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SAUDI ARABIA - The Arab Light Producers - Ghawar Group.

Discovered in 1948 by the then US-owned Aramco (Chevron, Texaco, Exxon & Mobil), Ghawar is the largest axis of fields in the world and is the main producer of Arab Light crude oil in Saudi Arabia. It is 250 km long and 15 km wide. It contains several fields, of which eight are major oil producers, and huge fields of natural gas in a Khuff reservoir deep beneath the oil formations (Fms). Ghawar's recoverable crude oil reserves exceed 70 bn barrels. Oil in place in the Ghawar region is estimated to be over 300 bn barrels.

Exxon found the first Ghawar field at Ain Dar in 1948, having joined Aramco in 1947. That find led to discovery and development of other fields by Exxon. (This was partly why ExxonMobil in 2001 chose to lead one of three core ventures to develop a huge south Ghawar gas field in partnership with other majors. ExxonMobil led another core project. But talks on both JVs collapsed later and the US super-major abandoned the Saudi Gas Initiative - see Vol. 61, Gas Market Trends No. 13).

The bulk of Ghawar's produced oil reserves occur in limestones of the Jurassic Arab A, B, C and D units, mostly at a depth of 6,920 feet, with big amounts in older Jurassic limestone. Beneath them lie giant Khuff and pre-Khuff gas Fms.

The main producing Ghawar fields are, from north to south: Ain Dar, Shedgum, Uthmaniyah, Farzan, Ghawar, al-Udayliyah, Hawiyah and Haradh. Their capacity is 5.3m b/d, of which most of the heavier oil production streams have been mothballed. It was said in 1990, when total Saudi capacity was less than 8m b/d, that these fields still had the potential to produce 4m b/d, as some of the wells were filled with diesel to keep them ready. In 1980, as Saudi output totalled 9.9m b/d, the Ghawar fields at times produced over 6.5m b/d. But the reserver was damaged as a result, and some of the older fields like Ain Dar have begun to decline.

Ain Dar and Shedgum fields have had an EOR system based on seawater injection. In September 2003 Snamprogetti of Italy was selected for a $110m EPC job. The FEED was done by Bechtel. The PMC is SNC Lavalin of Canada.

The main boost to Arab Light (AL) capacity came from a 520,000 b/d expansion at Hawiyah. Deep beneath Hawiyah's oil reservoir lies the Jawf field of non-associated Khuff gas. A $2 bn, 1,440 MCF/d gas processing plant built at Hawiyah came on stream in late 2001 as the 4th such facility in the Master Gas System (MGS). Hawiyah plant produces 170,000 b/d of condensate and 1,000 t/d of sulphur. The plant is being expanded by 800 MCF/d.

The Jawf gas/condensate field was found on July 21, 1994, as the Hawiyah-200 exploratory well yielded 20.2 MCF/d of sweet gas and 3,286 b/d of condensates from an interval of 13,650-14,353 feet. The well was spudded in January 1994 and was the first in a series of deep tests to explore new gas reserves on the flanks of Ghawar. It encountered zones bearing extensive sour and sweet gas deposits in a Khuff Fm at 12,500 ft. Now Jawf produces non-associated gas from six wells.

Deeper drilling through the Jurassic beneath other Ghawar oil structures had since the 1980s proved up large reserves of gas sometimes with condensate in Permian Khuff limestones and pre-Khuff sandstones. The deposits had been actively sought as industries and utilities in the kingdom, which depended on associated gas for power or feedstock, had been deprived of ethane and methane because oil production was cut back. Now Saudi Aramco is developing Khuff and pre-Khuff gas beneath Ghawar.

Haradh produces 900,000 b/d of AL. It has three 300,000 b/d GOSPs, with some of the heavy oil produced in the Ghawar area shut in. In March 2001, Snamprogetti got a $140m job to upgrade Haradh-I and build the second 300,000 b/d GOSP for Haradh-II. Haradh-III in February 2006 reached its 300,000 b/d capacity ahead of schedule. The field's performance exceeded virtually all pre-project goals. Haradth-III also produces 160 MCF/d of gas. The huge Khuff gas reservoir deep beneath Haradh's oil Fms has been partly developed.

