Aramco official spells out shale E&P challenges

Deposit depth and tightness will make Saudi shale drilling challenging

Aramco will work with major oilfield services companies on shale exploration and production. GETTY IMAGES
Aramco will work with major oilfield services companies on shale exploration and production. GETTY IMAGES

An official at Saudi Aramco has explained that developing shale gas in the Kindom will be “a challenge”, according to a Bloomberg report.

Adnan Kanaan, general supervisor for gas reservoir management at Aramco, told a conference in Khobar in Saudi Arabia that the depth of reservoirs and likelihood of very low permeability will make hydraulic fracturing in the country difficult.

Kanaan said Saudi has “great potential” as a shale gas producer, according to Bloomberg.

In January Aramco CEO Khalid Al-Falih confirmed that Aramco was in the early stages of a shale gas E&P program, which was followed by comments by Aramco’s head of exploration.

"If we can get it by 2020, that will be good," General Manager of Exploration Ebrahim Assa'adan told Bloomberg in January. "We are in the reconnaissance phase, shooting regional seismic programs and drilling all over the country."

Saudi’s drive for gas is motivated by its wasteful burning of saleable crude for domestic power generation. Last month Saudi Oil Minister Ali Naimi called crude burn a “shame”. “We can add value to it rather than just burn it,” he said. Naimi claims that this summer’s crude burn will be lower than 2011, as gas projects come online.

In a speech in January, Mr Naimi said gas production had risen from 1.65bn standard cubic feet a day in 1981 to 10.7bn scf/d in 2011, and production capacity would rise further, to 16bn scf/d by 2020, according to the Financial Times.

Arabia sells gas locally at a subsidized price of 75 cents per million British thermal units, reports Bloomberg.

Contrary to earlier indications that Aramco would attempt shale gas explorston alone, Kanaan said that Schlumberger, Halliburton and Baker Hughes are likely to be involved.

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