Saudi Arabia is planning to boost its oil production capacity by nearly 20 per cent in the next two years but its long-term target is to maximise its recoverable crude resources, according to the state-owned Saudi Aramco.
The Kingdom, which already controls nearly a quarter of the world’s extractable crude deposits, will focus on intelligent fields and other advanced oil production techniques to achieve that objective, said Amin Nasser, Exploration and Production Director at Saudi Aramco.
Speaking at an oil conference in Amsterdam, he said the strategy was prompted by growth in the world population, a steady increase in global energy demand and the fact that oil would remain a key source of energy.
“Saudi Aramco’s current plans are to increase production capacity by 20 per cent through the largest capital expansion programme in the company’s 75-year history,” he said this week in a speech obtained on Friday.
“There are long-term plans to substantially increase Saudi Aramco’s crude oil resource base and hydrocarbon recovery factors of existing fields… these include investment in intelligent fields through an integrated process of real-time measurement and optimisation.
“The Abu Hadriyah–Fadhili–Khursaniyah field development is slated to commence production at 500,000 barrels per day in about two months.”
Nasser did not specify the exact size of the capacity increase but Saudi Aramco, the world’s largest oil exporter, has spoken of plans to pump more than $50 billion into projects to raise capacity to 12.5 million barrels per day at the end of 2009 from the current 11 million bpd.
Saudi Arabia already maintains a spare output capacity of between 1.5-2 million bpd as a cushion for its long-standing role as a residual producer that involves raising production when oil prices soar and cutting output when they tumble.
Oil analysts said maintenance of that capacity, which accounts for more than two thirds of the world’s available crude capacity, has been very costly to the Kingdom. But they noted it paid off in terms of keeping prices high.
“Don’t forget a one-dollar increase in oil prices means more than $8 million in extra daily income for Saudi Arabia,” one analyst said.
Nasser did not elaborate on plans to boost the Kingdom’s proven oil reserves but other Aramco officials have said deployment of advanced technology would sharply expand those reserves through raising recovery rates.
Mohammed Saggaf, Manager of Saudi Aramco’s Advanced Research Centre, put the Kingdom’s oil in place at 722 billion barrels, of which nearly 109 billion barrels have been produced since Aramco began pumping crude 75 years ago.
But he said the total amount of oil that can be produced with present technology is around 260 billion barrels.
“Saudi Aramco’s long-term goal is two-fold, we want to increase total oil in place to 900 billion barrels by 2020 and to push the limits of recovery from around 50 per cent to 70 per cent in our major producing fields, using both improved conventional recovery and enhanced oil recovery,” he said.
“Globally, the average ratio of recoverable reserves to oil in place is mostly 30 to 40 per cent, with a level of 50 per cent. Saudi Aramco is already doing much better than the average. We intend to go further and push the limit to achieve recovery rates of 70 per cent.”
Nasser said Aramco was pursuing what he described as an aggressive technology strategy to maximise its hydrocarbon reserve base, including extreme-reservoir-contact wells; passive seismic monitoring; giga-cell simulation; and nano-robotic field monitoring and control.
Dubai-based Dragon Oil, one of the only foreign investors operating in the former Soviet republic of Turkmenistan, plans to increase oil output by 25 per cent this year and another 25 per cent in 2009. It produced 32,000 barrels per day in 2007, its President and CEO Hussain Sultan said in London yesterday.
Turkmenistan, taking its first steps to open its oil and gas sector to foreign investment, needs to attract technology to meet its target of 2.2 million bpd. (Reuters)
Saudi plans to boost oil production