Saudi oil drilling likely to be stable in 2010

Drilling for oil in top oil exporter Saudi Arabia in 2010 is expected to remain the same as last year, industry sources said on Saturday, but state oil giant Aramco would increase gas drilling activities.

Aramco's focus on gas came as the kingdom continues to step up efforts to meet soaring gas demand and after it completed last year a crude expansion project to boost output capacity to 12 million barrels per day (bpd).

One source said: "We see it (oil drilling) stable. We are not increasing, we are not dropping. ... We are trying to maintain around 100 rigs for the rest of the year."

The number of oil rigs in use stands at around 100, a second source said.

A third source said: "Exploration in gas is the drive, they are already concentrating on gas drilling more than on oil."

Decreased activity on oil last year led to a fall in the number of rigs used in the kingdom to 104 from 130, Aramco's chief executive, Khalid al Falih said in July.

Falling global oil consumption has left the kingdom sitting on its biggest supply cushion in years and allowed it to shift attention from oil to booming gas demand that is growing by 7 percent annually.

The oilfield service sector has been battered over the past year as oil and gas producers cut spending on new wells amid weak demand. Top oilfield service companies expect to see global recovery in the sector this year.

The kingdom announced on Tuesday a new gas find in the northern Jalamid area, which it said could be commercially exploited. Tests showed the well flowing at 12.1 million cubic feet per day (cfd). (Reuters)