Maximum Reservoir Contact (MRC) wells, smart completions, geo-steering, and the latest ITs were part of Haradh-III, at a scale and complexity unprecedented in the E&P industry. A decade from now, these will become standard in the lexicon of mega-projects. Initial production from Haradh-I occurred in May 1996, followed by Haradh II in April 2003

Saudi Aramco has had a $2 bn, 1,620 MCF/d gas processing plant built at Haradh, the 5th such facility in the MGS, which went into full production in late 2003. It is the second to process non-associated gas, and also processes associated gas from the Shaybah field. The plant produces 145,000 b/d of condensate. The plant is being expanded by 500 MCF/d.

The kingdom's 6th such facility, Straddle Plant, treats 3,800 MCF/d of gas and extracts about 150,000-200,000 b/d of NGLs from the Hawiyah and Haradh gas plants. The remaining gas will be produced from three areas in the remote Rub' al-Khali (RaK) region offered for gas E&P to foreign companies (see gmt13SaudiGeoSep24-07).

In parallel, Saudi Aramco has had the East/West (E/W) pipeline converted to carry gas as well as crude oil. This followed the 2001 conversion by Saipem of the AY-1 pipeline pumping 300 MCF/d to the west.

When all the gas plants and their expansions, including an ethane recovery unit at the Berri gas facility, become operational, Saudi Arabia's outputs by 2008 would have reached almost 10,000 MCF/d of gas, 900 MCF/d of ethane and 950,000 b/d of NGL. By 2010 gas production would reach 20,000 MCF/d.

Uthmaniyah is another Ghawar oilfield. There, a major gas processing plant with a capacity of 1,600 BCF/d has been expanded to 2,400 MCF/d. A 152 km underground gas pipeline, known as UBTG-3, has been built linking the gas facility to the processing plants of Ju'aymah and Berri. Two new GOSPs at Uthmaniyah were built in late 1992.

The Ghawar fields are now producing close to capacity, with the output being AL crude oil. The other Ghawar fields producing this grade are Khurais, Harmaliya and Abu Hadriya.

Khurais, expanded under Saudi Aramco's first programme which raised its capacity from 75,000 b/d to 150,000 b/d, is being expanded on a full scale. It will have six new GOSPs with a total capacity of 1.2m b/d by 2009, to be added to the existing 150,000 b/d. But the 1.2m b/d addition will be AL. The PMC for the fast-track expansion is Foster Wheeler.

New installations are to include facilities to inject 2m b/d of seawater into Khurais, Abu Jifan and Mazalij fields to support increased oil production. Companies were due to submit prequalifications by an extended deadline of Oct. 8 for the main construction packages. The largest - Package-1 worth about $2 bn - will cover construction of central processing facilities (CPFs) and include a GOSP, wet crude handling vessels, gas stabilisation columns, compression and liquid separation facilities, in-field trunklines and related works. It will also entail an upgrade of support facilities at the Ju'aymah gas plant through installation of steam boilers, water pumps and plant and piping facilities. The facilities will be built to handle 115 MCF/d of gas and 120,000 b/d of NGLs to be produced from the new CPF. Package 2, worth $1 bn, will cover installation of seawater supply and injection facilities at Khurais and the expansion of the Qurrayah water treatment plant, aimed at supplying 2,000 b/d of treated water. Package-3, worth $500m, will include supply and installation of pipelines for seawater intake. Package-4 will be for supply and installation 80 km of 24-28-inch pipelines at Khurais to transport crude oil, gas and NGL and the Phase-2 expansion of the E/W NGL pipeline by installation of new pumping stations and three 14-32-inch, 340-km pipelines. Package-5, worth $1 bn, will include construction of co-generation, infrastructure, and product handling and storage facilities - to cover accommodation and related major civil works.

