SAUDI ARABIA is beginning an oil exploration push that it says is expected to turn up 100 billion barrels of new oil in existing fields in the kingdom and in unexplored regions including the Red Sea.

The effort is also expected to increase the company’s natural gas production by 40 per cent by 2014.

A Saudi Aramco executive says the company plans to drill its first deepwater exploratory well in the Red Sea by year-end.

“We are optimistic about the potential for significant discoveries,” says Amin Nasser, Saudi Aramco senior vice president upstream, at the IHS Cera conference in Houston. “We expect to start drilling in the deepwater by the end of this year.”

Deepwater and shallow water drilling are key components of Saudi Aramco’s long-term goal of finding at least 100 million barrels of energy resources within the Saudi Arabian kingdom in the next several decades, Nasser says. The company is also working on increasing its rate of oil recovery from fields to 70 per cent from 50 per cent in coming years.

“The programme was designed to ensure that we continue to have ample spare capacity to meet underestimated energy demand,” he says. Saudi Arabia has 267 billion of so-called proven reserves, about one-fifth of the world’s total. “Proven reserves” is an industry term that means oil or gas that has been discovered and could be produced with today’s technology.

The world consumes about 89 million barrels of oil per day, or 32.5 billion barrels per year. The industry describes a field as giant if it has 500 million barrels of oil or more. He says geological surveys suggest that the oil will be found in “frontier” areas in the kingdom, including in the shallow and deep waters of the Red Sea. Nasser says shallow water drilling has begun already and that deep water drilling will begin later this year.

“We are very optimistic about the potential for significant discoveries,” he says.

He also says improved oil extraction techniques will allow the country to pull 70 per cent of the oil from its existing fields, up from 50 per cent.

The natural gas push is being made to handle strong growth in Saudi Arabian power demand. Nasser says power demand is rising 7 per cent a year.