Saudi Aramco Review

Rigs set for new record

SAUDI ARABIA may raise the number of its drilling rigs to a record high above 150 next year as the state oil giant ramps up exploration for unconventional gas. Boosting natural gas output helps Saudi Arabia meets its rising domestic demand for power.

Sources say that the rigs will mainly be aimed at an increase in drilling for unconventional gas in the Red Sea area and will include some rigs in the oilfields of Shaybah and south of Ghawar. The state oil giant will drill as many as 20 gas wells in the northwest of the country. Once these exploration wells prove to be economically viable, they will go for development and they will raise the rig count even more.

The number of rigs operating in the world’s second largest oil producer after Russia is already back to levels seen in the early 2008 oil boom at around 130, up from 100 at the end of the Q3 last year.

Khalid Al Falih, CEO of Saudi Aramco, says his company would focus on gas in the short to medium term and did not need to raise oil production capacity beyond the current 12 million barrels per day. Aramco had started drilling a number of unconventional gas wells including shale gas and tight gas located in rock and sand formations that are difficult to access.

Aramco has said unconventional gas resources may rival conventional gas reserves. Its gas reserves rose to 282.6 trillion standard cubic feet in 2011 from 279 trillion in 2010 giving the kingdom the world’s fourth largest gas reserves.

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