Found in 1957 and on stream in 1970, Khurais is about 70 km long trending north and north-west. It is about 100 km west of Ghawar. The field has three Upper/Mid-Jurassic oil zones producing 33[degrees] API oil from Arab D and Hanifa carbonates, and 36[degrees] oil from the deeper Fadhili reservoir. Oil in place at Khurais exceeds 20 bn barrels. But only 7 bn barrels would be recoverable at current cost rates. The field's full potential can be proven after extensive work on other related structures. It was partly in view of such considerations that Khurais was shut down as oil prices began to fall in 1985. Total Saudi Aramco output then declined to less than 3m b/d.

Hawiyah's gas processing capacity is being raised 800 MCF/d to 2,400 MCF/d by 2008. Jacobs Engineering is the PMC on the Hawiyah NGL recovery programme.

Qatif, a giant field shut down in 1995, has been reactivated and expanded under a $2 bn incremental oil and associated gas project which raised its capacity from 200,000 b/d to 800,000 b/d inaugurated in December 2004. The $630m EPC contractor for Qatif North's 500,000 b/d GOSP and the 300,000 b/d offshore Abu Sa'fa field's GOSP (see below) was Snamprogetti. The $105m EPC contractor for Qatif South's 300,000 b/d GOSP was CBI Arabia a unit of Chicago Bridge & Iron which has been involved in Saudi Arabia since 1939. The contracts were awarded in March 2002. Foster Wheeler was the PMC. The project also raised the field's gas and condensate production capacity.

Qatif is said to contain 17 TCF of gas and 200m barrels of condensate. Some of the field's condensate output is being used to blend a part of its AM production to turn AEL crude oil. Qatif can produce 600,000 b/d of AL, 130,000 b/d of AM, and 70,000 b/d of AEL (38[degrees] API with about 1% sulphur). Work on Qatif has included drilling of 20 development wells. Multiple wells were drilled from a single pad.

Berri, found in 1964 by Mobil, is an onshore and offshore giant. It has over 10 bn barrels of 32-34-39[degrees] API oils recoverable at relatively low cost. The field produces from several Fms of Upper and Mid-Jurassic, lying mostly at 8,300 ft. Its capacity has been raised from less than 700,000 b/d in 1990 to 1.15m b/d. Berri crudes are blended with lighter grades mostly produced from Abqaiq and the field's system can take crudes from Qatif. The export blend is AEL.

Berri's associated gas is being developed under a project, which includes expansion of its gas processing plant. This is MGS' third gas processing plant, the first two being at Shedgum and Uthmaniyah, and its capacity has been raised to 1,400 MCF/d. It has a unit to recover 280 MCF/d of ethane and 70,000 b/d of propane-plus, quantities of heavier NGLs and 3,300 t/d of sulphur. The project was completed in late 2005.

Saudi Aramco in mid-2007 gave a $200m contract for the Berri water injection and Qatif crude oil pipeline projects to Global al-Rushaid, a unit of Global Industries of the US. The project covers installation of water pipelines, two shore approaches and lateral pipelines and pre-commissioning work. Offshore installation was scheduled to start in September, with the project expected to last at least 12 months.

Abqaiq, a super-giant found in 1940, is said to have 17 bn barrels of oils recoverable at relatively low cost. They are reservoired in Upper and Mid-Jurassic Fms at 6,690 ft in most cases. The field was expanded in 1994 to produce 850,000 b/d of 35-37[degrees] API oils with 1.32-2.28% sulphur. This has added 165,000 b/d to the stream producing AEL. Work on Abqaiq has included horizontal drilling. Abqaiq's crudes and those of Berri and Shaybah are mixed at blending facilities built at Abqaiq to produce the AEL. These facilities are linked by pipeline to Shaybah field in the deep south-east.

Harmaliya, found in the 1950s, is producing 175,000 b/d.

The Main Fields Producing Heavier Oils: Saudi Aramco's mothballed capacity for AM and AH crudes is limited to 1.8m b/d, down from to 3.2m b/d in 2001 and 4.87m b/d in late 1993. They include small offshore fields shut in and many wells closed in the larger fields. There will be a further mothballing of field capacities producing heavy crudes as additional fields, including those in the Najd area south of Riyadh, come on stream in the next few years.

