, and announced plans in December 2012 for new drilling in the Red Sea. According to statements made to the press by company officials, Aramco is planning to drill seven gas exploratory wells in both shallow and deep water off the coast of the north-western city of Tabuk. The company is also developing the Midyan field in the same province, from which it is expecting to begin gas production in 2013. First discovered in the 1980s, the gas field is projected to yield approximately 2.12m scmd of natural gas along with 4500 bpd of condensate during its 20-year lifespan. The gas recovered from Midyan will be transported 135 km by pipeline to fuel a power plant in the coastal town of Duba.
Exploration
Exploration and discoveries of new oil sources have taken a backseat, as Saudi Aramco continues to focus more on new sources of natural gas and sustaining production from existing fields. After discovering four new oilfields (Namlan-1, AsSayd-1, Arsan-1 and Qamran-1) and six new reservoirs within existing fields in 2010, Saudi Aramco made a further discovery in 2011. Located in the Rub Al Khali, or “Empty Quarter”, 450 km south-east of the town of Dammar, the Wedyan-1 wildcat oil well produced a flow of 2300 barrels per day from the Mishit reservoir. The new discovery was the second in the Rub Al Khali since Saudi Aramco restarted exploration operations there in 2005.
