Saudi Arabia will begin deep-water drilling in the Red Sea by the end of the year and is expected to announce the results of current projects sometime next year, the president and CEO of Saudi Aramco, the world’s largest oil company, said in an interview.
A Saudi daily separately reported on Wednesday that Riyadh is also developing a natural gas field called Midyan in the northwestern part of the kingdom.
Saudi Aramco’s Chief Executive Officer Khalid al-Falih told the Eqtisadiah newspaper that gas will be used for power generation. The company confirmed on Tuesday it has released the engineering, procurement and construction tenders for the Midyan gas processing project that will cost about $800 million.
Conservative estimates suggest the gas field is expected to produce 75 million cubic feet a day of gas and 4,500 barrels a day of condensate for a 20-year period. Gas from Midyan will be transported by pipeline to a power plant in the coastal town of Duba, 135 kilometres southwest of the field, the report added.
The bid deadline for the tender submissions is mid-October with completion scheduled for 2015.
Red Sea Off-shore
In a report published on Wednesday in Al Riyadh newspaper, Al Falih said without offering further details that Aramco’s oil and gas research and exploration budget is the highest in the company’s history. Company officials have said in the past they are doubling the number of researchers worldwide, including establishing a research center in Houston where the company already has a strong presence.
The CEO also said the company is focused on the relatively unexplored north and northwestern regions where he says wells have been discovered and that production output estimates would be “announced in due course,” according to the newspaper report.
Most of the country’s oil production is onshore, but in recent years the country has been exploring ways to boost output. Offshore drilling is a relatively new phenomenon for the country, which has massive reserves beneath its eastern sands.
Saudi Aramco operated one offshore oil rig in 2000 which had 19 in operation and two in the works by 2009, a US-Saudi Arabia Business Council report suggested, citing Saudi ministry figures. The country has vast proven offshore oil and gas reserves, such as its northeastern Safaniya field just off the coast near the border with Kuwait.
In 2009 the country began a 15-month seismic study in the Red Sea where Saudi Aramco believes there are significant reserves of natural gas.