Saudi Aramco drilling-rigs count to jump 12% in 2012

Former exec of state-run oil company says most of the expansion is for gas development
Saudi Aramco drilling-rigs count to jump 12% in 2012
Saudi Arabian Oil Co plans to increase its drilling-rig count next year to 145
By Bloomberg
Sat 24 Dec 2011 11:29 AM

Saudi Arabian Oil Co plans to increase its drilling-rig
count by 12 percent next year to 145 to boost natural-gas and oil output from
its Manifa field, a former executive of state-run company said.

Most of the expansion is for gas development, Sadad al-Husseini said last week by e-mail. Al-Husseini was executive vice president for
exploration and development at the company known as Saudi Aramco. He founded
and runs Husseini Energy, an independent energy consultant in Dhahran, Saudi
Arabia.

Saudi Aramco will drill for gas onshore in northern Saudi
Arabia and near the Shaybah oil field in the Empty Quarter desert, as well as
offshore in Hasbah field in the Arabian Gulf, said al-Husseini. The company
will have 50 drilling rigs for oil, 50 for gas, 15 exploration rigs and 30
workover rigs to maintain existing wells next year, he said.

The oil drilling is mainly to “replace capacity declines
that result from ongoing production” and “will not add new capacity, except for
the Manifa drilling,” al-Husseini said.

Saudi Aramco increased the number of drilling rigs this year
to 130, more than figures given out by rig contractors, according to
al-Husseini. The nation currently pumps around 10 million barrels a day of
crude, he said.

Baker Hughes chief executive officer Chad Deaton said in
March that Saudi Arabia, the world’s largest crude exporter, is increasing the
number of its drilling rigs by the end of this year to 118 from 92. Nabors
Industries Ltd., the world’s largest onshore drilling contractor, had 30 rigs
in the kingdom at the end of the first quarter this year and said in March it
held talks with Saudi Aramco to add more rigs.

Saudi Aramco is increasing the number of drilling rigs in
its Manifa field to 20 next year from the current eight, al- Husseini said. The
company will spend about $17 billion developing the giant field, located in
shallow water in the Arabian Gulf, to bring the full field development 10 years
ahead of its planned schedule, Saudi Aramco’s Chief Executive Officer Khalid
Al-Falih said in Doha, Qatar, on Dec. 6. The field will start production in
2013, he said.

Manifa, the world’s fifth-largest oil field, is expected to
produce 500,000 barrels of Arabian Heavy crude oil in 2013 and 900,000 barrels
a day by 2015, according to the company’s annual review. Aramco’s Manifa oil
field development is aimed at maintaining the company’s production at 12
million barrels a day as it slows output from older fields, al-Falih told the
al-Hayat daily newspaper on Dec. 13.

No one at Saudi Aramco’s headquarter in Dhahran could be
reached for comment on the rig-count increase, as Thursday is the start of the
weekend in the country.

Halliburton Co. won a contract from Saudi Aramco in 2008 to
drill for oil in the offshore part of Manifa field. Halliburton said in April
that Saudi Aramco was planning to increase the rig count by approximately 30
percent in 2012 from its levels at the beginning of the year, with 60 percent
of this increase to be assigned to the Manifa project. The project was delayed
due to the global recession, Halliburton said.

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