Aramco, Shell JV may find light oil at Kidan.

Byline: KHOBAR:

Tests by a Royal Dutch Shell and Saudi Aramco joint venture give grounds for hope it will find enough light oil at the Kidan gas field to make development profitable, a top executive said. The joint venture South Rub Al-Khali Co (Srak) said earlier this month that a test well at Kidan flowed at 90 million cubic feet per day (cfd). "We have been able to flow hydrocarbons from the Kidan well, and it is quite encouraging for us," said Walter Voggenreiter, acting chief executive officer of Srak. "It's the first step towards hopefully further appraisal and ultimately, development." The level of condensate, or light oil, in the field, was the key to the project's economics, he said. He was acting chief executive while Chief executive Kamal Al-Yahya was on leave. "This is a gas condensate field so there is a liquid content," he told Reuters in a telephone interview. "The liquid content sustains a lot of the value of the hydrocarbons. We are looking of course at the liquid content." Saudi Arabia opened the vast desert of its southeast, known as the empty quarter, to international oil firms working in consortia with Aramco in 2003-2004. So far, they have failed to find the gas needed to meet future Saudi demand. Gas sales terms to Aramco were so poor that to make money the consortia need to find condensates which can be sold at market prices to cover the cost of development. The Kidan test flow gave 10-25 barrels of condensate per million cubic feet of gas. Still, the ratio of gas to condensates would be variable throughout the field, and Srak would need more studies to pin down condensate volumes, he said. Kidan faced other obstacles to development. Its gas has a high content of hydrogen sulphide, which makes it potentially dangerous and more costly to recover.

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