Abdullah al-Saif, Aramco’s senior vice president for exploration and production, was quoted in the March 14 edition of the Daily Star about future oil production projects in Saudi Arabia. Let us take a look at the projects he named in more detail.

Saudi Arabia produces five grades of crude oil; Arab heavy, Arab Medium, Arab light, Arab extra light and Arab super light. Arab heavy and Arab medium are considered sour crudes because of their high sulfur content. Besides these five grades of oil, Saudi Arabia also exports condensate and natural gas liquids.

Haradh is the southernmost part of the Ghawar Field, the world’s largest. The field produces Arab light crude and the proposed project will add 300,000 barrels per day of capacity in 2006. This is the third and final stage of the Haradh development program that began production in 1996. The Ghawar Field is under waterflood, which is to say that water is injected into the lowermost part of the oil reservoir in order to maintain pressure as the oil is produced. Over time, the oil is displaced into the higher parts of the reservoir. Haradh is the highest part of the Ghawar Field, so it is likely that increasing water cut in the lower parts of the field will offset production increases in Haradh. For a technical discussion of the Ghawar Field, see www.gregcroft.com/ghawar.ivnu.

The Khursaniyah Project involves three oil fields; Khursaniyah, Abu Hadriya and Fadhili. These fields are considered small fields in Saudi Arabia although they are respectably large by North Sea standards. Production at Khursaniyah began in 1960 and reached 200,000 barrels per day in 1980. Oil is present at five reservoir levels in the Khursaniyah Field, which produces Arab medium crude. Production of Arab light crude at Abu Hadriya began in 1961 and reached a peak of 105,000 barrels per day in 1971. The field has oil at six reservoir levels. Production of Arab extra light crude at Fadhili began in 1963 and reached a peak of 55,000 barrels per day in 1977. There are two oil reservoir levels at Fadhili. The proposed project will add 500,000 barrels per day of productive capacity in 2007. To add this much production from those three fields will require simultaneous, intensive development at all reservoir levels.

In 2008 production from the Shaybah Field and the Central Arabian Fields is to be increased by 300,000 barrels per day. The Shaybah Field is located in the Empty Quarter, near the boundary with Abu Dhabi. Because of its remote location, production did not begin until 1998. The initial development was a very intensive, state-of-the-art development with waterflood and numerous horizontal wells. Shaybah produces Arab extra light crude at a rate of up to 590,000 barrels per day. The first oil discovery in Central Arabia did not take place until 1989 and these fields produce from older rocks than the other fields in Saudi Arabia. They produce Arab super light crude, which resembles diesel fuel. Production comes from several smaller fields and the oil is pumped, a procedure that is not needed elsewhere in Saudi Arabia. Although these fields are quite small by Saudi standards, they are relatively new and additional discoveries are likely.

Production from the Khurais Field is to be increased to 1.2 million barrels per day in 2009. Khurais is located on a large structural trend to the west of, and parallel to, the Ghawar trend. Because of this superficial resemblance to Ghawar, there were very high hopes that Khurais would be comparably large. It turned out that the reservoir at Khurais was much smaller and not as high quality as Ghawar, though it is still the largest of the proposed projects. Variable reservoir quality has also been a problem at Khurais. Pilot-scale production at Khurais began in 1963, but the field has never been fully developed. It produces Arab light crude.

Three Conclusions

The new Aramco projects are not as attractive as the Shaybah, southern Ghawar and Marjan projects of the last decade. The new developments are either smaller fields or more difficult reservoirs.

Saudi Arabia’s production mix will shift to a higher proportion of lighter crudes. Unlike last year’s Qatif and Abu Safah developments, nearly all of the proposed projects produce Arab light or lighter crudes. The production capacity of Arab heavy and medium will decline over the remainder of the decade.

The next meaningful production increment does not arrive until 2007.

Greg Croft is an Oil Exploration Consultant