London, Asharq Al-Awsat- Saudi Aramco is expanding its drilling rig fleet by 100 percent over a two-year period, going from 55 in 2004 to a planned 110 in 2006.
The oil company, which is the biggest producer of crude oil in the world, announced the increase in a statement on its web site saying that it is to meet plans to drill several hundred wells in the next several years, part of the ambitious expansion of Saudi Arabia ”s crude oil and gas program. "This is the most aggressive ramp-up of drilling activity in the history of the oil industry." said the statement
One of the recently contracted rigs is the massive 3,000-horsepower Ensco 76 deep gas exploration rig. "This is the largest rig Saudi Aramco has ever contracted," said Fahad Mulaik, a superintendent in Northern Area Oil Drilling Operations. "It will be used to perform deep gas exploration drilling operations in several locations throughout the Arabian Gulf."
"We will be using very specialized equipment for this operation," said Tom Emmons, Ensco 76 drilling engineer. "That”s because the target wells will be some of the most challenging that Saudi Aramco has ever drilled due to the high temperature and high pressure of these wells.
"The Karan-6 location is actually one of the shallower prospects," said Mulaik. "Several of the locations will require more than 6,000 m of drilling. However, the Ensco 76 can drill up to 9,000 m."
A second exploration rig will join the Ensco 76 during 2006 in drilling deep exploration prospects in the Gulf. The two rigs will drill 11 prospects scattered through Saudi territorial waters. The entire project will last from five to six years. This reflects a substantial investment by Saudi Aramco to discover new gas fields.
"The strong outlook for energy makes it necessary for Saudi Aramco to invest in this type of exploration," said Mansour Al-Hammad, a superintendent in Northern Area Oil Drilling Operations. "This is very expensive and can cost three to four times as much as drilling on land."
The Ensco 76 is owned by Ensco Arabia Co., Ltd., a subsidiary of one of the biggest offshore drilling contractors in the world. Its journey to the Arabian Gulf was a long one.
The journey began in Trinidad , in the Caribbean , where the rig was in operation before being contracted by Saudi Aramco. It was moved to Sabine Pass , Texas , to be completely overhauled according to Saudi Aramco specifications. From there, it was loaded on to a trans-ocean carrier and arrived in Dammam 44 days later.
"We are very careful to ensure that all equipment is in perfect condition, and the personnel are well-trained," said Mulaik. "Our primary concern is to run a safe rig and make sure the operation meets all of its objectives."
Saudi Aramco also announced that the overhauled drilling/workover rig SAR-102, retired and dismantled in 1999, is now back in service. In July, the project of overhauling the rig was declared complete – safely, under budget and ahead of schedule.
The Drilling and Workover Organization (D&WO) pushed for reactivation of the rig in order to help manage the increase in its operational activities.
The task began in May. More than 100 multi-skilled disciplines were deployed by Saudi Aramco and its contractors to accomplish the project. A ceremony was held to celebrate the achievement and to recognize the team effort of all the organizations that supported it.
SAR-102 is now back in action, drilling and working over oil wells in the Ghawar field and helping Saudi Aramco meet global energy demands.
The latest announcements on oil drilling coincide with comments by an oil expert Matthew Simmons at the Oil and Money conference in London last week where he explained that the danger facing the oil industry was not a lull in production of insufficient refining capacity but rather, a shortage of oil rigs. In some cases, oil rigs have cost as much as $800million. A shortage of workers and an ageing fleet were also to blame, Simmons indicated.
Simmons, the author of “Twilight in the Desert” predicted production problems will hit giant oil fields in Saudi Arabia, including Ghawar, the world’s largest. His comments contradict earlier remarks by the Saudi Oil Minister Ali al Naimi who said production would increase by April 2006 and that the field had yet to reach its peak capacity.
Saudi Arabia had planned to increase its crude output to 12.5 million barrels per day by 2009 but, according to Nawaf Obaid, managing director of the Saudi National Security Assessment Project, a government consultancy firm, “due to higher spending and soaring oil prices, the target will be met by mid 2008.” He was speaking at a conference in Abu Dhabi on Tuesday entitled “Gulf Oil and Gas: Ensuring Economic Security”.
Facing with a looming supply crisis, the world was looking to Saudi Arabia and its oil-rich neighbors, Kuwait , the United Arab Emirates , Iraq , and Iran to fill an expected supply gap in the next two decades.
According to forecasts by the International Energy Agency, the production of the above five countries was likely to increase to 51.8bpd in 2030 to meet a global demand expected to reach 120.3 million bpd. Experts who attended the conference in Abu Dhabi disputed these predictions and said the maximum output for these countries would not exceed 38 million bpd, raising the prospect of a supply shortage.