Printer Friendly

Saudi Arabia - Expansion Background.

In the 1970s, the then American-owned Aramco was to expand its oil production capacity to 20m b/d by the late 1990s. Several factors combined to limit its capacity from over 11m b/d in the early 1980s to 7.5m b/d in late 1989. After it was taken over by the state, becoming Saudi Aramco (SA) in 1988, the idea was to have a sustainable capacity of 10m b/d by 2000. But the actual projects were not to be planned before a programme launched in 1990.

In September 1990, a month after Iraq invaded Kuwait and oil exports from these two states were suspended, SA advanced its target to end-1995. The 10m b/d level was reached in June 1995 with completion of SA's programme. It already had the potential to pump up to 10m b/d in late 1994. The costs of expansions, the Petromin/Samarec refineries (later absorbed by SA), SABIC and base/lube oil projects were in late 1991 put at $34-50bn. But actual costs came to much less than that. Some projects were scaled down and others were cancelled in response to falling oil prices.

SA's programme offered big opportunities to firms operating in services and building sectors, with US firms being the main winners. The focus was on bringing back shut-in facilities, construction of additional GOSPs and massive water-injection facilities to maintain reservoir pressures. The plan called for the drilling of 226 development wells and re-completion of 108 more.

E&P costs were $2-4bn/year in 1992-1994. It was estimated that spending for E&P, maintenance and support would range from $2.6bn to $4.3bn per annum in 1992-1995. The main SA upstream contracts had been awarded by late 1991. Their cost was estimated at $3.5 bn. The following were the main projects:

Northern Area - Fluor Daniel: This five-year plan upgraded the offshore Safaniyah, Marjan and Berri fields and the onshore Zuluf field. It involved addition of two GOSPs, improvement of a gas compression plant and a central utilities unit at Marjan.

Fluor Daniel as EPC contractor added gas compression facilities and a utilities plant in Safaniyah. It installed a wet crude handling system at Zuluf. In 1993, SA decided to partly moth-ball some fields producing heavy crudes. The move led to a major cut in the export of heavy and medium grades, affecting many of SA's clients on both sides of Suez.

COPYRIGHT 2017 Arab Press Service
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2017 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:APS Review Oil Market Trends
Date:Oct 16, 2017
Words:403
Previous Article:Saudi Arabia - Costs.
Next Article:Saudi Arabia - Southern Area - Ralph Parsons.
Topics:

Terms of use | Privacy policy | Copyright © 2020 Farlex, Inc. | Feedback | For webmasters