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Wed 6 Oct 2010 04:00 AM

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Conquering capacity

Saudi Aramco capped its largest ever capital programme in the company's history last year. Oil & Gas Middle East finds out what a $100 billion quest for capacity buys you.

Conquering capacity
The Khurais Gas Oil Separation Plant.
Conquering capacity
In 2009 Saudia Arabia had 1755 ship calls for the export of crude oil.

Saudi Aramco capped its largest ever capital programme in the company's history last year. Oil & Gas Middle East finds out what a $100 billion quest for capacity buys you.

In 2009, Saudi Aramco completed major work on the largest capital program in the oil giant's history. The program, with a total investment of more than US$100 billion, spanned the company's energy portfolio and included multiple mega-projects in oil, gas, natural gas liquids (NGL), refining and petrochemicals.

New and expanded hydrocarbon facilities were built by the company or its affiliates in Saudi Arabia and China, while work to expand a refinery in the United States was well under way by January 2010. Key in-Kingdom support facilities such as water injection and distribution networks were also expanded or upgraded.

In a nutshell, the end result has been that Saudi Aramco has raised its maximum sustainable crude oil production capacity to 12 million barrels per day (bpd), the highest in its history and a capability unmatched by any other company in the petroleum industry. Significant increases were also achieved in gas production and processing capacities. In another first, Saudi Aramco entered the petrochemical business with the start of production by the Petro Rabigh facility.

Beginning with the first crude oil increment at Shaybah, which came online in 1998, Aramco has completed an unequaled roster of projects that has boosted its ability to deliver energy to the world, and - crucially - further develop the Saudi Arabian economy. Including the original Shaybah increment, Saudi Aramco has brought online more than 3.8 million bpd of oil production capacity. Over the same time period, we have also expanded raw gas processing capacity by more than 6.3 billion standard cubic feet per day (scfd) through the construction of grassroots facilities and the expansion and debottlenecking of existing plants.

Overall, Saudi Arabia's crude oil production capacity, including the country's share of production from the Partitioned Zone, now stands at 12.5 million bpd, which equates to an astonishing 15 percent of total global oil demand. For 2009, Saudi Aramco's crude oil production averaged 7.9 million bpd, with premium grades (Arabian Super Light, Extra Light and Light) comprising 83 percent of total production.

Raw gas delivered to gas plants averaged 8.6 billion scfd, including the raw nonassociated gas feed of 4.8 billion scfd, while total NGL production averaged slightly more than 1 million bpd.

Aramco replaced its 2009 crude oil production primarily through the re-assessment of geological and engineering studies, with additions from exploration, delineation and development drilling.

At year-end, the company's annual review put total conventional crude oil reserves stood at 260.1 billion barrels.

On the gas front, Aramco added 13.2 trillion cubic feet of non-associated gas reserves through exploration and delineation drilling. Total gas reserves, including associated and non-associated gas, reached 275.2 trillion cubic feet.

Testing times

For the first time in a quarter century, global oil consumption declined for two consecutive years, but global oil demand did begin to rebound in the second half of 2009, led by growth from China and the Middle East.

Even with this upswing in demand, upstream investment declined worldwide, with more than 50 of the industry's oil and gas projects experiencing delays or cancellations. Estimates for worldwide exploration and producing expenditures declined 12 percent, from $454 billion in 2008 to $400 billion last year, a reversal after six years of growth.

The global recession also impacted downstream dynamics, significantly reducing demand at a time when capacity additions were under way, resulting in an oversupplied market.

By reaching 12 million bpd of oil production capacity, Saudi Aramco closed an illustrious chapter in its history, but this does not mean the story is over, just that another exciting chapter has begun.
The company remains ambitious and plans to expand gas production and processing capacities by 4.5 billion scfd by 2014, an increase of 40 percent over current capacity.

Even though Saudi Aramco's conventional crude oil reserves are the largest in the world, at slightly more than 260 billion barrels, it has said it will maintain and operate an extensive and aggressive exploration program to ensure it has oil resources to meet domestic and world demand for many years to come. Despite the mega-fields already under production, and an extensive historical catalogue of exploration survey data, the company said in its last annual report that it still believes there is tremendous potential to locate substantial new hydrocarbon resources in various regions of the Kingdom.

Exploration efforts will thus encompass the entire country, including new frontiers on land and offshore.

New discoveries

Aramco has booked two major discoveries in the last year. Sanaman, about 136 kilometres southeast of Riyadh, and Sirayyan, 125 kilometres southeast of Riyadh. Sanaman is a non-associated gas field, and the test well there flowed 8 million scfd of gas and 444 bpd of condensate from the Unayzah reservoir. The first test well at Sirayyan, an Arabian Super Light oil field, flowed 3,700 bpd of oil and 13.6 million scfd of gas from the Unayzah B reservoir and 21 million scfd of gas, plus 1,740 bpd of condensate, from the Unayzah A reservoir. The Sirayyan-2 well, a delineation well, flowed 3,435 bpd of oil and 3.9 million scfd of gas from the Unayzah reservoir.

These discoveries bring the total number of Aramco-managed oil and gas fields to 107, only 32 of which are today in production, encompassing more than 350 different reservoirs. In addition to the new fields, the company discovered new oil and gas accumulations in existing fields and new reservoirs in its Arabiyah, Hasbah, Jana, Juraybi'at, Karan, Midrikah and Shedgum fields.

Highlights of the exploration program include the offshore Lawhah-46 well, which flowed 30 million scfd from the Khuff B reservoir, and the Midrikah-41 well, which flowed 2.8 million scfd plus 545 bpd of condensate. The Midrikah-41 well was the first successful test of the basal Khuff Clastics reservoir in the greater south Ghawar area, a discovery that suggests the potential of additional reserves in other fields.

In the last year the company has delineated, extended and confirmed reserves in its domestic Arabiyah, Berri, Dirwazah, Hasbah, Khuzama, Midrikah, Zuluf, Abu Hadriya, Ghawar and Marjan fields. Some highlights include the Arabiyah-101 offshore delineation well that flowed 11.7 million scfd of gas and 20 bpd of condensate from the Jilh reservoir.

The Hasbah-17 offshore delineation well flowed 47.5 million scfd from the Khuff B reservoir. Improvements in seismic technology and reservoir modelling across the industry have dramatically increased success in finding oil and gas fields and have helped maximize hydrocarbon recovery from reservoirs. To this end, the company has maintained its commitment to infrastructure development and exploration, coupled with investments in advanced upstream technology and applied research.

The Advanced Research Center of Aramco's Exploration and Petroleum Engineering Center (EXPEC ARC) are dedicated to subsurface upstream research. Company scientists and researchers in this facility have made breakthroughs in reservoir simulation that enable Aramco to optimize production strategies and ensure reservoir sustainability over decades.

Fractured findings

Many of the oil and gas fields throughout the Middle East are in fractured reservoirs, presenting challenges to reservoir modeling, drilling and predicting production flow. Together with international oilfield service partners, has developed a workflow that integrates fracture characterization using data from well cores, logs, formation images, thin sections, seismic surveys and production statistics. A discrete fracture network was modeled in 3-D and enabled critical porosity and permeability to be derived along the fracture itself. This is fed into the dual fracture/media porosity and permeability simulation for accurate fluid flow. Aramco has applied the workflow successfully on Ghawar, Abqaiq and Safaniyah fields, yielding significant reservoir clarity.