Safaniyah, by far the largest offshore oilfield in the world, was found in 1951 by Texaco (which in 1937 was the first to join SoCal - now Chevron - in Saudi Arabia as a 50% partner in Aramco. But now Taxaco is part of Chevron). Texaco discovered and developed other offshore fields containing heavy oil.

Safaniyah has over 15 bn barrels of proven oil reserves recoverable at relatively low cost. The oil is heavy, 27[degrees] API with 2.93-2.96% sulphur, and much of Safaniyah's 1.5m b/d capacity has been mothballed. Like most other offshore fields in the north-east, the oil is reservoired in Cretaceous sandstones and carbonates mainly at a depth of 5,100 ft.

(Texaco sold 50% of its US East Coast system to Saudi Aramco in 1988. The resultant JV Star Enterprise gave Texaco permanent access to 630,000 b/d of Saudi crude oil. In 1997 Shell, Saudi Aramco and Texaco combined their assets into a new JV called Motiva Enterprise. On Oct. 9, 2001, as Chevron's takeover of Texaco was finalised, Saudi Aramco bought half of Texaco's stake in Motiva, with Shell buying the other half. Thus Motiva now is owned 50-50 by Saudi Aramco and Shell - see OMT 16).

In 1996, Saudi Aramco brought some of the mothballed desalting units and other facilities at Safaniyah back into operation. They enabled the company to handle more AM from the Zuluf field. Reservoir pressure at Safaniyah, however, has begun to decline.

Zuluf, another offshore giant found by Texaco in 1968, has about 6.5 bn barrels of proven oil reserves in a Lower Cretaceous Fm at 5,800 ft. Its capacity is over 500,000 b/d, with another 200,000 b/d and two GOSPs mothballed. Saudi Aramco has planned to raise the field's capacity to 1.2m b/d. Of this a further 500,000-700,000 b/d has been earmarked for closure. Related facilities to upgrade the field's AH to AM have been built.

Manifa, an offshore giant south-east of Safaniya found in 1957, has 10 bn barrels of proven reserves. It produces 200,000 b/d of 28[degrees] API oil with 2.97-3.66% sulphur. Manifa oils come mainly from two reservoirs, a Lower Cretaceous containing a very sour 26[degrees] grade, and an Upper Jurassic having a 29[degrees] API oil with 2.97% sulphur. Manifa was first brought into production in 1964 by drilling eight wells (see omt14SaudiFieldsOct3-05) Plans to expand the field's capacity by 2011 to 900,000 b/d of heavy oil, 120 MCF/d of sour gas, 50,000 b/d of condensate and 950,000 b/d of water have been delayed by two factors: a rapid rise in project costs and uncertainty about two 400,000 b/d refineries proposed to be built at Yanbu' and Jubail to convert its crude into light fuels (see down14SaudiRefOct1-07).

Saudi Aramco has recently put back to the second quarter of 2008 the tender for the programme's gas plant package. It has opted to reissue the qualification notice for the fourth package, with contractors told it may push the overall bids back until April 2008. The company is to combine the package with facilities to be built as part of the $10 bn Karan gas field development. Saudi Aramco briefed contractors on the first three packages during a recent meeting in London and is expected to complete these tenders before embarking on the fourth package.

Dubai-based J. Ray McDermott in May 2007 got a four-year contract to engineer, procure, construct, install, hook-up and commission the new Manifa facilities. The US company then said fabrication of platforms, with a combined weight of over 16,700 tons, was to begin at Jebel Ali in September 2007. The project includes modification work which entails design, procurement, installation, hook-up and commissioning of communication packages on 26 existing platforms. Its job has to be completed by 2011.

