SAUDI ARABIA - Saudis Exceed Target Of Finding 5 TCF/Year Of Free Gas.

From 1994, Saudi Aramco has put emphasis on non-associated gas in its exploration. Oil Minister Ali Naimi told a gas conference in Yanbu' in October 1997 that the aim was to add 5 TCF to the proven reserves every year. But Saudi Aramco has exceeded this target, having discovered 30 TCF of recoverable non-associated gas since 1995. In 1998 alone, Saudi Aramco discovered over 7.9 TCF of recoverable gas. Last year Saudi Arabia was the only country to have found more gas than it produced, with the world discoveries of 40.5 TCF having replaced only 67% of gas produced in 1998.

Now the recoverable Saudi reserves stand at 210 TCF, including more than 77 TCF of non-associated gas which account for almost 37% of the total. Saudi Arabia has over 261.2 bn barrels of proven oil reserves, 26% of the world's, a conservative figure based on an estimate made in late 1994.

To encourage Saudi Aramco's exploration for and development of non-associated gas fields, the price of gas to local industries, power plants and refineries was raised from $0.50 to $0.75/million BTU on Jan. 1, 1998.

Local demand for gas has been rising by more than 7% per annum. The annual growth rate for 1999 and the subsequent years is expected to exceed 8%. The number of industries on the waiting list to receive gas feedstocks remains far beyond Saudi Aramco's capacity.

Saudi Aramco's marketed gas production in 1998 reached about 46 BCM, up 1.5% from the 1997 figure of 45.34 BCM. There was a big jump in 1997, as marketed production in 1996 was 41.3 BCM, compared to 30.5 BCM in 1990 and 25.2 BCM in 1986. Naimi says: "If gas demand grows even at the conservative rate of 8% a year, we will require about 7 BCF/day by 2007".

Saudi Aramco's exploration focus for gas has been on low-risk, high-volume prospects mainly in the Khuff reservoir deep beneath the Ghawar region. Smaller gas fields, such as Midyan which was found in 1992 in the north-west close to Tabuk, also figure prominently and will be developed for use in nearby markets. Naimi says development of "pocket fields in scattered areas will bring gas - and new economic opportunities - to customers not yet served". Saudi Aramco has been exploring for oil and gas in the north-west, mainly between Turaif and Jalamid.

In the Ghawar area, Saudi Aramco has discovered several gas/condensate fields since late 1994. A total of 25 rigs have been active for exploration and development of non-associated gas in Ghawar's deep Khuff reservoir. It has contracted drilling companies such as Pool Arabia, Santa Fe, ADC and Egyptian Drilling. There is also emphasis on the Jawf gas field, on the flanks of Ghawar, where the gas is richer than that from Khuff and has a higher yield of ethane and methane.

Independent sources believe non-associated gas reserves discovered so far in the Najd fields, in the centre south of Riyadh, could exceed 14 TCF. The first major gas discovery there was made in October 1989 at Dilam, 75 km south of Riyadh, as a drill stem test at a depth of 7,900 feet yielded about 50 MCF/day of sweet gas with over 90% hydrocarbons and no trace of hydrogen sulfide. The field also tested 65 deg. API condensates (see geological profile in OMT).