Technological Advances to Quench Thirst for Oil  

(MENAFN - Arab News) Syed Rashid Husain

Oil markets are in turmoil, admits Saudi Minister of Petroleum and Mineral Resources Ali Al-Naimi in an interview in New York. With Saudi Arabia currently accounting for almost one-fifth of global crude exports and analysts expecting it to meet a quarter of the world's increasing crude thirst in the near future, the global dependence on Saudi Arabia is set to go up. As the only producer with significant excess capacity, the Kingdom has played a crucial role in alleviating temporary supply disruptions and crises. The Kingdom upped its daily production by 3.1 million barrels during the first Gulf War, for example, when oil production in Iraq and Kuwait dropped by 5.3 million barrels. It was crucial in balancing the global markets then. With geopolitics occupying center stage, the Saudi role would stay crucial to the global well-being.

The Ghawar oil field is the Kingdom's crown jewel — the center piece of Saudi crude exports. Being the world's largest oil field with roughly 5 million barrels of daily output, it holds an unparalleled significance to future global oil supplies. Stretching for more than 150 miles beneath the desert, it is the largest known deposit in the world. It produces twice as much oil than any other fields in the super-giant category, and has doubtlessly accounted for more than half of Saudi Arabia's oil production.

Industry stalwarts have been saying for years that new technological advances would keep the world well oiled.

Nansen Saleri, former head of reservoir management for Saudi Aramco, who now heads the Quantum Reservoir Impact, points to recent technological advances in quenching the global thirst.

Referring to the available technology adopted by Aramco while developing the Haradh oil field, the southernmost portion of the giant Ghawar complex, as unique and a model for future developments, Saleri terms them as a launching pad for a new era in reservoir management.

Against a backdrop of many international upstream projects straining to achieve their target production levels and intended plateaus, Haradh III reached its planned production capacity of 300,000 barrels per day well ahead of schedule, and the field's performance more than 18 months since its start-up exceeds virtually all pre-project goals.

The Haradh III project, encompassing the southern third portion of Haradh, came onstream in February 2006, adding 300,000 bpd of Arabian light crude production capacity to Ghawar. The project took 21 months, and entailed construction of a grassroots surface facility network, integrated with a complex subsurface development program. Maximum Reservoir Contact (MRC) wells, smart completions, geo-steering, and the latest information technologies were part of Haradh III, at a scale and complexity unprecedented for Saudi Aramco and arguably, for the global upstream industry. A decade from now, Saleri underlines these will likely become standard in the lexicon of mega projects, providing the much-needed supplies to the world markets.

From a technology-impact perspective, Haradh is interesting because the field was developed in three phases over a decade. Initial production from Haradh I occurred in May 1996, followed up by Haradh II in April 2003 and Haradh III in February 2006. The total Haradh production capacity is 900,000 bpd, with equal contributions from the three sub-segments and with progressively more complex sub-surface technologies.

However, some Ghawar skeptics raised doubts.

Stuart Staniford undertook computer study of the publicly available information on Ghawar. This giant oil field was developed by using peripheral water injection. After going through the data on Saudi production before 1980, Staniford infers that the depth of the remaining oil column in northern Ghawar at that time was about 500 feet. And with water level rising by about 18.4 feet per year, Staniford extrapolated that the northern part of Ghawar is by now quite depleted.

Staniford also used a detailed computer simulation of the reservoir, based on its size and shape, the porosity and permeability of its rock, and the assumed oil extraction rates. Then he concludes that production from northern Ghawar has likely peaked. Again one has to point out that Staniford was pointing to only a probability, based on whatever available — old and new — information he could lay his lands on. And some of this may not be pertinent too.

This study too, however, concedes that the southern Ghawar still holds a lot of oil, and admits that there is all likelihood that the Kingdom's push to find new fields will bear fruit. However, being cautious, Staniford underlined that northern Ghawar was developed first only because it was by far the most promising field and its production cannot be easily replaced.

Staniford admits also that the Kingdom has also made huge investment to reopen the Qatif field on the eastern coast, which was abandoned in 1995. This field is now producing an estimated half million barrels a day.

Even if one goes by Staniford projections, the Ghawar era is far from over — and technology is handy to boost production.