Marjan, an offshore giant found in 1967 by Chevron, extends well into Iranian waters, where the field is known as Forouzan. Marjan forms an axis of fields off the Saudi coast, all in Cretaceous-to-Upper Jurassic Fms, which include Hamur, Maharah, Lawhah, and Hasbah. Marjan, producer of AM, has a working capacity of 270,000 b/d - with 300,000 b/d of its 570,000 b/d capacity mothballed.

Khursaniya, an onshore field found in 1956, has almost 3 bn barrels of proven oil reserves in an Upper Jurassic Fm at 6,560 ft. Khursaniyah is being developed as part of a mega-project including Abu Hadriyash and Fadhili fields. The three-field system is to be on stream by end-2007 to produce 500,000 b/d of AL and AEL.

In late July 2007, Saudi Aramco and the main contractors, Bechtel and Technip, signed a new agreement converting the three-field development's deal to lump-sum turn-key (LSTK) status. This was previously on a cost-reimbursable basis. Saudi Aramco then said the mega-project will still be completed on schedule by end-2007. The main part of the project is expected to hit that deadline but it is understood the gas component may not come on stream until early 2008. The complex will process up to 1,000 MCF/d of gas and the facilities will produce 550 MCF/d of sales gas and 195,000 b/d of ethane and NGLs. Saudi Aramco is said to have agreed a final price of $3.6 bn with Bechtel and Technip. About 70% of the project was complete by late July.

Khursaniya's first-phase capacity by 1994 had reached 150,000 b/d of AM, compared with 75,000 b/d in 1991 and 50,000 b/d in the late 1980s. But about 50,000 b/d of its existing capacity has been mothballed.

Abu Sa'fa, found in 1963, straddles Saudi and Bahraini waters. It has more than 5 bn barrels of proven oil reserves. The field, shared with Bahrain, was shut down by Saudi Aramco in April 1987. It was re-opened in recent years. Bahrain receives 150,000 b/d from Saudi Arabia as its share in production from the Abu Sa'fa.

Universal modular platforms were installed by end-August 2001 at Safaniyah, Zuluf, Marjan and Abu Sa'fa by J. Ray McDermott under a contract signed in May 1999. A 300,000 b/d GOSP was being installed by Snamprogetti whose work was completed in late 2004, as part of projects for the onshore Qatif oilfield (see above). Abu Sa'fa has 18 new platforms. Together with Qatif, the two fields now are producing 800,000 b/d of AL.

Saudi Aramco is focusing much of its Khuff gas development on the 9 TCF Karan field, 100 km north of Ghawar, where it is to produce 1,000 MCF/d in 2011. Foster Wheeler in mid-2007 won the joint FEED/PMC contract on the onshore portion of the field. The project is estimated to cost about $10 bn.

The Najd Fields: The Najd reservoirs have lower pressure than first thought. Since 1994, production has been affected by the encroachment of sand into the wells. Underground pumps installed at the fields have clogged up with sand, with the blockage occurring roughly every three months. To prevent production from falling below 200,000 b/d, Saudi Aramco has been hooking up new fields found in that area since 1994. The fields need gas reinjection to maintain reservoir pressure.

Most of the gas is produced from the Nu'ayyim field, where the crude has the highest gas-to-oil ratio among the Najd structures. A 75,000 b/d GOSP at the field has been built, together with underground pumps, to raise gas supplies for a modified EOR system at the Hawtah centre. Nu'ayyim is being developed to produce 175,000 b/d by 2009.

Recoverable reserves of oil and condensates in the Najd area have been estimated at 10 bn barrels. Saudi Aramco experts still point to an earlier estimate that the Najd fields could have up to 30 bn barrels of liquids and major reserves of natural gas. The liquids and gas are reservoired in Paleozoic Fms older than the Khuff, at depths ranging from 7,900 to more than 9,000 ft. Some reservoirs are more than 150 ft thick. About 85-90% of the liquids and gas tested had no traces of hydrogen sulphide. Some crudes are free of sulphur and have been tested as a motor fuel.

The main producing Najd fields are: Hawtah, 190 km south of Riyadh, on stream since late 1994 with a capacity of 150,000 b/d, and its reserve of liquids has been put at about 1.5 bn barrels; Nu'ayyim, 25 km east of Hawtah, which came on stream with a limited capacity in January 1997, using facilities at Hawtah; Hazmiyah, south of Hawtah; and Ghinah, whose liquid reserves have been estimated at almost 1 bn barrels.

These and several other Najd fields are linked to Petroline (the east-west pipeline) by a 325-km spur for export to Ras Tanura in the Gulf or Yanbu' on the Red Sea. At present, the ASL is exported through Ras Tanura. The pipeline has been partly converted to pump natural gas from the east to Yanbu'.

Shaybah: A super-giant discovered in the early 1970s - with light/sweet oil in place having been estimated at about 14.3 bn, including 7 bn barrels recoverable, plus 25 TCF of gas - Shaybah came on stream in mid-1998 for tests. Its capacity reached 500,000 b/d in early 1999 and it was inaugurated in March 1999. Other projects include the Phase-2 expansion of Shaybah, which will add 300,000 b/d of extra light crude by 2008.

AEL from the field is transferred through a pipeline to Abqaiq for blending with AL. About 880 MCF/d of gas is reinjected into the field (see background in Vol. 61, No. 14).

Saudi Aramco on March 31, 2007, signed a $100m contract with Stroytransgaz, a construction arm of Russia's energy giant Gazprom, for laying a 200+-km crude oil pipeline from Shaybah to Abqaiq within 18 months. (President Vladimir Putin in February 2007 made a two-day visit to Saudi Arabia, which was the first visit of a Russian head of state. Saudi-Russian trade has risen from $88.5m in 1999 to $412m in 2005. The kingdom exports wood, coal, wood products, and paper products to Russia, while its imports from Russia include yeast, copper products, and steel. The two countries have only five joint industrial and non-industrial projects worth SR37m).

To explore for associated and non-associated gas, Saudi Aramco is to drill 307 wells, including 67 for exploration, between 2007 and 2011 (see gmt13SaudiGeoSep24-07).

The Divided Zone: The divided (formerly "neutral") zone is shared equally by Kuwait and Saudi Arabia, under a treaty signed on Dec. 2, 1922 to settle a territorial dispute between the two countries. The treaty was revised on July 7, 1965. The joint administration accord was supplemented in 1969 by an agreement whereby the northern half was administered by Kuwait and the southern part was run by Saudi Arabia. An undivided half interest in all resources was maintained over the entire area by each state. A joint Kuwaiti-Saudi committee oversees exploitation of these resources.

Texaco (Chevron), which has the onshore concession to 2010 in the northern half, shares its area's oil production equally with Kuwait. Saudi Arabia gets taxes and royalties on Texaco's share. Texaco's production capacity reached 420,000 b/d in 2005. It had risen after the Gulf war from 100,000 b/d in 1991/92 to 120,000 b/d in 1995 and 270,000 b/d in late 1998 and the first half of 1999. Texaco operates three onshore oilfields: Wafra, South Fuwaris and South Umm Gudair (see their profiles in the Kuwait survey in Vol. 68). The former US operator onshore, Getty Oil, was sold to Texaco in 1984.

Aramco Gulf Operations Co. (AGOC) is a unit of Saudi Aramco set up at end-February 2000 to take over half the operations of Arabian Oil Co. (AOC) of Japan - which had the offshore concession to February 2000 on the Saudi side and to Jan. 4, 2003 on the Kuwaiti side. AOC lost both concessions and now works as a service contractor for Kuwait Gulf Oil Co. (KGOC). The offshore area's oil production capacity is 300,000 b/d maintained since the 1980s. The area has two producing oilfields: Khafji which is offshore and Hout which is onshore. It also has a huge but undeveloped offshore gas field, Dorra, and a very small undeveloped structure called Lulu, and both are on the median line with Iran's waters. Lulu forms an extension of Iran's Esfandiar offshore field.

AGOC and KGOC have formed an operating JV called Khafji Joint Operations (KJO), which is spending $1.5 bn to upgrade and expand the capacity by late 2007 in two phases. Toyo Engineering got a contract in June 2003 to repair and upgrade the oil production facilities by end-2004 to ensure another 10 years of operations. Phase-2, 2005-07, required Toyo to prepare a plan and designs for rebuilding the al-Khafji facilities to ensure stable production levels during the next 30 years.

It has been proposed that Dorra, to be exploited jointly for Kuwait and Saudi Arabia, with a share to go to Iran as part of a territorial deal, will have a major stream of natural gas and this will feed a big electric power plant (see gmt14SaudiFieldsOct3-05).

Saudi Aramco earlier in 2007 unveiled a plan to expand its known resources by finding new oilfields while also concentrating on ultimate recovery from existing and yet to be found fields. It is looking into areas hard to explore and the potential of unconventional oil.

A pilot project for heavy oil involves a steam-flooding process developed by Chevron in Indonesia and other parts of the world - continuously injecting high pressure steam into Fms of heavy oil in the Divided Zone (DZ). The additional heat and condensation causes expansion in the liquid, releasing it from the surrounding rock. It reduces the liquid's viscosity, enabling it to be pumped out more easily. About $300m are being spent on this with Saudi Arabian Texaco (SAT). Targeted production is 300,000 b/d from 2010.

Saudi Aramco is looking into the DZ's offshore part and elsewhere in Saudi Arabia's Persian Gulf waters. Its Supreme Council, headed by King Abdullah, has authorised the NOC to share the risk of its new extraction plans for heavy oil with IOCs specialised in deep offshore E&P. It recently signed a deal with state-controlled Brazilian IOC Petrobras to tackle technological challenges in extracting heavy oil offshore and having a related olefins complex. This will be an integrated heavy oil E&P/downstream petrochemical JV likely to involve several billion dollars. If this experience proves successful, Saudi Aramco may have similar JVs with other specialised IOCs.

The DZ is said to hold at least 3 bn barrels of heavy oil. MEED on June 29, 2007, quoted Abdullah S. al-Saif, Saudi Aramco's senior VP for E&P, as saying: "Heavy oil is a big part of our future. Obviously, some is more difficult to reach than others but we realise 20, 30, 40 years down the line, heavy crude will play a very big part in our firm's production base". But extraction of heavy oil is not the only process under study.

Saudi Aramco's Diverse Operations: In March 2003 Saudi Aramco gave a five-year, A$150m ($89.1m) contract to Worley of Australia to provide PMC and engineering services to cover all of its ongoing offshore oil and gas projects including fixed platforms and submarine pipelines. The contract has provisions to extend Worley's services for another four years, with work having begun in April 2003.

A consortium led by Saipem of Italy in September 2007 won a seven-year contract, worth more than $250m, to provide offshore engineering and construction services to Saudi Aramco as part of its programme to maintain potential facilities. Saipem and its local partners - the Industrialisation & Energy Services Co. and al-Rushaid - will engineer, procure, transport and install offshore platforms and pipelines. A minimum workload of 16 platforms and 80 km of sealines is guaranteed during the first four years.

Saudi Aramco has four IPPs being built on BOT basis for a 1,000 MW capacity at Ras Tanura, Ju'aymah, Uthmaniyah and Shedgum. These were among 94 Saudi Aramco projects, worth $4 bn, tendered from early 2002 to end-2003 for execution in the upstream and downstream sectors. Saudi Aramco is having an ethylene cracker built at its Rabigh oil refining centre on the Red Sea coast (see DT No. 14 & 15). Some of its non-core units are to be privatised. Among other ventures, Saudi Aramco is to help found a private holding firm to produce equipment and machinery as well as provide services needed in the petroleum industry. Such firms can also produce for the other Middle East markets.
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Publication:APS Review Gas Market Trends
Geographic Code:7SAUD
Date:Oct 1, 2007
Previous Article:SAUDI ARABIA - The Gas Opening.
Next Article:SAUDI ARABIA - Saudi Sales Terms.

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